BxCap

Fed Continues to Discourage Regular Joe Americans from Saving

Imagine actually spending the $168 Billion on infrastructure? You would re-vitalize American construction, equipment, and engineering companies, provide jobs for people that invested great sums of money in their own education, and employment for those that work the trades. They would all share an interesting characteristic. They would all be, gulp, American.

Instead, as you pointed out, we are encouraged to buy foreign made consumables, vice save, in order to stimulate a financial system that should be allowed collapse under the weight of the pyramid of CDO's, CDS, ABS, and (insert favorite acronym here).

The Anatomy of a Bear Market

Great round-up of bear market quotes.

Staunch Government Intervention Needed to Avoid Full-Blown Depression

State budgets are balanced annually. No money. No programs. I think you took a simple reality and went a bit too far with it. The Fed cares about the State budgets because they often have to make up the difference in a State program with a similar Fed program. Or they don't. I liked the Z1 numbers linked by a commenter yesterday, on the Barry Rhitholtz posting, better.At least he could undersell the illusion to the panic of all.

Why Is This Market Holding Up?

I played with the graphic a bit, and if it repeats, there really is nothing holding this market up, which is your point. Interesting.....

bp1.blogger.com/_k-NDR...

Is the Stock Market Party Really Over?

Nice piece. As someone who is using the "Santa Claus Rally" to "go to safety", I both hope you are wrong, and think you are right. Keep us posted.

Learn from Japan and Have a Plan

Japan's GDP-to debt-ratio was better than the U.S. before 2000, but it is far worse than ours now. The first link will illustrate this shift, as Japan struggled and lost ground, resorting to currency sabotage to promote exports (as we are now doing).

This link will show 1995-2002
www.fin.gc.ca/ec2002/i...

This link is 2003
www.fin.gc.ca/ec2003/p...

This link has 2004 statistics
www.fin.gc.ca/ec2004/p...

I attempted to find the graph for the current ratios, but I'm having difficulty finding it. If your point was that we will see our debt-to-GDP rise, I do not agree with you, since GDP continues to climb and our debt is decreasing.

Learn from Japan and Have a Plan

First, the Federal Reserve and many other central banks DID step in to help.

www.fdic.gov/bank/hist...

Second, I enjoyed your post and agree that investors should be aware of what occurred in 1987, but they must also be aware that the emergence of India and China as commodity consumers changes the playing field that existed then versus now. I would have enjoyed your post more, if you would have shared your insights into this new dynamic, and how it will affect interest rates, global growth, credit availability, home prices/real estate values, commodity prices, stock sectors etc.