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Duke :
Sorry if my responses were harsh. There is more to despise in Greenspan than that infamous speech. We can debate endlessly about the actual motivation of that speech or the "clarification" speech. But "Greenspan put", bailouts, liquidity injections etc is there for all of us to see.
During the late 90s leading to the dot com boom I saw people deifying Greenspan, Abby Joseph Cohen, Cramer etc. My tolerance level for these people is especially low. Greenspan refused to accept the existence of the bubble. Then he created another one. Without learning any lesson from not so distant past. And refused to accept existence of that bubble either.
Now he is pathetically trying to rewrite history. And I do believe that history will not forgive him. The same people who were thanking him for creating a housing ATM will blame him for their misery. My views won't matter.
Put a basic social safety net in place to catch the people involved so they don’t have to go begging, and aggressively let bad businesses die.
If we let the market work its way, poor people will be disincentivized from procreation. Over time, poverty will be eliminated.
Again, we have the opposite.
Logic dictates that we end all means-based welfare programs.
I couldnt find a job in 1989. That was a major depression for me. I wondered why I went to college.
Oil is the reason we are in the Middle East. The Chinese are doing the samething in other areas. And arguably it is the best reason to go to war. Certainly more meritorious than saving Hawaii for rich Asians to vacation to. We sufferred 550k casualties in WW2 so that Russia could extend its Communist Empire. Is that a better reason that pursuing oil reserves?
And arguably it is the best reason to go to war.
I agree!
We sufferred 550k casualties in WW2 so that Russia could extend its Communist Empire. Is that a better reason that pursuing oil reserves?
Now, there is a much better peace-keeping tool. Mutual Assured Destruction.
It is not just about pursuing oil reserves. It is also about securing oil reserves.
I just wish that the war was managed slightly better.
StuckinBA,
Like many here, I've dedicated altogether too much of my life trying to read between the lines? The way that I understood "that infamous speech" was;
"Look, we all know the 2 year cap gain exemption is quite possibly the most generous table scraps we've EVER allowed to fall off the table. So let's quit pretending Joe and Jane Sixpack have ANY interest in building up long term equity in their primary "ATM" and have totally bought into the "buy to flip model". Housing consumers should take advantage of the even LOWER rates ARM's offer b/c we all know full well you'll be dumping it long before they've built up any paid in equity anyway! It's "The New American Way!"
Or... was that just me reading too much into it?
Salk
Sorry, you need to read up on your history, WW2 was not just about Hawaii and extending Russias empire.
I personally have know people who lived with the horror of Dunkirk, I dread to think what it was like for those in the concentration camps!
salk Says:
We sufferred 550k casualties in WW2 so that Russia could extend its Communist Empire.
That was the (unintended) consequence of the war, not the reason for American participation. The US joined the war to support the English, and to prevent German consolidation of power in Europe. It is arguable that the war on the Russian front actually reduced the number of allied (US/UK) casualties in the west. So that 550K number could have been a lot higher.
SP
Also, without that WW2, things will be a lot different now. I doubt even air travel would be popular/affordable.
I think this talk from Greenspan about interest rates needing to go into the double digits is no more than just candy to bring confidence to the dollar which is doomed anyway. I think Ben and Alan are on a tag team; Ben wants to cuts rates as Alan baffles everyone with bull$hit with false hope that the dollar will eventually rally. It's funny how this information gets out just before an expected rate cut.
Did Bush appoint Bernanke? I'm surprise he didnt appoint MLM guru Kiyosaki instead. That wouldnt surprise me at all. So many clowns and cronies surrounding bush (remember harriet myers?)
salk,
I'm going to guess that you didn't wonder much about history while in college. Your claims about Americans dying to make Hawaii safe for rich Asians and USSR expansion is particularly prepostrous.
1. Wouldn't Hawaii be even more welcoming if the Japanese were in control and spoke Japanese (and everyone in East Asia spoke Japanese because they're members of Imperial Japan's Co-Prosperity Sphere)?
2. Most successful Communist movements, especially in Asia and Latin America, was nationalistic in nature. USSR's "empire" was sufficiently unwieldy to distract it from America for a good chunk of the cold war and ultimately brought its downfall in the Afghan war.
