[Video] The Yield Curve Mambo

July 7th, 2009 by stacyherbert

Stacy Summary:  Hat tip to you @M!  Really smart video.

Tags:   97 Comments

97 responses so far ↓

  • Palantíri
    Jul 7, 2009 at 1:08 pm

    Goldman Trading-Code Investment Put at Risk by Theft
    http://www.bloomberg.com/apps/news?pid=20601087&sid=a_6d.tyNe1KQ

    “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,”

    -to be read between the lines… Goldman Sachs wants to keep the program to manipulating the market for themself

    “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.”

    -please please please, force Goldman to take theire own medicine and drug them death!

    “Someone stealing that code is basically stealing the way that Goldman Sachs makes money in the equity marketplace,”

  • Youri Carma
    Jul 7, 2009 at 1:12 pm

    Good summary piece Reuters: A Goldman trading scandal? http://tinyurl.com/ofws6l

  • Phil
    Jul 7, 2009 at 1:21 pm

    Probably Won’t Hear about this on MSM
    http://www.youtube.com/watch?v=r0HWpa1k-2M&feature=rec-HM-r2

    Quaint video 5 minutes .. soothing music.
    Certainly Interesting !!

  • Youri Carma
    Jul 7, 2009 at 1:29 pm

    Salbuchi – On The Road to World Government – Status Report – Part 1 (Vid) http://tinyurl.com/nmmkax

  • Mother Earth
    Jul 7, 2009 at 1:30 pm

    @phil Historicaly dictators where chosen to handle calamities, to be returned to civilian state or be reelected after 6 months..Maybe it is time one is appointed..

  • stacyherbert
    Jul 7, 2009 at 1:37 pm

    @Kaks – I’m not all that good at explaining bonds and yields, that will be Max but I think the wikipedia is a good explanation: http://en.wikipedia.org/wiki/Yield_curve#The_typical_shape_of_the_yield_curve In the film you can see when the yield curve becomes inverted nearly two years before the depression hit; Greenspan called it a ‘conundrum’ at the time. It’s not such a conundrum today.

  • Bill Stewart
    Jul 7, 2009 at 2:54 pm

    There was one IPO at the TSX this year thus far:

    TSX’s lone IPO this year seen as encouraging

    http://www.cbc.ca/money/story/2009/07/07/pricewaterhousecoopers-tsx-new-ssues.html

    A single stock issue in June by a company new to the TSX was the first initial public offering (IPO) since mid-2008, PricewaterhouseCoopers said Tuesday.

    The $500 million IPO by Capital Power Corp. of Edmonton doesn’t show the IPOs are bouncing back, but may be one of several “hopeful signs” for the market, Ross Sinclair, leader of the consulting company’s income trust and IPO services, said in a news release.

    “We’re starting to see the market regain some of its appetite,” he said. “The volumes are still very small but the Capital Power issue, along with some significant activity in secondary equity offerings and debt issues across the markets, point to a level of financing activity that has been absent for some time.”

    Companies that are not publicly traded are considering IPOs, and investors, looking for better returns than the low interest rates on bonds, are becoming more open to equity issues, he said.

    The Capital Power issue was sold at $23 a share and began trading on the TSX on June 26, exchange data show. It has dropped since, falling 60 cents to $21.05 Tuesday.

    Capital Power, an electricity generating company spun out of Epcor, the utility owned by the city of Edmonton, was the only TSX IPO in the second quarter this year and first since the comparable period on 2008, PricewaterhouseCoopers said.

    Including the TSX junior venture exchange and “other” issues, total IPOs were $514.8 million in the quarter.

    There were seven TSX IPOs worth $434 million in the second quarter of 2008.

    ==========
    Economics in the UK’s white colonies is much more glacial than the US or UK … and IPOs are no exception.

