at least the europeans are still talking to each other. I dont expect anything to happen, but maybe german steadfastness (to reality) will force the others to change their (bluff) position slowly over time. talking is one thing our partisan congressmen are not doing. it will hurt us.
Will The Federal Reserve Unleash QE3 Soon? [View article]
they wont do QE3 bc there is so much liquidity in the system and it is not increasing lending and investment, but just causing some inflation. add to that , the heat they are getting from congress, and it is unlikely QE3 is started unless we dip into negative growth and deflation becomes a fear again.
that is right, so i am not sure why twist is going to help mreits. nly does not have much credit risk, but it has spread risk, leverage risk and loan payoff risk (as rates drop people refi their mortgages versus as rates go up people dont refi their mortgages, but nly's cost of funds goes up). rates cant move up or down much and spreads need to go out more not come in. this thing will do ok and then one day it will blow up in your face. i recall many banks getting into trouble with this trade in the 70s and 80s. caveat emptor.
Why Pundit Ignorance About Politics Costs You Money: The Dimon Hearing [View article]
I agree. I am mildly surprised that santelli has not been muted or removed because his ranting on TV is nonsense. The problem is that a lot people agree with him so they dont take him off the air. But if you are going down that road, you could also say that Joe Kiernan is a ranter as well. he makes his tea party views well known and when subject matter experts do come on the show and tell him, politely, why he is wrong about certain issues, he ignroes them. Also, I think he treats Sorkin like sorkin is in idiot. Sorkin is about an order of magnitude brighter than Kiernan even if you dont agree with his politics. To be honest, I cant watch CNBC in the morning anymore bc of all the nonsense.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
it is hard for most to separate economics from politics. most economic positions are based on people's political views which in turn are based on emotion or instinct. only after they come to a conclusion based on instinct or emotion do most create a reason to justify their position. see The Righteous Mind: Why Good People Are Divided by Politics and Religion. you should read it. few use reason in the first instance to come to a conclusion.
Weighing The Week Ahead: Bernanke's Next Move [View article]
there will be little or no compromise until after the election because if romney wins, the republicans will view it as carte blanche to do what they want because there will be no veto coming from the white house. so they will wait and see. If obama wins, the republicans will have to make some compromise to get a budget passed or face the wrath of voters, who will vote them out after we go over the fiscal cliff. we are in for a dog fight of an election.
if you have read any books about the history of the house of morgan, which I have, you will understand that Morgan was making a subtle monopolistic, racist and anti-semitic remark. In fact he only lent or raised money for WASP industrialists who allowed him to control their companies and prevent the flow of funds to people who were not in the Morgan orbit. character was a code word for WASP industrialist in his orbit. In his defense, he was concerned about keeping financing and leverage very conservative. But that played into his ability to demonstrate his reputation as being the "honest banker/broker". And that let him keep control over investment banking and consequently US industry for a long time. he refused to do any business for non-wasp owned firms and let the big jewish owned investment banks like Kuhn Loeb (which merged into lehman brothers later) to do that business. according to him all of those people had no character.
we are in a very different world than in 1907 when JP morgan was the (private) central bank and he single handedly saved the financial system. i dont think it is fair to use his concept of "character" in this day and age and circumstance. he certainly did not mean it, the way you use it.
PS I do agree that had Bush, paulson, obama, Bernanke followed what JP Morgan did in 1907, namely, only lend to the banks which had a decent book of loans at high rates and let the rest go bankrupt, we would be in a better situation. however, the current banking system with derivatives is so much different and opaque than in 1907 that policy makers did not want to take the chance that the whole thing would go down the tubes. That was not a trivial fear. I respect the decision even though i was against it.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
make no mistake about it, all of the politicians are crooks. the question is who are they stealing for and how much and who does the least damage in the process (or does any good)?
the republicans may be dinosaurs, but if the economy stays in the crapper, they might win the whitehouse and this country may look like brazil 30 years ago.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
I agree. there has to be balance. It cant go too much one way or the other. otherwise, people feel like they are getting cheated. The social order can break down. I am concerned about the norquist republicans who are going too far. They want to reduce taxes for the wealthy, push social burdens back onto the poor, create a south american style regressive tax system which will lower overall growth, but benefit the rich at the direct expense of the poor. then they claim that we cant balance the budget because we spend too much. it may or may not be true that we spend too much (although the data suggests that we do not- with a few exceptions, namely health care-military), but we will never balance the budget if we keep reducing tax obligations and collections. reducing taxes will cause more economic growth but will reduce government revenues.
