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Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality,...

Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton."
Comments (67)
  • Machiavelli999
    , contributor
    Comments (829) | Send Message
     
    What were the markets telling us about the economy in, oh let's say November 2007?
    24 May 2010, 06:20 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    Audit the Fed and see the real Bernanke, not the public "all's well" one. We are not in recovery without Uncle Sugar, hence we're not in recovery period.
    24 May 2010, 06:32 PM Reply Like
  • Bill S. Friend
    , contributor
    Comments (715) | Send Message
     
    Audit the FED! www.ronpaul.com/on-the.../
    24 May 2010, 10:32 PM Reply Like
  • Tesa
    , contributor
    Comments (273) | Send Message
     
    Printing more cash will only make the markets rally.
    24 May 2010, 10:55 PM Reply Like
  • zorrow
    , contributor
    Comments (1244) | Send Message
     
    Thumbs down is not for you its for Ron Paul. The only reason he's in congress is that he's a baby doctor who's against abortion, and his congressional district is the center of the Evangelical worshiptoriums.
    His economics are nonsense. If he ever changed his position one centimeter on abortion, his constituency would be gone.

     

    Young people are impressionable. Whether its Hitler Youth, Children's Crusades, Kyhmer Rouge, or strapping a bomb on themselves and blowing up people in a marketplace. We used to transmit cultural values en masse through allegory, myth and cultural tradition. All that's broken down. To me, that may be a worse harbinger for civilization, then all the Libor spreads and other scary charts put together. Now we have poo throwers like Rush and Glen and Paul and Pallin poisoning the potential of our youth.
    26 May 2010, 08:13 AM Reply Like
  • Silentz
    , contributor
    Comments (714) | Send Message
     
    "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton."

     

    I'd take that a step further. We should be getting rid of every ivory tower intellectual in Washington. Period.
    24 May 2010, 06:36 PM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    and ever expert blogger should follow that purge.
    24 May 2010, 07:07 PM Reply Like
  • jqaman
    , contributor
    Comments (26) | Send Message
     
    unfortunately, there aren't too many intellectuals in washington.
    8 Jun 2010, 07:29 PM Reply Like
  • nyuszika45
    , contributor
    Comments (633) | Send Message
     
    There is even a question? It looked like the market voted on this issue in the last week or so, or is Bernanke looking at the chart upside down, again?
    24 May 2010, 06:39 PM Reply Like
  • Machiavelli999
    , contributor
    Comments (829) | Send Message
     
    You guys are so foolish and such ardent believers in the Efficient Market Hypothesis.

     

    What was the market telling you a month ago about the economy? You guys are like Rush Limbaugh. Only pointing out the market when it goes along with your narrative.
    24 May 2010, 06:47 PM Reply Like
  • jqaman
    , contributor
    Comments (26) | Send Message
     
    Until they start talking about things like the major indices being below there 200 day moving averages and the very low number of stocks hitting new highs, its just a bunch of baloney to manipulate public opinion.
    24 May 2010, 07:00 PM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    you are seriously suggesting that the nation's monetary policy should be driven by 200 dma????
    24 May 2010, 07:29 PM Reply Like
  • jqaman
    , contributor
    Comments (26) | Send Message
     
    no, i am suggesting that individual investors are easily led astray by hogwash and gobbledygook from people they perceive as experts who tend to parrot info they have been fed and ignore indicators that many more well educated investors are looking to for guidance like 200 dma, number of highs and lows, corporate profits, corporate spending etc. this was not about our govt
    8 Jun 2010, 07:28 PM Reply Like
  • Ohrama
    , contributor
    Comments (532) | Send Message
     
    And what happened to the thoughts that Fed, PPT etc. are propping up the market? If so, they are one and the same, and uncle Ben should know exactly what is happening. Perhaps he is telling the public something different.
    24 May 2010, 07:02 PM Reply Like
  • Harry Tuttle
    , contributor
    Comments (2221) | Send Message
     
    Bernanke is a politician. That is why he works in DC. Politicians are in the business to being popular, so they do whatever it takes to be popular.

