Comments on Matt Stewart's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/matt-stewart/articles http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-799858 799858 Thu, 10 Dec 2009 11:05:23 -0500
Who says monetary policy is currently designed for the 'Prima Facie case'? Remember that the Fed, in order to avoid complete financial system freeze up, took myriad new types of, ahem, lower quality assets onto its balance sheet as collateral from banks. This is still the case. Banks also still hold gobs of the stuff. Flattening the yield curve in order to be more fair to savers would restart the precipitous decline and/or evaporation of liquidity in these assets. That would hardly be in anyone's interest, saver, banker, even you.

The time to tighten is when things are still humming along. Were you advocating this in late '07?

]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-794426 794426 Mon, 07 Dec 2009 12:14:58 -0500
It's a waiting game - at least that's the game they're playing. They're hoping that enough people can jump into the housing market while the "getting is good".

The problem is that it's not going to work.
]]> http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-793965 793965 Mon, 07 Dec 2009 09:02:42 -0500
They were saying the same thing back in 1933 & the administration did pull the plug on easing & guess what happened. Thank goodness I don't believe the Fed will follow your advise.

Kirby ]]> http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-793428 793428 Sun, 06 Dec 2009 22:10:55 -0500
Furthermore, QE adds nightmare scenarios no one has ever dreamed of before like massive Federal Reserve losses, decade after decade recession with no recovery, a banking system addicted to Fed bond buying to keep them solvent, a fed that sucks money out of the economy just to finance it's QE and becomes the clearinghouse for the whole US economy's bonds at rsk to the taxpayer, and trillions of dollars annual stimulus paid for by dollar depreciation without so much as a single vote cast making the base of power shift from an elected government to a private bank with the head of the Federal Reserve being more powerful that the President.

You can decide which portion of these QE scenarios are most likely and which are already coming true. Zirp and QE is as bad for America as it is for those that save. It's about time Bernanke realized it. The fact that only 24% of the public approves of the Federal Reserve (less than Congress) shows that the public already knows inplicitly if not explicity that it serves to shift money and asets from them to bankers and is bad for them.

If you want the Federal Reserve to retain such power at least we should make them accountable. This should start by at least making them adhere to the good accounting principals they demand from others. Open your books Bernanke!]]> http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-793085 793085 Sun, 06 Dec 2009 16:02:06 -0500 http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-793084 793084 Sun, 06 Dec 2009 16:01:53 -0500
Bank Index negatively diverging, this weakness is beginning to weigh on the overall market and now we have the banks being sold in face of good news.

charts on my intablg

1 - Banks not confirming sp500 highs

2 - Banks began to lead downside Oct 15th

3 - Nov 1st Banks began to lag as sp500 rallied to new highs but not confirming sp500 highs.

4 - Banks participate in the recent rally to new highs.

5 - They now have formed lower highs.

In my opinion a Bank index Correction is Imminent. it’s time to came flat. Get profits. And wait next good opportunity.

Take care]]> http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-792308 792308 Sun, 06 Dec 2009 05:40:07 -0500 http://seekingalpha.com/article/176710-time-to-flatten-the-yield-curve?source=feed#comment-792305 792305 Sun, 06 Dec 2009 05:28:38 -0500 http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-792242 792242 Sun, 06 Dec 2009 02:38:43 -0500
And the government has done lots of actions to actually hurt some of the commercial banks. Most of the really bad banks when it came to subprime etc. failed or were taken over by stronger players when they were about to fail. Changing the capital requirements in the middle of a recession despite the fact that a supposed zombie bank like Bank of America will end up having squeaked out a profit in 2008 and 2009. Instead of demanding that they raise capital when their stock prices where high, the government handed them billions and that was a mixed blessing for the banks to say the least since the terms of the loans for all practical purposes were changed.... It was actually a bad deal for most of them. Most major commercial banks would have survived if the government and regulators just did their job at enforcing capital requirements. Yes, there would have been dilution for stockholders but less then what has happened to a few banks.