i think you misperceive the problems in spain. I am no student of spanish economic history, but having been there many times, and it appears that they had a problem similar to us with respect to their real estate bubble. Namely, they have a lot banks that had a lot of cash and they had to put the money somewhere. sounds familiar. It was similar to what happened here with our bubble. However, unlike here where they were printing too much (which was part of the problem), the ECB was not printing. so the problem was not the government printing presses, but just capital inflows into spanish banks.
on a separate note, the spanish government debt was not high and considering the bad recession is still not that high. However, the spanish economy needs structural reforms. they have had high unemployment for a very long time. This is nothing new.
rates there are high (not low as you say) bc there is a perception based on the weakness of the spanish economy that the government will not be able to pay its debt and that is especially so in light of money needed to bail out their banks. In a low or negative growth economy which is what spain is, 6.6% for debt is too expensive and unsustainable along with continued deficits by the government.
the other thing that spooked the markets in 2008 was that no one could see where the risk was. all the financial companies' balance sheets were too opaque. No one knew who had what CDS or mortgage backed exposure. this time around, do we know who holds all of the sovereign debt of greece, italy and spain? who sold CDS insurance on that debt? can the entities that sold the insurance pay in the event of default?
The answer is that no one knows. If the ECB lets spain and italy default, it will be a lehman like event.And they may becasue the germans, understandably, dont want to pay in the absence of tighter control.
Another Week, Another Euro Summit [View article]
talking is one thing our partisan congressmen are not doing. it will hurt us.
Will The Federal Reserve Unleash QE3 Soon? [View article]
Annaly: We Are 'Twisted' Again [View article]
Why Pundit Ignorance About Politics Costs You Money: The Dimon Hearing [View article]
Why Pundit Ignorance About Politics Costs You Money: The Dimon Hearing [View article]
The Current U.S. Stock Market Collapse Makes No Sense [View article]
The Righteous Mind: Why Good People Are Divided by Politics and Religion.
you should read it. few use reason in the first instance to come to a conclusion.
Weighing The Week Ahead: Bernanke's Next Move [View article]
If obama wins, the republicans will have to make some compromise to get a budget passed or face the wrath of voters, who will vote them out after we go over the fiscal cliff.
we are in for a dog fight of an election.
Weighing The Week Ahead: Bernanke's Next Move [View article]
Will Spain Leave The Eurozone? [View article]
he refused to do any business for non-wasp owned firms and let the big jewish owned investment banks like Kuhn Loeb (which merged into lehman brothers later) to do that business. according to him all of those people had no character.
we are in a very different world than in 1907 when JP morgan was the (private) central bank and he single handedly saved the financial system. i dont think it is fair to use his concept of "character" in this day and age and circumstance. he certainly did not mean it, the way you use it.
PS I do agree that had Bush, paulson, obama, Bernanke followed what JP Morgan did in 1907, namely, only lend to the banks which had a decent book of loans at high rates and let the rest go bankrupt, we would be in a better situation. however, the current banking system with derivatives is so much different and opaque than in 1907 that policy makers did not want to take the chance that the whole thing would go down the tubes. That was not a trivial fear. I respect the decision even though i was against it.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
the republicans may be dinosaurs, but if the economy stays in the crapper, they might win the whitehouse and this country may look like brazil 30 years ago.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
Will Spain Leave The Eurozone? [View article]
on a separate note, the spanish government debt was not high and considering the bad recession is still not that high. However, the spanish economy needs structural reforms. they have had high unemployment for a very long time. This is nothing new.
rates there are high (not low as you say) bc there is a perception based on the weakness of the spanish economy that the government will not be able to pay its debt and that is especially so in light of money needed to bail out their banks. In a low or negative growth economy which is what spain is, 6.6% for debt is too expensive and unsustainable along with continued deficits by the government.
What Euro Crisis? [View article]
Note On Spain: Regions And Banks Compete For Attention [View article]
What Euro Crisis? [View article]
The answer is that no one knows. If the ECB lets spain and italy default, it will be a lehman like event.And they may becasue the germans, understandably, dont want to pay in the absence of tighter control.