[patientrenter]

I think it’s pretty obvious that Mr Krugman is very committed to political goals, and will use his mental dexterity and knowledge and reputation to advance those goals.

People on the left side of the political spectrum, like Mr Krugman, tend to like inflation better than deflation. Why? Because it transfers wealth from people who have consumed less than they have produced to those who have consumed more than they have produced, and the latter group tends to be more left of political center than the first group. All politics tends to devolve down to grabbing more for your own group, and this is what Paul’s game is.

[patientrenter]

I think it’s pretty obvious that Mr Krugman is very committed to political goals, and will use his mental dexterity and knowledge and reputation to advance those goals.

People on the left side of the political spectrum, like Mr Krugman, tend to like inflation better than deflation. Why? Because it transfers wealth from people who have consumed less than they have produced to those who have consumed more than they have produced, and the latter group tends to be more left of political center than the first group. All politics tends to devolve down to grabbing more for your own group, and this is what Paul’s game is.

[patientrenter]

I think it’s pretty obvious that Mr Krugman is very committed to political goals, and will use his mental dexterity and knowledge and reputation to advance those goals.

People on the left side of the political spectrum, like Mr Krugman, tend to like inflation better than deflation. Why? Because it transfers wealth from people who have consumed less than they have produced to those who have consumed more than they have produced, and the latter group tends to be more left of political center than the first group. All politics tends to devolve down to grabbing more for your own group, and this is what Paul’s game is.

[patientrenter]

I think it’s pretty obvious that Mr Krugman is very committed to political goals, and will use his mental dexterity and knowledge and reputation to advance those goals.

People on the left side of the political spectrum, like Mr Krugman, tend to like inflation better than deflation. Why? Because it transfers wealth from people who have consumed less than they have produced to those who have consumed more than they have produced, and the latter group tends to be more left of political center than the first group. All politics tends to devolve down to grabbing more for your own group, and this is what Paul’s game is.

[patientrenter]

[quote=Arraya]http://globaleconomicanalysis.blogspot.com/
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.

I called Mark Hanson this morning to see if there was any improvement in the mortgage. Mark said “Rates fell from 5.5 to 5.375 on intervention rumors this morning but are now back to 5.5. If rates stay in the mid 5’s, new loan applications will quickly dry up.

By the way, that 5.5% rate is pretty much for the “perfect borrower” with a FICO score of 740 or higher and a 20% down payment. Jumbos are hovering near 8% with 1.5% points.

Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.

Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What’s next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.

[/quote]

Arraya, what limit does Ben have? That’s right, there isn’t one.

[patientrenter]

[quote=Arraya]http://globaleconomicanalysis.blogspot.com/
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.

I called Mark Hanson this morning to see if there was any improvement in the mortgage. Mark said “Rates fell from 5.5 to 5.375 on intervention rumors this morning but are now back to 5.5. If rates stay in the mid 5’s, new loan applications will quickly dry up.

By the way, that 5.5% rate is pretty much for the “perfect borrower” with a FICO score of 740 or higher and a 20% down payment. Jumbos are hovering near 8% with 1.5% points.

Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.

Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What’s next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.

[/quote]

Arraya, what limit does Ben have? That’s right, there isn’t one.

[patientrenter]

[quote=Arraya]http://globaleconomicanalysis.blogspot.com/
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.

I called Mark Hanson this morning to see if there was any improvement in the mortgage. Mark said “Rates fell from 5.5 to 5.375 on intervention rumors this morning but are now back to 5.5. If rates stay in the mid 5’s, new loan applications will quickly dry up.

By the way, that 5.5% rate is pretty much for the “perfect borrower” with a FICO score of 740 or higher and a 20% down payment. Jumbos are hovering near 8% with 1.5% points.

Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.

Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What’s next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.

[/quote]

Arraya, what limit does Ben have? That’s right, there isn’t one.

[patientrenter]

[quote=Arraya]http://globaleconomicanalysis.blogspot.com/
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.

I called Mark Hanson this morning to see if there was any improvement in the mortgage. Mark said “Rates fell from 5.5 to 5.375 on intervention rumors this morning but are now back to 5.5. If rates stay in the mid 5’s, new loan applications will quickly dry up.

