NRA! NRA! NRA!
pop quiz, since we’re having this great discussion on a stimulating topic for a change. who can explain why the Fed is trying to speed up paying interest on fed reserves deposits to banks? and what is the link to the concern about the fed’s treasury holdings getting halved over the last year. bonus brownie points if you can explain the link between US budget deficits, money creation and fed profits and losses. extra ice cream if you can explain how all this links to the plan being cooked up by paulson and bernanke to raise US debt, simply to deposit the proceeds at the fed. huh? i actually think this fed is a fascinatingly creative fed - if you follow them closely you can learn more about monetary economics than the prior 30 years combined.
Rohufish… you said a mouthful. I wish you could 'splain it to me in a way so that I could understand it to the point that I could sleep well at night and make a killing on a trade or two. Seriously… something moves in my brain when I read all that stuff you wrote. Please tell me what all that stuff means?!?
virginCFAhooker Wrote: ------------------------------------------------------- > Don’t blame the fed. Blame the foreigners. Those > foreigners using our greenbacks as reserve are, in > effect, our enablers. We’re not guilty. It’s > them that made us fat, lazy & stupid. I say we > make them pay. LOL. You should write for South Park!
rohufish Wrote: ------------------------------------------------------- > pop quiz, since we’re having this great discussion > on a stimulating topic for a change. > > who can explain why the Fed is trying to speed up > paying interest on fed reserves deposits to banks? > and what is the link to the concern about the > fed’s treasury holdings getting halved over the > last year. > > bonus brownie points if you can explain the link > between US budget deficits, money creation and fed > profits and losses. > > extra ice cream if you can explain how all this > links to the plan being cooked up by paulson and > bernanke to raise US debt, simply to deposit the > proceeds at the fed. huh? > > i actually think this fed is a fascinatingly > creative fed - if you follow them closely you can > learn more about monetary economics than the prior > 30 years combined. I don’t think you have a clue.
No ice cream for Joey.
no brownies either so joey, why don’t you clue us lil dumbos in - be good teacher, you know? i’m just going to go hide, you sound like you might put me in a windowless cellar for 25 years.
com’on joey, you’ve had enough time to read up and begin teaching us simple folks who don’t have a clue. i wanna make a buck or two off a trade if you’ll deign to share the clues. virginCFAhooker, joey will 'splain, we can all make a killing together as ‘joey’s class’. and that movement - are you sure it was in your brain?
eureka Wrote: ------------------------------------------------------- > House prices are not going to stop falling unless > they do something, and that is the big concern. > Check out the S&P/Case-Shiller, down 2.8% last > month. Hasn’t had an up month since June of last > year and the anualized return for the last 3 > months is -24.9%. Something needs to be done to > stop the decline from overshooting majorly, > although I don’t think anything can (barring the > g’ment buy up some of the excess inventory to > support prices). Ya and they should do… NOTHING. Go down to Florida and ul still see towers being built even though the one next to it is shiny new and unoccupied… Same with homes. Everyone knew the housing bubble was going to happen… just didn’t happen as soon as everyone predicted it to so builders continued to do what they do best… build and sell to anyone. A shakeout is needed. The economics will work itself out, eventually, how we proceed with it is another question.
I’ve been very concerned with Fed’s actions for a while and we will probably pay for their actions in the next few years.
CFABLACKBELT Wrote: ------------------------------------------------------- > eureka Wrote: > -------------------------------------------------- > ----- > > House prices are not going to stop falling > unless > > they do something, and that is the big concern. > > > Check out the S&P/Case-Shiller, down 2.8% last > > month. Hasn’t had an up month since June of > last > > year and the anualized return for the last 3 > > months is -24.9%. Something needs to be done > to > > stop the decline from overshooting majorly, > > although I don’t think anything can (barring > the > > g’ment buy up some of the excess inventory to > > support prices). > > Ya and they should do… NOTHING. Go down to > Florida and ul still see towers being built even > though the one next to it is shiny new and > unoccupied… Same with homes. > > Everyone knew the housing bubble was going to > happen… just didn’t happen as soon as everyone > predicted it to so builders continued to do what > they do best… build and sell to anyone. > > A shakeout is needed. The economics will work > itself out, eventually, how we proceed with it is > another question. I know exactly what you mean. New condo complex being built by an finished vacant one…
this fed, on evidence thus far, will raise rates just as rapidly as it cut them. i doubt very much that bernanke will do the 25 bips every few weeks for 2 year rate upcycle thing like greenspan. i was trying to broach the topic of this fed’s innovativeness with my post - but its hard to have a decent conversation around here when there’s judgmental old timers who just want to start passing their gas whenever they feel intellectually threatened. anyway, kangaroos aside, nanki and henri will go down as a team to remember in my opinion. even the bear bailout - if you look at the message it sent - served its purpose - backstopped the systemic failure risk (unfortunately they HAVE to do that - the alternative is catastrophy) while essentially sending a message - we don’t give a crap about equity that owned these banks, we will wipe you out and make you pay for your sins. but they defended the creditors, and the system, which is the right thing to do. the only reason they went to 10 a share is to ensure the deal goes through without hitting bankruptcy courts (which would have created systemic risks). also read my initial post again (yes, ignore the kangaroo) - these are pretty darn innovative actions - no more reserves, open mkt ops, rinse lather repeat. these actions i refer to each serve a very important purpose - the fed needs an accelerator and a brake, and they are inventing new ones. this fed is not running out of ammunition, as some people say. in either direction. i’d love to see others’ views on why the fed took these steps. even the kangaroo, whose writing is, when he’s not busy admiring himself in the mirror, actually quite interesting.