     

    The stock market, of course, loves him, as do the herds that make a living peddling "stocks for the long run" to the middle class.

     

    As long as people continue to think the economy IS the Dow Jones Index we will continue to replay this charade until it blows up.

     

    We have nobody to blame but ourselves.
    24 May 2010, 07:12 PM Reply Like
  • Paul Nelson
    , contributor
    Comments (225) | Send Message
     
    Yeah, the all knowing traders should make policy for the rest of us-go back on Kudlow's show with your nonsense.
    24 May 2010, 07:48 PM Reply Like
  • cstauffer
    , contributor
    Comments (506) | Send Message
     
    I used to respect Pento's opinions whether I agreed or disagreed with them, however this comment eliminates that respect if he was at all serious in his suggestion. Markets are at best a mixed bag of accuracy in determining the direction of the economy. Markets are inherently driven by bids and asks and are very succeptable to human emotions, momentum and short-term trading strategies. All I have to say is a 30% weighting of the technology sector in late 1999 and 21% weighting of the financial sector in early 2008. How about investor capitulation which usually accompanies a market bottom?
    24 May 2010, 08:05 PM Reply Like
  • JasonC
    , contributor
    Comments (4062) | Send Message
     
    What horsefeathers. The Fed has been right and early by 6 to 12 months throughout, and everyone acting on its forecasts has done fine. The markets, meanwhile, have swung from extremes of complacency to extremes of doom, all of them unsustainable and unsustained, and anyone listening to and trend following them has been eviscerated repeatedly.

     

    The universe of losers fading the Fed throughout hasn't changed, and they haven't made a dime doing it. They all screamed that rates at 5% were way too low and would result in hyperinflation as they bid oil to $150 a barrel and house prices to infinity, while the Fed already saw the yield curve inverted and correctly started cutting. Then they predicted the market would go to zero and it proceeded to recover 80% on the support of Fed action, which the same chorus roundly denounced.

     

    I'll take the Fed over you-lot every day and twice on Fridays.

     

    Don't. Fight. The Fed.
    24 May 2010, 08:10 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Really?

     

    So I missed the news release from the Fed, and Congress, in March of 2007 telling me about the coming catastrophe.

     

    Mind giving me a link so I can see how "in touch with the economy" the Fed is?
    24 May 2010, 08:26 PM Reply Like
  • TraderMark
    , contributor
    Comments (2422) | Send Message
     
    Subprime is contained.
    24 May 2010, 10:03 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    wow, lemmings DO speak.
    24 May 2010, 10:52 PM Reply Like
  • Harry Tuttle
    , contributor
    Comments (2221) | Send Message
     
    "The Fed has been right and early by 6 to 12 months throughout, and everyone acting on its forecasts has done fine..."

     

    The Fed is as good at forecasting as Abby Cohen. They both look right while the stock market (they don't care about anything else) is going up. In defense of Ms. Cohen, she is not assumed to work in the public interest
    25 May 2010, 08:10 AM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    "The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections."

     

    The Fed is not in the business of economic forecasting. It is in the business of price stability and maximal employment. The Fed is not supposed to properly forecast the economy, although it certainly helps if it does so. It's quite possible that its mandate demands that it keep as rosy as possible to maintain the facade of optimism key to 'confidence in the markets'. In this sense the Fed is doing a brilliant job - I do not remember the Fed ever making a negative statement about the economy.
    24 May 2010, 08:18 PM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    The fed has done nothing but intervene in the natural course of business cycles. The problems are still not fixed. Toxic Assets are still toxic and getting worse by the month, All they have done is run up debt trying to prop up a failed system. Tarp never did what is was intended, The troubled assets have not been addressed.(accounting rule changes do not fix it) The banks have failed to pay for their mistakes, They will however pay and pay dearly. We are fighting deflation and overcapacity/over supply. The fed only temporary slowed down the symptoms. The stock market is providing a strong signal that these issues are not resolved. Don't live in denial about the FED and government interevention
    24 May 2010, 10:40 PM Reply Like
  • Hendershott
    , contributor
    Comments (1619) | Send Message
     
    The stock market and the economy aren't the same thing. Policies meant to improve the economy may not make the stock market go up. I could live with a lot fewer "traders" opinions on economic and monetary policy. Most of them aren't very well thought out and by and large traders just talk their book up.
    24 May 2010, 08:24 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Who will you believe, Ivy League educated, schooled at the feet of the Rockefellers, Bernake?

