tag:blogger.com,1999:blog-6758770623162438423.post4440667632969951731..comments2023-09-28T04:27:48.195-07:00Comments on Goatmug Blog - Financial Perspectives from the Mountain Top: Give Us Something To Believe InGoatmughttp://www.blogger.com/profile/06717166521459240516noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6758770623162438423.post-5749603880226217292009-12-31T02:04:01.395-08:002009-12-31T02:04:01.395-08:00G
I told you you're worried for nothing. Not ...G<br /><br />I told you you're worried for nothing. Not only those programs won't be stopped, but a 4$ trillion bill is in the pipe in case things move in the bad direction.<br /><br />http://globaleconomicanalysis.blogspot.com/2009/12/congressional-legislation-introduced-by.html<br /><br />I realize now how foolish I was to believe in all these long-term deflation talks.daciannoreply@blogger.comtag:blogger.com,1999:blog-6758770623162438423.post-65243306619033704542009-12-28T20:05:47.194-08:002009-12-28T20:05:47.194-08:00Great analysis Goatmug! However... (Always a '...Great analysis Goatmug! However... (Always a 'but' or 'but equivalent' in there, isn't there...)<br /><br />I think that one thing you're not factoring in is that there are several states, and hundreds of counties & municipalities that are going to declare b/k. This is going to be huge, and require re-negotiating down hundreds of billions of pension & bond obligations.<br /><br />That, along with CRE, Alt-A, credit card and sovereign debt defaults (not to mention new and existing spending mandates) will increase deflationary pressures beyond what can be dealt with by printing (w/o disrupting markets beyond their ability to function effectively).<br /><br />As a result IMO the reset button will have to be pushed on or about (coincidentally enough) 2012. We will need a worldwide debt jubilee and a new, non-debt based currency (either each nation, or worldwide), probably one based on commodities and metals.Dave Narbyhttps://www.blogger.com/profile/10773693145577366704noreply@blogger.comtag:blogger.com,1999:blog-6758770623162438423.post-81393234261764076482009-12-28T12:01:47.913-08:002009-12-28T12:01:47.913-08:00Thansk Goatmug
I would like to make few comments ...Thansk Goatmug<br /><br />I would like to make few comments here.<br /><br />"Banks and other bank holding companies...er investment banks and insurance companies can now borrow at zero overnight and buy stocks, bonds, and commodities. Is there any wonder why all markets are screaming? What happens when that money is taken back?"<br /><br />There is no wonder; banks and insurance lobbied for that, so they got it. The money will never be taken back.<br /><br />"While short-term manipulation has been successful, it is just that - short term. The bond market is bigger than any one central government and the bet made by Bernanke is going to be called."<br /><br />Actually, the market as a whole is bigger than countries; but governments and FED are the bigger than the biggest players and the market; the prove is they can manipulate it (or influence it, whatever you want). Where was the bond market in 2008? Where is the japanese bond market letting that country running 200% public deficits. Can someone tell me please?<br /><br />"Home sales look to be moving up, but we must ask how long this will continue if rates jump substantially, cash for houses go away, the FED stops buying MBS (stops being the market), or banks actually release the huge backlog of foreclosures that they have kept on their books."<br /><br />All that - MBS buying, banks holding foreclosed homes for longer, etc. - will continue and it will be extended if needed; remember what Geithner said, look what they're doing with Fannie & Freddie - unlimited support, the market just loves it.<br /><br />"I'm very concerned that this could change if any of the government help is removed or investors demand higher rates and push mortgages rates over 6%."<br /><br />You don't have to worry as everything will be reactivated back if needed (I think actually it won't be removed at all).<br /><br />"We still don't know what banks are worth and they are still raising capital and still lying about the risk on their balance sheets."<br /><br />That is not that critical; what's important here is the market buys the lie, stocks move up and capital raising is successfull.<br /><br />"The dollar devaluation trade is simply a move to destroy the value of the dollar relative to other currencies."<br /><br />There is another lie we've been told: because currencies float, they can't be manipulated by governments; FOREX is too big to be manipulated. I was naivily thinking the same until recently.<br /><br />"The government states that it wants to keep rates low to stimulate lending, but I can also see that we need to keep rates low to keep from blowing our own foot off since we have been purchasing our own debt through quantitative easing.<br /><br /><br />The bond market at some point will change the behavior of our current administration and the corrupt politicians that look to hand out entitlements and lack the idea of being representatives of the people."<br /><br />Neih; the bond market can be very well manipulated in coordinated efforts among main central banks + lies. Again, you don't have to be bigger than that, just please investors and give them a bit of that drug; they'll do the dirty work for you.<br /><br />"We will see drastic cuts in city and state budgets and services before we see anything on the Federal side, but cuts will come at the national level."<br /><br />Maybe we'll see some local state budget cuts (as they can't print on their own), but overall don't expect any cuts in services or stimulus programs or "cash for traders" (we don't have that yet?).<br /><br />Overall you're a bit too worried; I think at the smallest sign of weakness we'll print (wasn't this guy chosen the man of the year while he was doing that?). Remember what Geithner said. The bond market we'll say nothing; US can go as 30$ trillions public debt with no problems imo, exactly like Japan. It's not that hard to do it I guess, the current administration might succeed at doing it I think; I'm quite confident actually :)<br /><br />Thanks again for this post!daciannoreply@blogger.com