I see the recession-mongers have moved their target now to Q2 and Q3, as the mouthpiece of the chief piranha of Wall Street [ viz., GS ] staked out his claim to fame. I suppose he had to move it, since Q4 won't fit now and Q1 looks slow, but OK too. These guys make these big mouth claims loudly so that IF it occurs, they can receive the mantle of "genius" and live on that for years. If it doesn't well, ... forget about that. Babblevision never checks a track record.
Hmmm by mid 2008, won't most of the "subprime" loans have reset? And won't the Paulson plan be having a major effect by then, too ? So all the risk for Q2 and Q3 is from secondary damage. That's pretty flimsy reasoning.
But they say, lots of other loans will be having more losses - credit cards, auto loans, corporate loans ... on and on. Of course, they forget to say that losses in corporate loans are still well below historical norms. And banks do make loss reserves in the ordinary course of business for losses on ... auto loans, credit cards, etc. So what's new ?
The only thing new of important is the Fed. Keep focused on the Fed. They matter. Bernanke speaks today at 1PM - hugely important if he says anything about current conditions.
The Fed has a tight money policy that they need to relax to avoid CAUSING a recession. Tight money can always do that if maintained too long. And they have had tight money for a few years now. Their unwillingness to recognize that the inflation war was won has induced them to keep money tight. That is a problem and it needs to be fixed.
I showed on these pages a few weeks ago that the "neutral" range in monetary policy is 3% to 5% for the overnight rate. So with obvious weakness, the overnight rate should be close to 3%. And the monetary base growth of 1.3% is too slow for an economy growing at over a 5% nominal rate [3% real plus 2% "core" inflation ].
The excessive, prolonged tight money policy of the Fed is causing the risk of a downturn. Had the Fed correctly recognized the war on inflation was won in early 2007 as core PCE was declining, they would have cut rates to mid-neutral then [viz, 4%] and mostly of this credit crunch would have never occurred.
As usual, they screwed up. Now they need to fix their mistakes and lower rates even more.
Hello Ben ... read your messages from Bunkerman ... obey him ! [ hehe ... ;-)) ]
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50 comments:
gm, Bunkerman.
hit my watering hole after practice last nite. got there late, place was closing (10pm). basically just the worden, myself, the waitresses, and the owner.
he walks right up to me, "so how bad is this recession gonna get?"
business is dead, the in the whole plaza. he is going to have to raise prices more as he prices keep going higher.
psychology plays an important role here. like in the movie "field of dreams", "build it, and they will come."
enuff people thinking we are in a recession creates one, on some levels.
by my quesstimate, about 80% of this country needs to mentally adjust thier attitude towards thier spending habits. Too much of what people earn is going straight to debt. credit cards, cars, mortgages, 2nd mortgages, furniture, etc.
the very fact that someone like suze orman has an audience is proof enuff for me 80% of the country is retarded. 5% like me, know im retarded, but am comfortable with that and celebrate it. then the 15% like u guys (bud excluded, he is in my 5%.)
gud looking, healthy, and rich.
:-)
i still think this is all elmers fault!
true Elmer raised rates too long and then cut too much and then raised too slowly. Three strikes.
I go by the friends in Ohio and here [not rich people]. I don't see most normal middle or working class people acting stupid. Some do, for sure. They are hurting now and paying for it.
I drove to Homer yeserday and some commercial space for lease that wasn't there a two months ago. But houses seem to be moving now, here and in Ohio.
The Bank of England held interest rates steady at 5.5 percent on Thursday, resisting calls for a cut amid mounting signs of a slowing domestic economy.
Economists had expected the decision would be a close call as the central bank weighed data showing poor retail sales and falling house prices against the threat of higher inflation from soaring oil prices and rising food costs
they r not being $ friendly
if your friends are 50 or over, they probably dont fit into my AVERAGE american category.
u need to visit bud, and see a trailer park. that is where about 50% of white people live in this country. bud lives in a nice one, i have seen some real shit holes!
true, I know few younger people under 35.