     

    Or your own lying eyes as you drive by empty commercial buildings, sparsely occupied store parking lots and the lady in front of you using food stamps at WalMart?

     

    I know which makes up the "real" economy (you know, the economy that used to pay for police, fire and schools).

     

    Apparently there are millions that don't. They just blindly follow helicopter Ben.
    24 May 2010, 08:29 PM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    Helicopter Ben is as incompetent as anyone else in our various levels of government. The government is run by attorneys and politicians who have no business since in the least. If the country were run like a business there would not be the problems we have today. No accountability and no immediate consequence for it's actions. However the consequences are getting larger and more severe each week. Flawed and incompetent governments fall. The stock market has provided the evidence of this for the last 10 years, but few realize. Until the real problems are addressed there is no hope for any sustained improvement in economy nor the markets, Just more bubbles to burst. Most investors live in denial and do not understand the major flaws our economy has developed over the last 10-15 years. They buy into the it will get better scenario, The fact is, It will not until the problems are addressed. Lets all sell some more crap to someone else, has been the US standard.
    24 May 2010, 10:52 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    And why should American companies necessarily be seriously injured by credit squeezes what with their solid balance sheets and all? Conservatives need to get real and recognize that American business has started a real recovery. And my politics are to the right of Attila the Hun. Obama hasn't done any serious damage to American business yet. Course, Obamacare has hardly had a chance to be implemented and Cap-and-trade is still a gleam in his eye. What with the elections this year and Obama's meddling causing the markets to tank, baby boomers will likely vent their voting frustration on the liberals, whether RINOs or dems.
    24 May 2010, 11:01 PM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    American companies are not profiting much from the US Consumer, it is the overseas markets that has allowed the earnings to stay strong. First goes Europe, then ASIA. The US Companies will be affected. Brazil will probably hold up a bit longer. There is no decoupling. Many Us companies depend on 60% revenue outside US.
    24 May 2010, 11:09 PM Reply Like
  • Tesa
    , contributor
    Comments (273) | Send Message
     
    That is nonsense. The economy in USA is improving and that is why the shorts portray Euro foggy minor league problems as major.
    25 May 2010, 01:23 AM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    And what percent of small cap companies are big into exports? Commodity exports jump started the recovery, but what reason is there to think that the U.S. recovery is no longer sustainable? You obviously haven't been paying attention to U.S. consumer statistics, which are very strong. Guidance from retail has been strong. If we got more massive layoffs, that would be reason to question the recovery.

     

    This correction merely shakes out the weak hands.
    25 May 2010, 08:21 AM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    What part of the economy do you think is improving? Maybe if you live in Dallas or Austin. Any improvement is just the result of liquidity and stimulus and temporary improvement in confidence,that will soon be evaporated, Debt eventually will catch up. If you think the improvement companies have had in the past year is due to the US consumer you are sadly mistaken, If Europe goes, then ASIA, say by bye fake recovery. Of course some sectors are less cyclical than others and feel the effects of recession less severely.
    25 May 2010, 08:28 AM Reply Like
  • cstauffer
    , contributor
    Comments (506) | Send Message
     
    We have the best higher education system in the world and students from every corner of that world come here if they can afford to in order access university education in the U.S. On top of that, Harvard, Yale, and Princeton are the pinacle of this premier university system that we have in this country. It never ceases to amaze me how when it comes to attempting to steer the largest and most complex global economy in the world, there are people like Teresa who denegrate our best intellectuals and think that we should put this enormous and difficult task in the hands of second rate minds. That would be like saying to a general who wants to send in the elite Navy Seals to secure a strategically important site during the early stages of an important military operation that we don't want the elite best trained soldiers for the job, we should just send in the army infantry instead because they are plain thinking folks just like the majority of Americans that they are fighting for.
    26 May 2010, 07:47 AM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    No "American" business is NOT recovering.

