[XBoxBoy]

Asianautica wrote > Getting a deal from an overpriced listing is not really a deal at all.

How true, and yet how many people forget this. My wife has a great term for what’s going on in La Jolla, where we are looking. “Swap Meet Pricing” The seller asks a really high price, and then when they come down the buyer thinks they got a deal.

XBoxBoy

[XBoxBoy]

Asianautica wrote > Getting a deal from an overpriced listing is not really a deal at all.

How true, and yet how many people forget this. My wife has a great term for what’s going on in La Jolla, where we are looking. “Swap Meet Pricing” The seller asks a really high price, and then when they come down the buyer thinks they got a deal.

XBoxBoy

[XBoxBoy]

Asianautica wrote > Getting a deal from an overpriced listing is not really a deal at all.

How true, and yet how many people forget this. My wife has a great term for what’s going on in La Jolla, where we are looking. “Swap Meet Pricing” The seller asks a really high price, and then when they come down the buyer thinks they got a deal.

XBoxBoy

[XBoxBoy]

gdcox states> The US Congress requires by statute that the Fed keep inflation low AND growth going.

Well, not technically correct. The fed must keep inflation low and try to maintain full employment. If you believe the government stats, employment is not doing badly. (And if you believe the government stats, inflation isn’t too bad either. But one of my major points is that this fantasy is getting readily dismissed in a surprising number of places these days.)

Also gdcox states> You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.

Well maybe. But I sure can blame him and his predecessor for being asleep at the wheel, and telling everyone that everything was just fine and dandy, when they should have been putting on the brakes. But… this is somewhat besides the point. I’m not that concerned with placing blame. (Although I’m gonna do it, it’s not my real question)

Finally gdcox wrote> In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises

Uhh… yeah…. and when the heck are things going to stabilize, and how is the fed going to raise rates when this reported stabilization occurs without further clobbering any recovery that might be starting? Isn’t it far more likely that the fed will continue to lower rates, ultimately the credit mess will bottom out, but then we will spend years with high inflation while the economy sputters trying to get back to it’s feet. I’m no economic expert, but isn’t it the case that when inflation takes hold, inflation causes the economy to stagnate because of the inflation? That this becomes a vicious cycle, the fed can’t raise rates because the economy is stagnated, and inflation continues unabated because the fed keeps rates low. Isn’t that what happened in the 70’s?

And if the above scenario occurs, then who is going to have the cajones to change policy and act like Paul Volker?

XboxBoy

[XBoxBoy]

gdcox states> The US Congress requires by statute that the Fed keep inflation low AND growth going.

Well, not technically correct. The fed must keep inflation low and try to maintain full employment. If you believe the government stats, employment is not doing badly. (And if you believe the government stats, inflation isn’t too bad either. But one of my major points is that this fantasy is getting readily dismissed in a surprising number of places these days.)

Also gdcox states> You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.

Well maybe. But I sure can blame him and his predecessor for being asleep at the wheel, and telling everyone that everything was just fine and dandy, when they should have been putting on the brakes. But… this is somewhat besides the point. I’m not that concerned with placing blame. (Although I’m gonna do it, it’s not my real question)

Finally gdcox wrote> In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises

Uhh… yeah…. and when the heck are things going to stabilize, and how is the fed going to raise rates when this reported stabilization occurs without further clobbering any recovery that might be starting? Isn’t it far more likely that the fed will continue to lower rates, ultimately the credit mess will bottom out, but then we will spend years with high inflation while the economy sputters trying to get back to it’s feet. I’m no economic expert, but isn’t it the case that when inflation takes hold, inflation causes the economy to stagnate because of the inflation? That this becomes a vicious cycle, the fed can’t raise rates because the economy is stagnated, and inflation continues unabated because the fed keeps rates low. Isn’t that what happened in the 70’s?

And if the above scenario occurs, then who is going to have the cajones to change policy and act like Paul Volker?

XboxBoy

[XBoxBoy]

gdcox states> The US Congress requires by statute that the Fed keep inflation low AND growth going.

Well, not technically correct. The fed must keep inflation low and try to maintain full employment. If you believe the government stats, employment is not doing badly. (And if you believe the government stats, inflation isn’t too bad either. But one of my major points is that this fantasy is getting readily dismissed in a surprising number of places these days.)

Also gdcox states> You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.

