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A Peak Under The Hood will be dedicated to providing unique insights into macro topics happening around the world and how these topics may affect financial markets. We will try to provide an entertaining, but informative blog, on subjects ranging from Real Estate, Mortgage Markets, Commodities, Major Stock Indexes, Bonds, and Select Trading Ideas. Our site will contain original posts, charts and also include opinions from outside investors and reporters who furnish original thoughts. We will attempt to dig deeper than what can be found on major network financial news outlets and it is our hope that you will continue to visit the site as we provide intelligent analysis that may be counter intuitive to mainstream ideas.

Thursday, July 14, 2011

Same Old (Magic?) Hat

Same Old Hat

Old Hat is a term given to someone who is a constant bull-shitter, usually based on unfulfilled promises, or someone that makes new, bigger, promises each time he can't fulfill the original BS promise.

 

Ben Wizzie, of course, being a master wizard capable of monetary magic, wears a wizard hat, but he still is guilty of the Same Old (Magic) Hat when it comes to his promises. 

Ben Wizzie 'spooks' market with NO QeTHRee talk.  Yesterday QeTHRee was a sure thing, but today it is off the table.
See this rabbit?  Watch it disappear! 

Markets deflated quick today with the idea of no more QE.  Sad really.  The true Old Hat in the market today is that QE will help the economy.  We have had two rounds of unprecedented money printing and the economy is still in the gutter.  It turns out that buying bonds does nothing to help pipe-fitters who's job was shipped to India or Homeowners that need a lil help holding onto the house. 

Old Hat rules the day!  The real question that lies ahead is the US debt limit.  When (not if-- maybe this August, maybe next April) the US bails on their debt payments we will have the greatest test of the American Dream.  Why?  Isn't the American Dream the Oldest Hat out there?  When did the American Dream become a debt laden nightmare? 

If the gov't stops paying social security and throws their hands up screaming uncle (Sam), can you really blame the little guy for letting the house go? 

But really the Oldest Hat of all is the idea that the US Gov't can keep printing money indefinitely and keep a perfect credit rating. 

If YOU go out and max out all YOUR credit cards, YOUR credit rating will drop... and YOU wouldn't get an advance on YOUR credit limits.

And the Gov't cries-- But it is ONLY $14.3 Trillion!!!

I'm sure next time it will ONLY be $17.2 Trillion... then $20.7 Trillion...

Old Hat for sure!

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