This is the smartest thing you've posted. This is an interesting thread, but totally unneeded info for trading.. I turn the damned TV off when I trade. Rennick
You're completely backwards with this view. The popular as in populist course for Central Bankers is to keep rates low. I guarantee you'll see the democrat controlled Congress take Bernanke to task for not lowering the Funds rate. Dem's want high wages even if those wages are being paid in a worthless currency. If Bernake holds his ground by fighting inflation at the expense of the economy he'll ironically face much greater wrath from the Left than from conservatives. The rich guy can live with 30% shaved off his portfolio. The day laborer building home foundations can't eat if the economy slows down. The real fun will be when in 2010 we have some weirdo Dem like Al Gore as Prez (I still see him as prob '08 nominee) who appoints some leftist inflator as successor to the then despised Bernanke. It'll be a blast trading Bonds when they're issuing some 12% coupons......
It amazes me that Greenie and Bernanke are not themselves considered inflators, and that bond yields remain so low in spite of inflation in prices of food, energy, healthcare, etc. If the usual answer is given about China, etc buying so many bonds, has that decoupled inflation from bond yields, at least somewhat? I wonder how money supply growth in the last ten years compares to the pre-Volcker era growth. -v
This IS an interesting thread. As to it not being needed for trading that I am not sure about. This whole damn thing is one giant "Cluster F***" as we said in the army. I am starting believe that a recession is on its way and can't be stopped. My concern is that it might be a depression. You and I as taxpayers are bailing out these idiots just as we did on the S&L bailout. What leads me to this thinking is that the small guy on the street has been living "hand to mouth" for a few years. Case in point a friend that owns an auto repair shop has quite a few customers that have to pay small repair bills (under $200) with combinations of multiple CCs and cash, because the CCs are maxed out! This subprime mortgage problem is not isolated to the USA and I believe there is a possibility that one or more Fed Insured Banks may collapse. High on my list is Washington Mutual Bank (WM on the NYSE), which acquired Homeside Lending a few years ago, stated in their latest filing that net deposits for the 1st 6 months are down $12+ Billion and for the comparable period last year deposits were up $11+ Billion... This tells me the little guy either doesn't have the money to deposit or is keeping it under his mattress... I'll let you decide which one you believe! The other part of this problem is that MidFirst Bank of Oklahoma which owns Midland Mortgage purchased some assets of Homeside Lending including some offices. Both of those mortgage companies have been heavily involved in subprime lending for years. There may be more ties between the companies than what appears on the surface. Ask anyone that was unlucky enough to have money in the S&Ls when that fiasco happened how much of their money that got back...they were NOT made whole!
also ..i have heard comparisons to the LTCM collapse of 98 ..when the fed orchestrated that bailout ... LTCM could look like a daytrader account compared with all the possible hedge fund blow ups this time around !! AUG 15 is a key redemption deadline day... outflows anyone ??
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