patrick.net

schmitz_kris says

Tatupu says:
QE will combat deflation.
Tatupu, you’ve never seen a chart of the Nikkei or Japanese RE have you?

OK--good. Let's use the exception as the rule.

And you make the same mistake as many people do. In order to gauge the effect of something (QE in this case), you can't just look at the end result. You need to compare the end result that would have happened without QE to what happened with QE. So, in Japan, their economy may have been down 10% without QE, but with QE it was only down 1%. So, in that case, it's very effective.

Troy says

For government intervention to actually be effective it needs to increase the productive capacity of this country, the capacity and ability to pay our way in the world via trade.

I'm not sure that is a true statement. The point of QE isn't to make the US more productive--it's to cushion the fall and reverse the negative momentum

schmitz_kris says

A sea of red AGAINST the US dollar.” This means things WENT DOWN in price/value against the USD - the euro went down against it, the pound sterling, stocks, oil, silver, etc. The value/price of the dollar WENT UP. The dollar gained in power - that’s deflation. You can define it several ways, but there’s no reason to quibble over semantics when the immediate reaction was this in-your-face obvious.

You are correct. I just looked at the US/Yen today and didn't look at other currencies. Dollar going up is deflationary. But I think there were other causes for that too--the growth in the rest of the world is slowing as well...

Of course, CNBC brings up my POV AFTER THE FACT!

BACKFIRE!

Gotta love them - are they good for ANYTHING other than the ticker gliding across the top of the TV set?

I don't think so.

http://finance.yahoo.com/news/Could-Feds-Move-Against-cnbc-1695418183.html?x=0&sec=topStories&pos=3&asset=bf22a09a752a52644a31adc2f0a90c1b&ccode=

kris,
Just so you know, your POV was discussed several days prior to it being your POV. Here's one example of someone preemptively discussing the possibility of QE2 backfiring. Note the date.

http://articles.latimes.com/2010/aug/07/business/la-fi-0807-petruno-20100807

Well, duh. I would hope in a nation of some 320 million or so that there'd be at least a few with two brain cells to rub together.

schmitz_kris says

Well, duh. I would hope in a nation of some 320 million or so that there’d be at least a few with two brain cells to rub together.

So your novel idea isn't so novel then since you probably just read and repeated it from someone else. Not sure why you're giving yourself so much credit for doing what 3rd graders can do.

I'm a currency trader. I've been studying economics intently for years - not exclusively textbook theory garbage either (Keynesianism, etc.). My beliefs and opinions are very strong, and they are my own. That said, since there is only a very limited number of opinions available on select economic topics, there are bound to be others, naturally, who share my beliefs.

I never said there was anything novel about my ideas. There didn't appear to be anyone else on the forum with a like idea, and sharing new ideas is what forums are for. Why would it matter if it were novel or not? What matters is how applicable it is to the markets and making money (or avoiding losses).

Great that you bring up 3rd graders. One of my ex-girlfriends is a teacher, and, when discussing how much houses cost one day, one of the elementary-age kids (11? 12?) said, "They cost way too much for what you get - they're gonna be on sale soon I think."

ROTFLOL...for the wisdom of babes is far greater than that of man.

can sombody explain this press-release to me?

what will do for mortgage interest rates ...etc

kris,

A colleague told me that there's not enough cold hard dollars in the world to make good on dollar debt. He told me that he read it in an article linked on Patrick. He told me that a symptom of it will be collapse in desecending order of M3, M2 till nothing is left but M1. It was too abstract and hypothetical to understand, but I remember the M3 part about what he said. And it is going down.

Is that what you are talking about?

how many people on the board are Keynesians ?

I am more or less Austrian school (classical economics)
work hard and save ...makes people rich....spend and spend makes people poor...

Solving a problem created out of the easy money policy by more easy money policy ..Does it make sense ? I just finished an MBA macro econ class from the worst professor in my life, the whole subject as it is taught is pure mental masturbation...some bunch of unsubstantiated theories and trying to pose as science..when you know its all opinions....

I think this crisis will send Keynesian theories to their grave, which is where they belong.

commonman2003 says

how many people on the board are Keynesians ?
I am more or less Austrian school (classical economics)
work hard and save …makes people rich….spend and spend makes people poor…
Solving a problem created out of the easy money policy by more easy money policy ..Does it make sense ? I just finished an MBA macro econ class from the worst professor in my life, the whole subject as it is taught is pure mental masturbation…some bunch of unsubstantiated theories and trying to pose as science..when you know its all opinions….
I think this crisis will send Keynesian theories to their grave, which is where they belong.

Based on this post, I'm not sure you understand Keynesian Economics. Maybe retake the class with a better professor?

commonman2003 says

Saving money will definitely make anyone wealthier over the long run but why work for it and save it if you aren't gonna spend it? I plan on going to my grave with pennies in the bank and a smile on my face cause life is too interesting to try and build wealth.

