Morgan Stanley: Fed to Raise Rates in 2nd Half of 2010
Submitted by
CalculatedRisk on Tue, 12/08/2009 - 11:03am (225 comments)
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right after the second half recovery. cough cough
3rd?
"As The World Turns" get cancelled after 54 years...
Art imitates life?
Sloppy fourths.....Hey wait a minute!
Morgan Stanley
John Mack cashed out today. Game over.
Meredith Whitney:
"states are Underfunded by 2 Trillion"
Oh Snap
So ... they're going to raise rates by one-and-a-half percentage points next year, on the back of the worst recession in 70 years ... and yet the GDP is going to shrug that off and rise by 2.8% in 2011 anyway?
I didn't know you could mainline
.
You had it made in the shade if you had a bunch of CD's paying 15%, back in the early 1980's...
I don't see that opportunity coming again, anytime soon.
Rather than analyzing the validity of this prediction, because after all, predicting the future is hard, we need to figure out what this intends to influence over the next few days.
Trying for a third-half recovery?
CDS spread blow-out update from markit:
Daily Wideners
Name 5Y Today Daily Bp Rise
Ukraine 1383.06 36.44
Romania 271.57 16.54
Hellenic Rep 188.86 8.59
Rep Bulgaria 219.80 6.98
Sultanate Oman 232.14 5.64
Go the grecians!
C
Tim waiting for 2012 wrote:
Maybe Obama can claim some loot out of TARP V2 next year to repurpose for unexpected needs - State assistance ?
Have you got the numbers on the Saracens?
76% Prefer Free Market Economy
It is useful to look to history. When did the BOJ raise rates from an essential zero point?
that was part of the rounding top of ticker symbol: PkA - peak america....
now you have to gamble to find yield....
All this doom today...are you guys trying to tell me the Red Queen finally caught her soldiers painting the flowers red?
0% rates into 2011 is bullish for stocks.
0% rates into 2011 and a widening current account deficit are also bad for the dollar. Carry trade on.
But I think the Fed might raise rates earlier--sometime in H2 2010--because surely low rates feeding an asset price bubble enters into the Fed's thinking now. No?
I've already gone on the record with an estimate of peak unemployment around 10.75% and no Fed tightening until 2011, putting me in agreement with Goldman's forecasts. I guess I've finally made it to the "think like a criminal" level of Trading Enlightenment.
S.
I think the Fed has painted itself into a corner, but instead of using paint, it has used mortar and concrete blocks.
As far as the dollar is concerned, it might rise short term, but there's nothing to support the currency without sufficient tax revenue.
For the love of God, Montresor!
What's Morgan's take on
?
Moruobai wrote:
Unfortunately, the Fed now holds a lot of those assets, so like China, they're caught in their own dollar trap-
How does a country discretely inflate it's money supply enough to get the Consumerist Capitalist Cronies Paradise back on it's feet again, but not make it look like it's willfully debauching it's currency?
shill wrote:
Taxes cannot support the dollar; only increased economic output to match the availability of dollars or dollar purchases by foreigners can do that.
Bernanke Signals Fed Will Maintain Its Outlook for Low Rates - Bloomberg.com
They just need to bump rates up half a % to put another nail in the
coffin.
drowned
from previous thread:
quoting and seconding Ezra Klein's comment on his WaPo blog: This is about the most effective presentation of data I've ever seen.
SEE IT HERE. It is worth your time.
Cinco-X wrote:
This is confusing. So, people think there's a free market NOW? And they support it?
I've always like that story. Of course I always took pleasure in seeing how Edmond Dantès worked in the Count of Monte Cristo as well. But I have never been a forgive and forget type of guy. I like that Old Testament God. Much easier to understand.
IMO Fed rates are small potatoes in comparison with all the other Fed /Treasury /Administration programs, pumping cash into the economy. See some tightening in FHA, & end to GSE securities buying will effectively raise borrowing costs enough to choke off any signs of inflation.
Report written by Dick Berner.
Applying the same rules to corporate anarchy and feral street thugs is not a government managed economy. Or maybe it is.
Paper boarding passes are still being accepted for flights to financial safety, at this late hour.
noob,
For yer carbon nano-tubes...
Scientists say paper battery could be in the works
Delicious Digg Facebook Fark Newsvine Reddit StumbleUpon Technorati Twitter Yahoo! Bookmarks Print Mon Dec 7, 4:28 pm ET
WASHINGTON (Reuters) – Ordinary paper could one day be used as a lightweight battery to power the devices that are now enabling the printed word to be eclipsed by e-mail, e-books and online news.
Scientists at Stanford University in California reported on Monday they have successfully turned paper coated with ink made of silver and carbon nanomaterials into a "paper battery" that holds promise for new types of lightweight, high-performance energy storage.
The same feature that helps ink adhere to paper allows it to hold onto the single-walled carbon nanotubes and silver nanowire films. Earlier research found that silicon nanowires could be used to make batteries 10 times as powerful as lithium-ion batteries now used to power devices such as laplop computers.
Scientists say paper battery could be in the works - Yahoo! News
"Fed to Raise Rates in 2nd Half of 2010"
This caters to those who think inflation may go uncontrolled...
Juvenal Delinquent wrote:
By debauching the dollar while claiming a "strong dollar" policy? Did I get the right answer? Is this a trick question?
Loan Modifications: A JOKE - The Market Ticker
Mish's Global Economic Trend Analysis: Coming Collapse of Municipal Bonds; States, Cities Dig Deeper Holes
You won't need to guess when the Fed will raise rates. They'll try keeping the overnight rate at 0.25 before they actually raise it to 0.25
NY Fed FF Chart
This ought'a get'chall goin':
Shocker polls: That Sarah Palin-Barack Obama gap melts to <em>1</em> point | Top of the Ticket | Los Angeles Times
gotta go; have fun
There will be no inflation, the government number bender is working fine. How do you fix a machine that is not broke!
