patrick.net

bgamall4 says

That is where I see the Fed as being part of the conspiracy

:-) you're certainly an interesting man Gary, I remember our chats going back to the BusinessInsider days, now Joey is at Bloomberg

bgamall4 says

I am trying to get to the bottom of it,

tenacity is always an admirable trait

If you learn;
Teach.
When you yearn;
Reach.
If you're last;
Run.
Catch up fast
Son!
If you're stopped;
Go.
Make your fast
Slow.
Let your last breath
Be your last blow.

bgamall4 says

mispricing risk?

I believed that the Fed and a lot people didn't understand what the concept of non capacity debt is and how that multiplier impact can be damaging to the economy as it gives a false reality.

Hence why many of my articles have been consistent with the theme that lending standards are not tight today and nor we should ever ease them for the sake of financially engineering growth.

House Of Debt is a good book you might want to read.

However, in bigger context it takes more variables than just one to create a bubble, speculation is a dance that needs many partners

The Fed does create inflation, it is just not clandestine it is obvious.

indigenous says

The Fed does create inflation, it is just not clandestine it is obvious.

indigenous says

indigenous  

Mr. Glibert

You can take this chart, it's very popular among a set of economic friends I have

BTW that peak at 1980 in your graph was caused by Chairman Martin forced to print money by LBJ who held his job over his head.

Since the US has seen globalization which has mitigated the effects of money printing.

Yes that is a very good graph, you should consider the effects it has had

"Many women, especially those in the booming textile industry, earned between $5 and $7 a week for working more than 50 hours"

http://www.historynet.com/the-first-minimum-wage.htm

Call it $7 for 50hrs, that's 14c/hr. in 1912

So by the resident kook's numbers, mill workers in Boston were making $2.80/hr. (2015 dollars) back then

But at least it was 'honest money', LOL.

The bottom line is that money -- spending power -- creates demand.

In economies with excess, idle capacity to create wealth to satisfy this demand, fiat money distributed to the masses just results in a rising standard of living and increased employment. In economies like Zimbabwe and Weimar Germany, it results in hyper-inflation (though the Wiemar inflation was such a brief event something else was going on).

As for the 1800s, so much opportunity was going idle due to an artificial scarcity of capital. People, towns, and governments had to beg the Captains of Industry to build rails, bribing them with immense gifts of the unclaimed commons to get them to invest in capital improvements that would make them billions anyway.

The 2000s is a different dynamic than then, or the 1900s for that matter. Fiat is also allowing us to float on a colossal negative investment position:

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

This is ~$25,000 per capita right now. I don't feel good about this, not at all.

US corporate loan growth on banks' balance sheets at 11% YoY

I guess buybacks are up 11%?

I read where small business lending is trending lower. Because of Dudd Frany

Commercial and industrial loans at banks rise by $11.9 billion in a week to $2.043 trillion

How much of that is small business?

bgamall4 says

chart even way into 2008,

That was the Housing Bubble, the mother of all over investment thesis on the most toxic debt build up and packaging economic cycle we have ever seen. :-)

It takes a village to raise a child, it takes a entire country to work together to mess things up that bad

Logan Mohtashami says

it takes a entire country to work together to mess things up that bad

You underestimate the Fed.

indigenous says

You underestimate the Fed

and you over estimate their power :-)

Logan Mohtashami says

and you over estimate their power :-)

How so?

indigenous says

How so?

Way to much velocity power....It's like when people think Presidents can really change economic cycles,

If the Fed moved against inflation up or down, that would be a valid thesis but that hasn't been the case.

The recessions pre 1900 were longer and harder on the American people only 2 Recession post 1900 were dramatic in terms of length ...

A lot my Gold Bug Anti Fed friends always say

The Fed allows speculation to happen

However, if underwriting standards today were placed back in 1996, a lot of the excess speculation would have been taken out of line

Logan Mohtashami says

Way to much velocity power

? velocity is beyond the reach of the Fed as we see today.Logan Mohtashami says

If the Fed moved against inflation up or down, that would be a valid thesis but that hasn't been the case.

That is not the case with Volcker.

Logan Mohtashami says

The recessions pre 1900 were longer and harder on the American people only 2 Recession post 1900 were dramatic in terms of length ...

But there were "stimulated" with inflated/printed out of thin air money.

Logan Mohtashami says

However, if underwriting standards today were placed back in 1996, a lot of the excess speculation would have been taken out of line

So you are saying that banks knowingly wrote bad loans?

indigenous says

So you are saying that banks knowingly wrote bad loans?

The loan that were created I termed them back then as Band Aid Loans

These loans had no capacity to work long term, they were only needed to bridge until the next refinance happened.

Those lenders are all gone, none exist because they created Non Capacity Owning debt .... Which allowed home ownership to be a speculation and then from 2004-2006 the cash out craze happened which made things even worse

A lot debt on debt leverage

indigenous says

That is not the case with Volcker.

The economy that Paul V. had to deal with is much different now. That time frame was the birth of globalization and the start of the export/import side of the U.S. where we began to import deflationary factors, hence our trade surplus now.

Technology , Globalization, Demographics killed inflation ... while creating pocket inflation

These banks knowingly committed suicide?

Logan Mohtashami says

Technology , Globalization, Demographics killed inflation ... while creating pocket inflation

Seems like a stretch, as Volcker's actions correlated with the lower inflation.

indigenous says

These banks knowingly committed suicide?

Greed is a sickness that all men can't see when $$$$$$$$$ are around...

I call it Gold's disease

We export inflation $
We import Deflationary $

For a consumption based economy, it's not a bad deal

That can't go on forever

Logan Mohtashami says

Greed is a sickness that all men can't see when $$$$$$$$$ are around...

Behind all bubbles are policies that create them.

Let me ask you guys this

Is the Fed 100% responsible for the oil production of all oil nations?

;-)

what is your definition of inflation?

indigenous says

inflation?

The same as always.... too many $ cashing too few goods...

Logan Mohtashami says

The same as always.... too many $ cashing too few goods...

And who controls M2?

indigenous says

Behind all bubbles are policies that create them.

Yep--repealing Glass Steagall is a big part of the last one.

tatupu70 says

Yep--repealing Glass Steagall is a big part of the last one.

Cept Glass Steagall had nothing to do with derivatives.

indigenous says

Cept Glass Steagall had nothing to do with derivatives.

So what?

tatupu70 says

So what?

The banks you think were involved in derivatives would not have been affected by Glass Steagall.

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisislow

With Glass-Steagall, there would not, could not, have been a Citi/Travelers merger, and competitors would not, could not have bulked up the way they did. Major money center banks most likely would have been smaller, more manageable, more easily wound down

https://www.washingtonpost.com/repeal-of-glass-steagall-not-a-cause-but-a-multiplier/2012/08/02/gJQAuvvRXX_story.html

The S.E.C. 2004 Leverage Act .... allowing 40-1 from 10-1

EWOMD

Economic
Weapon
Of
Mass
Destruction

So what is the deal on commercial lending? I read where the lending is tight to small business.