    However, for all of the USes IPOs — speculation will wipe 90% of them out of existence sooner or later irregardless of weather they produce any meaningful goods or services.
    ==========

  • Phil
    Jul 7, 2009 at 3:08 pm

    @Sharon .. “moving abroad”

    Just a tip on your Pension…

    If you are getting a UK State pension and move outside the EU, your UK Pension-”Increases” become “frozen” !
    If you are getting a German State pension and move outside the EU, your German Pension is simply reduced by 30%.

    I have a German friend ( OAP ) that moved to the Philipines which is how I found out about it. I checked myself with the UK Pension people … and luckily “only” the “increase” is frozen. If you return to the UK, the “freeze” gets unfrozen !

    As usual, Govts. always find new ways of stealing your money !

  • zmoore
    Jul 7, 2009 at 3:13 pm

    The Capital Power IPO is an example of selling publicly owned assets to the bankers.

    It is a private sector grab of public assets by Bankers and Bay Street (Canada’s Wall St) making margin on trades and floating the share issue. Capital Powers evolved from a City owned utility which was owned and operated in the publics interest. Now it will be profit seeking and likely evolve into a polluting gulag workplace shell.

    It reminds me of the sale of the Natural Gas producing fields owned, for 70 years, by the same City. These were sold for a few Sheckles of profit to some private concerns. After three years the gas bills doubled and have been going up ever since.

  • Phil
    Jul 7, 2009 at 3:14 pm

    @Sharon .. P.S.

    You mentioned Thailand, S.America and France.
    I would play safe if I were you and take France.
    Moving to far away foreign countries can be pretty risky.
    I’ve heard the saying that in the “western world” countries, the Govt. steals your money ; in those “far away exotic places” , it is others that steal your money.
    “Money” … as in the sense of your general well being !

  • Youri Carma
    Jul 7, 2009 at 3:15 pm

    Israeli sub said armed with nuclear-capable torpedoes navigates Suez Canal http://tinyurl.com/n7lo6d

  • Youri Carma
    Jul 7, 2009 at 3:18 pm

    U.S. consumers fall behind on loans at record pace http://r.reuters.com/fem48c

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 4:06 pm

    @zmoore

    hahahaha
    That’s funny you mention the crap about Natural Gas
    I had one of the many 3rd part shills offering a “stable gas rate” come to my house the other day trying to lock me in for $9.95/GJ.

    I then began to tell him about the market value of Natural Gas and how it has been plummeting since last year, and how the introduction of the SHALE drillers in BC are just going to increase the supply, so WHY would I want to sign up?
    (if I signed up with the sharks that came around LAST YEAR I’d be paying more for my supply than I am now)

    Even though the Junior Drillers are jibber-jabbering about their HEDGED contracts for this year (one in particular DEE.to announced their contract for $6.50-$8), they are all fucked come next year, especially if the market value stays where it is now (<$4)

    but I guess that is the variable in question…
    whether or not NG is going to trade in its current range

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 4:25 pm

    @Bill Stewart

    IRREGARDLESS is not a word…
    irrespective is…
    ;)

  • white hunter
    Jul 7, 2009 at 5:19 pm

    @Giuseppe Bagodonutti
    @zmoore

    buy ung

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 5:26 pm

    @HonkyHunter

    UNG on the TSX???

    or UNG on the NYSE ??

    either way it’s out of my Po’ass TRADER’s price range…

    I just want to keep my water and house heated, bro…

  • white hunter
    Jul 7, 2009 at 5:41 pm

    @Giuseppe Bagodonutti

    NYSE

    Negative media hype has driven ung to $12.18. It was over $59.00 in our recent natural resource bubble of last summer. Might be a good way to hedge against the cost of those heating bills.

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 5:55 pm

    @ultra-violet Hunter

    Ahhh…
    the cheaper one… the TSX version is like $47

    nevertheless…. totally out of my price range…
    and IRREGARDLESS (catch that one Bill?) it is out of my price range…
    but that in consideration….
    Any prices we’ve seen are not reflective of what is going with the markets right now….
    it will be lucky to see $20 this year
    IMHO (granted I haven’t looked at the MD&A or Candlestick Chart….)