MS says rates to rise, JPM says no. What does GS say?
I don't see how rising rates is the end of the world, but it certainly adds much pressure to housing and lending in general.
Locally, claim is median house prices up 5%. Ironically, that up 5% is $8,000.
In our Bizarro World, we owe the Chinese pawnbroker a trillion or so, but instead of some triad coming after us for the dough re mi, we threaten to have his legs broken if he doesn't loan us some more money.
Bubblisimo Gerkinov wrote:
You are probably right but in my pitiful rusty synapses, I cannot get over the fact that the dollar is a future claim on good and service and that there are too many future compounding claims.
I like the dueling at five paces with double-barreled sawed off shotguns. Both parties turn, but are having second thoughts about pulling that trigger.
Rassmussen is a wholly owned subsidiary of the Republican Party. Their polls are widely discredited for their inaccuracy.
Can we just accept that all polls are biased by their very creation in the first place?
batteries now used to power devices such as laplop computers.
Especially favored by proof readers.
How convenient.
CR,
This time around, there are several sets of Fed rates. In addition to the traditional rate at which banks borrow, the Fed also pays interest on excess reserves. They have an MBS buying plan, which lowers the MBS rates.
There are an assortment of other Fed policy levers now. One of the most interesting would be changing the haircuts or eligible collateral. There can be a self-reinforcing cycle if the haircuts for a particular collateral rise quickly. Even more severe is kicking something out as eligible collateral. In that case, I suspect some sort of grandfathering.
Debt Jubilee 2010!!!
The Fed will be forced to react, not to act. Ben is on the timetable's of others. Not his own.
They just need to bump rates up half a % to put another nail in the In CONSUMER coffin.
Fixed it for you.
they must still believe the fed is an independent apolitical body. Fed is going to jack up interest rates 1.5% with 9.5% unemployment months before an election. They must be smoking something. They maybe right about the end point 2% at the end of 2011 but if anything I think they have their targets reversed. 0.5% by year end 2010 and 2% by year end 2011 makes more sense. BTW just the fact that the Fed is willing to raise rates even a little bit before the 2010 election will prove their anti inflation bona fides.
steelhead wrote:
I would not be displeased, but it is earlier than my uncertain date.
So who gets the heave-ho when piracy on the high seize needs a convenient scapegoat?
(Jolly Roger @ half-mast)
edit: seriously, the amount of basic and mission oriented science that could have been purchased instead of propping up zombie asset prices and institutions is just mind boggling...opportunity cost writ large...
Yes. When you are talking Trillions, you are talking about decades of genuinely life-altering technologies that weren't funded in favor of sustaining the lifestyles and passive incomes of a parasitic nobility for a few more years. Opportunity cost indeed.
Hollywood Hack: Cardinals to win WS in 2010
I think I have more credibility on this one.
CR,
The historical model is no longer valid.
The great moderation is over, risk will start to be priced accordingly whether we like it or not.
some investor guy wrote:
for people wh are paid a lot of money this report is really unimaginative. I have consistently said pretty much what you have said- there has never been a easier time for the Fed to tighten then the next few years. If we all agree that it is long term rates that matter then the Fed has never had as much control of long term interest rates as it does at present. Just selling their hoard of long term assets will put pressure on mortgage rates and corporate rates- the Funds rate is truly a cosmetic in this equation.
A dollar crash would effectively be a debt jubilee. Careful what you wish for...
ResistanceIsFeudal wrote:
well stated and I could not agree more
in fact it is the most compelling reason for the waste and looting to be prosecuted
ResistanceIsFeudal wrote:
But they're the ones who own the govt. Their priorities will be a little different to ones which actually make sense.
Imagine what could have been accomplished.....
~splat
The Fed needs to talk about raising rates in order to perpetuate the "recovery" illusion.
The recession is over. Unemployment has peaked. 2010 will show growth. Fed ready to raise rates.
Zippity doo da!
With the Fed so confident in the recession being over and how strong the recovery will be that rate rises are on the cards. I wonder if they'll be letting the administration know how big the budget surplus will be so that they can start spending it in advanced.
~splat
Basil Too beat me, but why is everything supposed to happen in the 2nd half?
“There is a Chinese saying that one could quench the thirst by drinking poison,”
We can either default on our debt, or debauch our currency, or both.
A classic either-and-or Mexican standoff
Paying it back in the constant worth of today's dollars, is simply out of the question...
It's far enough out that hopium and extend 'n' pretend might have resulted in some short term gains.
~splat
lawyerliz wrote:
The gambling addict is always one more bet away from striking it rich. Was supposed to be H2 2009, then pushed off into H1 2010, now H2 2010 because it is possible if everything goes well from here on out for there to be hike by H2 2010
splat (profile) wrote (in reply to...) on Tue, 12/8/2009 - 2:41 pm
But they're the ones who own the govt. Their priorities will be a little different to ones which actually make sense.
Imagine what could have been accomplished.....
~splat
So long as we can sustain the massive social inequality, discourage investment and invention, punish thrift and reward successful gambling, all will be well. Gambling and thievery are what made this country - it's in our national DNA.
Take a name asswipe wrote:
whats the matter you don't have any good Merican sayings- isn't it bad enough that we are debt to them and have to buy virtually all consumer goods from them. Now we have to use their sayings as well?
