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Jim Myrtle

Jim Myrtle
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  • Is Inflation Next? [View article]
    ""Which has been a greater store of wealth?" A 1965 quarter or a Silver pre-1965 quarter?"

    Over the last 3 years, the 1965 quarter has outperformed the 1964 quarter by 150%.
    Apr 15 09:36 AM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "So "Debt " is good Jim?"

    Sometimes.
    Apr 15 01:01 AM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "Jim, I state what I state and it's open to criticism which is why I am entering these debates. Thank you for corresponding"

    No problem. I'm happy to point out your errors.

    "As far as your investments, you are only investing in stocks?"

    I have some money in a few bond funds. No commodities as such.

    "If you are a fan of the Fed, based on your reply"

    I'm a fan of accuracy.

    "Would you agree that the low interest rate cycle for bonds is coming to an end?"

    We'll probably see 4% on the 10 year before we see 2%.

    "What happens when the 10 year goes over 3%? How do you account for the higher interest payment on the debt?"

    Our debt will become more expensive to finance.
    Some Republicans will come up with ways to cut spending.
    Most Democrats will demonize them.
    Most likely, little will be done.

    "Where do you see commodities; gold, silver, oil?"

    I don't play them. When China goes into a tailspin, oil should drop.
    Fracking will also play a role.

    "Do you think the U.S. will see battle in N. Korea area or the Middle East?"

    I hope not.

    "How is this paid for?"

    More debt.
    Apr 13 11:34 PM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "No, and especially if you're GS and bet on the right side, you walk away with profits even if the counterparty can't pay"

    But of course AIG could have paid, even at firesale prices, they had plenty of assets.
    Apr 13 12:27 PM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    Why would it wreak havoc? The bank on one side of the bet makes money, the one on the other loses money.

    "One more time: Counterparty risk. As in: Wall Street, 2008"


    "A distinction without a difference. If derivatives are written on sub-investment grade paper, the movement of the underlying paper wreaks havoc and taxpayers come to the rescue"

    So if I have a derivative on Venezuelan debt, and the underlying moves, that will wreak havoc because of counterparty risk?
    Why will the taxpayer rescue me? What if my derivative is profitable?
    Will I still get rescued?
    Apr 13 11:44 AM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "Jim, not sure what you're talking about"

    Your confusion between derivatives and bonds.
    Your claim about the Fed's ability to control long rates.
    Your claim that the Fed did not react to the RE bubble.
    Your error about what Greenspan said about adjustable mortgages.

    "what is your prediction of the next 1-5 years for the economy and investment climate "

    I think we've got another year or two of gains in the market ahead of us.
    If the Republicans take the Senate and can repeal Obamacare in 2017, that will be a huge boost. But I won't hold my breath.
    Apr 13 11:40 AM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "Nitpicking Jim"

    A 60% drop from 3 years ago is nitpicking? LOL!
    Apr 12 08:51 PM | 2 Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    I'm just glad, after repeating those errors for years, now you know better.
    Apr 12 08:49 PM | 2 Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "Yes ,convert FRN's to Silver. Why? Because it is a better storage of wealth"

    Obviously. As you can see by the 60% decline in the last 3 years.
    Great way to store wealth.
    Apr 12 06:25 PM | 3 Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "Why can't the market dictate interest rates Jim?"

    The market does dictate interest rates. Except for the overnight rate.

    Jim said; "Yeah, the Fed doesn't control long rates."

    "It's part of their Dual Mandate you can read from their own website Jim"

    Their dual mandate doesn't mean they control long rates.
    You should know that.

    "Why, then, did the Federal Reserve not take note and increase the interest rate sooner?"

    Sooner?
    Glad you finally agree they did react, years before the bubble burst.
    Despite your initial claim to the contrary.

    "Not confused Jim. From the horse's mouth"...

    "Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward."

    Excellent! I see the part about the past decade.
    Don't see the proof for your claim.

