Looks like we got ourselves the next Nobel Laureate in Economics right here!
And economic textbooks are just filled with useless charts and laundry lists!
Congrats LOL
You said it. Why make things so complicated?! Jeez Louise.
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read this and weep you idiot free market geeks
- Thread starter stock777
- Start date
Looks like we got ourselves the next Nobel Laureate in Economics right here!
And economic textbooks are just filled with useless charts and laundry lists!
Congrats LOL
You said it. Why make things so complicated?! Jeez Louise.
Quote from Bigpipn:
Keeping interest rates as low as they were, the Federal Reserve created artificial demand of credit. This artificial demand coupled with lax lending standards transferred the asset bubble from tech stocks to the housing bubble (The government needs higher asset prices to collect more tax dollars on). In such environments risk gets overly mispriced and MMs take advantage of it in pricing ABS. MMs bid up asset prices and pawn them off on Joe Public and Municipalities. This has been happening from the start of the Federal Reserve System.
A "free market" would call for 6-8% rates so that the bonds can at least outpace inflation.
The balance between greed and fear is a very fine line.
Government intervention is never the answer. Name one thing that the government got involved in that it helped.
This writer is clueless. Cognitive dissonance is the problem here.
Thanks. Insightful post.
let's assume this is true,what's the next investment craze to keep this air balloon afloat,if they don;t invent one,then we will correct hardQuote from Bigpipn:
Keeping interest rates as low as they were, the Federal Reserve created artificial demand of credit. This artificial demand coupled with lax lending standards transferred the asset bubble from tech stocks to the housing bubble (The government needs higher asset prices to collect more tax dollars on). In such environments risk gets overly mispriced and MMs take advantage of it in pricing ABS. MMs bid up asset prices and pawn them off on Joe Public and Municipalities. This has been happening from the start of the Federal Reserve System.
A "free market" would call for 6-8% rates so that the bonds can at least outpace inflation.
The balance between greed and fear is a very fine line.
Government intervention is never the answer. Name one thing that the government got involved in that it helped.
This writer is clueless. Cognitive dissonance is the problem here.
Quote from Capablanca:
Thank you for the comment. I find it amusing though to see how far they can stretch their bizarre theories and still maintain a straight face without realizing how ridiculous they are sounding.
You obviously haven't read the Congressional report, the litany of Founders tirades against Central Banking, or understand, at a fundamental level, why fiat banking is inherently corrupt.
Were you even aware that European Goldsmiths would lend out (or spend) more "demand notes" than they held in physical gold in their vaults?
Thats the root of fractional reserve banking and how the Rothschilds and other European banking dynasties came to be.
Were you aware European Monarchies would dictate new coinage every few years and debase privately-held gold or silver coins with lead or some other cheap metal, and keep - and spend - the difference?
This shit has been going on for a very long, long time.
Do you even know what inflation is or how its created???
Are you a trader?
buying real estate with little or no money down encourages speculation and rewards people for not developing the most important discipline of saving money for a down payment. When people believe that saving has no meaning/benefit they gorge on credit in every way possible which has led us here. Consumers need to learn to save. Houses need to be purchased onyly with some sort of minimal down payment, perhaps 20%. If people want home ownership they must earn it. In turn this would control many from over using their credit and keep prices and reckless spending in check. There must be some regulations on downpayments for housing. The lack of it has led us to this disaster. God help us all.
you want to see an interesting 40 min vid on oil, go to www.quicksilverscreen.com click on documentaries,towards the top in lite blue click on A-Z, then click on O,then scroll down and click on Oil,smoke and mirrors. There is no energy shortage,at least not as low as we've been toldQuote from achilles28:
I've heard it'll be Renewable Energy and Carbon Credits.
Just a rumor.
Quote from IluvVol:
nobody has a monopoly on credit. The only difference is the Fed can print money, therefore by definition cannot go into default (although it would be entirely possible). Other institutions may experience credit freezing up (including the government) so that they may go into default at any point in time.
This is by the way a crisis of liquidity and confidence and not of credit. Lehman and BS went into default at their particular times because of the loss of confidence by other counterparties. (According to the FED LEH did not even tap the FED liquidity facility all the way until default).
I dont understand why people make things so complicated. It all boils very quickly down to the human aspects of greed and fear. In LEHs case most counterparties lost all confidence in Lehman and stopped lending even short term. Others such as KfW still had confidence (out of negligence and lack of due diligence) and transferred 350 million Euros to Leh on the same day Leh went into default. Simple as that.
OK, it's a liquidity crisis. I just have one question: why counterparties lost confidence in LEH, if everything else was so dandy?
i remember reading how the other major players had no sympathy for Leh,they didn't go with the flow,hence they didn't have any favors to call in,they weren't part of the clubQuote from telozo:
OK, it's a liquidity crisis. I just have one question: why counterparties lost confidence in LEH, if everything else was so dandy?