By the way, that 5.5% rate is pretty much for the “perfect borrower” with a FICO score of 740 or higher and a 20% down payment. Jumbos are hovering near 8% with 1.5% points.

Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.

Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What’s next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.

[/quote]

Arraya, what limit does Ben have? That’s right, there isn’t one.

[patientrenter]

[quote=Arraya]http://globaleconomicanalysis.blogspot.com/
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.

I called Mark Hanson this morning to see if there was any improvement in the mortgage. Mark said “Rates fell from 5.5 to 5.375 on intervention rumors this morning but are now back to 5.5. If rates stay in the mid 5’s, new loan applications will quickly dry up.

By the way, that 5.5% rate is pretty much for the “perfect borrower” with a FICO score of 740 or higher and a 20% down payment. Jumbos are hovering near 8% with 1.5% points.

Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.

Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What’s next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.

[/quote]

Arraya, what limit does Ben have? That’s right, there isn’t one.

[patientrenter]

I don’t know if you’ve followed my occasional posts over the last 2 years, partypup, but I have long advised readers to prepare for appreciation of the yen versus the dollar. I’ve made a good amount of money on that bet.

That won’t prevent the Federal Reserve from buying Treasuries. In fact, it will encourage the Fed to buy more, since the demand for Treasuries coming from foreign CBs is declining, while the US govt deficit is high and increasing.

Pressures are pushing domestic interest rates up, and the value of the dollar against foreign currencies down. Our government can influence how much of each occurs. It is clear that our government is committed to cheap money, so they will keep interest rates low by having the Fed buy lots of Treasuries and other assets, if necessary. That will leave the dollar open to depreciation against other currencies.

Will the dollar “collapse” and become “worthless”? Of course not. It may lose 10% of its value, or 20%, or 30%, or even 40%, over time. But it won’t become worthless, and it won’t lose enormous amounts of value overnight. And a reserve currency is not unique. It is only natural that other currencies will be used more than they are now as a reserve of value. Already the euro, and even the GBP, are reserve currencies. As the world becomes more diversified and dispersed and complex, we should expect that more and more currencies will be used as a store of value. But we’re not all going to wake up in 12 months and find everyone refuses to accept any dollars as payment for anything. That’s just exaggeration.

[patientrenter]

I don’t know if you’ve followed my occasional posts over the last 2 years, partypup, but I have long advised readers to prepare for appreciation of the yen versus the dollar. I’ve made a good amount of money on that bet.

That won’t prevent the Federal Reserve from buying Treasuries. In fact, it will encourage the Fed to buy more, since the demand for Treasuries coming from foreign CBs is declining, while the US govt deficit is high and increasing.

Pressures are pushing domestic interest rates up, and the value of the dollar against foreign currencies down. Our government can influence how much of each occurs. It is clear that our government is committed to cheap money, so they will keep interest rates low by having the Fed buy lots of Treasuries and other assets, if necessary. That will leave the dollar open to depreciation against other currencies.

Will the dollar “collapse” and become “worthless”? Of course not. It may lose 10% of its value, or 20%, or 30%, or even 40%, over time. But it won’t become worthless, and it won’t lose enormous amounts of value overnight. And a reserve currency is not unique. It is only natural that other currencies will be used more than they are now as a reserve of value. Already the euro, and even the GBP, are reserve currencies. As the world becomes more diversified and dispersed and complex, we should expect that more and more currencies will be used as a store of value. But we’re not all going to wake up in 12 months and find everyone refuses to accept any dollars as payment for anything. That’s just exaggeration.

[patientrenter]

I don’t know if you’ve followed my occasional posts over the last 2 years, partypup, but I have long advised readers to prepare for appreciation of the yen versus the dollar. I’ve made a good amount of money on that bet.

That won’t prevent the Federal Reserve from buying Treasuries. In fact, it will encourage the Fed to buy more, since the demand for Treasuries coming from foreign CBs is declining, while the US govt deficit is high and increasing.

Pressures are pushing domestic interest rates up, and the value of the dollar against foreign currencies down. Our government can influence how much of each occurs. It is clear that our government is committed to cheap money, so they will keep interest rates low by having the Fed buy lots of Treasuries and other assets, if necessary. That will leave the dollar open to depreciation against other currencies.