     

    I own one, my customers, their customers, my vendors, their vendors are NOT recovering.

     

    The massive amount of cash flowing (and corrupting) our country from the printing presses has temporarily halted the bleeding.

     

    But, make no mistake, American business is dead, it is just on life support right now and Congress (and the IRS) is working hard to cut that off for you.

     

    Reality is going to be shocking for so many.
    27 May 2010, 06:50 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    How many jobs have you created?

     

    How many times have you forgone your paycheck, or house payment, to pay your employees and keep a customer.

     

    You don't know what you speak of.

     

    And, btw, they send their students here to learn how to screw us over and steal our business away. Lookee' there, it is working.
    27 May 2010, 06:52 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
     
    Ben Bernanke seemed to find out early
    How to open stores while on the fly [in a helicopter].
    Rich Uncle's here so you won't have to worry.
    You'll spend your dollars and never run dry.

     

    He can't hide his lying eyes.
    Cause paper money's just a disguise.
    I thought by now, he'd realize,
    There ain't no way to hide his lying eyes.

     

    (Apologies to the Eagles).
    27 May 2010, 07:00 PM Reply Like
  • cstauffer
    , contributor
    Comments (506) | Send Message
     
    Teresa, obviously you have not read my Bio. I am a small business owner and just this year we added two new positions and filled them with very qualified professionals. We hired these individuals because we have almost doubled our revenues over the last three years.
    27 May 2010, 11:15 PM Reply Like
  • Tesa
    , contributor
    Comments (273) | Send Message
     
    TeresaE, you are spending way too much time on these boards and that could be the cause of your business failing. I don't know many enterprises that can be simply owned to print money while the owner is on chat boards. Maybe your business is not fit for survival.
    28 May 2010, 09:17 AM Reply Like
  • Silentz
    , contributor
    Comments (714) | Send Message
     
    Wrong. Navy Seals have actually held a rifle and fired in. They didn't just read about it in a book. They know the practical application of the use of force, and not just the theories behind it. Your analogy is flawed.
    28 May 2010, 11:50 AM Reply Like
  • cstauffer
    , contributor
    Comments (506) | Send Message
     
    Silentz, my anology is not flawed. Being an economist is an academic pursuit, like it or not. Even one of our most widely admired Fed Chairman, Paul Volcker, was a career economist/public servant. Volcker attended Princeton, Harvard and the London School of Economics before starting his first job at the Fed n 1952. He spent five years as an economist at Chase Manhattan Bank and then joined the U.S. Treasury Department.

     

    My point is that we want the smartest and best trained individuals for any critically important job whether it is the best trained soldiers, many who take on critical missions based upon training alone as many did not possess "real" combat experience prior to 2002, or the best trained economists in the role of Fed Chairman.
    28 May 2010, 01:05 PM Reply Like
  • Silentz
    , contributor
    Comments (714) | Send Message
     
    You just said it right there. Volker was an economist for Chase Manhattan. That's real world experience. He was able to see the results of his recommendations first hand and develop experience in understanding what real world decisions do to the real world economy. "Ivory Tower" economists, like Krugman for example, have no real world experience to draw upon. Economists have become too much of a political animal, and it's very easy to fall into a confirmation bias trap when researching from a purely theoretical standpoint. We're all guilty of it, and economists are not immune, especially now, when their livelihood depends heavily on pitching the party line...whichever side of the fence they're on.
    28 May 2010, 01:27 PM Reply Like
  • cstauffer
    , contributor
    Comments (506) | Send Message
     
    Out of almost 60 years of his working life Volcker spent five years at Chase Manhattan Bank as an economist. Have you ever worked at a bank? How many economists have you actually known or worked with? I spent 20+ years at various commercial banks and the economists that work at banks do not typically make real world business decisions and see the successes or failures of their work. They build models and make forecasts the same as they do when they work for the government or in academics. What you are trying to argue does not work with economists, just like it would not work with a meteorologist. A weather forecaster who works for the National Weather Service is no less experienced than one who works for a the local news channel. They both analyze data and make forecasts.

