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  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    we're all biased my friend. not everyone is capable of acknowledging it.
    Jul 29 12:07 PM | Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    i understand economic theory as well as any reasonably informed academic; and what you have described above is keynesian economic theory. it does not address in any way how the fed creates jobs. as you've pointed out, congress can create jobs and the private sector can create jobs. the fed can't. it can only create conditions that are theoretically favorable for job creation but it cannot force it down the throat of either the government or the private sector. job creation is a silly mandate that has led the fed down the path its on today. its nuts.

    i understand the fed is well intended. but i also understand that the path to hell is often paved with good intentions. whether it's the fed or our congress of fools they've both been down that path more than once.

    the fed has not repealed the business cycle despite its best efforts....overwhelming do so. will it have the courage to raise rates when it becomes necessary or will it be perpetually behind the curve, as so often has been the case? it's track record sucks, particularly since the late 90s. my money is not on the fed. we're in a free money era that, in my view, will not be reversed without imposing significant pain on both government and the private sector.

    with respect to the fed not being influenced by the stock market, i can only assume you know better. the fed has intentionally goosed the stock market by its own admission in order to jump start consumer spending after the housing crash....which occurred largely as a result of the neglect of all regulatory agencies including the fed.

    i'm from missouri. until someone convinces me that two 50% market crashes in 10 years....which is unprecedented in a (supposedly) highly developed economy....were no fault of the federal reserve, i'll forever believe that the fed increasingly lurches from one crisis to another that it often creates itself. the fed's mandate is far too broad. it should narrow it's focus to its traditional role of providing price stability. let the economy stand on it's own.

    i'm tapped out on the issue and will give you the last word if you wish to have it.
    Jul 28 06:18 PM | 2 Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    stockman is a commentator. he has the right to his opinion, as do you and i. does the fed apologize when they issue a ludicrous GDP forecast?

    if there were hard evidence that the fed's free money policies have worked i would be more supportive of their efforts. i believe the evidence is thin. when they are reduced to claiming "but it would have been soooo much worse had we not acted" you know the fix is in. the path not taken, by definition, is unknown. i would also point out that any claim of "victory" by the fed...which they have not done...would be the equivalent of george bush proclaiming the end of the iraq war on the bridge of an aircraft carrier. the final chapter in this era of free money has not yet been written.

    as for the fed's dual mandate, it was given to them by an inept congress of fools. if you can explain to me exactly how the fed "maximizes employment" i'll nominate you for the nobel prize. they might as well have been given a mandate to make everyone rich.

    two 50% stock market crashes in 10 years is something that occurred on the watch of the last 2 fed chairmen. if you believe the fed has no responsibility for that you're far too generous to those who are charged with maintaining a stable financial system; and i can't think of anyone more responsible for that than the federal reserve.
    Jul 28 01:12 AM | Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    the federal reserve has the job of managing the nation's financial system...not mr. stockman. i think the fed should be held to a higher standard. if you don't, you must just love mediocrity.

    stockman is just one of many prominent names in the investing world who have expressed worry about asset bubbles. people like carl ichan, david einhorn, robert schiller, bob dole, jeremy grantham, stan druckemiller and many others have done the same. these are not novice investors. neither are they perma-bears. and neither are they stupid.

    i'm not smart enough to know if the stock market is in a bubble or not. but i'm not so ignorant to dismiss the possibility.
    Jul 27 08:49 PM | 1 Like Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    i support that argument. for those who challenge it i would ask what range of p/e ratio would be reasonable if interest rates across the yield curve were zero. it's not so farfetched when you look at japan's 1.6% yield on 30 year bonds.

    my point: interest rates are the common benchmark by which equity investments are valued. at a zero rate, there is no p/e at which stocks could be viewed as "overvalued" relative to bonds; and the standard deviation of stock prices would be through the roof. in the case of the japanese market, the 1990 high was about 38,000; and the 2009 low was about 8,000. if the S&P 500 traded in similar fashion we could see in excess of 3,000 as a high on the index; or, alternatively, see a low of 250 from current levels.

    don't think it can't happen.

    the fed has knocked the floor out from under one of the most critical valuation benchmarks we have.
    Jul 27 05:05 PM | Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    if the federal reserve can't recognize bubbles i wouldnt be too hard on mr. stockman for having the same shortcoming.
    Jul 27 04:42 PM | Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    in a crash, there is no "safety" trade other than treasury bonds and cash.

    i would never be more than 50% invested in equity markets that require this degree of fed support. the fed is simply too accident prone to trust.
    Jul 27 11:17 AM | Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    a few points regarding hobart16's post:

    1. my assertion that the fed is distorting the cost of capital is not a value judgment. it is a fact, unless you think the 3+ trillion increase in the fed's balance sheet has had no effect on interest rates.