Will the dollar “collapse” and become “worthless”? Of course not. It may lose 10% of its value, or 20%, or 30%, or even 40%, over time. But it won’t become worthless, and it won’t lose enormous amounts of value overnight. And a reserve currency is not unique. It is only natural that other currencies will be used more than they are now as a reserve of value. Already the euro, and even the GBP, are reserve currencies. As the world becomes more diversified and dispersed and complex, we should expect that more and more currencies will be used as a store of value. But we’re not all going to wake up in 12 months and find everyone refuses to accept any dollars as payment for anything. That’s just exaggeration.

[patientrenter]

I don’t know if you’ve followed my occasional posts over the last 2 years, partypup, but I have long advised readers to prepare for appreciation of the yen versus the dollar. I’ve made a good amount of money on that bet.

That won’t prevent the Federal Reserve from buying Treasuries. In fact, it will encourage the Fed to buy more, since the demand for Treasuries coming from foreign CBs is declining, while the US govt deficit is high and increasing.

Pressures are pushing domestic interest rates up, and the value of the dollar against foreign currencies down. Our government can influence how much of each occurs. It is clear that our government is committed to cheap money, so they will keep interest rates low by having the Fed buy lots of Treasuries and other assets, if necessary. That will leave the dollar open to depreciation against other currencies.

Will the dollar “collapse” and become “worthless”? Of course not. It may lose 10% of its value, or 20%, or 30%, or even 40%, over time. But it won’t become worthless, and it won’t lose enormous amounts of value overnight. And a reserve currency is not unique. It is only natural that other currencies will be used more than they are now as a reserve of value. Already the euro, and even the GBP, are reserve currencies. As the world becomes more diversified and dispersed and complex, we should expect that more and more currencies will be used as a store of value. But we’re not all going to wake up in 12 months and find everyone refuses to accept any dollars as payment for anything. That’s just exaggeration.

[patientrenter]

I don’t know if you’ve followed my occasional posts over the last 2 years, partypup, but I have long advised readers to prepare for appreciation of the yen versus the dollar. I’ve made a good amount of money on that bet.

That won’t prevent the Federal Reserve from buying Treasuries. In fact, it will encourage the Fed to buy more, since the demand for Treasuries coming from foreign CBs is declining, while the US govt deficit is high and increasing.

Pressures are pushing domestic interest rates up, and the value of the dollar against foreign currencies down. Our government can influence how much of each occurs. It is clear that our government is committed to cheap money, so they will keep interest rates low by having the Fed buy lots of Treasuries and other assets, if necessary. That will leave the dollar open to depreciation against other currencies.

Will the dollar “collapse” and become “worthless”? Of course not. It may lose 10% of its value, or 20%, or 30%, or even 40%, over time. But it won’t become worthless, and it won’t lose enormous amounts of value overnight. And a reserve currency is not unique. It is only natural that other currencies will be used more than they are now as a reserve of value. Already the euro, and even the GBP, are reserve currencies. As the world becomes more diversified and dispersed and complex, we should expect that more and more currencies will be used as a store of value. But we’re not all going to wake up in 12 months and find everyone refuses to accept any dollars as payment for anything. That’s just exaggeration.

[patientrenter]

[quote=peterb]Speculation and investing are the same thing. Man, some people just dont get it. No one can predict the future. [/quote]

peterb, I think sdr was drawing a distinction between people who buy assets for the future income they can produce (for them) without selling the assets, versus people who buy assets for the purpose of selling them to someone else for more than they paid.

I know that assets bought for one reason can end up being sold or kept for the other reason, and some assets may end up producing some income and a nice gain on sale, but I think sdr describes a valid difference. Anyone who buys gold (other than jewelers or others who process it) is a speculator by this definition. It’s harder to find an asset that can only be used for investment by this definition, since virtually any asset that produces income can be sold, and so could be used by speculators.

In any case, I buy stocks almost always for the dividends they produce, and would only buy real property for the net income it produces. Those assets form what I think of as my ‘real’ permanent investment account that I rely on. I have a separate account, about 10% of my net worth, that I use to buy and sell assets based on what I think prices will do in the next few days or few years. I think of that as as my ‘hedge fund’, and I don’t rely on it, and I do consider it purely speculative.

[Author]

Posts