patrick.net

Exactly. Add a few zeros to each bank's balance sheets and all problems are solved.

You'd think something so simple and elegant would have been thought of in the centuries of the banking industry, but then they could never pick up on global warming, either.

We are much smarter today.

Add the biggest existing risk to the economy- the Fed!

Call it Crazy says

Hmmm...

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday the U.S. economy was still in need of lots of support from the central bank given the "considerable slack" in the labour market, and she cited weakness in the housing sector as a fresh risk.

Maybe she finally found Patnet and is reading the threads here???

No doubt we are having a slowdown in housing, I concede that to the bears. Any further slowdown will trigger a stimulus from the feds. Either way the slowdown will be short lived.

Strategist says

Call it Crazy says

Hmmm...

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday the U.S. economy was still in need of lots of support from the central bank given the "considerable slack" in the labour market, and she cited weakness in the housing sector as a fresh risk.

Maybe she finally found Patnet and is reading the threads here???

No doubt we are having a slowdown in housing, I concede that to the bears. Any further slowdown will trigger a stimulus from the feds. Either way the slowdown will be short lived.

You may be right and yellen is foreshadowing her next move:
HIT print
http://smaulgld.com/janet-yellen-and-the-precious-printing-press/

Home equity is the only thing keeping the masses from revolt.

exfatguy says

Home equity is the only thing keeping the masses from revolt.

That is probably true

smaulgld says

Add the biggest existing risk to the economy- the Fed!

Fed bad! Fed bad! Fed bad bad baaaad!

Grunt! Squeak!

Iosef V HydroCabron says

smaulgld says

Add the biggest existing risk to the economy- the Fed!

Fed bad! Fed bad! Fed bad bad baaaad!

Grunt! Squeak!

Can i use your quote with attribution?

smaulgld says

Add the biggest existing risk to the economy- the Fed!

... and why is that? Explain...

edvard2 says

smaulgld says

Add the biggest existing risk to the economy- the Fed!

... and why is that? Explain...

They printed $4 trillion over five years most of which went to protect their shareholders the too big too fail banks and had yet to produce job and wage growth or even real GDP growth which has been less in total dollar terms than the amount the Fed printed

smaulgld says

Iosef V HydroCabron says

smaulgld says

Add the biggest existing risk to the economy- the Fed!

Fed bad! Fed bad! Fed bad bad baaaad!

Grunt! Squeak!

Can i use your quote with attribution?

Meh. Cabronsito is a pale imitation of AF. Quoting him is insignificant.

The biggest risk to our economy is govt. meddling in it.

Yellen is giving more signals that the Federal Reserve will not raise interest rates.

So stocks will be the place to be in the near future.

The Federal Reserve painted themselves into a corner years ago and getting out of it will be difficult.

50% of outstanding mortgages are alt-a/sub prime and 19.4% of houses have negative equity. I can't imagine why there could be a problem anywhere.

dodgerfanjohn says

Meh. Cabronsito is a pale imitation of AF. Quoting him is insignificant.

still would make good copy

smaulgld says

had yet to produce job and wage growth or even real GDP growth which has been less in total dollar terms than the amount the Fed printed

Interesting.

Any comment on Bush's tax cuts (in time of war), plus spending increases, which created no jobs over 8 years? Or is this to be dismissed as base partisan sniping, and a continuation of the false red-blue dichotomy which noble libertarians are trying to lead us out of?

P.S.: I think the Fed has been mostly toxic/useless since the 1980s, but I wish you'd stop using the term "printing", since that money was not actually printed, but was used to repurchase debt. Yes, it was injecting liquidity, but it was not literally printing cash.

Your terminology can easily deceive the weak-minded among the precious-metals crowd, some of whom are actually convinced we're in a period of hyperinflation.

Basically, what Yellen is saying that with a lack of vigorous buying/selling RE activity, economy is a toast. Make it affordable for the middle class as wages are not going anywhere. Yeah, that's the solution.

Iosef V HydroCabron says

Any comment on Bush's tax cuts (in time of war), plus spending increases, which created no jobs over 8 years?

