Keiser Report ?6: Markets! Finance! Scandal!
Every week Max Keiser looks at all the scandals behind the financial news headlines. This week, Max Keiser and co-host Stacy Herbert look at sad Santa stories and bailout largess for the politically connected. Keiser also speaks to economist and best-selling author Ravi Batra about wage gaps and revolution in America.
Great author–Ravi Batra—he is outstanding!!!!!!!!!
I’m not a fan of O,Riley at all but I have serious doubts about climate change and the amount of control given to committees to dictate industrial production based on misleading facts and completely unproven theories it was only thirty years ago theses same scientiest were waring us that we are going into another Ice age.
people forget that scientist do lie allot about facts in order to make whoever is paying there salary happy and global warming is an easy sell even though it’s totally unproven
Global Warming is a fraud you moron FUCK You jew
Fourth, the primary reason that treasuries are being bought now is due to the fact that foreigners and institutions are swapping their worthless MBS and toxic debts for slightly less toxic treasuries.
Fifth, the so-called profit made by the Fed was outweighed by the fact that the Fed used mark-fantasy accounting rules, and continues to purchase hundreds of billions of dollars in worthless debts nonstop. That directly devalues the dollar.
I could go on and on and on, ladies and gentlemen..
“averageworkinggal” does not even understand the basics of derivatives or of bonds, all she is doing is digging herself a deeper hole.
First of all an IRS is an interest rate swap not the internal revenue service.
Second of all bond prices and yields have an inverse relationship, that is a fact.
Third, it is impossible for banks like BOA to actually own $50 trillion worth of hedged IRS with treasuries as a reference as that exceeds the entire treasury market multiple times over.
First of all you thought that an IRS was a tax revenue collection agency. No that is totally wrong, you can’t understand the context of the greater bond market, obviously.
Then you thought that demand was rising incredibly for US Treasuries. No that is also wrong. Treasury prices have been falling. The Treasuries that are being purchased are due to foreigners swapping their MBS for Treasuries.
There are so many other ways in which you are wrong, it is self-evident.
That would mean that the dollar would deflate against commodities and other currencies.
You do not understand the foreign exchange market. Net dollar assets outstanding would decrease so less support to the dollar would actually be given, I’ve already should you how over the last two years about 100 trillion has been brought into the IRS market alone. That is practically accounting for the total increase of derivatives in the market over that time period.
Yields have been rising since december 2008, bond prices have been falling.
That is the definition of inverse.
You clearly do not even understand what is occurring right now in the bond market.
No if bond prices deflate, you will see what is happening in greece, rates would soar and the currency will be brought down. That is basic fact. You still cannot explain why greek sovereign debt has rising yields, it is called default risk.
So you’re telling me that JP Morgan actually owns $60 trillion worth of bonds. That is impossible.
Interest rate swaps create an artificial demand. You clearly cannot grasp this very very basic concept regarding derivatives.
@faller666 – the bond market is propped up by investor demand.
@faller666 – you’re wrong about the yield curve and wrong about bonds.
If the yield curve was inversely proportional to the interest rate, then the yield curve would have a negative slope from near to long term as interest rates rise and in fact it’s the opposite, it has a positive slope, increasing with interest rates.
Also, as bonds deflate, so does the balance sheet, which means capital destruction, which means deflating money stock, which means boosted dollar.
@reiser666 – If the “prices” of existing Treasury bonds collapse, that’s deflation and the dollar will be boosted by the destruction of capital.
@reiser666 – you’re TOTAL DELUSIONAL and don’t understand the sovereign debt market.
Guess how the bond market is propped up, through inflation.
So when bonds deflate, the dollar will deflate as well. Hence inflation not deflation.
Actually most otc derivatives are related to Interest Rate swaps that prevent the US dollar and the US Treasury market from collapsing.
Again you do not understand the function of derivatives.
Those bonds supposedly collateralizing interest rate swaps do not exist, they are fraudulent.
Once that market collapses, as there is no possible way for those contracts to be supported the value of treasuries will also collapse as interest rates rise exponentially.
That will cause a panic in the dollar.
You do not understand the bond market either.
@reiser666- the notional value of the bonds sold by the US govt. don’t “collapse” to the US Govt. since the US govt. originates the bonds and gets full face value principal.
Interest Rate Swaps don’t exchange principal so notional value is irrelevant to the “IRS Market.”
The only thing relevant to the “IRS market” is the anticipated change to interest rates over time.
The IRS are causing that lower yield curve to be created, it otherwise would not have been.
Their clearly is not enough collateral for such securities to even begin with. The demand created by the irs market is literally out of thin air. There is not enough real demand for treasuries is what is proven.
These derivatives are totally uncollateralized when they are exposed, there will be a panic in the treasury market and therefore the dollar. These institutions are propping up the dollar.
@reiser666 – a “lower” yield curve means a BETTER market because demand is willing to accept a lower interest rate for the government bonds.
In case you haven’t figured it out, you just argued that speculators are making an “artificially lower yield curve”
which means that speculators are betting against higher interest rates and thus betting against inflation and a falling dollar.
OTC derivatives act be creating demand for Treasury securities be keeping interest rates low that otherwise would not have been.
In order to support the current market over $350 trillion in collateral is needed to keep rates from soaring.
Rates are inverse to Bond prices. Bond prices will collapse, rates will soar as in greece due to sovereign default risk and a lack of demand not due to greater economic growth.
@reiser666 – the notional value of the OTC derivatives market is irrelevant to US Treasury securities as that notional value in determined by what the Treasury Dept. sells which is only about $7.8T so far.
The $7.8T notional value of US Treasuries IS BACKED by the full faith and credit of the US.
OTC derivatives aren’t money.
They are contracts, not money stock.
If OTC derivatives “collapse”, the money stock will be affected negatively by the losses and the dollar will go up.
No, it shows that there are greater treasuries to be sold and not enough demand for them.
Look at the Greek sovereign debt market. Are rates increasing due to a great economic boom, no.
The IRS market generates an artificially lower yield curve, without that element in the market place there would be no Treasury market.
The purchase of treasury securities are being offset by the fed’s purchase of MBS. Foreigners are getting less toxic junk for exchanging their more toxic junk.
@reiser666 – you’re making a ridiculous speculation-based argument devoid of fact whereas supply and demand drives the market for US Treasuries since they are still AAA and the ultimate safe haven.
The Jan 2010 Yield Curve on US Treasuries is positive and showing that the market anticipates a US economic expansion.
Interest Rate Swaps are used to generate the yield on longer term Treasury securities so the Yield Curve accounts for the “IRS Market.”
The notional value of such derivatives demonstrate how it would not even be possible to collateralize them to begin with.
They are unbacked. Official money supply statistics do not count the growth of OTC derivatives. If it were not for the creation of such derivatives, the whole Treasury market would have collapsed by now, causing a panic in the dollar. Credit derivatives also allowed for banks to lend out trillions, when they were too under-capitalized to do so to begin with.
MSNBC or CNN isn’t left. LOL They are more right wing than most Americans believe. Outside the US CNN is concidered very right wing compared to most of the industrial world.