     

    What you want to do is bash academics, which I don't entirely disagree with in the context of many different areas of study, but economics is not one of those areas of study where private sector experience as an economist make the person a better economist.
    28 May 2010, 03:42 PM Reply Like
  • fed_alchemy
    , contributor
    Comments (245) | Send Message
     
    I vote for Rick Santelli ...not sure which school he drank at though.
    24 May 2010, 09:45 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2588) | Send Message
     
    The Fed was created in Jackyll island by the then some of the most powerful and richest clients. Obviously Bernie as Chairman would in my view be a pawn of those forces.
    24 May 2010, 10:45 PM Reply Like
  • 2ctruth
    , contributor
    Comments (22) | Send Message
     
    The 'Fed' respresents a group of the international bankers. There is nothing altruistic in their desire ti mainatin price stability and full employment. They make $$$ when people work day and night to pay huge mortgages on property 'purchased' at peak bubble prices.

     

    We are their slave labor. It is in their best interest to promote the illusion of prosperity and keep us all working, as they clinch that golden collar around your neck.

     

    Work beasts, and pay your masters.

     

    24 May 2010, 10:45 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    Well, the markets predicted 11 of the last 3 recessions. Judge for yourself.
    24 May 2010, 10:56 PM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    They sure as hell predicted the one we are in now back in Jan 2008. October 2007 was the top. I am sure many got in thinking the economy was getting stronger. The market does eventually get calibrated and get it right. Beat marker rallies are quite convincing though. Hard to not jump on board while they are running.
    24 May 2010, 11:12 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    A bear market rally is still a rally. You'd be a fool not to get in while it's running. And if it turns out that what you thought was a bear market rally is the start of a bull market, then you just missed out if you stayed out.

     

    Clearly, we are in a bull market now.
    25 May 2010, 08:24 AM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    "Clearly, we are in a bull market now."

     

    oh boy, hence the name "marketstudent" and not market "graduate".
    25 May 2010, 08:32 AM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    One thing is for certain. Nothing is Clear. If we don't test the lows of last year and make new highs this year in the S&P, then I will grant you, we are in a bull market. The charts don't look to good supporting your thesis though. If the lows hold and we make new highs then i guess the bears are wrong. There are more sellers at 1200 S&P than there are buyers, that we know and that does support your bullish thesis either.
    25 May 2010, 11:57 AM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    yes and all the market students who were laughing all the way to the bank in 1999...

     

    ... were unemployed and crying all the way to the bankruptcy court judge in 2002.
    27 May 2010, 06:53 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    Guess you will miss the next leg up.
    27 May 2010, 10:13 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    ...and, in the spirit of your assumption, I guess you got crushed on this plummet down.
    28 May 2010, 08:41 AM Reply Like
  • citizenleung
    , contributor
    Comments (271) | Send Message
     
    The market is a collection of many traders making many decisions. Traders are pretty smart as a group, but a single trader alone has the intelligence of a monkey. A pit trader would raise and lower interest rates every other day. Pento's frustrations are overwhelming his common sense.
    24 May 2010, 11:04 PM Reply Like
  • bearfund
    , contributor
    Comments (1534) | Send Message
     
    Neither. Both are wrong as often as they're right. Save your money in gold and invest in income-producing assets when they're cheap. That's all anyone needs to know.
    24 May 2010, 11:59 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    Gold can decline just like anything. I saw it go from 200 to 800, then back to 200. When you see the ads to retail investors on TV, it's time to sell.
    25 May 2010, 08:26 AM Reply Like
  • zorrow
    , contributor
    Comments (1244) | Send Message
     