You folks are silly with the childish idea QE has anything to with helping America or some "Economy". This is nothign more than payouts to buds. what can HE do to payout more to his buds. I mean, they took the losing side of something like $2T in mortgages and the bank club assumed the losses. Now he's got to gas the accelerator. This things headed for a wreck but there's still billions or even trillions to be siphoned off for their buds before it happens.

For the little guys like you and me we can keep on trucking too. Bank away before the credit pop. Looks to me like a crazy year or two ahead of this while the feedback accelerates. Free money for all! Get in on the free-for-all. Last one into the debt pool wins though! It's all knowing when to get out.

commonman2003 says

Basically Keynesianism is wealth redistribution in disguise. And that is why “haves” hate it and “have nots” love it.

Again--I don't think you understand Keynesian economics....

Based on this post, I’m not sure you understand Keynesian Economics. Maybe retake the class with a better professor?

Keynesian economics in a nutshell.
Y = C + I + G
Y = output
C = consumption
I = Investment
G = Government Spending
You consume a fraction (c) of output (Y) so that C=c*Y
Now you have Y = c*Y + I + G
Rearrange the equation so that: Y = (I + G) / (1 – c)
So you see, in Keynes' mind, the best possible outcome is when you spend 99.9999999% of your money.
He assumes investment is fixed and that the economy produces and consumes 1 single product. If you believe that, I have some lipstick I want to sell you. You can eat it for lunch.

theoakman says

Keynesian theory requires that the government spend the money because they don’t trust the general public enough to spend it for them to increase aggregate demand.

And I agree with this.

Good Keynesian spending ends up creating actual wealth that accretes to future earnings.

Just mailing money out to people results in empty consumption of consumer goods at best and higher living expenses (land/rents) at worse.

I recall plenty of Keynesian economists throwing a fit when George Bush implemented his own Keynesian experiment mailing everyone a $300 check.

Fat lot of good that did in the long run.

Troy says

theoakman says

Keynesian theory requires that the government spend the money because they don’t trust the general public enough to spend it for them to increase aggregate demand.

And I agree with this.
Good Keynesian spending ends up creating actual wealth that accretes to future earnings.
Just mailing money out to people results in empty consumption of consumer goods at best and higher living expenses (land/rents) at worse.
I recall plenty of Keynesian economists throwing a fit when George Bush implemented his own Keynesian experiment mailing everyone a $300 check.
Fat lot of good that did in the long run.

This country hasn't seen good spending in 50 years. It's a pipe dream with this Congress. The stimulus package was nothing but a bunch of subsidies to politically connected corporations and universities.

(never mind)

This is hardly QEII.

They're just staying they'll keep the balance sheet where it is, instead of letting it slowly wind down.

If you were looking for QEII, this certainly is not it. Rolling over payments into new debt purchases has been the policy of the Fed since... uh.... 1913.

Hey, maybe that inflation will kick in next year?

Nomograph says

theoakman says

The stimulus package was nothing but a bunch of subsidies to politically connected universities.

I think you’re just bitter because you didn’t finish. Weren’t you blaming Jon Corzine for all your problems last year?

Uhh, no. I successfully defended 2 weeks ago. You really are incapable of having a mature argument though. You always try to make everything personal. Thanks for trying though.

Btw...I'm not bitter. You know how much of that stimulus money went straight into my pocket for working part time?

tts says

No true Keynesian could back the gov.’s actions at this point nor have any faith in Bernanke’s or the Fed’s competence given their actions both recently and over the last decade or so

I don't know if I'm a "true Keynesian" or not. Is there a test? And I'm not a huge fan of Bernake either.

But you were right in your other post. The problem isn't the government's actions now--the problem was what the government did from 2000-2008.

Part of being a Keynesian is following the "run a surplus in the good times" part that everyone hates, if you don't do that part but spend spend spend all the time, then no you're not a Keynesian.

Also while the current gov. didn't start the mess they sure aren't helping, and that is just as bad. All they want to do is put the figurative band aide on the bullet wound, none of them will do what is really necessary.

tts says

Part of being a Keynesian is following the “run a surplus in the good times” part that everyone hates, if you don’t do that part but spend spend spend all the time, then no you’re not a Keynesian.

Exactly. Do you think this is a "good time"? Of course not.

tts says

All they want to do is put the figurative band aide on the bullet wound, none of them will do what is really necessary.

OK--what is really necessary?

From Nomo's linked article:
"San Diego County couples who want to join the state's 18,000 gay and lesbian couples in wedlock can now do so by setting an appointment with county officials and following the routine steps that heterosexuals do."