Actually, the core of both WWI and WWII was largely about empire - between the first wave empires of Great Britain/France/Benelux and the second wave empire wannabes Germany/Japan. The heavy tolls on both sides created a power vacuum that was filled by the US and USSR. US and USSR, barred from direct confrontation due to the insanity of MAD, fought limited wars in Korea, Vietnam and Afganistan...and suffered mightily for it.
There is an important takeaway from this: modern empires should avoid armed conflicts, even regional conflicts, as much as possible. Any such conflict is likely to weaken its position domestically and internationally, conveniently creating a power vacuum for...if we're lucky then the EU/Japan/Korea; if we're unlucky then Russia/China/India.
Most people on this blog are interested in the Fortress and nearby areas. I like to play a lot more attention to the Fringe, as I consider it a sneak preview - to a certain extent.
So this morning's bit on KCBS about Mountain House caught my attention. For those not in BA, this is a completely new town built near Tracy. Seems like it is becoming a foreclosure city. The reporter pointed out the irony of the street names like "Prosperity". Vacant houses and brown lawns and all that stuff. One guy commented that the foreclosures and short sales are not really selling. The reason ? Builders are still building and offering discounts of 100K.
A person I know first hand had booked a house there. About 2 years ago. A brand new, huge house less than 600K. Suddenly he got cold feet and surrendered his deposit. I was quite surprised, as the conventional wisdom even then was "BA and everything around it is special". I don't know what research he did. Maybe he discovered a blog or two. But I commented to my wife that he paid a small price and saved himself from making a huge mistake. She didn't believe me then. I am sure the guy is feeling much better now.
600K in Mountain House didn't seem that bad then, because similar houses even in Los Banos had similar range, Tracy was 700K and Dublin was 800K. Now all these prices seem ridiculous. A lot changed in last few months. But this is also how the wave retreats. Since you can get a house for 400K in Mountain House, you won't pay 700K in Tracy and 800K in Dublin. And so on.
There is an important takeaway from this: modern empires should avoid armed conflicts, even regional conflicts, as much as possible.
I thought modern empires should facilitate other people's conflicts as much as possible. ;)
Peter P,
Possibly the case in theory, but likely to yield unpredictable blowback in real life. See also modern histories of Russia, Iran, Iraq and Afghanistan.
"It is arguable that the war on the Russian front actually reduced the number of allied (US/UK) casualties in the west."
The Red Army kept 190 German divisions occupied that would have been free to fight elsewhere. The Red Army also took casualties in the range of 100,000 dead per week for about 4 years, while killing about 7 million or so Germans (and it wasn't the "winter" that defeated the Germans, as the Germans were at the outskirts of Moscow for three years. German defeat came from the 360 Red Army divisions that the Soviets were able to put together after retreating, scorching the earth, and regrouping after the surprise German invasion). Yes, I'd say the Soviet efforts in their Great Patriotic War saved a few Anglo/American lives.
Astrid,I essentially agree with most of what you have written. However, I abhor the term "Cold War". War involves bullets, bombs, and mass casualties. Hundreds of millions of christian europeans were enslaved by Communist Russia (our ally!). 550k US casualties so that we would have to spend trillions to counter Communist China and Russia? Only Japanese militancy and its threat keep Asia peaceful currently. Only the threat of Germanic militancy kept Russia from conquering Europe the last 60 years. It is only the blood of Japanese and Germans that have prevented global Communism (and with it the death of western civilization). Asia is in many ways a big winner. By my point is pursuing oil (which the free world needs) at the expense of 3000 casualties is more easily defensible than 550k US casualties and the expansion of Communism.
Our allies, China and Russia, could teach us something about death camps.
"Only the threat of Germanic militancy kept Russia from conquering Europe the last 60 years."
Both Germany and Japan have been rather pacifist these last 60 years. Something other that fear of the Bonn government kept the Soviets out. Maybe NATO and US nukes.