With all the quality jobs sent to our overseas competitors in the last year, 5 years, 10 years, and so on and so on (btw, do we really call ourself a sovereignty anymore?), it's certainly not out of the realm of possibility that we get an increase in rates next year if Bernanke continues running the printing press at full throttle and/or the dollar finally crashes, both real possibilities, but nothing I'm sure Morgan Stanley has in mind. Obama added fuel to the fire today when he said we must spend our way out of this recession with money we don't have. Obama has kept none of his campaign promises, but I never expected anything from him when you saw whom he associated with and the little slip of the tongues they made BEFORE the election like Donna Brazile saying we were gonna spend gobs of money borrowed from the Chinese.
crazyv wrote:
We are in debt and in this mess because we ignored those good old American sayings.
I listened to my grandmother...
Speed wrote:
To Hu?
Because it's in the future.
Please. What is this announcement intended to influence in the next few days?
Or is it just fiction produced by someone paid to write something, anything?
EvilHenryPaulson wrote:
I feel like a Cubs fan.
Blackhalo wrote:
Hu will object ?
CaptainMorgan wrote:
How about this one, born & bred dopes (ducks)
Morgan Stanley's Richard Berner and David Greenlaw forecast that the Fed will raise the Fed Funds rate in the 2nd half of 2010 to 1.5%.
I'd like to see that just to witness the carry trade temper tantrum.
which is scarier-
that they know that these policies are garbage and will only enrich GS or
that they actually believe in them?
Hu can't always get what you want, but if you try sometimes, you get what Hu needs.
"Gambling and thievery are what made this country"
Actually, it was addictive drugs and slavery that made the colonies economically viable in the first place. Though, I suppose, planting nothing but tobacco was certainly gambling.
tg (profile) wrote (in reply to...) on Tue, 12/8/2009 - 2:50 pm
How about this one, born & bred dopes (ducks)
Oldie but a goodie...
Eric (profile) wrote (in reply to...) on Tue, 12/8/2009 - 3:49 pm replyIgnore userEvilHenryPaulson wrote:
Was supposed to be H2 2009
I feel like a Cubs fan.
.........and then the Pilgrims starved. .........the first "Thanksgiving" was REALLY a last meal for many......
ResistanceIsFeudal wrote:
I completely agree. And yet... we're reaching the point where the steal-your-way-to-wealth ethic can no longer coexist within an advanced society. The restraints engineered 75 years ago which mitigated the worst of greedaholism and funneled some of the take back toward the general good have all been slashed.
We as a people had the rage to disavow the greedheads 70 years ago. I only hope we still have it. Well, we do have higher standards than 70 years ago, and the worst hasn't arrived yet. So as far as I'm concerned, this is still early days, 1930. History only happens fast from a distance.
Hot from the Archives: Sebastian and . . .
New Century Financial!
Sebastian wrote on Sat, 3/3/2007 - 11:39 am
Better and better. I've tried to buy NEW stock twice now, sold at a small profit the first time, got stopped-out at a loss the second. As long as the only significant change regarding the company is one of investor perception and not deteriorating company/industry fundamentals,** **I'm going to keep looking for optimal buy-points.****
(Editor's Note: Trading was halted for NEW on 3/12/2007. New Century Financial filed for Chapter 11 bankruptcy on 4/2/2007.)
picking on earlier comments about hot water and the Romans. There are those who believe that one of the things that caused the downfall of the Roman empire was lead from all their water pipes. Ironic if their crowning achievement -running water wold be the cause of the down fall. Perhaps there is a lesson for us too- our crowning achievement industrialization -food and everything else- might be causing us to become fat, lazy and stupid. It is worth noting that ruminants who don't need intelligence for their food are dumber than the predators who feed on them.
I always thought God was a little harsh on his chosen. Of course Miles Standish went back to England...didn't he...
Business Roundtable: Don’t expect hiring in next six months - Dallas Business Journal:
Hot Air » Blog Archive » Gallup: Holiday spending off 21% from 2008
the Cubs? You should be Chicago Blackhawks fans first and foremost. They have some excellent players right now and are as good contenders for the Stanley Cup as they come. Plus their jersey is one of the best of any sport on the planet earth
shill wrote:
But that second half will be fantastic!
crazyv wrote:
I commented about something similar a while back. There are correlations between parental drug use and ADD in children, and those children are given Ritalin and other drugs. Wil we one day learn Ritalin correlates to X in children? What will we give them for X?
Of course we lowered rates to deal with a stock market crash...
Vonbek777 wrote:
.....some of us remained.......and have been quite blessed still.
Hot from the Archives: Sebastian and . . .
Wright Model B!
Sebastian wrote on Sat, 8/4/2007 - 9:58 am
dryfly said: "...I think a recession is baked in, many here think it is baked in... but those debt markets don't think its baked in else deals like the Chrysler LBO would've been 're considered'.
Nor do folks like Seb or Banker here believe a near term recession is likely. There are many like them."
Just FYI, I've got the recession probability indicator (Wright Model "B") plugged into my stock-charting software. It's at 32%, and that's with a 12-18 month window.
Also, I don't see how we can be anywhere near a recession when the ISM manufacturing and services numbers are still in the 50's.
Sebastian wrote on Fri, 4/25/2008 - 3:40 pm
Curiouser said: "could someone explain the repeated reference to the Wright Model B?"
It's a yield-curve indicator adjusted for the level of Fed funds.
Although it gets no respect here, it's an indicator that has a 100% success rate in signalling the U.S. recessions of the last 40 years, and has so far not signalled this "recession."
Sebastian wrote on Sat, 4/26/2008 - 9:42 am
jm said: "And although the Wright Model B is a leading indicator, he has argued that because it is now low, we can't possibly be in a recession."
No, that's not what I'm arguing now, or ever.
The model forecasts recession with a window of 12-18 months from the first time the yield-curve inverts. In fact, the Wright Model "B" curve never has inverted on this cycle, although it came close a year ago.