Well maybe. But I sure can blame him and his predecessor for being asleep at the wheel, and telling everyone that everything was just fine and dandy, when they should have been putting on the brakes. But… this is somewhat besides the point. I’m not that concerned with placing blame. (Although I’m gonna do it, it’s not my real question)

Finally gdcox wrote> In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises

Uhh… yeah…. and when the heck are things going to stabilize, and how is the fed going to raise rates when this reported stabilization occurs without further clobbering any recovery that might be starting? Isn’t it far more likely that the fed will continue to lower rates, ultimately the credit mess will bottom out, but then we will spend years with high inflation while the economy sputters trying to get back to it’s feet. I’m no economic expert, but isn’t it the case that when inflation takes hold, inflation causes the economy to stagnate because of the inflation? That this becomes a vicious cycle, the fed can’t raise rates because the economy is stagnated, and inflation continues unabated because the fed keeps rates low. Isn’t that what happened in the 70’s?

And if the above scenario occurs, then who is going to have the cajones to change policy and act like Paul Volker?

XboxBoy

[XBoxBoy]

gdcox states> The US Congress requires by statute that the Fed keep inflation low AND growth going.

Well, not technically correct. The fed must keep inflation low and try to maintain full employment. If you believe the government stats, employment is not doing badly. (And if you believe the government stats, inflation isn’t too bad either. But one of my major points is that this fantasy is getting readily dismissed in a surprising number of places these days.)

Also gdcox states> You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.

Well maybe. But I sure can blame him and his predecessor for being asleep at the wheel, and telling everyone that everything was just fine and dandy, when they should have been putting on the brakes. But… this is somewhat besides the point. I’m not that concerned with placing blame. (Although I’m gonna do it, it’s not my real question)

Finally gdcox wrote> In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises

Uhh… yeah…. and when the heck are things going to stabilize, and how is the fed going to raise rates when this reported stabilization occurs without further clobbering any recovery that might be starting? Isn’t it far more likely that the fed will continue to lower rates, ultimately the credit mess will bottom out, but then we will spend years with high inflation while the economy sputters trying to get back to it’s feet. I’m no economic expert, but isn’t it the case that when inflation takes hold, inflation causes the economy to stagnate because of the inflation? That this becomes a vicious cycle, the fed can’t raise rates because the economy is stagnated, and inflation continues unabated because the fed keeps rates low. Isn’t that what happened in the 70’s?

And if the above scenario occurs, then who is going to have the cajones to change policy and act like Paul Volker?

XboxBoy

[XBoxBoy]

gdcox states> The US Congress requires by statute that the Fed keep inflation low AND growth going.

Well, not technically correct. The fed must keep inflation low and try to maintain full employment. If you believe the government stats, employment is not doing badly. (And if you believe the government stats, inflation isn’t too bad either. But one of my major points is that this fantasy is getting readily dismissed in a surprising number of places these days.)

Also gdcox states> You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.

Well maybe. But I sure can blame him and his predecessor for being asleep at the wheel, and telling everyone that everything was just fine and dandy, when they should have been putting on the brakes. But… this is somewhat besides the point. I’m not that concerned with placing blame. (Although I’m gonna do it, it’s not my real question)

Finally gdcox wrote> In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises

Uhh… yeah…. and when the heck are things going to stabilize, and how is the fed going to raise rates when this reported stabilization occurs without further clobbering any recovery that might be starting? Isn’t it far more likely that the fed will continue to lower rates, ultimately the credit mess will bottom out, but then we will spend years with high inflation while the economy sputters trying to get back to it’s feet. I’m no economic expert, but isn’t it the case that when inflation takes hold, inflation causes the economy to stagnate because of the inflation? That this becomes a vicious cycle, the fed can’t raise rates because the economy is stagnated, and inflation continues unabated because the fed keeps rates low. Isn’t that what happened in the 70’s?

And if the above scenario occurs, then who is going to have the cajones to change policy and act like Paul Volker?

XboxBoy

[XBoxBoy]

Yes it definitely appears that the fed’s rescue has failed. But here is the thing I’ve been wondering for several months now:

What do the fed governors and BB really think? Given that if they say negative things, there’s a good chance real panic will happen, the question is what are they really thinking and saying to each other in private. Do they believe what they say, that things aren’t that bad, or in private do they roll their heads and mutter, “hey guys, We’re f*ckd. Interest rate cuts aren’t working and inflation is totally getting out of hand.”