I don't completely agree with the policies but low interest rates are response to any recession in the US nowadays. In 2001 the banks weren't in trouble but interest rates were still lowered quite a bit so the economy would pick back up after the dotcom bust.

And don't kid yourself... the government is most concerned about saving its tax revenue base and that is the main reason for low interest rates. If the rates were 2% right now, sure home prices would be moderately lower as well. Low home prices = low property taxes. S&P at 500 = even lower tax revenue. So, tax revenue would also been much lower and can the US afford that? The government has gotten *very fat* and used to high tax revenues. I wouldn't have minded the entire system being reset but the banks at their worst financial position were not in nearly bad shape as government entitlement programs and pension obligations! Without MBS being bought buy Bernanke, the banks would have been hurt but those affects may have been offset by an even larger spread on mortgages.

I don't agree with the bailouts of AIG, GM, Chrysler and the GSE's but Bernanke and Paulson/Geithner were correct in deciding to take decisive action to make sure there wasn't a run on the banks. JMP, Wells Fargo, BofA, Citigroup all failing would have led to everyone taking their money out of their banks. Nationalize Citigroup and literally everyone puts their cash in the Citigroup. I don't agree with some of their decisive actions but overall they did a reasonable job responding to the crisis. The government deserves tons of blame for doing little to prevent a major crisis in the first place.




]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-791902 791902 Sat, 05 Dec 2009 16:52:24 -0500
2. Immunized unsecured bondholders... oh, you mean the retirement accounts of millions of citizens. Enough said there. The real issue here is that the government has really only back-stopped a few lynch-pin companies. You don't have to like it, but don't equate it to an across-the-board policy because it isn't. Automakers have been screwed for years, bondholders should NOT be surprised. Other then that you are basically talking about AIG which is a special case hardly indicative of a broader policy. This is one of those press-hyped issues that has gotten a few people into a big frenzy over basically nothing.

3. The carry trade is overrated. If the Fed is forced to raise interest rates they will but the carry trade hurts foreign entities a lot more then it hurts us... those entities have the ability to adjust their own monetary policy (right out of Bernanke's mouth, but he's right).

4. The natural rate for long-term mortgages has always been set by the government, because we wouldn't even HAVE long-term mortgages without government help. Take on 30-years worth of interest rate and inflation risk? Right... banks wouldn't offer them at all. In anycase, who is going to pull us out of this recession? The middle class. Who benefits the most from low long-term mortgage rates? Think about it... yup, the middle class, where a family able to refinance a loan can literallly put a few hundred dollars more in their pocket EVERY MONTH (screw the Bush tax refund, this is much better). Sounds like good policy to me.

-Matt]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790953 790953 Fri, 04 Dec 2009 17:52:04 -0500 http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790888 790888 Fri, 04 Dec 2009 16:53:01 -0500
I believe the Fed, both Greenspan's as well as Bernanke's, made some serious blunders. (I rate the whole organization, Bernanke is the person that sticks out the most. I don't believe that Bernanke makes up Fed policy any more than I believe that the President makes laws.)

I believe that our Congress had a bigger hand in creating our mess. They respond with less understanding of economics; in permanent ways, to temporary problems; with political agendas; with deference to a small part of the country; too slowly and inefficiently to effectively address the problems that arise in our economy.

I know it seems popular to blame Bernanke for our mess, and call for the dismantlement of the Fed. Like I said, I know that the Fed is partly to blame. However, after watching some of the economic debate on the CSPAN channels, I really worry about putting our economy in the hands of those macro-economic morons.