What this suggests is slower economic growth, but not recession. That's completely consistent with what we're seeing now in a variety of economic indicators, slower growth but not recession.
If the MSM, the Congress, the President, the Fed chair and the Presidential candidates are panicked or encouraging panic for political gain, that's not my concern. If posters here are responding to that, also not my concern. I'm focused on what the data says (and not relying solely on the Wright model, regardless of what my detractors say), and the data does not confirm recession.
So let me re-iterate for the benefit of any newcomers: No U.S. recession at any time this year or in 2009.
(Editor's Note: According to the National Bureau of Economic Research, a recession began December 2007.)
shill wrote:
Bad news for us, really bad news for the Chinese.
3,00 pm whats the betting on the market higher or lower on the close?
EHP
Coordinated blasts hit Baghdad; kill at least 127
Wave of coordinated attacks in Iraq kills 127 - Yahoo! News
If they banned cars from populated areas such as city centers, may be the death rates would be lower?
CaptainMorgan wrote:
Corn sweetener. Cures anything.
5 foot 3- besides proving Sebastian right or wrong I think there is a more important story.
If an indicator that had never been wrong failed to call this down turn is it because (a) the indicator was garbage or (b) that there is something unique about this down turn. If it is the latter shouldn't we be throwing out the previous play book in dealing with this down turn?
shill wrote:
Business Roundtable: Don’t expect hiring in next six months - Dallas Business Journal:
According to the article, [t]he CEOs were surveyed in the fourth quarter 2009
It is a family joke for us. My wife's (who doesn't know who her father is) mother is a big family tree addict. Of course she doesn't get how the big gaping hole in my wife's family tree affects her, but I digress...anyway this woman has traced her family roots back to Miles Standish (doesn't 3/4 of the country?) and then back to William the Conqueror. My wife's view, considering the bust size of all the women in the family...maybe Miles and Willy's wet nurses but that is as far as it goes...
SNAFU wrote:
I recall a medical study which demonstrated that radical double mastectomies reduces breast cancer.
Bob Dobbs (homepage, profile) wrote (in reply to...) on Tue, 12/8/2009 - 3:59 pm reply Ignore user shill wrote:
Hot Air » Blog Archive » Gallup: Holiday spending off 21% from 2008
Bad news for us, really bad news for the Chinese.
First of all, there's nothing wrong with Wright Model B. It works. It's all in the interpretation.
Second, concerning Obama's speech today. He and his team don't have a clue.
President Obama delivers remarks on job creation and the economy - washingtonpost.com
Sad, very sad.
So you are thinking cars are like breasts? Helps explain the infantile obsession some have over them, also the bigger is better theory.
http://www.gallup.com/poll/124616/Gallup-Economic-Weekly-Spending-Remains-Weak.aspx?CSTS=alert
Copenhagen climate summit in disarray after 'Danish text' leak |
Environment |
The Guardian
Rich countries will keep the boot heel on the face of the poor countries via global warmer policy.
Nelson: Ha-ha!
I think science proved that a pig stuck in a cage so small that it didn't allow movement and feed constantly but on a low calorie diet lived longer than its barnyard cousins too...but who would want that existence.
tncubsfan wrote:
isn't most of the data we get derived from polls? Its just a question of whom they sample and what the bias of the person asking the question is. The gallup poll might be more accurate than the government statistics since they don't have the equivalent of the B/D adjustment that government statistics have. Given the decline in consumer credit, decline in wages, the c4c and FTHB down 21% makes a lot more sense than up a little .
It's all in the interpretation.
Said the entrails reader.
mp wrote:
FIXED !
Wright Model B : Disasters, Devastation and Destruction
re: Yield Curve
It went inverted late 2005 / early 2006 (?), and it did it in a funny way. Long term rates were flat but short term rates spiked up.
It can take a long time for certainties to play out
mp wrote:
No problemo, Obama says we're going to spend our way out of this:
Obama urges major new stimulus, jobs spending - Yahoo! Finance
Arrrgh.
Mr Slippery wrote:
Damn Chinese keeping us down
~splat
crazyv (profile) wrote (in reply to...) on Tue, 12/8/2009 - 4:10 pm replyIgnore usertncubsfan wrote:
I'd rather see hard economic data than a poll.
isn't most of the data we get derived from polls? Its just a question of whom they sample and what the bias of the person asking the question is. The gallup poll might be more accurate than the government statistics since they don't have the equivalent of the B/D adjustment that government statistics have. Given the decline in consumer credit, decline in wages, the c4c and FTHB down 21% makes a lot more sense than up a little .
This is the kind of sales plummet that will cause a lot of retailers to go under!
Hot from the Archives: Sebastian and . . .
TANTA vs. SEBASTIAN ! ! !
Sebastian wrote on Sat, 7/28/2007 - 10:30 am
mort_fin's half-baked thoughts today rival a lot of fully-baked thoughts I've read on this blog. Nicely done.
Re: the job of the rating agencies, a related anecdote.
As a young stockbroker-in-training I had an opportunity to talk one-on-one with my one of my firm's leading equity strategists, and I'll never forget her advice. She said that even a reliable stock analyst's "buy" rating did not mean "at any price" or "regardless of conditions."
You don't get God for a commission, or even ongoing fees.Smile
Tanta (profile) wrote on Sat, 7/28/2007 - 10:43 am
As a young stockbroker-in-training
I HAVE to start drinking cold coffee, this is ridiculous.
Anybody want to drop some change into the tip jar for a new box of Kleenex for Tanta?
Sebastian wrote on Sat, 7/28/2007 - 10:57 am
Tanta said: "I HAVE to start drinking cold coffee, this is ridiculous."
Well, it's not like I started off the story with "I was raised as a poor Black child in a shanty-town and pulled myself up by my bootstraps.":)
What, you weren't ever young? You weren't ever in training? You didn't ever know less than you do today?