Joey, I think he complemented you in the last sentence.
i only want to be complementing my wife
more action from fed today: http://online.wsj.com/article/SB120973064396062567.html?mod=hpp_us_whats_news i have learned more about monetary econ from fed following in the last year, than all my econ and CFA classes combined. i was very skeptical of nanki being able to transition from princeton ivory tower to deft practitioner, but hats off to the guy.
CFAsmasher Wrote: ------------------------------------------------------- > i’d be happy to give 100 to 1 odds if you lay at > least 100 on the yuan becoming the world’s reserve > currency in the next 75 years. moreover, asia > doesn’t bring the types of productivity and > institutions to be home to the world’s reserve > currency in the next 75 years. i’d also add rf i% > to your ‘deposit’ too. the euro would be the only > market with depth and breadth enough to challenge. > > > certainly japan would never settle in yuan just > based upon politics. > > does anyone else feel like the chinese will run > into difficulty as they attempt to move up the > economic value added intellectual property type of > economy. the first move toward land rights just > occurred about a year or so ago. > > anyway, if someone reading this could provide > insight into the differences of mzm vs. monetary > base post from earlier today, that would be great. > have a good night everyone. USD became reserve currency after the Bretton Woods agreement in 1944, primarily because it was running huge trade surplus with rest of the world and it was logical to make it the reserve currency, so trade could happen smoothly. Trade matters; if history repeats itself, we will see yuan as a reserve currency in our lifetime.
busy_people Wrote: ------------------------------------------------------- > CFAsmasher Wrote: > -------------------------------------------------- > ----- > > i’d be happy to give 100 to 1 odds if you lay > at > > least 100 on the yuan becoming the world’s > reserve > > currency in the next 75 years. moreover, asia > > doesn’t bring the types of productivity and > > institutions to be home to the world’s reserve > > currency in the next 75 years. i’d also add rf > i% > > to your ‘deposit’ too. the euro would be the > only > > market with depth and breadth enough to > challenge. > > > > > > certainly japan would never settle in yuan just > > based upon politics. > > > > does anyone else feel like the chinese will run > > into difficulty as they attempt to move up the > > economic value added intellectual property type > of > > economy. the first move toward land rights just > > occurred about a year or so ago. > > > > anyway, if someone reading this could provide > > insight into the differences of mzm vs. > monetary > > base post from earlier today, that would be > great. > > have a good night everyone. > > > USD became reserve currency after the Bretton > Woods agreement in 1944, primarily because it was > running huge trade surplus with rest of the world > and it was logical to make it the reserve > currency, so trade could happen smoothly. > > Trade matters; if history repeats itself, we will > see yuan as a reserve currency in our lifetime. Exactly, people who believe in the infallibility of the American economy remind me of how the British must’ve thought at the turn of the 20th century, only the change will happen much faster then that one. The world is constantly changing, we need to figure out how to adapt otherwise we’re done. Either way, the short term seems pretty bleak.
Guys… Just because China has the most people and has grown 10+% over the last thirty years doesn’t mean that will keep going. At some point a country can’t just transplant technology into a labour glut to continue to grow. The United States will continue to be the strongest economy moving forward for many years to come. Again, I repeat, the Chinese government just instituted a primitive form of private property. This was about a year and a half ago. Let’s continue: if you are a saver in china, you have two options. One, you can receive negative real interest rates in a bank account. or, two, you can invest in domestic shares. There are a few investment groups advising access methods to international markets, but it is extremely thin right now. The history of governmental institutional instability, inflation (tougher to control as services are not a large part of the index), and a one-party system will have drastic consequences on china’s desire to grow into a modern economy with large middle class. Let’s all not jump on the China train. There is significance to the story, but I would love to make a bet on the yuan NOT becoming the world’s de-facto reserve currency. Please post the odds you would need to take that bet. 25-1 ?? 50-1 ?? Let’s talk some numbers and not in the abstract.