Headset, there is no debating that our ally,Communist Russia ,did most of the dying and fighting. And it was very late in the day when our Generals said "Hey, without the Germans, Russian is gonna steam roll Europe and us real soon. " Well Communist Russia eventually did conquer most of christian europe anyway. And we spent trillions in the succeeding decades fighting communism and building atomic weapons. My point is that we are very susceptible to propaganda and that our government will sacrifice trillions$ and hundreds of thousands of US lives to achieve nebulous goals.
Headset, atomic weapons would not be part of any military scenario in Europe. Not one US soldier fired a single bullet against the Communists. Stalin was aware of our poor performance against the Wehrmacht despite outnumbering them 10:1. We also sufferred casualties in 10:1 ratio despite having the most well equipped military. The Communists realized that despite its numbers, it could not defeat Germany unilaterally. This saddened Stalin because he had overt plans for world domination. And with a military of its preWW2 size, it could have been realized.
"Wow, half point cut federal funds and discount rates."
Damn, now we can't see if the selloff Justme predicted will come true if we had less than a .5 rate cut.
Ben is bending over. He is cutting rate when we should have much higher interest rate.
wow. 1/2 point afterall.
http://www.npr.org/templates/story/story.php?storyId=14502179
Let's go into inflation mode strategies.
It is sad that a fine businessman like Kennith Lay was prosecuted to death while our currency is allowed to be destroyed. Which is a greater crime?
salk,
You really need to re-read some history books, man. Or look up some post-war maps. Most of the post-war "christian Europe" was either under NATO influence or neutral.
Thanks, HeadSet :)
Here is something interesting: After the initial "Bernanke pop" 15min ago, CFC has now retraced back to its pre-pop value. Several other stocks are taking a similar turn, although less dramatically so.
Is it a good time to buy home Builder stocks? They started going up.
"Is it a good time to buy home Builder stocks? They started going up."
Yes, you do that. We'll be right behind you.
Headset,
LOL! Yeah the NAHB sentiment is at 22 year low. Even Cheerleader in Chief David Seiders doesn't see "a gradual recovery" until the 3rd. qtr. of NEXT year (but I'd sure hate to get left at the station).
Justme,
Your welcome! But let's see if the converse is true. I predict the Dow will fall back in a few days to just under 13,500.
Headset,
OT (and not nearly as depressing) but had you heard about the Russian's new "suck bomb"? I'm told it's as potent as a nuke but is completely conventional.
I’m told it’s as potent as a nuke but is completely conventional.
So if it is use a nuclear response should be justified.
What's your prediction of the FED rate by the end of this year? I think it will be around 3.75-4.00%.
I'd heard there was a "show of force" right around the time a "Bear" flirted with Swedish air space. Some of the footage was pretty impressive. It looks like an internal fuel tank (fitted on C-130's) for extended range and dropped with a parachute. So it falls to earth quite gently and then creates a fireball the size of Manhattan.
My question is, if you're simply using "para-drop" weapons deployment how accurate can it be? Wind direction, ground track, air speed? A lot of variables there. I mean, a loadmaster with a safety line shoves the damn thing out' the back?
DinOR,
No I haven't. Are you setting me up as the straight man for a joke?
I got out of the Air Force in '95, so that was the last of any intel briefings for me. I can tell you this though, anyone who thinks we would not have responded to a Warsaw Pact invasion of Western Europe with nukes is mistaken. The Soviet conventional forces held too much of a numerical advantage for us to take on otherwise. We even had systems in place, such as F-16s and artillery with tactical nuke capability.
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So is helicopter Ben going to come to the rescue on 18th, cutting interest rates, and thereby proving to speculators that they can keep profits but count on ol' Ben to save them from losses? I think the answer, unfortunately, is yes.
Since lower interest rates encourage inflation, does this mean that responsible savers will see the value of their savings eroded to support irresponsible spenders and lenders?
Or could it be that mortgage interest rates will go higher anyway, ignoring the Fed? It seems possible that banks and investors have been spooked enough by the unclear liability for a trillion dollars of bad mortgages that they will still demand higher rates from borrowers, to compensate for the risk of mortgage lending these days.
Patrick
#housing