no too bad of a close considerin' the nosedive we took...bond mkt thinks feds doner....prob is that bernie's beloved indicator of infla didnt tell him to take it easy....me thinks he'll raise and mkt will tank...but...but...he also will say this is the last time no matter what...and whooosh mkt on fire.
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Crash is Upon Us
- Thread starter Pabst
- Start date
Looks like the nasdaq is going to make ANOTHER 2% gain today..glad im not short
Quote from Bitstream:
no too bad of a close considerin' the nosedive we took...bond mkt thinks feds doner....prob is that bernie's beloved indicator of infla didnt tell him to take it easy....me thinks he'll raise and mkt will tank...but...but...he also will say this is the last time no matter what...and whooosh mkt on fire.
And then when inflation doesn't abate and he has to raise AGAIN, market will get smacked hard...
Not sure how weak the market currently is. don't think it will be a crash like 87 initially (although i do think it will def bottom lower, just over time), but if the market is sound up until next round of major quarterly eco reports (Q3 GDP, etc) then it's def gonna go to sht after people realize growth is stalling, inflation is still pressuring to the upside, housing slump widens and deepens, no consumer spending, etc...
Quote from BrandNewTrader:
And then when inflation doesn't abate and he has to raise AGAIN, market will get smacked hard...
point of discusison -
inflation just started rearing it's "ugly" head - the fed has seen this coming for a long time and has made a point of stating that current data is a lagging indicator when pertaining to the FFR and the hikes over the past 2 years.
do you thin kben will keep going until inflation comes back down? if it's _just beginning_ to show, it will take a while for it to cycle back in-line: using the hikes that are already in the system.
Quote from krazykarl:
point of discusison -
inflation just started rearing it's "ugly" head - the fed has seen this coming for a long time and has made a point of stating that current data is a lagging indicator when pertaining to the FFR and the hikes over the past 2 years.
do you thin kben will keep going until inflation comes back down? if it's _just beginning_ to show, it will take a while for it to cycle back in-line: using the hikes that are already in the system.
Right - this is why the Fed is more comfortable overshooting the target than underestimating inflation. If they pause pause cut, or pause cut cut, or pause pause pause, they risk undershooting inflation and leting it get out of hand. Danger with that is in the current global-financial environment they CANT let it get away from them. If inflation starts to get out of hand, hyperinflation can't be far behind. Based on our ever expanding money supply and Import > export = huge deficit spending habits, there is already natural downward pressure on the dollar. And if you consider we are currently in a business cycle in which gov spending is actually out of control - (the culture in the admin is ACTUALLY out of control in regards to spending. This is b/c of the war, special interests, and too long since a REAL recession. 2001 didn't count) - then you can see there are factors that could lead to hyperinflation if current infl gets out of hand.
Of course, the Fed would never allow hyperinflation, which is why they have to raise rates. But if they undershoot inflation now, they're have to raise rates dramatically in the near future as Volcker has done in the past (17%???). This scenario would most certainly precipitate the kind of crash we had in '87... if the market hasn't already crashe by then.
The recession is inevitable, pausing now would only temporarily placate the market and would be politically motivated due to the upcoming election. Raising rates quickens the coming recession and makes republicans look bad = bad for their election stats. Not raising rates MAY postpone the recession somewhat, giving the republicans a chance to fool everyone yet again and keep/win seats...
Gotta love this country.
Quote from bsmeter:
It's interesting to watch the naivety of the un informed. You'll be pumping gas even when crude oil is well over $200 a barrel. You can count on that the same way you can count on death and taxes.
May be you cannot?
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Quote from Aok:
Self-destructive?
I'll give you self destructive.
Banks dont make money by loaning money and charging a vigorish for it
They make electronic poker chips to pony up at the alter of world finance by loaning sheep fiat paper, which the sheep use to buy a shiny bangle to put in their ear as they are sheared.
Think about this. If everyone on earth had their loans called in, a world margin call if you will, THERE WOULD BE NO PHYSICAL MONEY IN THE SYSTEM. The worlds central banks are free to loan ad infinitum and so the value of the debt exceeds the value of the repayable loan.
Banks are free, to literally create "money" out of nothing. Actually, they are free to collect vigorish and not have to liable for anything. Nice work if you can get it.
with inflation in check
may be they are not?
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Quote from 1000:
Just because a sovereign country has to defend itself against some terrorists, that doesn't seem justify buying gold and silver.
The price of fixed comodities like gold and silver can only go up if another person buys it at a higher price. I suspect that is the reason why the price of gold and silver go up and down, not because there is any underlying value.
Why not buy Tanzanite?
Also can anyone tell me how fixed income can generate 5% or so interest without the money being put to work?
i.e. someone (be it the fed) has to make that money work inorder to afford to give that amount of interest (there has to be a counterparty with the equivalent funds and/or productivity to balance the equation)?
indeed