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JWM in SD
ParticipantAN,
You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.
ParticipantAN,
You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.
ParticipantAN,
You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.
ParticipantAN,
You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.
Participant“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”
Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.
Participant“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”
Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.
Participant“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”
Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.
Participant“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”
Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.
Participant“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”
Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.
Participant“Inflation is the opposite of recession btw.”
No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Participant“Inflation is the opposite of recession btw.”
No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Participant“Inflation is the opposite of recession btw.”
No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Participant“Inflation is the opposite of recession btw.”
No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Participant“Inflation is the opposite of recession btw.”
No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
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