The Credit Crisis Financial Stocks Short Journal
- Thread starter Daal
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Not a Kudlow fan, but I'm not surprised that's the best retort you can come up with.
What happened to the stated purpose of this thread: "This journal will be to report short ideas in financial stocks"? An epic failure that's turned into a Keynesiot support group? Oh well.
How this site has fallen (not that it was ever on a high perch in the first place...)
Is there anyone twisting your arm, forcing you to engage in discussions with people here? I was under the impression you were doing this voluntarily, in which case your complaints about the quality of the site/thread sound a bit silly. Wouldn't you agree?
'Nobel-prize winning economist Peter Diamond said the causes of high unemployment in the U.S. are âoverwhelingly cyclicalâ rather than structural.'
http://noir.bloomberg.com/apps/news?pid=20601068&sid=aIfQHsPXNU9o
Translation: The Fed needs to print more money
http://noir.bloomberg.com/apps/news?pid=20601068&sid=aIfQHsPXNU9o
Translation: The Fed needs to print more money
I have been debating some perma deflationists in the last few days. Its funny, the argument they use keeps changing. When they say QE is infective because the money is just ends up on banks balance sheets as excess reserves. I point out that 40% of QE1 endup in the non-bank sector and M2 rose. Then they say that even if M2 soars that is no guarantee of inflation because Velocity wont rise and the money might just sit in the private sector as it does on the banks.
I point out that the mere HINT of QE by the Fed lead to a plunge in the dollar, run to commodities and a rise in inflation expectations all suggestive of declining money demand(In another words, increase in velocity), Bernanke saying 'I'm going to destroy the dollar' will almost certainly lead to a increase in velocity. I find it hard to see a counter to this point but I'm waiting for their answer. I suspect they will grumble things about Japan and how QE never worked there, even though there is quite a bit of difference between the Fed and the BOJ
I point out that the mere HINT of QE by the Fed lead to a plunge in the dollar, run to commodities and a rise in inflation expectations all suggestive of declining money demand(In another words, increase in velocity), Bernanke saying 'I'm going to destroy the dollar' will almost certainly lead to a increase in velocity. I find it hard to see a counter to this point but I'm waiting for their answer. I suspect they will grumble things about Japan and how QE never worked there, even though there is quite a bit of difference between the Fed and the BOJ
Gross is calling for the end of the UST bull run. I believe this is not the first time he did that(I recall a few years back the saying he was 'now a bear market bond manager')
But I believe he's got a point, if QE2 is large enough actually work the 30y is a short because rates would go up instead of down. Bernanke and the Fed knows this, yet they keep talking about 'lowering rates to stimulate borrowing' maybe that is the case for a short period but an effective program would create inflation, probably above target inflation for a while and this would send rates up. But they need to keep talking like they used to, mentioning interest rates, even though they are not highly relevant
But I believe he's got a point, if QE2 is large enough actually work the 30y is a short because rates would go up instead of down. Bernanke and the Fed knows this, yet they keep talking about 'lowering rates to stimulate borrowing' maybe that is the case for a short period but an effective program would create inflation, probably above target inflation for a while and this would send rates up. But they need to keep talking like they used to, mentioning interest rates, even though they are not highly relevant
An epic failure that's turned into a Keynesiot support group?
I still somewhat enjoy this thread and am proud of the eurodollar call option trade which we made completely against than-prevailing opinion and is now total conventional wisdom. I am hopeful that more 3-5 baggers are forthcoming.
However, that's a great line from MKTrader.
I still somewhat enjoy this thread and am proud of the eurodollar call option trade which we made completely against than-prevailing opinion and is now total conventional wisdom. I am hopeful that more 3-5 baggers are forthcoming.
However, that's a great line from MKTrader.
Okay now the dude said he accepts that velocity might be rising after the Fed QE hint but
"I can see a lot of trading and positioning over QE2, and yes this may count as velocity, but I don't see AD rising."
Funny, the dude accepts that the Fed can raise both M and V but somehow doesnt accept that AD(aggregate demand) will rise. As far as I know NGDP IS AD, so how he is in that camp is beyond me given that the very definition of NGDP is M times V
"I can see a lot of trading and positioning over QE2, and yes this may count as velocity, but I don't see AD rising."
Funny, the dude accepts that the Fed can raise both M and V but somehow doesnt accept that AD(aggregate demand) will rise. As far as I know NGDP IS AD, so how he is in that camp is beyond me given that the very definition of NGDP is M times V
