Sorry.. wrong title. I was thinking of: Extraordinary Popular Delusions and the Madness of Crowds http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/1897597320 First published in 1841
Screw the fed. Just trade. All of these moronic bank CEOs and bond guys (bill gross) forecasting a 50 to 75 basis point cut....they were HOPING it would because it would help them out of a HUGE hole. What a joke. Did anyone else see it? Including the Bloomberg news article about what the CEO of Wells Fargo foresaw (75 basis points cut). Who the F*** cares about what they think. I am SO GLAD the fed barely cut the rate. We need to have some longer term thinking. I think the fed realizes the problems. Well until they engineered that liquidity injection the following day (personally i think it was them taking the heat, and bending over). So we have a big problem. Well not really a problem because I have a short bias to date. The problem is that traders or "investors", most of them, are only positioned to make money as the market rises. This makes their dollars easy fodder for those who see the big picture, and currently for the last two months it's been on the SHORT side. Cramer is an entertainer. He was a blowout trader. He values the limelight more than a positive equity curve. The big picture, I mentioned earlier, is that there is a lot of weakness and the fed attempted to buoy the market with their cuts and liquidity injections. I always can be wrong, but I think the markets will still be pricing in the losses and the lessons we have learned from the past few years. Time to take the economic medicine and just let the markets trade where they will trade. The quicker the downside stuff blows out, the faster the uptrend may return. The more the fed and others try to stop it, the stronger and faster this market may fall.
Your counter argument has ground, it is one I have long realized. It's one of the positives of capitalism, the focus on technology. The goal then becomes to push technology so that it eventually will be able to fix all the backlogged consequences (like environmental destruction, wasteful use of resources and DEBT). It's a gamble. However, inflation has gone rampant and the whole system is just trying to stay afloat long enough for some significant breakthrough. Inflation is a manipulation of the demand side of the equation, hence often forcing adoption of new technology before it's truly ready. Someone eventually has to face the consequences. The biggest problem behind the central bank systems is that money is DEBT. This is no mistake, it was by design. It's perpetual inflation, and that is exactly what you see reflected in commodity prices. Because after all, hasn't technology advanced far enough to actually bring down the costs of extracting and refining resources?
I don't think anyone really comprehends the mammoth productivity gains we've had over the past 20-30 years due to technology. We should be working 2 hour days at this point, but all the profit has gone to the beneficiaries of inflation (banks & govt). Those productivity gains have successfully hidden inflation by keeping prices subdued. But even with those gains, today we must work 80 hours/week to maintain the standard of living provided by a 40 hour week in 1970. (1 wage earner vs. 2) The goal of a central bank is to print as much money as possible while hiding its results. Maintaining the perception there is no inflation so they can continue inflating. Eg. targeting 2% keeps it under the radar, but is hugely profitable. They don't want to kill the golden goose (us).
Could you imagine how far ahead we might be now if we spent the several hundred billion in Iraq/Afganistan on advanced solar, battery, etc. research? all good conclusionary points here.
i totally agree, we were talking about the exact same thing tonight imagine where we'd be without central banking. i'd call it the most under-acknowledged barrier to progress since 1913. central banking and systemic inflation are taxes on human progress
When Cramer talks about stocks I watch skeptically and sometimes think what an idiot. When Cramer talks about the fed or the economy I think what a complete loser.
Cramer would make great as a Fed Chairman. He doesn't have a beard that is #1 advantage. He will cut the rates to zero and flock the stock market to the moon! I would love to see that.