    Oh gee, another Wall Street trader telling us we need a Wall Street Trader to head the fed. Yeah, and we also need to privatize Social Security. What do these licensed bandits know about anything other than how to steal money from hardworking people in their crooked casino.
    25 May 2010, 12:06 AM Reply Like
  • JasonC
    , contributor
    Comments (4062) | Send Message
     
    The Fed began cutting rates in the fall of 2007, by starting with a large half point rate cut. I wrote a column about it at the time. I showed that historically, every such initial loosening move of a half point or more predicted a recession ahead and would be followed by a year or more of additional easing.

     

    The prediction was correct, and the Fed's prescription was correct. It was widely criticized at the time as being too loose and risking inflation, and the oil market in particular took off like a rocket on its final idiotic fling. Every commodity speculator on the planet was predicting that the Fed choosing to cut at that time would result in large scale inflation.

     

    They were completely wrong and the Fed was completely right. There was recession ahead and the Fed was cutting at the right time. If anything it was 3 to 6 months late.

     

    Moreover, before then the same chorus of Fed haters was claiming that the Fed was encouraging a bubble by being too loose - when in fact, M1 did not grow at all for 3 straight years, from the start of the Fed's tightening cycle in the spring of 2005, until about Bear Stearns day. (Lower rates from the fall of 2007 until the spring of 2008 only kept M1 from sliding, it did not grow).

     

    The Fed tightened enough to stop the inflationary brainstorm of the housing speculators and the commodity bubble speculators, which only took 5% short rates. When many in the markets were calling for 8% and pretending that since inflation "might" be 4% or "might"
    be 15% in houses and 25% in oil, that short rates of 5% were effectively negative or at any rate way too low to stop large scale inflation.

     

    They were completely wrong, and the Fed correct, that 5% had already been enough to halt the flow of capital into housing and thus break all the bubbles. More precisely, having held M1 growth to zero for nearly 3 years, there was no excess new money to support the speculator's insanely doubled prices for everything, and those doubled prices therefore just destroyed demand.

     

    I followed the Fed's signals in this cycle. (For those in Rio Linda, that means when it raises rates until the curve inverts it is time to get out, and when it starts cutting it means recession ahead, and when it intervenes massively with quantitative easing it is time to get back in). My liquid net worth more than doubled and I got a new house out of it for a song, as well. Pretending its signals were inaccurate is a lie and pretending. I know better. Those endlessly fighting the Fed are ideologues and not traders, and their trading stinks.

     

    Don't. Fight. The Fed.

     

    Use to be every trader knew that. Now anti government and gold bug ideology has convinced them to throw their brains out instead. Which I assure you, is not fattening to the wallet.
    25 May 2010, 05:39 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Jason, that is funny.

     

    I predicted the recession when the Fed INCREASED the rates in '05/'06.

     

    All I had to do is look around; zero down mortgages, teaser credit cards, union contracts and pension assumptions.

     

    All tied to the interest rate and the defaults started when Alan started upping rates in a fantasyworld economy.

     

    We haven't seen the recession yet. This is nothing but warning shots.

     

    I kinda feel for you and those like you, when the chickens come home - and history shows me they will - people like you are going to be in sorry shape, what with your neverneverland of the government and academics are always right.
    27 May 2010, 06:57 PM Reply Like
  • Machiavelli999
    , contributor
    Comments (829) | Send Message
     
    Be honest Teresa. Tell us your long/short weight in March, 2009 and how much money you have lost since then.
    27 May 2010, 07:01 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Honestly?

     

    I've lost and gained nothing.

     

    Because I haven't sold anything.

     

    All of those investors, and pensioners, that look at their statements today, and say, "look how much money I've made," will hopefully say the same thing after they cash out.