    I just don’t see any real price moves in NG (despite Faber or Rogers’ call) until post OCTOBER when the markets do their STAGED collapse or demand increases

  • white hunter
    Jul 7, 2009 at 6:05 pm

    @guy to calls me HonkyHunter and ultra-violet Hunter

    We have different crystal balls. That’s why gypsies can’t have children, BTW. From this price, I’m looking for a 150% return by February. All of the natural resource sectors will be up due to the public’s awareness of real and anticipated inflation.

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 6:24 pm

    @Clorox Hunter

    150%????
    $18 for UNG ???

    OK, I give…. what’s going to drive the Nat. Gas price past $6 ?

    Demand?
    Taxes?
    Cap’n'Trade?

    I can concede that after OCTOBER when the staged collapse happens, certain commodities will rise, but how will that reflect on UNG’s price?
    Are they like a 3X bull ETF or something?
    do they have some hedged contracts going on?

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 6:38 pm

    HOLY FECAL EXCREMENT OF (insert deity of choice here)

    UNG is ready to unload 1BILLION shares into the market

    I’m no US stock player but that seems OBSCENE as far as share dilution goes

  • white hunter
    Jul 7, 2009 at 6:41 pm

    @Giuseppe Bagodonutti

    No, I stated 150% return. That would would put it at $30.40.

    “OK, I give…. what’s going to drive the Nat. Gas price past $6 ?”

    (1) It is near,or at, an all time low due to the media have been flooding their viewers with an increasing number of stories about an alleged global surplus of natural gas.

    (2) There will be actual or anticipated inflation or hyperinflation due to the the effects of the “stimulus” money.

    (3) Guys like you are certain it will not happen.

  • white hunter
    Jul 7, 2009 at 6:56 pm

    @Giuseppe Bagodonutti

    What dilution? Unless they engage in fraud, which I humbly acknowledge is possible, actual futures contracts will have to be purchased for all of the shares issued. It seems to be that this would put an upward pressure on the price of the futures and ung.

  • white hunter
    Jul 7, 2009 at 6:58 pm

    @Giuseppe Bagodonutti

    What dilution? Unless they engage in fraud, which I humbly acknowledge is possible, actual futures contracts will have to be purchased for all of the shares issued. It seems to me that this would put an upward pressure on the price of the futures and ung.

  • white hunter
    Jul 7, 2009 at 7:00 pm

    sorry for the double post

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 7:13 pm

    @WhiteHunter

    I might be misreading the NEWSWIRE
    but I’m seeing 1Billion shares being issued….
    (via 100k “creation baskets”)
    (@15:33 EST… check the news, bro)

    oh wait… they are suspending the issuance thereof…
    pending SEC review…

    PHEW!!!!
    but if they go through with that, it’s going to kill the share price…

  • Don
    Jul 7, 2009 at 7:16 pm

    Ah! IPO’s the good ole mining of the markets, at least that has been my experience with most junior mining companies. They essentially allow inexperienced “executives” to live high on the hog with other peoples money, producing little results in the way of actually mining a deposit, unless that deposit of course is capitol put up by an investor!.

  • Don
    Jul 7, 2009 at 7:16 pm

    The other great ponzi

  • white hunter
    Jul 7, 2009 at 7:24 pm

    @Giuseppe Bagodonutti

    if my understanding of ETFs is correct, the proceeds of all of the new shares sold must be used to purchase the underlying commodity or futures in that commodity. That would put an upward pressure on the price of both the ETF and the underlying commodity. It is the same way that purchase of Max’s Gulag Index would support the price of the prison and taser stocks.