Tanta (profile) wrote on Sat, 7/28/2007 - 11:10 am
Sebastian, what could possibly make you think that I or anyone else who has been reading your comments for more than a week would believe that you have ever been trained as a stockbroker?
If you're going to make up some advice from some grizzled veteran "equity strategist" to share with us, **could you think of something marginally less banal? **
. . .
. . .
Tanta (profile) wrote on Sat, 7/28/2007 - 1:00 pm
Sorry, albrt, I got distracted. Must have been my trouser-cuffs.
There I saw one I knew, and stopped him, crying "Sebastian!
You who were with me in the ships at New Century!
That corpse you planted last year in your garden,
Has it begun to sprout? Will it bloom this year?
Or has the sudden frost disturbed its bed?
Oh keep the Dog far hence, that's friend to men,
Or with his nails he'll dig it up again!"
(Editor's Note: Oh my Lord! The exchanges between Tanta and Seb are hilarious, especially with hindsight.)
Notice in that graph that as short rates get lower and lower the economy gets worse and worse.
Wait...I am getting a vision of an insidious plot...defer the collapse until after Palin wins in 2012. Financial Armageddon arrives...people start blaming women for shopping at Goodwill instead of Sax...Palin wears red once to many times and is labeled the whore of Babylon by the same religious right that elected her. Golden idols for all.. Cats and dogs living together...is this what is coming?
animated yield curves
2002 to present vs. SP500
1977 to present
He and his team don't have a clue.
We have top men working on it right now.
,rad 5'3",
Seb's the ultimate reverse indicator, don't force him back into his burrow!
crazyv wrote:
* reply
* Ignore user
SNAFU wrote:
f they banned cars from populated areas such as city centers, may be the death rates would be lower?
I recall a medical study which demonstrated that radical double mastectomies reduces breast cancer.
That would be a personal choice. This is a public choice, same as no knives allowed in airplanes. Some people...
tncubsfan wrote
"Americans' average Christmas spending prediction is now $638. This nearly matches the $616 recorded in November 2008, amid one of the worst holiday retail seasons in recent memory."
http://www.gallup.com/poll/124283/Christmas-Spending-Forecast-Reverts-Record-2008-Lows.aspx
Mr Slippery wrote:
Now the shenanigans are starting to make sense.
Just another power play by TPTB-
Vonbek777 wrote:
Fiendishly brilliant ! I shall discuss your proposition at the next meeting of the New-World-Order, local 157.
~splat
Hot from the Archives: Sebastian and . . .
TANTA . . . being Tanta ! ! !
Sebastian wrote on Wed, 10/24/2007 - 12:17 pm
"Mark Thoma says Tim Duy is losing sleep."
With more reliable indicators comes better sleep.Smile
The Fed is going to ease again, but it won't be problemmatic for inflation because it's so low already.
Old topic: I once said that some of the best money-making opportunities involved taking advantage of other people's irrational behavior, to which Tanta replied that she'd gnaw off a limb to escape being my neighbor. Smile
Now is one of those times, IMO, to take advantage and press it for all it's worth, both for stocks and housing.
(Editor's Note: On 10/24/2007 the Dow reached 14,198 and the SP500 1517. The high for both indexes was 10/11/2007.)
ac wrote:
Are you confusing the associated causality? Just askin'
Americans' average Christmas spending prediction is now $638. This nearly matches the $616 recorded in November 2008, amid one of the worst holiday retail seasons in recent memory."
I never get to hang out with the cool kids. Just get to do their homework.
well i was trying to debauch a dollar bill, but couldn't get anywhere
then i showed it the animated yield curves and it did the trick
splat wrote:
Are you coming to Boston?
Psst, mp! Do you know anybody who needs a Proto 4 1/2 inch slugging wrench?
Just picked one up today and need to unload it on the next speculator. Giant heavy steel.
Someday this war's gonna end...
tncubsfan wrote:
Cubs memorabilia is cheap, right?!
Vonbek777 (profile) wrote (in reply to...) on Tue, 12/8/2009 - 3:10 pm
I think science proved that a pig stuck in a cage so small that it didn't allow movement and feed constantly but on a low calorie diet lived longer than its barnyard cousins too...but who would want that existence.
There are geeks the world around who would disagree... and many others didn't see the message because they are busy figuring out how to install a toilet in their recliner and making a feeding tube out of aquarium tubing
Citizen AllenM wrote:
Trade ya' for a use wire stretcher-
Copenhagen has nothing to do with climate change.
You have the rich world bankers who think they are going to get rich.
You have the poor country development associations who think they are going to get rich.
If it were environmentalists in charge, like David Suzuki or James Hansen, each country would just institute its own Swedish-like carbon tax and then handle the rest by instituting tariffs on a country by country basis.
However there are a lot of well meaning people who have been suckered into cap-and-trade because they mistakenly think it will be good for the environment, or they believe their own cause will get rich from it.
Cinco-X wrote:
I admit I'm lazy....did Rasmussen really survey "the Political Class"....if so I'll have to forward this to my dad, who made a career doing survey research....he'll bust a gut.
EvilHenryPaulson wrote:
Are you trying to make my point for me? Sorry that I didn't articulate it very well. BTW, I e-mailed you earlier regarding a comment yesterday.
You owe me a keyboard. Almost choked on that one. My eldest was trying to dial 911 because daddy was turning blue. Thanks for the perspective...
big ticket items like cars or televisions probably skew that average
nice pabloP
funny memories
Are you confusing the associated causality? Just askin'
I think that excessively low rates have destroyed the US economy.
ac wrote:
The conventional wisdom of low interest rates has to be challenged. The problem is that just like drugs each trough needs to be lower than the previous one and finally when you hit zero - splat!!!
