Three Government Reports Point to Fiscal Doomsday
- Thread starter ByLoSellHi
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If the Fed prints more monetary base(increase their purchases and thats a big IF) deflation will taking over, the economy will be weak, thats hardly bullish for equities.
I understand Faber is a government basher so I wouldn't take what he says too seriously as to what the Fed WILL do. If the money supply(M2) were to start to grow a lot(and this hasnt happened in about a year) the Fed would slow down and possible stop their purchases, thats almost a certainty, now of course, faber has an audience of fed bashers so he cant say that, no one would buy his newsletters. He has to say they stuff like 'US is zimbabwe' 'Bernanke is a money printer he will bankrupt us'. These are just attacks, they are hardly likely accurate predictions
The Fed's loan officers are obviously idiots, as if we didn't know that already. My banker friends are dying to loan, but nobody is asking. Rates are extremely low right now while at the same time spreads are favorable for banks. It's a win-win situation (except for those on fixed incomes and the American taxpayer of course.
)Once again. There is plenty of money to loan. The reason loans are not being made is because we are in a business contraction (called a recession). Credit is NOT tight and the Fed has bent over backwards to ease. In spite of the easy money, many consumers and businesses are deleveraging and belt tightening, while commercial real estate is in the dumpster. That's why you don't see a lot of new loans. It is not because credit is not available to any reasonable credit risk.
Sure, if you're a bankrupt builder asking for a loan, you're not going to get it. That's because banks have gotten the wake up call.
If your comparing the days of liar loans with today and concluding that credit is tight, then that's just a ridiculous comparison. Of course credit is tight compared to the days when "Easy Al" was "regulating" the credit markets.
Its not the Fed's loan officers, its the banks loan officers. The fed does a survey
"Survey of approximately sixty large domestic banks and twenty-four U.S. branches and agencies of foreign banks. The Federal Reserve generally conducts the survey quarterly, timing it so that results are available for the January/February, April/May, August, and October/November meetings of the Federal Open Market Committee. The Federal Reserve occasionally conducts one or two additional surveys during the year. Questions cover changes in the standards and terms of the banks' lending and the state of business and household demand for loans. The survey often includes questions on one or two other topics of current interest."
Anecdotal evidence is not very meaningful compared to this
I'm not interested in defending Obama, I'm adopting a wait and see attitude. Let's be reasonable. Mr. Obama has had virtually nothing to do with the financial situation the US finds itself in today. He's been President for less than 10 months! Give him a little time to screw things up before you start complaining.
Well it's probably true that demand is as high as ever among winos. And there certainly are fewer qualified applicants then there were during the giddy days when to qualify you didn't need a job to get a jumbo loan; all you had to do was say you had a job.
You are saying credit is tight because credit standards are higher than required for liar loans. I am saying credit is loose because interest rates are low, and there is plenty of money to loan to anyone who might be able to pay it back. In fact, i don't recall a time in my lifetime that credit has been any easier for a qualified borrower to get than right now.
Demand has dried up; yet banks are falling over themselves to loan because that's how they make a living. But there are not many loans being applied for by entities that can pay them off. All we did was go back to reasonable standards. I don't see how that can be interpreted as tight credit, especially in an environment of historically low rates.
You may have been relying too much on Gee Whiz Yahoo Headlines -- as in "Desperate Derelicts Denied Credit."