I keep seeing the fed governors give speeches in which they talk about how it’s important that we don’t allow “inflation expectations to become unmoored.” (Is it just me, or do others keep seeing that phrase?) And every time I see that phrase I wonder, “What in god’s name are you talking about? Inflation expectations broke away from the dock months ago! Don’t you guys even look at the press? Have you seen all the articles talking about how inflation is clobbering people? And have you seen the price of everything from gold to oil to wheat?”

Then add to this the fact that the fed governors are now talking about how if (if??? if??? wtf is with the if?) inflation expectations get unmoored they will have to reverse their rate declines rapidly. Huh???? WTF? How in the world are they going to keep the economy from full collapse if they throw in the towel and reverse their rate declines?

So, the final question here is how does this play out? Everyone is certain the fed is going to keep cutting rates, (and god help us if they change course, cause that will really unhinge the markets) Which so far clearly means that inflation is gonna keep right on going full steam ahead. (Despite what Mish and the deflationista’s say) Are we headed for a long period of stagflation? At what point will policy change? When the dems take the white house will they throw BB out and bring in a Paul Volker? (I find that hard to believe but what do I know) How long are we going to have a slowing economy and rising inflation?

Always wondering… XBoxBoy

[XBoxBoy]

Yes it definitely appears that the fed’s rescue has failed. But here is the thing I’ve been wondering for several months now:

What do the fed governors and BB really think? Given that if they say negative things, there’s a good chance real panic will happen, the question is what are they really thinking and saying to each other in private. Do they believe what they say, that things aren’t that bad, or in private do they roll their heads and mutter, “hey guys, We’re f*ckd. Interest rate cuts aren’t working and inflation is totally getting out of hand.”

I keep seeing the fed governors give speeches in which they talk about how it’s important that we don’t allow “inflation expectations to become unmoored.” (Is it just me, or do others keep seeing that phrase?) And every time I see that phrase I wonder, “What in god’s name are you talking about? Inflation expectations broke away from the dock months ago! Don’t you guys even look at the press? Have you seen all the articles talking about how inflation is clobbering people? And have you seen the price of everything from gold to oil to wheat?”

Then add to this the fact that the fed governors are now talking about how if (if??? if??? wtf is with the if?) inflation expectations get unmoored they will have to reverse their rate declines rapidly. Huh???? WTF? How in the world are they going to keep the economy from full collapse if they throw in the towel and reverse their rate declines?

So, the final question here is how does this play out? Everyone is certain the fed is going to keep cutting rates, (and god help us if they change course, cause that will really unhinge the markets) Which so far clearly means that inflation is gonna keep right on going full steam ahead. (Despite what Mish and the deflationista’s say) Are we headed for a long period of stagflation? At what point will policy change? When the dems take the white house will they throw BB out and bring in a Paul Volker? (I find that hard to believe but what do I know) How long are we going to have a slowing economy and rising inflation?

Always wondering… XBoxBoy

[XBoxBoy]

Yes it definitely appears that the fed’s rescue has failed. But here is the thing I’ve been wondering for several months now:

What do the fed governors and BB really think? Given that if they say negative things, there’s a good chance real panic will happen, the question is what are they really thinking and saying to each other in private. Do they believe what they say, that things aren’t that bad, or in private do they roll their heads and mutter, “hey guys, We’re f*ckd. Interest rate cuts aren’t working and inflation is totally getting out of hand.”

I keep seeing the fed governors give speeches in which they talk about how it’s important that we don’t allow “inflation expectations to become unmoored.” (Is it just me, or do others keep seeing that phrase?) And every time I see that phrase I wonder, “What in god’s name are you talking about? Inflation expectations broke away from the dock months ago! Don’t you guys even look at the press? Have you seen all the articles talking about how inflation is clobbering people? And have you seen the price of everything from gold to oil to wheat?”

Then add to this the fact that the fed governors are now talking about how if (if??? if??? wtf is with the if?) inflation expectations get unmoored they will have to reverse their rate declines rapidly. Huh???? WTF? How in the world are they going to keep the economy from full collapse if they throw in the towel and reverse their rate declines?

So, the final question here is how does this play out? Everyone is certain the fed is going to keep cutting rates, (and god help us if they change course, cause that will really unhinge the markets) Which so far clearly means that inflation is gonna keep right on going full steam ahead. (Despite what Mish and the deflationista’s say) Are we headed for a long period of stagflation? At what point will policy change? When the dems take the white house will they throw BB out and bring in a Paul Volker? (I find that hard to believe but what do I know) How long are we going to have a slowing economy and rising inflation?