Lower interest rates only work if they are lowered sharply and then raised before the savers start cutting back in the face of lower rates. Its sort of like a neck brace- use it for a short while and it can help - use it for a long time and you atrophy the muscles. I don't have a PHD in economics but sometimes common sense is all it takes. I recall when I worked for a bank talking to the folks who ran our factoring business about interest rates and the impact on their clients. I still remember his comments- its not where interest rates are but how they get there.
Kunstler's latest:
"...we’re headed into the wildest king-hell debt workout that the world has ever seen, which will propel a lot of people used to working in air-conditioned cubicles into a world made by hand. "
king-hell debt workout... that has a certain ring to it...
ICSC-Goldman & Redbook reports pretty much spell out Christmas shopping consists of lumps of coal. Black Friday was the last time anyone went out to shop?
Vonbek777 wrote:
Cinco-X
Just stating my opinion as a tree hugger, and also in a partial undirected response to the uninformed opinions flooding the airwaves and press
Dealers to Begin Trading Prime Mortgage Credit-Default Swaps
By Jody Shenn and Sarah Mulholland
Dec. 8 (Bloomberg) -- Wall Street banks have agreed to create benchmark credit-default swap indexes tied to prime U.S. mortgages.
The benchmark contracts, similar to so-called ABX index swaps linked to subprime loans, may begin trading as soon as the first quarter of 2010, said Michael Gormley, a Markit Group Ltd. spokesman.
Dealers to Create Prime Mortgage Credit-Default Swaps (Update2) - Bloomberg
+++
Say goodbye to the prime mortgage market.
Welcome to the Even Greater Depression
shill... One thing is for sure: that universe doesn't end with a whimper...
Black Star Ranch wrote:
I knew it was a mistake to go long on switches-
dum luk wrote:
do the people they polled end up with the average national wage or do you reckon that it is just the average response of the people that they polled. Also is that number per person or family or just adults? It seems to me it matters a lot to know what the answers are to those questions. if it is adults that would be 1300 for a family making the median wage of 40,000- 3.25% of your pre tax income on gifts? !!!!
as soon as they do, all primes should stop paying, and buy into a CDS etf on said index!
Because Wall Street stuck its finger in the fire and got a $16 billion bonus and a lollipop.
Comrade Rally Monkey wrote:
Beat me to it-
i knew CDS would be the motor that powers our recovery
Cinco-X wrote:
kind of an
day in the casino
Agreed, I am looking for the big bang theory myself
Comrade Elmer Fudd (profile) wrote on Tue, 12/8/2009 - 3:38 pm
i knew CDS would be the motor that powers our recovery
s/motor/black hole/
We are all Romulans now.
The conventional wisdom of low interest rates has to be challenged. The problem is that just like drugs each trough needs to be lower than the previous one and finally when you hit zero - splat!!!
Nobody even begins to explain how low rates can address misallocations and structural deficiencies in the economy.
The economists just whip out some simplistic equation that looks like it was written for a discrete system with a handful of components, not an infinitely complex diverse evolving self-reflective organic system.
Those big bushy beards must suck all the nutrients out of their brains.
Yes I am sure he would...but you are arguing with a fool who flunked stats 3 times in college because he argued with a very respectable 80yr old prof who finally passed me if I promised not to come back to class and debate him ad nauseam about the very validity of his area of expertise. The very asking of the question, very language that is chosen...influences the results...and then there is the question of why bother determining what the majority of people (whatever the sample size is) matters to the given question at hand. Good for herd management I guess. Polls are a tool used by the elite. As an absent minded philosopher I would rather resort to astrology or augury...they seem the same. I mean no disrespect by the way. To each his own, my prof was very sincere in his belief...I am in mine too. My wife says I don't dwell in 'normal space' anyway, so best just ignore the raving loony in the room. Most people do.
The Administration is now characterizing the paid back TARP money as "Surplus"
The SPIN is ON!
"Morgan Stanley: Fed to Raise Rates in 2nd Half of 2010"
The idiot who wrote that must not have recieved the TBTF memo.
BSR wrote:
I'm not seeing any signs that expenditures are being reduced, let alone faster than the decline in revenues.
Obama promising to spend us out of recession is not helping.
i think my bp went up 1 tick when i read that this am. i think i'm getting good at this!
Looks like the doom is invading
land. Rumors flying that the FDIC will be abolished in 2010...no guarantee for account holders...BofA preparing for bank runs...my it is an interesting day when the 
and the mainstream are hard to tell apart. Bodes badly.
Vonbek777 wrote:
Sadly, none of it wore of on me...the Monty Hall thing just hurts my head.....
Vonbek777 (profile) wrote (in reply to...) on Tue, 12/8/2009 - 3:41 pm
Yes I am sure he would...but you are arguing with a fool who flunked stats 3 times in college because he argued with
I argued with a lot of my professors... only students there to punch their ticket got irritated by the distraction, most of the profs genuinely enjoyed the debates... I remember reading that university life used to be like that in the earlier days of the academy.
Obama urges major new stimulus, jobs spending - Yahoo! Finance
Ok so we threw $12 Trillion or better at this Bitch, and yet they say we have more of the
( cough ) $787 billion still left over........who are they kidding? We have billions sitting in Banks!....
Jonathan wrote:
Hi, I'm from the government, and I'm here to help.
Now just empty your wallet into this bag......thanks.
Oh, and good luck finding a job! Oh, you say you're employed? Just wait until next year. Sorry.
