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"market correction, as much as 90%"
- Thread starter mutluit
- Start date
No one here seems to grasp the dynamics of how bull runs end. When every last retail investor, every taxi driver and granny, is fully invested there is no where left for the market to go but down - violently.
The fact that all the newspapers are telling you the economy is doing great suggests that a large section of the public is fully invested.
The fact that all the newspapers are telling you the economy is doing great suggests that a large section of the public is fully invested.
Hence the govt control is symbolic. Correct...
If not let us have specific instances of govt control.
and lets weigh that against the private control.
If not let us have specific instances of govt control.
and lets weigh that against the private control.
Quote from Martinghoul:
Quite clearly, "consensus" is the wrong word here, given that, at pretty much every meeting, there are dissenters (e.g. George and Bullard at the Jun FOMC), who vote against the policy decisions made. And the whole point of FOMC is to represent, at least symbolically, a mix of public (the government-appointed Board members) and "private" (regional Reserve Bank presidents) interests.
I have already given you a number of these... How could you have missed them if you actually read the stuff I have written?Quote from jem:
Hence the govt control is symbolic. Correct...
If not let us have specific instances of govt control.
and lets weigh that against the private control.
Of the people on the FOMC, how many are nominated by the President and confirmed by Senate? How many are not?
What is the entity that controls, supervises and oversees the regional Reserve Banks' boards, according to the Federal Reserve Act? Is this entity public or private?
I can go on, but what's the point?
Quote from Ash1972:
No one here seems to grasp the dynamics of how bull runs end. When every last retail investor, every taxi driver and granny, is fully invested there is no where left for the market to go but down - violently.
The fact that all the newspapers are telling you the economy is doing great suggests that a large section of the public is fully invested.
Not really, but I agree with your earlier points about 1999 and 2007. Every statistic that I've seen has shown the public liquidating the entire rally higher BUT the rationale has to be put in proper context.
With rates at zero and the highest unemployment in 30 plus years (labor participation rates), lots of stealth inflation, etc, etc...it is perfectly logical to assume that the retail public CANNOT afford to risk another 30-40% decline AND they need the principal to cover their everyday expenses. Some anecdotal evidence can also be found in the record number of retirement plan liquidations/loans over the past 5+ years as well.
The demographics are just not there for the retail public to be increasing their participation; no matter what the market does, I'd argue they are in liquidation mode and with a heavily indebted upcoming generation, I don't see a return to the sort of participation we've seen over the past 30 years.
But there are plenty of other indicators to gauge market sentiment and/or participation.
15 straight up or flat bars on the hourly ES as of right now. I guess that 90% correction is going to be a little delayed, again.
But we're only a little early on that call, I'm sure. One day, it'll be right. One day, the Fed will really be a private corporation and David Graeber and jem will be correct too.
One day.
But we're only a little early on that call, I'm sure. One day, it'll be right. One day, the Fed will really be a private corporation and David Graeber and jem will be correct too.
One day.
Quote from Martinghoul:
I have already given you a number of these... How could you have missed them if you actually read the stuff I have written?
Of the people on the FOMC, how many are nominated by the President and confirmed by Senate? How many are not?
What is the entity that controls, supervises and oversees the regional Reserve Banks' boards, according to the Federal Reserve Act? Is this entity public or private?
I can go on, but what's the point?
Lawyers know when the law is on your side argue the law, when the facts are on your side argue the facts and when neither is on your side bang the table and make a lot of noise.
1. I will give you that the structure is beautiful. I consider it specious... I am sure you do not. I reserve the right to come back to this argument if need be.
2. For now I want to look at the fact of control.
a. Lets look at actual control.
I just presented you a link from the federal reserve website which shows the control you are speaking of his illusory.
I will present it again...
http://www.federalreserve.gov/pubs/frseries/frseri2.htm
Finally, the Committee must reach a consensus regarding the appropriate course for policy, which is incorporated in a directive to the Federal Reserve Bank of New Yorkâthe Bank that executes transactions for the System Open Market Account. The directive is cast in terms designed to provide guidance to the Manager in the conduct of day-to-day open market operations. The directive sets forth the Committee's objectives for long-run growth of certain key monetary and credit aggregates. It also sets forth operating guidelines for the degree of ease or restraint to be sought in reserve conditions and expectations with regard to short-term rates of growth in the monetary aggregates. Policy is implemented with emphasis on supplying reserves in a manner consistent with these objectives and with the nation's broader economic objectives.
-------------------------------------
b. When the Fed decided to lend out trillions of "our" money to banks around the world during the financial crisis... remember there was a public song and dance about TARP.