I sleep much better knowing that the economy is not totally under Congressional control.]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790706 790706 Great Comments Moon Kil...of course...the hope is that while they > prop everything up, loans amortize and run-of...and the deleveraging > is orderly... > > but how does this dovetail with the rhetoric that the economy needs > more credit and not less??? > > A...it doesn't. > > Effectively, US savers are now indirectly paying off their neighbours' > mortgage balance... > > now that is socialism! > > Uncle Sam is currently the lender of last resort for $5 trillion > of RMBS...QE is the only way they avoid widespread defaults...and > write-downs underwritten by US Taxpayer ... > > no matter how you slice it...avg. Joe is getting hosed...]]> Fri, 04 Dec 2009 14:15:59 -0500
I'm all for a revolution in this country ... but I don't believe in Marxist philosophy. Violence is fruitless and does more damage than good. And don't forget our "founding fathers" of the U.S. were at one time, extremist revolutionaries who espoused violence ... to what end ???

Because only two hundred years after the U.S. constituition has been ratified ... America finds the document to be full of falsehoods ... and lets not forget the 1860s. The sad fact about this country and the world in general ... not a day goes by were misery begets violence and revolution.

Bernake's actions are trying to forestall such a revolution ... but when it comes ... it's going to blow like Mt. St. Helen ... not like the volcano in Hawaii.


On Dec 04 10:25 AM Matt Stewart wrote:

> Great Comments Moon Kil...of course...the hope is that while they
> prop everything up, loans amortize and run-of...and the deleveraging
> is orderly...
>
> but how does this dovetail with the rhetoric that the economy needs
> more credit and not less???
>
> A...it doesn't.
>
> Effectively, US savers are now indirectly paying off their neighbours'
> mortgage balance...
>
> now that is socialism!
>
> Uncle Sam is currently the lender of last resort for $5 trillion
> of RMBS...QE is the only way they avoid widespread defaults...and
> write-downs underwritten by US Taxpayer ...
>
> no matter how you slice it...avg. Joe is getting hosed...]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790650 790650 Fri, 04 Dec 2009 13:42:13 -0500 There are people working on a "real" methods of control;
www.sciencedirect.com/...

It comes down to math, regardless of the chaos involved. Look at missile guidance systems, delivering tons of pressure to fin accuators in microseconds, in response to sensor input gathered microseconds earlier. You think we can't control the stupid economy? We can.... they won't let us.]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790265 790265 Fri, 04 Dec 2009 10:25:55 -0500
but how does this dovetail with the rhetoric that the economy needs more credit and not less???

A...it doesn't.

Effectively, US savers are now indirectly paying off their neighbours' mortgage balance...

now that is socialism!

Uncle Sam is currently the lender of last resort for $5 trillion of RMBS...QE is the only way they avoid widespread defaults...and write-downs underwritten by US Taxpayer ...

no matter how you slice it...avg. Joe is getting hosed...

]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790117 790117 Fri, 04 Dec 2009 09:27:57 -0500
Although Bernanke and Greenspan echoed that bubbles are best addressed after they pop, I strongly disagree. After Bernanke's zirpish QE commodity and stock bubble pops who will bail out who then and can we afford it?

Can we even affird to prick the CDS, CMO derivatives market? Or the commercial property market? Although Bernanke say he saved the US, did he? Or did he just pull a big sheet over it as he digs a hole in which to bury this mess once and for all? If the US economy is better why is he bailing out Fannie Mae Freddie Mac and AIG still by buying up their bonds and giving them taxpayer credit facilities?

Why is he still backstopping commercial property and other bonds thwe baks hold, why still QE and zirp. Fine is when we have a 4% fed funds rate, no QE, and the markets don't melt down Bernanke. To say otherwise means you are not fit for the job. America was not fine under Bernanke's stewardship. He make a historically terrible mess that he is still hiding under artificial dollar depreciation and 0% interest policies.

We can't even unwind QE without the market collapsing. That itself is a bigger mess than Citibank, BoA, and Welld Fargo going bankrupt. If you dount it go ask any Ivy leauge economics department to run the numbers. They will find instant QE reversal in this market will result in a VL, as in a double dip with no recovery. That's why no one can suggest it with a straight face. It's downright unpalatable. But in the long run we must unwind or remain in eternal recession much like Japan.]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-790006 790006 Fri, 04 Dec 2009 08:44:24 -0500
Since the only source of wealth is "We The People" it should not come as a surprise that socialist governments steal from "We The People" to feed their institutions including the big boated Wall Street Banks.

