Nobody ends up "rescued" when the $USD goes crashing into oblivion and nobody wants it. We'll be little better off than a guy holding $Gazillions in Monopoly money.
The Fed and other central banks are clueless. In Europe Trichett said repeatedly last month nothing - over my dead body, or something like that - would stop rates rising in Sept. Well, the Bank of England and the ECB left rates unchanged this week. Trichett must be feeling like a dickhead. The Fed is also out of touch. Bernanke cut the discount window on options expiration Friday Aug 17 after the DOW was pounded 700 points that week. Just days earlier, the Fed was saying inflation was the biggest threat and rates might have to be tightened. Bernanke must also be feeling like a dickhead. How's he going to feel when the DOW plummets 1000 points next week? If you were CEO of a company and you got it wrong like this you'd be fired.
This faggot of Kudlow, is as stupid and ignorant as they come...and is totally out of touch with reality except for his own crooked understanding of social economy!
It's the coke man...some people do 12 steps....some people do neo-con steps. Both are faith-based fantasies. Larry did them both.
Bernanke is the college professor that knows it all but can't change a flat tire..... I sense that some bizarre half bailout/half monetization of the problem will emerge... the Dollar gets hammered short term...gold does a run to $900 and then we'll see.... October should be worth the wait...
Quote from Brandon: The Fed should raise rates if anything, but the best course of action would just be to leave them alone. Instead the WallStreet/Washington DC Mafia is going continue to provide excess liquidity to the market and a rate cut. We will see hyperinflation. The fed has forgotten what their job is, they are no longer trying to be ahead of anything. They are simply trend followers who do what "the markets" tell them to do. This is not always what they should do, but the relationship between Wall Street and the top Economic officials in Washington is that they are one in the same anymore, so the Fed cares about Wall St, and they don't give a damn about Mainstreet. Anyone with open eyes can and does see this, but there is very little we can do about it. Our entire society has become corrupted by a short term what's in it for me greedy mentality. The Fed is only place we see it, but they might cause one of the biggest messes. If/when Putin/Russia decides to stop pricing their Oil in USD, holding Greenbacks will make as much sense as holding Argintine Peso's, probably less. Brandon I agree with the above post. Its just a question of when. The debt is "insurmountable".
What good is it to have an appreciated USD with high unemployment and negative GDP. Rates must be lowered, and this will INCREASE the demand for USD. However, it's not simply about high interest rates causing a downturn in housing. Rates must be lowered because Banks are no longer lending to each other due to the attractiveness and safe haven in treasuries. Too much saving and cash hoarding in low interest rate tresuries is not bullish for an economy. No! This is about Securitization of worthless asset backed securities which is rapidly skrinking the CP market. Ironically, Europe will be hurt more by the subprime fallout than the US. Because Europe holds much of the subprime mortgages which the US Banks through mortgage Securitization have sold to them.
are you implying cutting FF rate will lower longer term treasury (mortgage) rates? To me this would create an opposite effect, if the rate cuts are eventually successful this will stimulate the economy and drive up the cost of money, or market interest rate. But more immediately a rate cut could spook bond holders as they see the value of their holdings deteriorate. I think their best bet is the stronger dollar and try to keep people in the treasuries
No sir, I'm speaking more specifically about short term Treasuries. Floods of cash going into short-term treasuries is not good for the economy. Everybody is running scared because they don't trust the paper. But it's the CP which runs the economy. It's the oil in the engine if you will. However, if the CP is worthless because the Asset behind the paper are shit; what happens to day to day Business operations. I have no idea what's going on. But, when this stuff gets mark to market, OH BOY!..We could be in for a real barn burner. Downside risk could be more than 20%?? I don't think there's anyway you could know. As far as the USD is concerned, If the USD rises because of tighter lending due to an evaporating commercial paper market. Or, cash hoarding into short term treasuries. Businesses will cut back on everything, and some may even go bankrupt. So you'll have a higher dollar, but, more layoffs and a huge drop in production. Yeah, the dollar will be stronger, but more people will be out of work. But who cares right, that trip to Europe will be cheaper.
Actually, the Fed is waaay behind the curve. Take a look at how they usually follow the short term T-Bills and how far things have gotten out of whack. Unless they suddenly start to "wing it" and chuck out the window everything they've been doing since the foudation of the Fed, we're going to see a cut and very soon.