Hello again~!

  By Mystic | July 20, 2012 - 02:45 |

Internet has been off for most of the week chez moi, but I am back now.
Well…….I am back, but after not being `plugged in`, it will be interesting to see if I pick up and run on like before.
I’ll put up this one, that I made a week ago …….. and we will see what happens next, eh~!?
Audio -

07:12 min.

Play

Podcast: Play in new window | Download

Written by: Mystic on July 20, 2012.
Tagged . Bookmark the permalink.
  • Emmazedbend

    Thank goodness for that I thought something awful had happened.

    • http://overthepeak.com/wordpress/ Mystic

       Hello,
      Thanks Emma …… no, nothing wrong.  In fact I did my `heart test` yesterday and everything was tiptop.

      I am going to check now that the world is still there …… ….. …. .

  • axionication1

    Blody hell…good to have you back.

    For a moment thought that we would have to start doing all the work ourselves ( even had me thinking of putting some crap up).

  • snedmeister1

    Good morning Nick,

    Glad everything is OK at your end….

    I agree, there needs to be some serious discussion on how banking works, and how TPTB understand it to work….

    A little of topic ( a little ), I don’t know if you remember, but some time ago, we discussed central banks buying assets over a period of time ( as per link 6 ), and I asked what would happen if the asset prices fell..??

    Would the CB require the high street bank to find more assets or would they just wait until the term ended, and the swap was reversed..???

    ie CB swaps £100m of mortgages for £100m cash, if the assets fall to £50m, do the CB ask the high street bank to find the difference or do they just wait until the end of the period, and swap back ( regardless of the new asset value )..???

    I can’t remember what conclusion we came to back then ( If any )..???

    Nice to see you back fit and well.
    Sned.

    • snedmeister1

      I think I found the answer here…

      http://en.wikipedia.org/wiki/Repurchase_agreement

      Under the heading “Risk”…

      • http://overthepeak.com/wordpress/ Mystic

         I may just make a video.
        Note that some CB’s are buying the assets (US and UK QE) ….. and some are lending on the asset collateral (ECB LTRO)
        You probably did. 
        I’ll make the video.

        • snedmeister1

          Yes, I noticed ….

          Look forward to the vid…. :)

          • http://overthepeak.com/wordpress/ Mystic

             The vid is a bit of a wash-out.
            (I’ll put it up anyway)

            We are happy that CB’s are part of government (except the ECB that has no government to be a part of).
            People understand (and seem okay with the idea) that CB’s can print up magic money. 
            CB’s can buy, lend against assets ……. and I don’t think anyone cares what happens next, because it has gone out of `real land` and into `magic money land`.

            CB’s can technically go broke, but have many magic tricks to avoid it (and they would use them).

            One thing is for sure – People have stopped talking about CB’s `reversing out of this`.
            This is a new world~!

            • snedmeister1

              I will leave my last question for the vid, I think…

              It’s not complicated, but something else I had been thinking of earlier…

            • snedmeister1

              I’m thinking you weren’t impressed with your vid..?? :)

              No prob, I will ask now;
              Doesn’t the ECB use existing money to perform their LTRO, (as apposed to QE creating new money to buy them)..??

              Also, interesting point about reversing out this scenario…!!!

              I remember, probably about the time of your Youtube vids, before OTP, where all you ever heard on the net was “What is the FED’s exit strategy.??”
              We don’t hear that anymore….

              You may well have a point…. There isn’t an exit strategy, we are all in, and perhaps always were…!!??

              Which then leads onto, what happens when the REPO/LTRO terms are up in the Euro area..??
              Will they just extend them / roll them over..???
              ( I can’t imagine what other options they have )

            • Anonymousson

              Hello Mystic, 

              Great to see you back.

              “CB’s can technically go broke, but have many magic tricks to avoid it (and they would use them).”

              This is one that I have never understood – how can it go broke as issuer of its own currency?

              • http://overthepeak.com/wordpress/ Mystic

                 CB’s keep balanced books as well as normal banks.
                Their asset side can collapse in value, when their liabilities hold up (just like normal banks).

                The thing is, that the CB can print up fresh air money (just like normal banks), but cannot just keep it for itself (just like normal banks can’t).

  • lgrinaker

    There you are!  I was thinkin’, “Uh-oh, it’s not like Mystic to not let us know something, even if he wants to take a long break.”  But then, I thought that Mrs. Mystic might stop in to let us know if something was up with your health.  (I think I remember her stopping in once while you were laid up before.)  So that helped me to breathe a sigh of relief, ;-).