WMT good sales comps. uh ... I even the poor/working class still have money.
the Fed should cut rates now!............and pummel the dollar even more.....and then oil prices go even higher.......yup....that should really stimulate a lagging economy
PS.....Bman always like to say "fed has no mandate on dollar'
lmaooooooooooo
that's like a doctor sayin ...." take this pill ....it will give you energy.......but it will also give you a heart attack"
$10 FOR WINGS??...WE COMMON MEN SAY ..OH HELL NO..WE WONT GO!!
Do not crucify the common man on a cross of dollars !!!
My libertairan populism at work ... William Jennings Bunkerman.
Bunkerman for President !
Let the dollar fall .. we need to export more.
I can afford the Brie and had it on my bagel for breakfast .. but the common man doesn't eat Brie or drink Fench wine. His chicken comes from Arkansas and his beer from St. Louis.
Let dollar fall.
My multicultural breakfast: bagel, brie, grapefruit, pumpkin pie, coffee
good jobless number ... no major layoffs.
We Ohio and Pennsylvanians cant have a bust when there was no booom!!
..and its not a lie..if you believe
true, spin. My area of Ohio was dead for five years - no boom ... nada.
But wings there are 6 for $3 at KFC. prices are low.
pumpkin pie for breakfast? how does that jive with your workout schedule?
this is healthy pie - just pumpkin [lots of beta carotene, etc.], sour cream and stevia in a graham cracker crust - no suger.
Today will be the upper body weights .. hitting the weight room soon.
my workout times vary a good bit, but are always before noon. Usually at around 8AM nowadays.
GS cutting sectors across the board.......looks like they gonna be guttin their own beefer
COF, there is some real creative destruction.
ya people 35 and under r broke, dont invest, and leveraged to the hilt. and thats if u even make a 100 grand.
WMT is clearly taking share here, as people pass up publix for WMT. ultimately, this is part of the problem becuase almost everything in there is imported.
the food prices at WMT vs publix is huge, but i bet the quality of food at publix is better. i get my cleaning products etc from WMT, but for food publix or road side stands (which are great tasting and cheap). for protein, Land and Sea, great meats and seafood. we eat mostly chix, turkey and seafood,and that continues to skyrocket in price, but that is for the upper tier stuff. again prices at WMT r cheap.
pa and ohio r booming if your sell meth, or oxys. other than that, look at michigan, this is where that is headed. sadly.
i think i cud move to michigan and live in a mansion for 200k, but how wud i sell this house? NO CHANCE not even for free, right now.
lol
changed my mind .. hiting the power cleans today. That's a fine exercise frmo Olympic style weightlifting. I used to do that stuff ... snatches, clean & jerk, etc.
Once I read that a 125 lb girl [US]could lift more than me - that was depressing. But shows what a human is capable of.
my bros place...11 wings,bleuch, celery...$4....
he ordered 4500 lbs for Super Bowl Sunday..lol...geeesh
come on bud, that beef has to be short, by now.
u dont bite the tit!
lol, spin.
i routing for the gmen for the first time ever, this weekend.
$4 wings ?.....puke
you prolly get that at the turn on your 28bux round
President Bush met with Palestinian leaders in the West Bank on Thursday, predicting that a Middle East peace treaty would be signed by the time he leaves office in 2009.
ROFLMFAO!
do they drug test this guy? im serious!
saw hiliary cry today, PATHETIC! THERE IS NO CRYING IN POLITICS.
loool...price has nothing to do with quality or service you sad little man.....
really?......W cried, Bill cried, Bush senior cried, reagan cried....etc........
i guess it's ok for a man to cry
you really are a chauvinist pig
i know frosty is .....he thinks women shouldn't be allowed outside the kitchen or bedroom..........
breakfast is usually around 6:30 AM nowadays. I like to get my blog posted before eating .. what a sacrifice !
really, they cried about how tuff campaiging is?
imagine the water works when she loses.
4 bucks for wings. if i get to 60 ish ill retire up north. its beautiful and cheaper!
bud, if i was a chauvinist pig i wudnt be comfortable with letting cindy pay the bills.
lol
i need a nap
Bud is delusional.
