Wednesday, August 10, 2011

The Path to Saver Hell

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. - Alan Greenspan (1966)

Here's an update to yesterday's post.

Click to enlarge.

You know things are bad when you start falling off charts to the downside.

Investors are now willing to lock in a real -0.13% annual loss over the next decade and pay taxes on any inflationary gains.

That should tell us all we need to know about the state of the economy. There is a saying that in a bear market the goal is to lose less than the average person. I think bond investors are fully aware of the theory.

Further, what do investors think Bernanke can really do from here? He's got 10 year inflation expectations right where he wants them (directly on the blue line). He successfully combined the deflationary Great Depression with the stagflationary 1970s. Mission accomplished!

August 10, 2011
Dow's downward spiral batters media stocks

LOS ANGELES ( - The stock market spent Wednesday tormenting investors, knocking the Dow Jones Industrial Average down 519.83 points and slamming media stocks.

Source Data:
FRB: Selected Interest Rates
US Treasury: Interest Rates


Who Struck John said...

The road to saver hell is paved with good central bank intentions.

fried said...

Sure, you can lock in a real loss of .13%, or you can take even greater losses in the casino. This is truly brutal, but especially for the elderly. Margins have been raised tonight on treasuries, gold and swiss francs. There's a pretty clear will get back into the market and you will take your losses...and presumably like it.

Stagflationary Mark said...

Oh, we can't take another torment. Though he says he's our friend, we're at our debt's end. He says the rates are bona fide, but that don't coincide with bills that are past due.

And when we ask him to be nice, he says, "You've gotta be pump to be kind in the right measure, pump to be kind it's a very good sign, pump to be kind means that I'll save banks!! Crazy? I gotta just pump to be kind!!!"

Sorry. Just had a flashback to a 70s song.

mab said...

It's all about saving the intermediaries of credit fraud.

It may sound odd, but we're truly lucky to have such self serving and crooked middlemen. No way would we have this level of prosperity without them. They're a national treasure!

Thank you Ben, may I have another.

If you can dodge a wrench, you can dodge a ball - Patches O'Houlihan, from the movie "Dodgeball".

Stagflationary Mark said...

Let me tell you, a double-fault final-play elimination hasn't occurred since the Helsinki episode of 1919, and I think we all remember how THAT turned out! - Cotton McKnight (from that same movie)

Fortunately, there will not be a double-fault. At worst, it will just be a default.

mab said...


All I can say is that it's very fitting that the prudent are being penalized. Serves them right for not participating in the Gov't sanctioned prosperity producing ponzi scheme.

Training with wrenches makes sense in this light.

mab said...

“Everybody panic! Oh my God, there’s a bear loose in the coliseum! There will be no refunds! Your refund will be escaping this deathtrap with your life! If you have a small child, use it as a shield! They love the tender meat!” — Jackie Moon, from the movie "Semi-Pro"

Stagflationary Mark said...

Everything is OK today. Woohoo! ;)