The American Dream

[30ashopper]

I wouldn't say regionals are any better at seeing the future than the big banks. We've had a lot of regional failure. But when a regional fails, it doesn't take the U.S. economy down with it. Unfortunately, we now have even bigger too big to fail banks. I'm not convinced we've taken any steps in the right direction, although I do believe we've brought leveraging standards down.

 

[Bob]

Had the FED not existed, we may not have gotten into this mess in the first place. I'm not so sure we're better off with a FED.

perhaps you need to live through a full blown depression

 

[scooterbug44]

IMO a lot of the regional failures (like big bank failures) came about because they were not following the rules and were being greedy.

Merely ENFORCING some minimal loan and reserve standards would prevent a repeat.

 

[DuneAHH]

perhaps you need to live through a full blown depression

Apparently so... and I have the distinct feeling we are going to have to experience those very hard times (or worse) once again. I feel lucky to have the lessons of my agrarian heritage to fall back on. Many urban folks don't have that.

My grandparents and parents raised us on the lessons of the '29 Crash and '30's Depression. Dad is a lifelong farmer and soil conservationist who ALSO served about 15 years each as a vo-ag teacher, school board member, state legislator, and longtime director on his community's 5-star bank board (and also ended up on the board of an FDIC bank takeover that HIS community's bank was asked to take receivership of). The man is a freedom loving idealist who committed his life in tireless service to his Land, Animals, Neighbors, Constituents, Community & State; with the belief that the Country's greatest good resides in the grassroots home fronts. Fortunately for me he's still alive and still an avid 'student of history with a current events overlay'. He's proven consistently correct in his predictions of the Country's current state of affairs for over 40 years (and he's no fan of The Fed Res).

His banking experiences with the FDIC left him underwhelmed as to their intelligence, effectiveness, or expertise: ("those FDIC guys couldn't find their own a--es with their own hands, much less the embezzlement trail").

As the rebellious kid, about the LAST damm thing I ever wanted to do was find out I needed to tell my Dad "You're right. Turns out you've been right all along." But I've come to believe he was and he is.

Sorry for the overlong blah-blah.

 

[TNJed]

Here's exactly how QE2 works. A handful of kids with a couple of computers, telegraphing their moves in the world's largest game of poker with Wall Street.

All of this is based off of a theoretical college paper. The good news is they are getting the exact opposite result they were counting on, but that's ok because that means it's working as they expected.

http://www.nytimes.com/2011/01/11/business/economy/11fed.html?_r=2&emc=eta1

 

[TNJed]

Never thought I would link a CNBC interview but this was on at 5am from the European Desk so I consider it a push

News Headlines


Same interview in the Telegraph:

http://www.telegraph.co.uk/finance/...sane-if-you-dont-own-gold-investors-told.html


Robin Griffiths, a technical strategist at Cazenove Capital, told CNBC: "I think not owning gold is a form of insanity. It may even show unhealthy masochistic tendencies, which might need medical attention."
He added that the dollar was heading for "oblivion".
Mr Griffiths predicted that gold's 10-year bull run would continue and even intensify. "Although it's been a top performer for each of the last 10 years, it's still in a linear trend," he said. "Eventually it will go exponential and make more in the last little bit than the whole of the 10-year trend."
He said investors should regard any short-term falls in the gold price as a buying opportunity, adding that gold was still not an "over-owned trade".

 

[DuneAHH]

Here's exactly how QE2 works. A handful of kids with a couple of computers, telegraphing their moves in the world's largest game of poker with Wall Street.

All of this is based off of a theoretical college paper. The good news is they are getting the exact opposite result they were counting on, but that's ok because that means it's working as they expected.

http://www.nytimes.com/2011/01/11/business/economy/11fed.html?_r=2&emc=eta1

I read thru the article twice... and I really don't get it. I'm slow & stupid that way.

It DOES just seem like a game they devised, constructed, and... mostly,
play with themselves ---> BTW,
there's another more descriptive word for that act :roll:

Since it's a private game they get to change the rules, parameters, and definitions of a successful win on a whim. But no worries right? THEY will always win!

Below 2nd paragraph excerpt with emboldened quote by the game-creators themselves "insist the program has succeeded"...
reminds me of the US Treasury declaring the HAMP program a success. P'LEEZE.


Bolds are mine

The trouble is, though yields fell sharply between August and November as the markets anticipated the new program, they have risen since it was formally announced in November, leaving many in the markets puzzled about the value of the Fed?s bond-buying program.


Mr. Frost, and his boss, Brian P. Sack, insist the program has succeeded. Mr. Sack, 40, joined the Fed 18 months ago to run the entire markets group. He has a Ph.D. from M.I.T. and worked most recently for a Washington consulting firm. In 2004, he wrote a paper with Ben S. Bernanke, the future chairman of the Federal Reserve, and another economist about unconventional measures for stimulating the economy in extraordinary times ? just like large-scale purchases of Treasuries.

 

[TNJed]

I read thru the article twice... and I really don't get it. I'm slow & stupid that way.

It DOES just seem like a game they devised, constructed, and... mostly,
play with themselves ---> BTW,
there's another more descriptive word for that act :roll:

Not slow at all! It's really that crazy. Any wonder why banks have record profits?

I'm reminded of the movie Armageddon, when the Bruce Willis character says something along the lines of, "you're NASA for pete's sake! I thought you all had a room full of guys just thinking stuff up, and another room of guys backing them up! You mean this is it? Our hope rests on this?"

I don't know what to think. It scares me is all I know.

 

[TNJed]

Harry Schultz?s last investment testament Peter Brimelow - MarketWatch


By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) ? After 45 years, Harry Schultz has just published the last issue of his International Harry Schultz Letter. He?s superbearish but opportunistic.


....?Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930?s are ludicrous. We?ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.? He writes favorably of investment advice given in a recent interview by former Reagan Office of Management and Budget Director David Stockman:
?Stockman replied (to my huge surprise, coming from a former top government official) ?Get some gold, beans, water, anything that Bernanke can?t destroy. Ron Paul is right. We?re entering a global monetary conflagration. If a sell-off of U.S. bonds starts, it will be an Armageddon.??
About gold, Schultz retains his long-term bullishness. He quotes the respected Seeking Alpha service:
?For gold to match the growth in US M1, M2, public debt & budget deficit, gold will have to reach $1,800, $2,400, $7,800 & $13,200, respectively. While I can?t imagine gold going to $13k, these numbers tell me that calling gold a bubble is a bit premature. In my view, money supply, public debt & the budget deficit are in a bubble, not gold, not yet.?
Schultz?s comment: ?Wake me up at $2,400 gold.?....

 

[Bob]

you are on a roll