9 replies to this topic

[NAV]

While the whole world has been debating on whether the Fed should cut 25 bps or 50 bps, let me ask you this - why should the Fed even bother to cut the interest rates ?. The whole globe is still swimming in excess liquidty. The job situation accross the globe is in a fine shape. The demand for skilled labor is outstripping supply. Inflation is shooting through the roof. I don't beleive for one moment that the economy is soft whether in U.S or anywhere else in the globe. And the deluded perma-bears, who don't seem to live on mother earth, still keep talking about deflation.

The media blitzkreig about the coming economic collapse and the former maestro (Greenspan) now the propanganda machine for the economonic disasters that lie ahead, were all in my opinion, building the cause for a rate cut. It doesn't need anything to persuade the perma-bears that something is wrong in the world. They breathe, fear and live the armageddon nightmare everyday. But what about the rest of the world ? - fear need to be spread before a rate cut of this magnitude can be taken. Now that sufficient fear has been built in the minds of common men, with that constant media bombardment, Bernanke has the GRAND excuse for a rate cut.

Go ahead bears, keep displaying those DOW:Euro, DOW:Gold charts. Hold cash, cuz deflation is just around the corner. Go get your dollars out those banks and stash it under your matress, cuz the banks are not gonna be around.

Read this. It doesn't get any clearer than this.

http://www.federalre...121/default.htm

[Tor]

my pivot was taken today, the august 8 highs. i didnt think it would be but there u have it.

[linrom1]

While the whole world has been debating on whether the Fed should cut 25 bps or 50 bps, let me ask you this - why should the Fed even bother to cut the interest rates ?. The whole globe is still swimming in excess liquidty. The job situation accross the globe is in a fine shape. The demand for skilled labor is outstripping supply. Inflation is shooting through the roof. I don't beleive for one moment that the economy is soft whether in U.S or anywhere else in the globe. And the deluded perma-bears, who don't seem to live on mother earth, still keep talking about deflation.

The media blitzkreig about the coming economic collapse and the former maestro (Greenspan) now the propanganda machine for the economonic disasters that lie ahead, were all in my opinion, building the cause for a rate cut. It doesn't need anything to persuade the perma-bears that something is wrong in the world. They breathe, fear and live the armageddon nightmare everyday. But what about the rest of the world ? - fear need to be spread before a rate cut of this magnitude can be taken. Now that sufficient fear has been built in the minds of common men, with that constant media bombardment, Bernanke has the GRAND excuse for a rate cut.

Go ahead bears, keep displaying those DOW:Euro, DOW:Gold charts. Hold cash, cuz deflation is just around the corner. Go get your dollars out those banks and stash it under your matress, cuz the banks are not gonna be around.

Read this. It doesn't get any clearer than this.

http://www.federalre...121/default.htm

He is bigger fool than I thought. We already know what happens when credit is JUST spread around to stimulate artificial demand for assets like housing to individuals who have no means of ever paying it back. People are beginning to understand that rampant liquidity benefits those closest to its source--- Wall Street--- while they have to suffer the consequences of evil tax called inflation and taxpayer funded bail outs.

The system got away with inflating assets in the '70s because women went to work. They can't do that anymore. They must raise wages, but the predators running Wall Street and our corporations won't let that happen since that would mean reduction of the true source of excess profits (reduced labor compensation.)

Edited by linrom1, 18 September 2007 - 04:37 PM.

[ogm]

I think they did what they did just to boost confidence in the markets

Edited by ogm, 18 September 2007 - 04:55 PM.