  • Giuseppe Bagodonutti
    Jul 7, 2009 at 8:11 pm

    @WhiteHunter

    http://www.schaeffersresearch.com/commentary/trading_floor_blog.aspx?blogid=93941&single=true&c=allfeed

    I was under the impression that ETF’s are treated in the same manner as regular stocks (with a Mutual Fund flavour)…

    UNG has approx. 333Million Outstanding “units”
    if they were to introduce another 1BILLION “units” into the market, that would mean a 3:1 dilution, which brings the price down to $4 or so…

    HOWEVER, they made their application for the issuance on June 5th, and the SEC still hasn’t accepted, so perhaps it is a NON-ISSUE… i.e not a problem…

    When I see a desire of a “company” to issue shares, it means they are looking for some quick funding…

    Perhaps with the money they make by issuing these “creation baskets” they can then invest in gas companies, but it doesn’t mean they have the commodity in stock or on order…

    it is a cash grab…
    We have ETF’s in Canada, and they are “rebalanced” everyday, which is one reason they are shitty INVESTMENT vehicles… strictly for day-trading purposes only…

    I don’t make claim to understand the voodoo governing the american markets (I don’t invest in them)… that is something that PHIL might be more enlightened on…

    Nevertheless, I would not be putting my money in that one….
    But Good luck to you… I hope you are right…

  • TS Gordon
    Jul 7, 2009 at 8:24 pm

    Wow! Awesome use of pixels. This should be mandatory viewing in high school. (Yeah sure!)

  • jterror
    Jul 7, 2009 at 8:40 pm

    “Apparently, Goldman Sachs has been booted out from doing computerized quant trades at the New York Stock Exchange.

    — GS had been making $100,000,000 a day with computerized trades.”

    http://www.dailykos.com/storyonly/2009/7/7/750786/-Incredibly-Shrinking-Liquidity-as-Goldman-Flushed-Quant-Trading

  • Mother Earth
    Jul 7, 2009 at 11:44 pm

    This what we don’t need: Patent abuse to block competition in green car industry.. http://tinyurl.com/kryw8m

    Can anyone knock out the Comex systems power supply & backup? I think that could be helpfull..

    @max Maybe you could run this video in the background: The Sychelles, where bankers go to enjoy the spoils of financial warfare.. http://www.youtube.com/watch?v=TwrrBYGzc04&feature=related

  • Mr Supergeek
    Jul 8, 2009 at 12:54 am

    @Freddy from oregon
    Great link….as always.

  • Giuseppe Bagodonutti
    Jul 8, 2009 at 1:27 am

    @jterror

    WOW!!!!
    So Goldman Sucks was ripping off the transaction info and placing their bets before the traders’ orders even hit the market?
    Good ol’ UNIX servers…

    And GETCO
    and Renaissance Technologies’ Medallion Hedge-Fund
    are involved in this shit, too?

    This story is getting juicier by the day…
    I wonder how long it will take the Ass-munching Turd-tokers to catch on to this part of the saga.
    And more importantly, can GS be charged with criminal activity as a result?

  • Phil
    Jul 8, 2009 at 1:41 am

    @All .. great links as always ..Thx guys !

  • Phil
    Jul 8, 2009 at 1:45 am

    @Giuseppe
    @jterror

    I vaguely remember when the LSE tried “highly computerized trading” ca. a decade ago … it was stopped due to the LSE almost crashing IIRC.

    I will check the average volume of NYSE stocks in the coming days to see if and where the “sudden voulme drop” occurs .. if at all !

    Great links .. Thx.

  • Fibon1123
    Jul 8, 2009 at 1:56 am

    The extra debt is irrelevant!!

    When looking at this clock it really does not matter what been borrowed this time around, as its going up so fast and the damage has been done. In for a penny in for a pound.

    Incredible how out of control it all has become.
    http://www.usdebtclock.org

  • Kaks
    Jul 8, 2009 at 2:32 pm

    @stacy – thanks for the wikipedia link – am doing my homework now and have noted that, “the anticipation of falling interest rates will cause an inverted yield curve. Strongly inverted yield curves have historically preceded economic depressions.”

  • Kaks
    Jul 8, 2009 at 2:53 pm

    Still looking at that yield curve mambo chart and wiki text…
    “A flat yield curve is observed when all maturities have similar yields…A flat curve sends signals of uncertainty in the economy. This mixed signal can revert back to a normal curve or could later result into an inverted curve.”

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