     

    Until you sell, you haven't "made" or "lost" a red cent.
    27 May 2010, 08:20 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    Oh yeah, simply beleeeve the Fed's inflation numbers, which ignore the impact of education cost growth rates, govt. spending growth rates, and health care cost growth rates. I've got some swamp land in Florida you might be interested in....
    27 May 2010, 10:17 PM Reply Like
  • marketstudent
    , contributor
    Comments (232) | Send Message
     
    Well, I would agree with you that U.S. solvency issues haven't hit home yet, though they may never hit home. The U.S. debt may yet be dealt with. Hopefully we won't wait for a liquidity crisis before dealing with solvency problems. That would be a bit late and we'd probably have to rely on inflation to fix our liquidity problems (cash flow) enough to deal with the solvency issues (overall balance sheet debt) over a longer time frame. If the ratings agencies downgraded U.S. debt, or hinted at it again, that could bring about a liquidity crisis very quickly.

     

    The keynesian analysis of U.S. debt typically focuses on only a small part of the total debt and compares current debt/GDP with debt/GDP from the early 1940s. This is faulty because we have to consider that our total debt is $12T (federal, excluding Social Security/Medicare) + $17.5T (Social Security) +$36.4T (Medicare). Of course, we don't have to pay interest on the Social Security and Medicare parts of the debt as long as they are funded by current taxes. However, this is getting to be more and more of a problem, which causes us to pay additional interest for them which impacts liquidity. I've left out debt owed by some of the states, which is a growing problem.

     

    We have some strengths in our economy lacking in Europe, which gives us some more leeway and time to deal with our solvency problems.
    27 May 2010, 10:35 PM Reply Like
  • JasonC
    , contributor
    Comments (4062) | Send Message
     
    TeresaE - the recession has come and it has gone. We are already in the recovery, and GDP is back to pre crash levels. Asset values aren't, and unemployment isn't back to boom levels, and as a result the usual suspects in the doom monger panic crowd continue to peddle their tripe; that is all.
    28 May 2010, 05:21 PM Reply Like
  • nyuszika45
    , contributor
    Comments (633) | Send Message
     
    back to boom levels? Please tell us how squeezing small business credit, increasing rick parameters for all SMB companies is "growth", and please, oh please, tell us where the 8 milion jobs that were promised on the way to recovery might be.

     

    Codswallop to the Apostles of the FED.
    8 Jun 2010, 08:29 PM Reply Like
  • wave1bullmarket
    , contributor
    Comments (80) | Send Message
     
    I hope you come down off of your Cool aid soon. You are either in denial or just have no idea about the business climate in most sectors. The stock market is providing many signals that the V shape recovery is seriously in doubt. There is no evidence of any recovery that has not been produced by government stimulus and inventory rebuild.
    8 Jun 2010, 10:29 PM Reply Like
  • JasonC
    , contributor
    Comments (4062) | Send Message
     
    US GDP in 1Q 2010 - $14.592 trillion annual rate
    US GDP at pre crash peak, 3Q 2008 - $14.547 trillion annual rate
    (2Q 2008 was $14.498 by the way, top is right between them)

     

    Disposable income now - $11.103 trillion annual rate
    Disposable income pre crash 2Q 2008 - $10.967 trillion annual rate

     

    Personal consumption now -$10.354 trillion annual rate
    Personal consumption pre crash peak - $10.220 trillion annual rate

     

    So, total output, the amount flowing as income to the household sector, and the amount that sector is spending on consumption, have *all* recovered completely to their pre crash levels.

     

    Yes this has been accomplished using few workers, each producing a higher value of output. Yes that results in hardship to the 5% of the workforce not needed to do it, and room for additional growth as those people are taken up by other business. It has also grown the cash reserves of US corporate business to $1.8 trillion, as they produce the same output with lower expenses.

     

    But it is what recovery means. Output, income, and spending are all right back where they were before any of it hit. The only lasting aggregate impact has been to asset values - the same businesses and real structures exist, but are not valued as highly in the market as they were at the peak.

     

    Your approval of these facts is not required for them to be true...
    15 Jul 2010, 07:42 PM Reply Like
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