Americans voted for socialism (Social Security, Medicaid, Medicare, Fannie Mae, Freddy Mac, Cash for Clunkers, Food stamps, etc., etc., etc.) and now you are reaping what you voted for. If the many support a safety net, the few unfortunates can enjoy it. If everyone is IN the safety net, there is no safety net because there is no one left outside to hold it up.]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-789946 789946 Just like Churchill helped to save Great Britain (the people thanked > him > by voting him out of office)....Bernanke helped to save our financial > system.....]]> Fri, 04 Dec 2009 08:24:34 -0500
Bernanke is an employee of the Fed. Who owns the Fed? The Wall Street Banks do. The Fed was created to coddle these banks and Ben Bernanke is acting true to form.

The problem in not Ben Bernanke, the problem is his firm, his employer, The Fed!

On Dec 04 06:59 AM bbro wrote:

> Just like Churchill helped to save Great Britain (the people thanked
> him
> by voting him out of office)....Bernanke helped to save our financial
> system.....]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-789942 789942 Fri, 04 Dec 2009 08:22:41 -0500
I am far more comfortable with the Ben Bernanke I know and respect, than I would be with a new appointment by the Obama Administration (with of course the usual assistance of Nancy Polesi). So those of you who are calling for Ben's head on a pike, should also name your favorite candidate to replace him.

Ben is to be reappointed, thank you.]]> http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-789897 789897 Fri, 04 Dec 2009 07:59:15 -0500 http://seekingalpha.com/article/176549-bernanke-needs-to-go?source=feed#comment-789810 789810 Fri, 04 Dec 2009 06:59:05 -0500 by voting him out of office)....Bernanke helped to save our financial system.....]]> http://seekingalpha.com/article/126559-stop-the-presses-bernanke-geithner-is-out-of-control?source=feed#comment-457485 457485 > The Anti-capitalists control the world today. They have our money. > We are told, "Trust me." God has nothing to do with it.]]> Thu, 09 Apr 2009 10:47:05 -0400
pacman1947 wrote:

>
> The Anti-capitalists control the world today. They have our money.
> We are told, "Trust me." God has nothing to do with it.]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-441788 441788 Thu, 26 Mar 2009 23:19:47 -0400
Let us look back at the recent history:
- Carl Marx theory and central-planning economy worked only in "intellectual elite" minds. The both have proven to be complete failure
- When people with "great" ideas fail, people start desperately look for leader to follow. It happened with Hitler, Mao, Stalin, etc.,

Consequences are always the same: dictatorship, wars, and endless suffering. Eventually, people become tired of this shit and societies return back to something "normal & peaceful" when people work hard and understand meaning of the life. People standards of living start to improve only when some form of a free-market economy returns back.

But in any case, life continue regardless of anything.]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-441034 441034 Sir, would you be able to comment on the possibility of a kind of > government organized (but not government-owned) cooperative to lend > mortgage money? Well, credit unions ARE a kind of co-op organized by the government, and they lend money for mortgages. The fundamental problem with a mortgage co-op (if that's what you're referring to) is that you'd need a person or persons to put up a sizable chunk of money (even if the borrower put down a decent down payment) for a long (i.e. 15 or 30 years) period of time. Note that this type of co-op DOES occur in certain instances: * older family members lending money at very low interest rates to younger members so that the younger members can buy property * established members of a particular ethnic community (Jewish, Chinese, etc.) lending money at very low interest rates or for a share of equity to younger members so that the younger members can purchase capital and build a business I do not think that this type of activity can gain acceptance among large portions of our population. Families and ethnic communities are willing to take greater risks and lower returns for two key reasons: (1) they have inside knowledge about the borrower and his upbringing that financial institutions do not have and/or (2) they receive some utility/satisfaction by "helping out" a member of their "tribe" or "clan."]]> Thu, 26 Mar 2009 11:15:52 -0400
> Sir, would you be able to comment on the possibility of a kind of
> government organized (but not government-owned) cooperative to lend
> mortgage money?