    2. credit is not available without limit; and it is too much credit in the system....not too little....that caused the housing bubble that led to the 2008 crash. the fed stood by with blinders on and watched it happen. those who think the fed "saved" the economy are wearing their own blinders.

    3. if fed policies have worked so wonderfully the question must be asked "why does the fed stick with a ZIRP policy 6 years into an economic "recovery?" by the fed's own admission it is because any significant increase in interest rates risks choking the remaining life out of the meager recovery we currently have. the fed has boxed itself in and the only thing that can bail them out is inflation. i'm old enough to have been down that road and it isn't a path that a well managed economy should be on.

    4. we have had two 50% stock market crashes within a 10 year period. that's hardly an admirable track record of financial stability under the fed.

    the fed is under the misguided impression that it can eliminate the down side of the business cycle while preserving the upside. it has proven itself wrong in my judgment.
    Jul 26 12:17 PM | 1 Like Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    "neither you nor i are born to any entitlement to a risk-free return on our capital."

    this is simply wrong. savers provide capital only for its return....the greater the risk the higher the expected return. at a risk-free return of zero savers who cannot accept risk (older retirees with limited means) would be just as well off (arguably better off) keeping money buried in their back yard rather than in a bank. we can argue about the appropriate level of return; but savers indeed are entitled to a risk free return. our economic system relies on it.

    the more intelligent argument is the exact opposite...that borrowers are not entitled to a borrowing rate subsidized by savers. that is exactly what we have per the fed's wrong-headed mission to suppress interest rates, thereby distorting the cost of capital.

    the federal reserve has turned capitalism on its head by encouraging an over-leveraged society to borrow even more and take risks it not only cannot afford to take but doesn't even realize it is taking, all in the name of "promoting economic growth." it has simultaneously eliminated any incentive for the public at large to live and invest within its means. it is truly bizarre behavior not to mention unconscionably unethical.

    the arrogant elitists who run the fed have made a mess of our economy and anyone who can't see that is ignorant. all of their PhD degrees should be written on toilet paper. that's their intrinsic worth.
    Jul 26 12:02 AM | 2 Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    "In a deflationary credit collapse it's insanity to provide an incentive for people to save money and avoid commerce."

    i think you have it exactly backwards. in an inflationary environment...which the federal reserve couldn't recognize unless it took a wheel barrow full of money to buy a proverbial loaf of's insane to keep interest rates at zero percent.

    Jul 19 08:53 PM | 8 Likes Like |Link to Comment
  • IBM Transformation Continues, Expect The Shares To Trade To $250 By Year-End [View article]
    i do not invest in companies that rely on financial engineering to boost EPS. all companies go through cycles and when the downturn in their business comes, those who have taken on heavy debt to buy back shares...and IBM is the poster boy for it...usually pay the price.
    Jul 18 10:39 AM | Likes Like |Link to Comment
  • Prospect Capital Vs. Fifth Street Finance [View article]
    you are not using the same logic with the dividend yield. with due respect, the inconsistency is glaring.
    Jul 8 05:08 PM | 1 Like Like |Link to Comment
  • The Bond Trap [View article]
    if you think republicans are better stewards of the economy than democrats you're drinking the kool aid. we didn't get where we are today by the misdeeds of one party. we got here because of the misdeeds of both parties. wake up.
    Jun 24 10:02 PM | 7 Likes Like |Link to Comment
  • American Realty with pro forma response to Marcato letter [View news story]
    famous last words. if you want out, sell.
    Jun 4 10:01 AM | 1 Like Like |Link to Comment
  • Prospect Capital's Potential Financial Restatements: Explaining The Current Situation And Its Impacts - Part 1 [View article]
    for PSEC to fight the SEC on this issue, i suspect they have a lot to lose by consolidating these off balance sheet entities. i sold the few shares i owned the day this was announced because i want no part of any company that uses arcane accounting methods...whether legal or bury relevant financial information.

    i'll be shocked if PSEC wins this battle. their case doesn't pass the smell test to me.
    May 10 04:59 PM | 5 Likes Like |Link to Comment