IMO, a very important story:
Corruption threatens "soul and fabric" of U.S.: FBI - Yahoo! News
Raising rates in 2010 would be the height of irrresponsibility. there is no inflation on the horizon and long term unemployment is not just t record levels, but way off the chart record levels. I think hte only people calling for the fed to raise rates have a political agenda. Nothing will help the GOP pick up seats in Congress like double digit UE come 11/2010. The Fed will raise rates at close to 10% UE (U-3) this time around, but waited until UE fell to 5.6% last time, will anybody think that the Fed is an independent body, or will they conclude that it is simply an arm of the GOP. I don't think it will happen, Greenspan was much more of a political hack than Ben is. Taylor rule right now calls for a negative FF. Also, a falling $ is good for the economy now. It is just about the only thing that has a hope of putting a dent into our long term chronic trade deficit problem. Remeber, it is the TD that drives the amount of our external indebtedness, not the budget defitict.
One of these days the bond market is going to wake up- it will be the event that will be the event that will throw all those continuous curve risk models for a complete loop. I remember the debacle with perpetual floating rate notes- one day they were trading at par and the next day they were at 76%. I guess somebody looked at the dictionary and realized the perpetual meant forever-
A continuously declining interest rate environment destroys capital.
shill - where else will banker bonuses come from? $787B sitting at 4% earns $31.5B. That's a lot of baby banker bonuses before they have to hand back the free money we don't have that they borrowed from us.
Good for herd management I guess. Polls are a tool used by the elite
Perhaps to distinction should be in how the poll is used: 1)as a tool to measure opinion or 2)as a manipulative pronouncement, in the fashion of "most people think ....," so why don't you? Of course if it is 2), no real need to waste time conducting the poll, just say you did. cough rasmussen cough.
Is this newsworthy? 4 week T-Bill auctioned to 0%, with a bid-to-cover of 5.33.
Sadly, I only had a couple of profs that like to debate and were open to honest academic discussion. The majority of mine were there to state the established religion of any given subject. My college transcript is amazing. Honors and As in upper level research based courses....not so great in the intro classes that dealt with methodology. If the class used multiple choice tests...I was fine...but if it required me to regurgitate via essay what the professor taught, I couldn't do it. My personal ethos required me to write what I believed. You would not believe how many times a prof would pull me into his office and say...that was brilliant but not what I taught, and I have to grade you on what I taught...form before content.
Dirk van Dijk wrote:
Then it's a lock, eh?
Just look at the sudden burst of health in the DXY on the rumors alone.
Quote of the day from the Economist.
“What is good for Goldman Sachs might turn out to be good for America, but it might be best if the government could make an independent judgment.”
Jim
Cinco-X wrote:
The Jacobin on Girondin Reign of Terror. I only know a little about it, but I would say that it was infighting for power/control of the revolution and not an intellectual purge. Your link just said revolutionary leaders one day, had to watch their backs the next. When I mentioned an intellectual purge the other day, I was thinking of Khmer Rouge Cambodia, Chinese Cultural Revolution, USSR philosopher ships. Rich/poor, party member or not -- they were deported/isolated/executed for what they may do in the future
H-1B demand spike may signal improving outlook for skilled pros
Demand for H-1B visas has accelerated over the last six to eight weeks after being flat for months. This comes as the number of companies planning to increase college hiring is also on the rise. Together, the trends may be early indicators of an improving economy for skilled professionals.
Throughout summer and into September, demand for H-1B visas flatlined at about 45,000 visa petitions. But on Friday, the U.S. Citizenship and Immigration Service released data showing that in two weeks alone it had received 3,300 H-1B petitions, continuing a spike that began in October that has increased the number of visas petitions to 58,900, approaching the 65,000 cap.
Reading that Obama said we're going to spend our way out of the recession, but I can't find the actual quote unless it's quote #2 below, in which case, that's not what he said.
"Despite Republican criticism concerning record federal deficits, Obama said the U.S. must continue to "spend our way out of this recession" as long as so many people are out of work."
(12/8/2009: Out of context quote - Page Not Found - Yahoo!
"Even as we have had to spend our way out of this recession in the near term, we've begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run"
(12/8/2009: TradingMarkets Online Stock Trading Investing.
"We are under no illusion that somehow the federal government can spend its way out of this recession"
(12/4/2009: Error | 404
- Washington Times.
mp wrote:
He spoke words out loud that few dared ever utter. His is a desultory chore.
the bond market may wake up, but it will still be tied to the chair in the fed's basement, with a well armed bill g and his pimpco posse vigilantly standing guard a few feet away. so it ain't going anywhere.
Dirk van Dijk wrote:
Firstly, I don't think raising rates has any impact on the real economy- it just changes the amount of money savers are pumping into the banks. Secondly, lowering rates was the height of irresponsibility - IMO it was the Fed actions in the fall of 2007 lowering rates to address a liquidity problem coupled then with not providing sufficient liquidity that precipitated the catastrophic failures of 2008. The dumbest action that they could possibly have done in December 2007 was limit the amount of term funding they would provide and require banks to bid for. The smart thing would have been for them to have said that they would provide all the funds necessary at fixed spread to Fed funds (based on historical relationships). It was the break down of the Fed funds -Libor spread that caused the markets to seize. Liquidity in the fixed income markets was always a function of the spread relationship between various asset categories. Once the relationships broke down each asset class became its own market which was then swamped one at a time.
From CNN
I had no idea how important burgers were...
yes, the poor junkie had a seizure due to the pains of withdrawal. the lack of smack was the problem all along.
JBR wrote:
I want one right now
Speed wrote:
at least that is better than " dow drops because people were looking for safer assets like the dollar"
Treasury to sell 88.4 mln JPMorgan Chase warrants
burger flippers now represent a good part of the workforce.
edit speaking of flippers I just got an email from an acquaintance talking about himself and some buddies going in on houses to flip...because there is no better time...and did I want in on the action...my lord is it coming to this?