So while the TARP sideshow was happening and Congress was voting on whether credit or money should be given to banks... the FED was lending out trillions anyway.
What power and control did the President or Congress exercise over the fed when it came to the creation and lending of these trillions of dollars.
In short the correct answer is... the FED did what it wanted to do... there was no and there is no real control over the most important thing a central bank does... create money.
Note... this is an academic discussion I am not advocating the banks charter be pulled. I just want Congress to cap spending and lower taxes.
a. I have read the text in the link, so you don't have to quote it again, really. I am not sure what particular part of the text suggests that "control is illusory". If you're referring to the use of the term "consensus", I have already mentioned that this is, clearly, on the basis of available evidence, erroneous.
b. Right, firstly, please note that TARP and Fed lending were two very different sets of programs. TARP consisted of outright unsecured purchases of assets and equity from financial institutions. It was a direct injection of taxpayer-supplied capital into the banking system. It was not "credit" or "lending". On the other hand, the Fed lending that was done during the crisis through the various programs was through over-collateralized short-term loans to the various financial institutions. So while TARP was money "given", Fed programs was money "lent".
Furthermore, like I said previously, for 200 years or so the role of the Central Bank has been to provide "liquidity insurance" to the banking system by acting as a lender of last resort. Here's a description by Jeremiah Harman of the Bank of England's actions during the banking crisis of 1825:
"We lent [money] by every possible means and in modes we have never adopted before; we took in stock on security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount, in short, by every possible means consistent with the safety of the Bankâ¦Seeing the dreadful state in which the public were, we rendered every assistance in our power.â
The reason why the Central Bank is granted the power to act as a lender of last resort is the same reason, roughly, why military commanders during conflict are allowed to make every day operational decisions without having to consult the president and congress.
You may disagree with the idea of allowing the Fed to act the way it did during the crisis. The power to change this and many other characteristics of the Fed that we have discussed lies with the democratically elected government. The fact of the matter and my overarching message here is simply this: the Fed is structured the way it is and behaves the way it does because of the decisions made by the US government and nothing else. The US government is democratically elected by the American people. Therefore, the Fed IS a manifestation of the will of the American people and their responsibility. Change the Fed, if you don't like it. If you can't change it and make it better, it's nobody's fault but your own. The people get the government, and the Central Bank, they deserve and that includes the American people.
b. Right, firstly, please note that TARP and Fed lending were two very different sets of programs. TARP consisted of outright unsecured purchases of assets and equity from financial institutions. It was a direct injection of taxpayer-supplied capital into the banking system. It was not "credit" or "lending". On the other hand, the Fed lending that was done during the crisis through the various programs was through over-collateralized short-term loans to the various financial institutions. So while TARP was money "given", Fed programs was money "lent".
Furthermore, like I said previously, for 200 years or so the role of the Central Bank has been to provide "liquidity insurance" to the banking system by acting as a lender of last resort. Here's a description by Jeremiah Harman of the Bank of England's actions during the banking crisis of 1825:
"We lent [money] by every possible means and in modes we have never adopted before; we took in stock on security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount, in short, by every possible means consistent with the safety of the Bankâ¦Seeing the dreadful state in which the public were, we rendered every assistance in our power.â
The reason why the Central Bank is granted the power to act as a lender of last resort is the same reason, roughly, why military commanders during conflict are allowed to make every day operational decisions without having to consult the president and congress.
You may disagree with the idea of allowing the Fed to act the way it did during the crisis. The power to change this and many other characteristics of the Fed that we have discussed lies with the democratically elected government. The fact of the matter and my overarching message here is simply this: the Fed is structured the way it is and behaves the way it does because of the decisions made by the US government and nothing else. The US government is democratically elected by the American people. Therefore, the Fed IS a manifestation of the will of the American people and their responsibility. Change the Fed, if you don't like it. If you can't change it and make it better, it's nobody's fault but your own. The people get the government, and the Central Bank, they deserve and that includes the American people.
Obama criminals trying to bring in 15,000 russian troops under dhs dept agreement with russia for staging in the east coast.
http://www.eutimes.net/2013/06/obam...-troops-for-upcoming-disaster/comment-page-2/
Upper corp execs I know in usa have already sold out of stock holdings in may and june. They talk about a currency crisis this year. hmm?
http://www.eutimes.net/2013/06/obam...-troops-for-upcoming-disaster/comment-page-2/
Upper corp execs I know in usa have already sold out of stock holdings in may and june. They talk about a currency crisis this year. hmm?