Bush is the jackass that appointed Bernanke!Iosef V HydroCabron says

but I wish you'd stop using the term "printing",

Bernanke's own words in a 60 minute intereview. From 2009!
https://www.youtube.com/watch?v=odPfHY4ekHA&t=8m21s

Iosef V HydroCabron says

Your terminology can easily deceive the weak-minded among the precious-metals crowd, some of whom are actually convinced we're in a period of hyperinflation

I think the weak minded are more likely to believe what the Fed says than to be in the precious metals crowd

Bernanke on printing money
https://www.youtube.com/watch?v=odPfHY4ekHA&t=8m21s

The Federal Reserve has not and can not stimulate the economy or jobs.

GDP growth/wealth come from 1. production 2. innovation

Texas and N. Dakota have increased oil&gas production, and the wealth and jobs have grown in those areas. Austin and Silicon Valley/San Fran. Bay Area have innovation and these have caused some wealth creation.
Obviously interest rates have absolutely nothing to do with the above.Bernake was mostly worried about a repeat of the great depression. For review, after the stock market credit fueled bubble popped, many banks lost everything, and in a few years the remaining banks weren't really lending. So, there was no liquidity and banks "taking their ball home" messed up the economy.

The Federal Reserve has been very careful to say in public what is politically correct for them to talk about, "creating jobs", etc. but the REAL reason for low interest rates is to enable banks and as a secondary goal enable the tax and debt spenders in Washington.

clambo says

GDP growth/wealth come from 1. production 2. innovation

Correct their QE program was a bailout for the banks but they used as cover the "growth the economy and jobs" excuse as cover.

smaulgld says

They printed $4 trillion over five years most of which went to protect their shareholders the too big too fail banks and had yet to produce job and wage growth or even real GDP growth which has been less in total dollar terms than the amount the Fed printed

Had the Fed not acted the economy would have gone into a depression. Not a recession as it did. That's a fact. And sorry, but you need to at least crack open a newspaper: The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

clambo says

Texas and N. Dakota have increased oil&gas production, and the wealth and jobs have grown in those areas. Austin and Silicon Valley/San Fran. Bay Area have innovation and these have caused some wealth creation.

Obviously interest rates have absolutely nothing to do with the above

As someone who actually works in SV I can tell you that innovation alone didn't help us get out of the recession. As soon as the recession hit venture capital dried up. It took the severe lowering of interest rates in general to unleash that money. I can also call bullshit on interest rates not being a factor for economic growth: As soon as rates fell for loans home sales exploded all over Cali.

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

Yeah, but the wages have hardly gone up and many of those jobs that came back are offering less pay than it were before the recession.

"Let me continue to pour more money in places from where I know if won't flow into the economy while pretending to care about jobs and housing."

You are incorrect about how wealth is created, I stated it clearly enough.

It is also correct that capital was destroyed in 2008 but Venture capital is not sensitive to interest rates because it's VENTURE capital.

You are incorrectly correlating venture capitalists being cautious or fearful following the Lehman collapse in 2008 to interest rates being "high".
Interest rates were low already. You would also be clearer about the dates you mean when you say "when the recession hit".

LOW interest rates do not create wealth nor economic growth.
High interest rates have been used to slow the economy to combat inflation, e.g. Paul Volker.

Innovation at places like Intel, Apple etc. create wealth. Do you recall what the interest rates were when Apple was founded for example?

Where is "Cali"? Should I go ask a "dude"?

bubblesitter says

Yeah, but the wages have hardly gone up and many of those jobs that came back are offering less pay than it were before the recession.

That's not a result of the Fed. As reported many times wages for both the middle and lower classes has either actually gone down or remained stagnate for over 30 years. That's a whole nother' ball of wax.

clambo says

It is also correct that capital was destroyed in 2008 but Venture capital is not sensitive to interest rates because it's VENTURE capital.

I'll pretend I didn't just read that... Seriously?

Either way, Let's have all of the conspiracy theories come flooding forth. I'm sure that will come along with plugs to buy gold and stuffed animals as well as emergency potato seeds or whatever.

The Federal Reserve was in fact worried about a depression. There is debate whether it in fact would have happened if the large stupid banks went out of business.
I also doubt the USA economy would have collapsed if we had not bailed out foreign banks.

