Top Gun

My 2010 Market Predictions

Very nice. I feel much the same. A main item is that Fed can indeed control rates by returning bonds to the market and sucking out cash, just as was done by Treasury with removing TARP from several institutions. With several trillion to work with, short term rates can stay low while long term rise. Deficit will be a risk, if bond holders perceive indefinite deficits, 10yr bond will go to 6%+, which could be a problem.

Fed, Treasury Propose the Dissolution of Capitalism

I agree that we are putting ourselves at risk for a Chavez like situation where a leftist dictator gains control. Then our constitution is at risk, innovation is at risk, our very well being becomes a concern.

Fortunately, as long as current technologies are used, our quality of life can remain high. It would be a shame to move backwards from the agricultural, transportation, energy, housing and medical gains we have made in the last 50 years.

Five Predictions for This Market

Bought GE yesterday. I suspect it is worth more now in pieces, which means they will emerge. Immelt took much of the blame, that in and of itself told me I had to own some. I'll just let it sit for a while.

Nice post.

Trust - Not Confidence - Is the Issue for Geithner

I agree with all above. We need a Treasury Sec who has public service as his sole purpose. Someone like Volker. Too bad only high profile people get consideration.

Predictions for the Coming 'Flation'

Fed added $250B to shore up capital. It is 3 year loan. Banks will need to raise the same to pay it back. Not inflationary, but only prevent asset deflation, not general price deflation.

Direct stimulus campaigns are inflationary.

Should have let the banks and asset prices crash, then the regular guy could afford them. Too bad.

Economic Indicators Signal a Major Collapse Ahead

Add to that, reduced tax revenues in municipalities will force tax increases, further reducing disposable income and consumer spending.

We are bankrupt, and need to behave accordingly by resetting all asset values and curbing leverage. Otherwise, inflation is the only way out.

Don’t Blame Wall Street - At Least Not Completely

As you said, destroy American life as we know it, and as you stated so clearly - THAT NEEDS TO BE DONE