Bernanke Is Clueless

dhpar: Please explain why Trichet stood down on a rate increase. Explain why he has consistently had to inject more euros than Bernanke did dollars (notice also that Bernanke's moves follow rather than lead Trichet's, best as I can tell, which is very interesting indeed), both in absolute terms and in terms of the exchange rate. Please also explain why the first and only bank to fail so far was a German, not a US bank.
I alluded to the first in my post, which you again failed to read for comprehension. I throw the second and third in because I'd love to see how you handwave it away.
 
Quote from QQQBALL:

"The banks did not lend to subprime because Fed fund rates were low or high but because they did not know what to do with all that money floating around."

that was a very nice post, but i disagree with the above statement. it was negative real rates that influenced borrowing - the money floating around was a result of low rates - the cost of money was below the rate of inflation; credit growth is money creation & banks were not throttled-back with higher reserve requirements, tighter lending standards, etc, and margin requirements were not increased for SM investing... i the borrowing spurred asset bubble in real estate and SM, and promoted spending via MEW (mortgage-equity withdrawal), and via "wealth effect." so now here we sit with asset prices declining and debt-destruction. the bubbles were encouraged. these guys are so arrogant that they think that they are gonna micro-manage everything perfectly. savers have been punished for years - the way to increase savings rate is to raise rates, which would also support USD.

the way i look at it, the FED can "save" real estate or USD, but not both.... if USD wasn't the reserve currency, the USA's debt/liability level would make Argentina's debt default look like a "cake walk."

sorry you're feeling poorly.
More...

I think we are saying the same thing.
Note that I said that "it did not matter much for banks if Fed fund rates were high or low", i.e. not any rates.
I still believe that rates were low because money was plenty. This is an important distinction for fed too because while they can directly influence money supply they can't easily directly influence rates. Anyway either low rates or too much money got us into trouble - not high rates as many people (here) claim.

Thanks
 
Quote from trefoil:

dhpar: Please explain why Trichet stood down on a rate increase. Explain why he has consistently had to inject more euros than Bernanke did dollars (notice also that Bernanke's moves follow rather than lead Trichet's, best as I can tell, which is very interesting indeed), both in absolute terms and in terms of the exchange rate. Please also explain why the first and only bank to fail so far was a German, not a US bank.
I alluded to the first in my post, which you again failed to read for comprehension. I throw the second and third in because I'd love to see how you handwave it away.
More...

ha - now it rang a bell for me. You are that idiot that called Trichet "a moron" and that the best thing to have in Europe is as many currencies as possible: http://www.elitetrader.com/vb/showthread.php?s=&threadid=102734&highlight=trichet

let's pick some of your quotes from this thread for a record:

"trichet is a moron"

"higher rates are causing inflation through making people less productive" (I like this one :D)

"local currencies are more efficient than currencies covering a very large area"

"Trichet wouldn't even know what I'm talking about."

"Trichet is clueless"

etc.

I am done with you kid. You have no clue (IKB included)
Bye
 
"The banks did not lend to subprime because Fed fund rates were low or high but because they did not know what to do with all that money floating around."

____________________________________________

dhpar, I disagree in part with this statement ! They did know exactly what to do with that money floating around ! Lending it to people with scratchy credit history - that´s been the name of the game !

1) What would have happened if this "easy money" had been lent to parties with better credit scores ? What would have happened if the easy money would have been allocated to a greater extent into producer durable goods ? Other story, or ? Or would the "asset bubble" accur at another spot in economy ?

Is it the FED´s fault that banks and particularly non bank financial intermediaries implemented loose credit lending standards ?

2) More of a concern to me is the total failure in the way that banks assessed the risk inherent in selling subprime related products. I don´t know how many times central banks warned about "herd like mentality" ( see BLOOMBERG article http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKd2bSuB5rRc in DECEMBER 2006 ) in the credit derivatives markets ! That´s the true scandal about the happenings !:mad: :mad: :mad:
 
i can not support my long post better than this:

"Gartman reported on Friday that Nippon Oil, who buys 25% of Japanese imports of oil from Iran, transacted their latest purchase in yen rather than US$. We have all heard that Iran was making noises about billing in other than US$ but, apparently, this is the first occurrence. Gartman is a bit flabbergasted that there was hardly any notice taken of item by the international press."

note: I got this info indirectly, unfortunately I do not have access to Gartman Letter.
 
You must log in or register to reply here.
Back
Top