| To: LLCF who wrote (29352) | 3/25/2005 1:12:55 AM | | From: mishedlo | | | | Exactly, it is by no means as clear as what the article said.
Oddly enough I agree with most of the article.
Just the premise was wrong.
Shhesh
Mish |
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| To: mishedlo who wrote (29351) | 3/25/2005 1:15:39 AM | | From: Elroy Jetson | | | | While higher interest rates will help the dollar, the author points out the many reasons why the Fed will experience problems raising them.
If Volker were running the Fed, I'd be betting on the US Dollar rising as his past behaviour makes it clear that he is willing to put the US through that level of pain.
Unless Greenspan's alter-ego emerges to do the same, I think he's going to lose his nerve before we get too far along the road to that higher dollar and drop rates back down. With Greenspan's temperment I fear this is a long drawn out ugliness similar to Japan.
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| To: Elroy Jetson who wrote (29354) | 3/25/2005 1:45:12 AM | | From: mishedlo | | | | With Greenspan's temperment I fear this is a long drawn out ugliness similar to Japan.
Oddly enough that is the BEST we can do from here IMO.
The alternative is one huge global depression for 4 years.
Mish |
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| To: mishedlo who wrote (29355) | 3/25/2005 1:51:40 AM | | From: Elroy Jetson | | | | I prefer the fast and quick. I am reminded of a Pogo cartoon of many years ago.
A bulldog, looking very much like J Edgar Hoover is inspecting agent training with Pogo at his side.
The trainee is beating a gunny-sack with a face painted on it. The instructor reprimands him saying, "Don't beat the prisoner like that - beat him like this, it's more humane."
Upon saying this, the trainer doubles the intensity of the beating. Pogo looks at J Edgar Hoover and says, "More humane?"
The bulldog replies, "Yes, this way it's over faster."
I have always preferred the "more humane" recession.
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| To: Elroy Jetson who wrote (29354) | 3/25/2005 2:20:32 AM | | From: michaelrunge | | | | >Unless Greenspan's alter-ego emerges to do the same, I think he's going to lose his nerve...
If Greenspan were going to raise rates now to "save the dollar" would he have lowered rates as low as he did, for as long as he did? No, he knew at the time what the outcome would likely be. The very fact that he did what he did leads me to believe that he won't try to "save the dollar". He might try and make it look that way, but not really.
To save the dollar at this point would be to put GM out of business. And a lot of other major financial players.
Mike |
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| To: michaelrunge who wrote (29357) | 3/25/2005 2:47:00 AM | | From: John Vosilla | | | | | As long as real short term rates remain negative and there remains some steepness in the yield curve Greenspan hopes to avoid a collapse and save his banker friends. He can actually pretend to be instituting a tight money policy since the BLS inflation figures are way understated. Lots of other things have to go right like increasing wages and pricing power at real inflation rates for most businesses. |
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| To: michaelrunge who wrote (29357) | 3/25/2005 7:50:40 AM | | From: Crimson Ghost | | | | But the consequences of the dollar losing its reserve currency status could be worse than a severe recession or even a GM bankruptcy And a further plunge in the greenback could well trigger this.
My take is that Greenspan does not care much about the buck UNLESS ITS RESERVE CURRENCY STATUS IS THREATENED.
And we may be nearer to that point than many think |
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| To: orkrious who wrote (29346) | 3/25/2005 9:03:10 AM | | From: russwinter | | | | This Schiff commentary is an important piece. Again, the fate of the USD will depend on the Fed's and US Treasury response to the fallout from "normalizing" rates and reducing liquidity injections. Right now the actions as I've been tracking suggests that the money printing is being cooled off post Dec. 8th. So for three and a half months the Fed has engaged in a credible USD defense, while as before their policies (mostly Ministry of Propaganda shenanigans) were killing the USD. If they bring Uncle Ernie back out at the first sign of trouble however, the USD will swoon, it's that simple in my view.
The test of this new found Uncle Ernie in the closet persona is soon at hand. Consumer and HELOCs lending since the beginning of the year has turned basically flat,
federalreserve.gov
federalreserve.gov
and consumer confidence has suddenly plunged,
rasmussenreports.com
bank deposits are no longer growing,
federalreserve.gov
YOY steel and auto production is falling off, Feb inbound shipments into the three big California ports was 601,645 vs 615,181 in January. The thing that's missing so far is credit seizure, and a big widening of credit spreads. We've only seen that at the margins (GM), and I think that's because the Pig Men with their four football fields size trading floors still have incentives to speculate. The consumer may be tapped, but rates are still too far below inflation for Bully and Pig Men not to mobilize credit to buy everything from oil to junk bonds. |
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