So, 18,000 couples are already married and the world is still turning? The government still operates, and mormons continue to send their missionaries to spread the word and sign people up... maybe it doesn't make a difference to anyone else, except the parties involved.

Maybe it is personal in nature, and not a political issue after all...

tts says

While I would agree that the tax system needs to be reformed it alone will not fix the mess. You could tax income at 100% rate and it still wouldn’t be enough to pay down the debt. We’re going to have to reform the entitlement spending (ie. SS and Medicare), and by reform I mean institute all sorts of stuff like rationing, means tests, and flat out cuts. We’re also going to have to massively cut spending on our military.”

Well, no true Keynesian would agree with you there. Cutting spending during bad times is not usually good policy....

Nomograph says

theoakman says

I successfully defended 2 weeks ago

That’s great, congratulations! Will you be taking a post-doc somewhere? I would suggest something different and marketable, perhaps biofuels or alternative energy research. This is the time to change research areas if you want.
theoakman says

You really are incapable of having a mature argument though.

I really can’t disagree with you there.

I'm teaching high school again this year. I also retained a part time position at the University as an instrument tech. I don't plan on doing a post-doc. I can't work for a low salary now that I'm married. Also, I'm kind of geographically limited to the NJ/Philly area. I'm looking to go into Alternative Energy development at GE.

Can't nominate yourself? Okay -

(9) Nomograph - MD with a snarky outlook who consistently speaks his own mind, regardless of the reception he may get.

(10) Mikey, a very punny guy.

tatupu70 says

tts says

While I would agree that the tax system needs to be reformed it alone will not fix the mess. You could tax income at 100% rate and it still wouldn’t be enough to pay down the debt. We’re going to have to reform the entitlement spending (ie. SS and Medicare), and by reform I mean institute all sorts of stuff like rationing, means tests, and flat out cuts. We’re also going to have to massively cut spending on our military.”

Well, no true Keynesian would agree with you there. Cutting spending during bad times is not usually good policy….

That's not true. There are a ton of super talented scientists and engineers that could be adding to the productive capacity of the US in private jobs that are currently employed by the military. Unless we plan on selling weapons to the rest of the world, we would be better off employing those individuals in jobs that add to the productive capacity of the economy.

In a forum with posters that lack balance, Pkennedy is very balanced and gets it.

I nominate SF ace. Very well rounded and has knowledge in just about everything discussed here. Optimistic thinker but still realistic.

theoakman says

That’s not true. There are a ton of super talented scientists and engineers that could be adding to the productive capacity of the US in private jobs that are currently employed by the military. Unless we plan on selling weapons to the rest of the world, we would be better off employing those individuals in jobs that add to the productive capacity of the economy.

Agreed--but before they could find those new jobs that add to the productive capacity, they'd be unemployed. And that would be bad in the short term. That's why it's better to make the cuts during good times when jobs are available.

How's about Knewbetter and Techgromit? They've been here forever, too. They're fair in their assessments and can respectfully disagree with you - or me.

Please add to Nomo's something 'bout how his snarky comments has caused me to sneeze various liquids onto my keyboard. (I really like the word "snarky," can ya tell?)

Will there be an awards ceremony? Can I bring my pistol?

tatupu70 says

theoakman says

That’s not true. There are a ton of super talented scientists and engineers that could be adding to the productive capacity of the US in private jobs that are currently employed by the military. Unless we plan on selling weapons to the rest of the world, we would be better off employing those individuals in jobs that add to the productive capacity of the economy.

Agreed–but before they could find those new jobs that add to the productive capacity, they’d be unemployed. And that would be bad in the short term. That’s why it’s better to make the cuts during good times when jobs are available.

So, you give them their severance and let them find a new job.

Shouldn't Mikey be in the hall of shame? He's just a serial punster who likes to milk it. I know it sounds corny, but I guess that's Life.

PS: Don't forget that Ray guy. He wants everything to be all right.

Who gets the remote is still a war, regardless of orientation. Things do change after sanctioned marriage.
The kink factor evaporates after nuptials, gay or straight, and few survive the Cinderella syndrome when the white picket fence fades with familiarity.
The trouble starts even before the rice is thrown.
Male and female is a bad mix all around, except perhaps, in the animal world, where sex leads to much less drama.

There was a guy named Surfer-X who posted quite often in the old days. He has a penchant, a flare shall we say, for profanity.

theoakman says

So, you give them their severance and let them find a new job.

Meanwhile the economy goes further down the dumps and more people get laid off. Which in turn lowers your tax revenue and actually increases the deficit. No thank you.

mikey says

Shouldn’t Mikey be in the hall of shame? He’s just a serial punster who likes to milk it. I know it sounds corny, but I guess that’s Life.
PS: Don’t forget that Ray guy. He wants everything to be all right.

See number ten, dude. I nominated you, 'twas a nominal effort.