Be that as it may, unemployment is high. Wages are falling because the USA has imported foreign labor, which drives down wages.

The 92 million out of the workforce plus the "official" 9 million unemployed is a lot of people not working.

Interestingly, all of the illegal aliens I know are working.

Strategist says

Call it Crazy says

Hmmm...

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday the U.S. economy was still in need of lots of support from the central bank given the "considerable slack" in the labour market, and she cited weakness in the housing sector as a fresh risk.

Maybe she finally found Patnet and is reading the threads here???

No doubt we are having a slowdown in housing, I concede that to the bears. Any further slowdown will trigger a stimulus from the feds. Either way the slowdown will be short lived.

Remember the Fed is not able to stimulate housing, they can only create a cerebral illusion.

smaulgld says

clambo says

GDP growth/wealth come from 1. production 2. innovation

Correct their QE program was a bailout for the banks but they used as cover the "growth the economy and jobs" excuse as cover.

Liars...............................

clambo says

The Federal Reserve was in fact worried about a depression. There is debate whether it in fact would have happened if the large stupid banks went out of business.

I also doubt the USA economy would have collapsed if we had not bailed out foreign banks.

There was a debate and a decision and hence why the decision to bail out the banks was made. While distasteful and unpleasant the reality was that had they not done so the banks would have failed and the economy would have sunken to much, much worse levels than it did. Its a tricke-down effect. Another and perhaps more easy to understand example was GM. GM has several million employees and millions more who make money from their business ranging from suppliers, dealers and so on. GM was bailed out because not doing so would have instantly caused the loss of millions of jobs and potentially trillions in future income over time as a net result of that failure.

Then again if some of you think you're so smart and know all about economics, maybe you should go get jobs and actually work for the government and suggest your ideas.

edvard2 says

GM has several million employees

Are you sure about this??

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market.

Heraclitusstudent says

"Let me continue to pour more money in places from where I know if won't flow into the economy while pretending to care about jobs and housing."

That is an accurate summary and they can always point to "saving" the economy when they created the excessive debt housing bubble crisis as an excuse to keep printing money and sending it to the banks

smaulgld says

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market.

You would expect a possibility of more stimulus in this scenario, and higher gold prices too. Does anyone know why gold dropped $20 today?

edvard2 says

There was a debate and a decision and hence why the decision to bail out the banks was made. While distasteful and unpleasant the reality was that had they not done so the banks would have failed and the economy would have sunken to much, much worse levels than it did.

Even if one accepts the necessity of the original bailout- was QE1, 2, 3, 4 + necessary?

Strategist says

You would expect a possibility of more stimulus in this scenario, and higher gold prices too. Does anyone know why gold dropped $20 today?

yep more stimulus probably on the way as low rates themselves as not doing their trick

Strategist says

Does anyone know why gold dropped $20 today?

Says Yellen's Upbeat assessment of the economy and Putin blinks
http://www.kitco.com/news/2014-05-07/Gold-Sells-Off-on-Yellen-s-Upbeat-Assessment-of-US-Economy-and-as-Putin-Blinks.html

smaulgld says

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market

Perhaps you failed to read my initial response. Are there people unemployed? Yes. How many are unemployed now? A LOT less than at the peak of the recession. Would there be more or less people unemployed had nothing been done- which was essentially what the government did immediately after the crash of 29'- to shore things up on account of the fed? Take a wild guess.smaulgld says

Even if one accepts the necessity of the original bailout- was QE1, 2, 3, 4 + necessary?

Like I said... if some of you think you're these informed geniuses then I'm sure there are future careers working within the inner circle of the Fed and US government in which you could show all those people just how smart you really are.

Strategist says

Does anyone know why gold dropped $20 today?

ah ha! there we go! I knew it was a matter of time before gold was mentioned...

edvard2 says

Like I said... if some of you think you're these informed geniuses then I'm
sure there are future careers working within the inner circle of the Fed and US
government in which you could show all those people just how smart you really
are.

Are you implying the majority of people working in the Fed and US government are informed geniuses?