Well, credit unions ARE a kind of co-op organized by the government, and they lend money for mortgages. The fundamental problem with a mortgage co-op (if that's what you're referring to) is that you'd need a person or persons to put up a sizable chunk of money (even if the borrower put down a decent down payment) for a long (i.e. 15 or 30 years) period of time. Note that this type of co-op DOES occur in certain instances:

* older family members lending money at very low interest rates to younger members so that the younger members can buy property

* established members of a particular ethnic community (Jewish, Chinese, etc.) lending money at very low interest rates or for a share of equity to younger members so that the younger members can purchase capital and build a business

I do not think that this type of activity can gain acceptance among large portions of our population. Families and ethnic communities are willing to take greater risks and lower returns for two key reasons: (1) they have inside knowledge about the borrower and his upbringing that financial institutions do not have and/or (2) they receive some utility/satisfaction by "helping out" a member of their "tribe" or "clan."]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-440604 440604 Here's a great idea. Lets have everyone save 100% of what they earn. > This will lead to 100% unemployment. All businesses will go bankrupt > and fail(I mean they were run by terrible people anyway, right, right...) > and we'll just start over with all the "smart people who don't make > mistakes" running the show. > Except cars won't have windows or air conditioning, maybe brakes. > > Online banking, atms, secure banking are all out. > Health care will be completed with leeches, CAT scans and expensive > surgeries are out. > Energy - we won't need it, we'll all be living in tents and living > off of seed. > Internet - sorry, shut down, just no capital for it. > > What petri dish does this all work in?]]> Thu, 26 Mar 2009 05:19:17 -0400

On Mar 25 03:33 PM CJJ wrote:

> Here's a great idea. Lets have everyone save 100% of what they earn.
> This will lead to 100% unemployment. All businesses will go bankrupt
> and fail(I mean they were run by terrible people anyway, right, right...)
> and we'll just start over with all the "smart people who don't make
> mistakes" running the show.
> Except cars won't have windows or air conditioning, maybe brakes.
>
> Online banking, atms, secure banking are all out.
> Health care will be completed with leeches, CAT scans and expensive
> surgeries are out.
> Energy - we won't need it, we'll all be living in tents and living
> off of seed.
> Internet - sorry, shut down, just no capital for it.
>
> What petri dish does this all work in?]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-440535 440535 Thu, 26 Mar 2009 01:36:07 -0400
It isn't the governments job to save everyone from their bad decisions. It's their own job. In fact it's not even advisable for the government to do so. As the proverb goes: let the child fall and pick himself up - he will learn how to avoid falling and have confidence that he can get back on his feet on his own!]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-440064 440064 Wed, 25 Mar 2009 15:33:09 -0400 Except cars won't have windows or air conditioning, maybe brakes.
Online banking, atms, secure banking are all out.
Health care will be completed with leeches, CAT scans and expensive surgeries are out.
Energy - we won't need it, we'll all be living in tents and living off of seed.
Internet - sorry, shut down, just no capital for it.

What petri dish does this all work in? ]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-439729 439729 Wed, 25 Mar 2009 12:12:40 -0400

Regards
Koh Choon Lin]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-439710 439710 Wed, 25 Mar 2009 12:01:52 -0400
Just before the situation turns sour, at the peak of oil prices (another bubble caused by wasteful spending), one can buy a new automobile with zero interest loan.

There should be a proper cost for consumption, not an artificially created low or high cost. Throwing money in to stimulate consumption will cause more problems; the money should better be wisely used for useful infra-structure and smart business investment.]]> http://seekingalpha.com/article/127727-geithner-vs-schiff-a-thought-bridge-between-two-wrongs?source=feed#comment-439692 439692 Wed, 25 Mar 2009 11:51:16 -0400
Keynesian policy got us into this mess and the current "fixes" are to apply "more of the same". Let's see how that works.]]>