[arbman]

So, are you saying the ~13% correction that was giving crash warnings near the lows a few weeks ago that got stopped with the discount window operation was a mistake? So you know better than the markets? Better than thousands of professionals who are looking all these assets and trying to determine where to find the money to pay the angry investors? So you think the entire market is being manipulated to dump nearly 2 trillion dollar worth paper assets?!? Come on NAV, give me a break... There has been a mass lying and deception to create more and more inflation to stop the 2002-2003 deflation from happening again over the past 2 years. All of the asset classes got inflated and despite the excess liquidity, the growth has been still sluggish. The money is not worth anything anymore. They darn know very well that if a second wave of deflation hits from here, it will be impossible to stop it without creating hyperinflation, it seems to be headed that way anyway now... The hyperinflation does not fix anything, it only postpones it for now. I firmly believe that these rate cuts for 2008 or 2009 might manage to avoid a recession here, but it only compounds the problem into 2010-2012. The 2003 lows will not be taken, but the pain will be probably equally bad from the next top. For the Fed, it is a comedy, they said everything was fine in July, a total bluff. Then came and cut the discount rate by 50 bps only 2 months later. I mean it is really a comedy now... - kisa

[pdx5]

Kisa, you are pretty close to the truth. History tells us that Roman empire, the Mughal empire, the Weimar republic and other empires all had one thing in common, depreciating currencies! The Fed is in their infinite folly trying to find short term solutions and sowing the seeds of a long term demise of US as a leader in economic & military power. I guess that is another common characteristic of all former superpowers, and that is, they all had a rise and then a fall. Some wise person said, "those who ignore history are doomed to repeat it".

[SemiBizz]

Bernanke failed his test. He needs to go back to school ... permanently - where he belongs. And he did boldface lie to us about the economy and the credit crisis... Where is the 21st Century Paul Volcker when we need him?

[arbman]

pdx, the whole world didn't have to go with the US in inflating, they could easily ruin the US by pulling the plugs earlier too. So I do not think this weakens the US's position on the world or it will bring the end of the modern financial world. What you are looking for will happen with the saturation of the productive labor or when the inflation surpasses the income rate of the majority of the labor where the poverty line will go up to the levels of social unrest. This is where working insane hours will not even meet the basic living standards, the central banks can inflate and continue to squeeze the life out of the societies until this happens. The end of the productive labor might also come sooner than expected with the deteriorating living conditions since many young people will not be able to prosper enough to have children anymore. I predict it will happen within 40-50 years after the world population doubles one more time from here and not only the inflation reaches to the extreme levels because of the depleting resources, but most importantly due to the population saturation. This will be the end of the inflation model and collapse of the current financial models based on the paper currencies. Until then, we will be only getting more crowded like rats and consuming everything...

[NAV]

So, are you saying the ~13% correction that was giving crash warnings near the lows a few weeks ago that got stopped with the discount window operation was a mistake?

Yes, IMO it was a mistake. 13% correction is pretty normal in bull markets. I would have to say sub-normal. 20-30% corrections are also normal. Bull markets historically have continued even after 30% corrections. Fed's job is not to protect the markets. The markets know how to go about doing their job. 87 crash was just another day in the markets.

Better than thousands of professionals who are looking all these assets and trying to determine where to find the money to pay the angry investors?

Thes guys better think about prudent risk practices or they have no reason to be in the business. In fact purging out such unwanted weed is good for capitalism.

So you think the entire market is being manipulated to dump nearly 2 trillion dollar worth paper assets?!?

I did not say that. The sub-prime crises was a real event. The event is used as an excuse to inflate away and the media is being used to convince the masses that a rate cut is the way out.

I firmly believe that these rate cuts for 2008 or 2009 might manage to avoid a recession here

What recession ? Where ??

For the Fed, it is a comedy, they said everything was fine in July, a total bluff. Then came and cut the discount rate by 50 bps only 2 months later. I mean it is really a comedy now...

It's a tragedy !

Edited by NAV, 18 September 2007 - 09:48 PM.

[arbman]

The market is so super leveraged that a bigger correction could collapse the markets more than 30%. It is not too hard to see this once we saw how the tiny sub-prime loans brought the entire mortgage market down on its knees...

What recession ? Where ??

In the manufacturing first, in the real estate since last year, in the financial earnings latest and the next was going to be in the service sector and consumer spending...

I bet the Fed doesn't want to rescue any abuses of the financial system, but keep the economy buoyant and do not see any other choice...