Always wondering… XBoxBoy

[XBoxBoy]

Yes it definitely appears that the fed’s rescue has failed. But here is the thing I’ve been wondering for several months now:

What do the fed governors and BB really think? Given that if they say negative things, there’s a good chance real panic will happen, the question is what are they really thinking and saying to each other in private. Do they believe what they say, that things aren’t that bad, or in private do they roll their heads and mutter, “hey guys, We’re f*ckd. Interest rate cuts aren’t working and inflation is totally getting out of hand.”

I keep seeing the fed governors give speeches in which they talk about how it’s important that we don’t allow “inflation expectations to become unmoored.” (Is it just me, or do others keep seeing that phrase?) And every time I see that phrase I wonder, “What in god’s name are you talking about? Inflation expectations broke away from the dock months ago! Don’t you guys even look at the press? Have you seen all the articles talking about how inflation is clobbering people? And have you seen the price of everything from gold to oil to wheat?”

Then add to this the fact that the fed governors are now talking about how if (if??? if??? wtf is with the if?) inflation expectations get unmoored they will have to reverse their rate declines rapidly. Huh???? WTF? How in the world are they going to keep the economy from full collapse if they throw in the towel and reverse their rate declines?

So, the final question here is how does this play out? Everyone is certain the fed is going to keep cutting rates, (and god help us if they change course, cause that will really unhinge the markets) Which so far clearly means that inflation is gonna keep right on going full steam ahead. (Despite what Mish and the deflationista’s say) Are we headed for a long period of stagflation? At what point will policy change? When the dems take the white house will they throw BB out and bring in a Paul Volker? (I find that hard to believe but what do I know) How long are we going to have a slowing economy and rising inflation?

Always wondering… XBoxBoy

[XBoxBoy]

Yes it definitely appears that the fed’s rescue has failed. But here is the thing I’ve been wondering for several months now:

What do the fed governors and BB really think? Given that if they say negative things, there’s a good chance real panic will happen, the question is what are they really thinking and saying to each other in private. Do they believe what they say, that things aren’t that bad, or in private do they roll their heads and mutter, “hey guys, We’re f*ckd. Interest rate cuts aren’t working and inflation is totally getting out of hand.”

I keep seeing the fed governors give speeches in which they talk about how it’s important that we don’t allow “inflation expectations to become unmoored.” (Is it just me, or do others keep seeing that phrase?) And every time I see that phrase I wonder, “What in god’s name are you talking about? Inflation expectations broke away from the dock months ago! Don’t you guys even look at the press? Have you seen all the articles talking about how inflation is clobbering people? And have you seen the price of everything from gold to oil to wheat?”

Then add to this the fact that the fed governors are now talking about how if (if??? if??? wtf is with the if?) inflation expectations get unmoored they will have to reverse their rate declines rapidly. Huh???? WTF? How in the world are they going to keep the economy from full collapse if they throw in the towel and reverse their rate declines?

So, the final question here is how does this play out? Everyone is certain the fed is going to keep cutting rates, (and god help us if they change course, cause that will really unhinge the markets) Which so far clearly means that inflation is gonna keep right on going full steam ahead. (Despite what Mish and the deflationista’s say) Are we headed for a long period of stagflation? At what point will policy change? When the dems take the white house will they throw BB out and bring in a Paul Volker? (I find that hard to believe but what do I know) How long are we going to have a slowing economy and rising inflation?

Always wondering… XBoxBoy

[XBoxBoy]

You wrote: in the end the banks investors are going to be left holding the bag.

Exactly. And this is why we are seeing that although the rates on the 10yr are going down, mortgage rates haven’t gone down. All these workouts, bailouts and other programs in the end will make buying mortgages less attractive. And that’s why in the end they won’t stop the housing decline. (If investors don’t buy mortgages then the price of mortgages goes up. If the price of mortgages goes up, then the housing decline accelerates.)

XBoxBoy

[XBoxBoy]

You wrote: in the end the banks investors are going to be left holding the bag.

Exactly. And this is why we are seeing that although the rates on the 10yr are going down, mortgage rates haven’t gone down. All these workouts, bailouts and other programs in the end will make buying mortgages less attractive. And that’s why in the end they won’t stop the housing decline. (If investors don’t buy mortgages then the price of mortgages goes up. If the price of mortgages goes up, then the housing decline accelerates.)

XBoxBoy

[Author]

Posts