Hillarys' enemies thought her cryin would crush her.....oops...backfired
99.99% of americans have cried many many times in their adult life....nuthin wrong with that
i love when republican white males bash hillary......she is gonna clean up with the womens vote
keep it up guys!!!!!
its hard to blame him. i think he was raised in the UN
Hmmm Hillary meet Putin .. Putin says, no. Hillary sobs ... wow, what a vision.
Leader of the free world .. wahhhhh!
Hillary is getting a pass for now "because" she's a woman. Ed Muskie, a man, got dumped in ten seconds when he cried 35 years ago.
bud how come obama aint your guy?
he snorts blow, and he is from kenya, plus he sleeps with a Koran.
Bud is Hillary's cousin - he supports family ;-)
Fireman was killed here...5,000 Fireman from all over in the city for his funeral today....something else
"We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," he said.
B-man speaks, ben listens
;-)
how this is news to the marketplace is beyond me...is there anyone out there who really doesnt think Ben will cut like a drunken maniac....he will just be late in doing so...
well, it's news to the extent that the Fed wwas so wrong for months. So until they do the right thing - obey me ;-) - it will be a surprise.
if they sell this news Bunkerman....well....I'd be a wary bull....
Why don't we go down? Because of the oscillator, because we are oversold ... for now. You need dramatically worse data to get hammered here. Not even bad Fed speak can take things down big.
That's why I emphasize that at this level you have to cover your shorts and you have to do it now. You can't risk a rally.
yesterday, at the low, jjc, was as bearish as ever. ive been reading him this week for the first time in years. how does he have a following, he is wrong so often its insane.
while ben chats about "restrictive" lending, can we discuss how and y we got here.
in 98 LTC blew up, threatening capitalism to its very core. so sir alan greenspan lowered rates and created a lot of money. that continued into 99, while he started to raise rates he was printing cash like the world was gonna end becuase of y2k. that was the meat ball of a lifetime. that money went straight into the 100 stocks going up on the nazz while the rest of the market had already started a bear.
so 3/10/00 abbey puts in the big top, the fed over shoots on hikes, and the rest is history. so to make up for this secular dislocation sir alan, cut rates to 1% to fight "deflation" altough we never had a hint of it. then at 1% he suggests ARM's to first home buyer (ie, retards). that kick started anothe bubble, this time in housing. eventually it lead to the private equity bubble. u cud get cash for anything. so once again those structual excesses need to be purged, and they are, but if the fed fights mother nature again, what is going to happen? either more assets bubbles or, it doesnt work, and we end up looking like the nikkei for the next 20 yrs.
of course the lending is restritive, it shud be! only an idiot wakes up after a bender and pours a bloody mary, unless u wanna die from alcholism. do what real men do. smoke a big bowl, wash it down with some valuim, take a nap and when u wake up, all the bad stuff will be over.
This blog post originally appeared on RealMoney Silver on Jan. 8 at 9:29 a.m. EST.
I have friends.
I have friends in Washington D.C.
I have friends who are very close to the Administration.
I have friends who are very close to members of the Fed.
This morning, several of those friends gave me an indication of heightened concerns regarding the domestic economy -- far more than what has been expressed by the President, the Secretary of the Treasury, and the Federal Reserve in various platforms over the last week.
And they say that the Fed will ease momentarily.
cramer blowing kass. although the down is up 50 pts from that post. kass got really bullish right before 911 and stayed that way until may of 03, and has been bearish since. he just turned bullish, probably means more pain for longs.
frosty congrats on CFC
you worked at BAC didn't you?.......hmmmmmmm
my fault for not pickin that up
I doubled up on some CFC yesterday under $5, at least, thanks for mentioning it, frosty.
Darn, I was just working on the CFC preferreds per a friend's question to me. Missed that - it almost dobled on the rumor as in a takeover might go to par.
BAC would likely buy CFC for stock.
gud job frosty
that Tata "nano" looks just like the old VW.
did maria eat a fart? she looks rancid
Bark lika dog Maria!!!
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