    "Or are you referring to after Greenspan went on record in 2004 that home owners should take out an ARM"

    Try again?
    Apr 12 03:47 PM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "Jim, the Fed via Greenspan artificially lowered rates"

    What should the rates have been? When?

    "Janet Yellen; "long-term interest rates were well below what appeared consistent with the expected future path of short-term rates."

    Yeah, the Fed doesn't control long rates.

    "Is this reacting to the housing bubble years before it burst?"

    No. M1 on Sep 20, 2004 was $1.372 trillion. On Feb 18, 2008, M1 was $1.374 trillion. That's almost 3.5 years with no change.
    http://bit.ly/QgMhUF

    The Fed Funds rate went from 1.75% in Oct 2004 to 5.25% in Jun 2006.
    They held the rate there for over a year.
    http://bit.ly/QgMhUJ

    Isn't that reacting to the bubble years before it burst?

    "Or are you referring to after Greenspan went on record in 2004 that home owners should take out an ARM"

    You'll have to share the exact quote. I suspect you're confused.
    Apr 12 11:15 AM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "but they also didn't see the last crisis and reacted after the fact"

    But Doug, they did react to the housing bubble, years before it burst.
    What would you have done differently, if you ran the Fed?
    Spell it out.
    Apr 11 07:58 PM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    "A distinction without a difference. If derivatives are written on sub-investment grade paper, the movement of the underlying paper wreaks havoc and taxpayers come to the rescue"

    Why would it wreak havoc? The bank on one side of the bet makes money, the one on the other loses money.
    Apr 11 07:52 PM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "90% were adjustable rate mortgages Jim."

    It's true, subprime borrowers have a difficult time getting a 30 year fixed.
    Straight adjustables, as opposed to teaser rate adjustables, would have done much better.

    "The bonds that are 30 year held to maturity paying 3% to 4% when interest rates are 6% (historic average) or higher, isn't such a great deal"

    I agree. Good thing the Fed doesn't need to make a profit.

    "As far as derivatives go, you originally said, "I know what a derivative is, what's a sub-investment grade derivative?" I pointed you to the quarterly OCC report that showed those were primarily credit derivatives"

    You can have a derivative on a sub-investment grade bond or company, but the derivative itself, essentially a zero sum bet, is not sub-investment grade.

    "Still a problem for the 2 banks in my opinion, but this is just 2 U.S. banks"

    Could be, but not a problem for the Fed.
    Apr 11 09:24 AM | Likes Like |Link to Comment
  • Is Inflation Next? [View article]
    "Oh..I don't know...why don't you ask the 2.25 million who got foreclosed in 2008 http://1.usa.gov/1gdTAms and 2.85 million in 2009. http://on.mktw.net/1gd..."

    Thanks for the links. They discussed subprimes, not adjustables.

    "Ratings: (not just bonds Jim and it seems you are the one "confused.") - Structured Finance"

    Yes, bonds....debt securities. Not derivatives.
    I have some derivatives (options) on Intel.
    Can you find a rating on that derivative?
    What about a rating on some corn futures, another derivative?

    "$90 billion in annual profits can cover a lot of losses while their sheet runs off. Got a link Jim, or are we supposed to believe everything you say?"

    You want a link to the last few years of Fed earnings? Really?

    "You make it seem like the Fed's annual profits can go on forever"

    Obviously profits will shrink when their sheet does. More if they actually sell positions at a loss. You must be confused about what you think I said.

    "But I know...I know...the Fed will hold those to maturity and not take a loss. Meanwhile interest rates will have shot up and everyone else will be making money but the Fed who is stuck in a low paying investment"

    Gosh, it would be awful if they held those bonds paying 2%-4%, funded with 0%-0.25% financing, until maturity.

    "Are we done with this charade yet Jim?"

    Are you done confusing bonds with derivatives?
    Apr 11 12:10 AM | 3 Likes Like |Link to Comment
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