    Good to “see” you again – we missed you here at the pub! ;-).  And I’m awfully glad to know that you’re doing well, even if you ultimately decide to let the old ship wind down…

    Linda

    • Lyle

      “…even if you ultimately decide to let the old ship wind down…”

      Which would drop Nick’s stress level considerably. While also incentivising other to participate more as it did me. I’ve been mentally beating myself up a bit about spending so much time here while my business ends await. Like Nick, I’ve been called to address online stuff for many years and it’s gotten old and to a large extent tiring. Even if I do make $ from the work – which Nick doesn’t.

      I think if fearless leader, Nick, posted a couple times a week – the ship would continue to run just fine.

  • Lyle

    Just a wonderin’… here in my neck of the woods, China, and the fact that they make virtually everything has become the ubiquitous scapegoat.

    Do you find the same in the European countries?

    It just seems plain that in time the Western world will be driven to turn on China like angry vipers.And you know exactly what that metaphor really means.

    • Lyle

      Shortsighted as it may be, street level Joe’s want their labor jobs back and blame China and their government officials for their absence. Street level Joe’s are desparate and pissed and they vote.
      It’s easy to project the long term outcome.

      • http://overthepeak.com/wordpress/ Mystic

         There is a world glut of factory workers.
        `Train them up` …… and I suspect there would be a world glut of `trained up` factory workers.

        The question is (may be) …… If there was more money in the world, would more factory made things be bought~??

        Hello Lyle (dude).

        • Lyle

          Old short bald dude to you Mr. Mystic :)

          Glut of factory workers – yup! I default to simply too damn many people on the planet – period.Too many major problems developing that are ultimately ungovernable – as in unmanagible.

    • http://maxwellsrepublic.tumblr.com/ maxwell

      I think the majority of jobs have been lost to automation/technology and not China (something like 80% is efficiency). Just think of all the jobs you’d have if not for the modern factory, robots, and computers… and perhaps, the jobs you might not have too. After reconciling all the puts and takes, the figures might be very interesting. I’m sure there is more than enough data out there to do some damage. Without a doubt, the future of cheap labor is in robotics. They don’t need food or water, and always work hard.

      • Lyle

        The street word used to be “automation” as culprit years ago. Now the chatter seems mostly China. It’s in your face on most every item in every store… so… wa la!

  • Axel1million

    There you are old boy, you had me worried and I am one of the most unphasable people  on the planet.

    • http://overthepeak.com/wordpress/ Mystic

       The earth is still revolving (spinning slowly down to die).

      • Axel1million

        ” Then one by one the stars would all go out
        Then you and I would simply fly away”

        • http://overthepeak.com/wordpress/ Mystic

           Something like that.

  • Nascentmind

    Hello captain!

    Sorry you were off line for a while ( Its a pain but sometimes it’s good  to be missed )
    Hope your well~?

    • http://overthepeak.com/wordpress/ Mystic

       Ahoy Matt,
      Shore leave over, set sail for places unknown~! 

  • doc

    Well Nick, hope you found yourself on your time off (probably in some rurally tranquil place in the gentrified countryside in say, mmmm… France~!?). Anyway, you were due for a good kick in the innernuts, yes… Alas, you will not get the lost cybertime back, the world has moved, man… And now, back to the business with Mystic.

    • http://overthepeak.com/wordpress/ Mystic

       Hello doc,
      ….I got the internet back ………. and there it was ……… the world …… still there (still doing silly things).

  • John_by_the_creek

    Sot.  A week-long bender, and the best excuse you can think of is [my] “internet has been off”.  Who posted your bail? 

    • http://overthepeak.com/wordpress/ Mystic

       I have friends in high places~!

      • John_by_the_creek

        Yeah…I’m sure you have friends in “high” places.

  • joebhed

    Great rip there, Nick.

  • safeinsuburbia

    Mystic, your US tax chart is incomplete.  My wife is a bookkeeper, and we record our personal finances on computer accounting software.  We are taxed on the Federal, State, County and local levels.  After adding all the various sales, income, real estate, school, etc… taxes, we pay around 50% of our income to taxes. Of course, my wife’s family in Italy doesn’t pay that much in taxes.  Probably because they never see the income, as they have relatively low average incomes.  I assume the taxes are taken before they even see the income. 

    • http://overthepeak.com/wordpress/ Mystic

       Yes, same for everyone in most all countries.

      (noting that it says on the chart – “Average Federal Tax Rates”) …… (or, do you want `local level taxes` put on a `Federal Tax` chart~!?).

      What is your point~?

      • safeinsuburbia

        Seems you are talking about how little taxes the whining Americans pay.  Then you only show the Federal taxes.   I figured if you were interested in taxes, you would want the complete picture, not just the Federal portion.  My point is, Americans pay lots of taxes, like everyone else.   

        • safeinsuburbia

          50% tax begs the question…..  Where is half of my energy and production going, and is it worth it?  Doesn’t seem very efficient to me.

          • http://overthepeak.com/wordpress/ Mystic

            In your opinion, what level of taxation would be the most efficient~?