the conceit of central banks

[nando]

Still waiting for the collapse of the dollar, double digit inflation, and $2500 gold.

Wont hold my breath...

Btw, george... how are those rising yields treating your bond portfolios? Is it ironic that the policies that you hate (or the man, i cant tell from all your hubris) are what gave you the bond run that made you money the last few years? And now that its over, the end of those same despised policies are now hurting your overweight bond strategy?

Yet you're arguing against it? You are the definition of the word "irony".

We're all still waiting for the Republican plan on jobs and the economy. I guess we'll see thatwhen the double digit inflation, that was supposed to happen 2 years ago, finally materializes? Or maybe when they are done shooting themselves in the foot on immigration and legislating women's private parts...

[matthugie]

I'll dig up the paper tomorrow (don't remember what economic journal it's from off hand).

[matthugie]

"Deciphering the Liquidity and Credit Crunch 2007-2008" by Markus Brunnermeier. Published in the Journal of Economic Perspectives, vol 23, number 1, winter of 2009, pages 77-100.

And upon rereading it was about 150 million pending transactions.

Edit: I'll address the fed reserve question when I get time

[z31maniac]

And upon rereading it was about 150 million pending transactions.

That sounds like a lot, no doubt, but how does that compare to pending transactions for the entire system?

In other words, what did Bear Stearns represent as a % of pending transactions.

Otherwise there is no context to the pending transaction number.

[matthugie]

It's really the interconnection of the banks that makes the transactions significant. It's hard to explain the least bit concisely, but you can PM me your email address and I'll send you the paper if you'd like.

[gwb72tii]

Still waiting for the collapse of the dollar, double digit inflation, and $2500 gold.

Wont hold my breath...

Btw, george... how are those rising yields treating your bond portfolios? Is it ironic that the policies that you hate (or the man, i cant tell from all your hubris) are what gave you the bond run that made you money the last few years? And now that its over, the end of those same despised policies are now hurting your overweight bond strategy?

Yet you're arguing against it? You are the definition of the word "irony".

We're all still waiting for the Republican plan on jobs and the economy. I guess we'll see thatwhen the double digit inflation, that was supposed to happen 2 years ago, finally materializes? Or maybe when they are done shooting themselves in the foot on immigration and legislating women's private parts...

with a 65% bond correction the bond side of our accounts have lost about 1.7%
and yes i argue the fed should exit. there is no irony in that. the fed has perverted ALL asset prices with its misguided policies.
the fact the bond market has corrected should make you less inclined to own stocks. google the schiller p/e of the s&p if you want some insight into where stocks trade today versus history, and then come back and argue why anyone should consider switching from one less overvalued asset (bonds) into a grossly overvalued asset (stocks). sorta like dating the least ugly woman in the room?

and yes, bear sterns should have been allowed to blow the f**k up, live with the resulting aftermath, and move on. the fed made it's first mistake bailing out Long Term Capital in 1998, and now large financial institutions know the fed will come to the rescue. GM is another example of a company that should have declared bankruptcy on its own without the government coming in to make the unions rich at the expense of the bondholders, many of whom are older fixed income types

[nando]

but the fed exit is what cost you money, and is in reality why you are so pissed.

hey, how is all that austerity working for the EU? oh, they're in a depression you say? and it turns out the theory it was based on was a lie? oops..

still waiting for the grand republican jobs/economy plan...

[gwb72tii]

but the fed exit is what cost you money, and is in reality why you are so pissed.

hey, how is all that austerity working for the EU? oh, they're in a depression you say? and it turns out the theory it was based on was a lie? oops..

still waiting for the grand republican jobs/economy plan...

actually my narrow sighted friend, we prepare for and anticipate losses. asset classes move in differnt directions all the time. its part of investing.
and the fed has not exited.

what lie?

and austerity is a result of government spending

[z31maniac]

but the fed exit is what cost you money, and is in reality why you are so pissed.

hey, how is all that austerity working for the EU? oh, they're in a depression you say? and it turns out the theory it was based on was a lie? oops..

still waiting for the grand republican jobs/economy plan...

http://www.theaustralian.com.au/opinion/columnists/do-austerity-the-estonian-way/story-e6frg7bo-1226642391718

There are plenty more stories of how Estonia took the beating up front, got it over with, and now are back on the path to growth.

[BraveUlysses]

actually my narrow sighted friend, we prepare for and anticipate losses. asset classes move in differnt directions all the time. its part of investing.
and the fed has not exited.

what lie?

and austerity is a result of government spending

He's referring to the error in rogoff and reinhart's austerity study, pretty sure rwh pointed it out to you months ago but i'm shocked you aren't aware of it.

http://www.newyorker.com/online/blogs/johncassidy/2013/04/the-rogoff-and-reinhart-controversy-a-summing-up.html

[nando]

http://www.theaustralian.com.au/opin...-1226642391718

There are plenty more stories of how Estonia took the beating up front, got it over with, and now are back on the path to growth.

and Iceland and Ireland. there are certainly times when it has worked.

What about the rest of the EU? how many consecutive quarters has Greece been shrinking now?

George is arguing that it would have worked here, that allowing our economy to fall into a deflationary death spiral would have been better. because obviously, the conservatives would have come in and saved the day with lower taxes for the 1%. :p

[herbivor]

My friend has a PHD in economics and is a professor at the nearby university. When asked how many economists tend to agree with each other about economic actions, he said at least 80%, most of them agree with a Kensyian type approach in times of recession. The austerity cuts in Europe was dumb, as is austerity here, according to him and the majority of economists. Unless you study economics, you really have no expertise on how it all works. Ideological positions have no merit amongst math and science.
the GOP in NC are cutting money to education, raising taxes on the poor and lowering them for the rich, trying to kill green energy programs, opting out of the ACA benefits, and doing all the ideological things that a hard right Republican could ever want. It is a grand experiment of austerity and stupidity. We'll see how it plays out in the next few years.

[matthugie]

Herbivore, probably better through PM, but may I inquire as to who you're referring to? I know quite a few people from that program (assuming you're referring to the institution in University).

[Fusion]

[gwb72tii]

"I worry about the effects on the long-run stability and efficiency of our financial system if the Fed attempts to substitute its judgments for those of the market. Such a regime would only increase the unhealthy tendency of investors to pay more attention to rumors about policymakers' attitudes than to the economic fundamentals that by rights should determine the allocation of capital." - Ben Bernanke, October 15, 2002

oh really...........

why anyone believes a word this guy says is surprising