I was just pondering what someone in the 1950s would have thought about a burger joint not only being part of an 'industrial' average, but leading it
volker the viking (profile) wrote (in reply to...) on Tue, 12/8/2009 - 5:03 pm JBR wrote:
I had no idea how important burgers were.
I want one right now
How much in the Fed going to raise the interest rate it pays on reserves?
probably something like this:
... 
I nominate that for question of the day...burgers not steel...
Vic wrote:
So long as everything goes optimistically in the next 5 months, we could see some hiring at 2008 levels?
everybody is open to the idea of recovery, indeed it will take at least a couple of years before they'll begin to give up on the return of that 20% drop in demand. all the surveys for leading indicators have been through the roof for many months and it just doesn't translate to coincident indicators. the stimpacks to date have been barely enough while they were growing. now they're stagnant or shrinking, and state/local governments haven't begun to balance their budgets
we should have seen NFP employment growth in SEPTEMBER if there was to be enough time/momentum for the economy to follow through on its own.
Hoover did a better job in his day of stimulating the economy (he wasn't an idiot, he just thought the problem was solved right before the election and didn't get a second chance. The Hoover dam is named after him for a good reason. I doubt Bank of America or Chrysler will one day be named after Obama)
edit: I correct myself, Hoover did have time for a second chance. His term was 1929-1933.
fwiw, time was probably the one responsible for ending the depression, because it was with time that the debt overhang was worked down
The more things change...
House Flipping Makes a Comeback - WSJ.com
Was Ben being?
a.) stupid
b.) lying
c.) all of the above
"We may see somewhat better economic conditions during the second half of 2008, reflecting the effects of monetary and fiscal stimulus," Bernanke said.
They always said there was no future in flipping burgers.
Yes, taken out of context. He said
"One of the central goals of this administration is restoring fiscal responsibility. Even as we have had to spend our way out of this recession in the near term, we have begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run."
He's talking about the past - not the future. The tone is one of ending the spending, yet the out of context quote is everywhere claiming the opposite.
Damn the liberal media!
Apparently they were wrong. Burger flipping is our country's future! Eat More Burgers!
I'm sorry, I just don't have what it takes to do it. Now that I think about it, there aren't that many rich philosophers are there? Damn.
Ok I'll bite...............in what sector?
"If you can dodge a wrench, you can dodge a ball"
"If you can flip a burger, you can flip a house"
just got this, not sure how credible their source is.
Dismal Results for Trial Loan Mods
Dismal Results for Trial Loan Mods
By Cheyenne Hopkins/American Banker
December 8, 2009
Only 6% of trial modifications have become permanent or are likely to become permanent under the Obama administration's foreclosure program, according to data the Treasury Department plans to release on Thursday.
On Monday, Treasury officials gave servicers in its Making Home Affordable Program or HAMP a preview of the data. The poor results come a day before the administration and servicers were to testify before the House Financial Services Committee on the modification program.
According to the data, 11% of trial modifications that were extended have been canceled; 49% lack some or all of the necessary documents to convert them to permanent loans; 33% have the required documentation but have not been converted, and 6% are currently slated for conversion.
Under the administration's modification program, servicers must complete three months of trial modifications where the loan was reduced to 31% of the debt-to-income ratio before a workout is made permanent.
On Thursday, the Treasury will for the first time officially announce how many of those loans have become permanent. So far 650,000 trial modifications have been extended.
Servicers were allowed to accept verbal documentation of income and expenses but the borrower must provide verifying documentation before a loan can become permanent.
@Charles Kiting
How much in the Fed going to raise the interest rate it pays on reserves?
I was going to ask you how an 8-day reverse repo drains cash out of the system. Since the Fed pays interest on this "loan", even going to the extreme of putting the security into the hands of a 3rd party for collateral, my meager math skills calculate a net pump of cash into the system.
Treasury to sell 88.4 mln JPMorgan Chase warrants - MarketWatch
Treasury Department announced Tuesday that it will sell 84.4 million warrants to purchase common stock of JP Morgan Chase & Co
energyecon wrote:
Two strands of carbon nanotubes invisible to the naked eye could support the weight of a Buick. The possibilities for redesigning our world are mind boggling. And that's only the obvious applications. I'd never heard of using them as batteries, although I did know they were conductive. It would be the generation of an entire new industry...and if the genesis of that industry was in the USA, it would be the commencement of a new source of competitive advantage.
The current orgy of zombie asset value inflation spending does nothing to foster any future competitive advantage, and that's a missed opportunity, and an awful shame.
you could be a great hedge fund manager...there used to talking their book.
...IMO, I think the McDonalds' sales decrease is more ominous than thought....... I think more people are eating more top-ramen at home. No sense going out for a burger if there is a pack of delicious & nutritious top-ramen still in the cupboard!
shill wrote:
I was talking about the college graduate / H1B employer hiring survey. The big companies hiring H1Bs have entire departments just to process the paperwork in time because there is a limited number. If they might want to hire in the next year, they'll of course reserve a spot. They're open to the idea of hiring, but they won't change their behavior if all the inputs into their decision making don't improve from today. Otherwise they would be hiring last year's college graduates today.
I'm not sure what flavor of 'moral hazard' this is - the idea that people game a system to the maximum when there are no repercussions is relatively straightforward (and, really, the natural state of banking in lieu of regulation)... but the expectation that people are voluntarily altruistic (e.g., submitting tons of paperwork to a wreck of a behemoth like B of A in the slim hopes that an extremely underwater house would be a slightly less painful experience because it is morally preferable to just forgetting to pay the mortgage and/or pushing a clouded title issue through the courts for months and months) is a bit more subtle
Lord please don't say that. Wife and I lived on top-ramen for a time, wife lived on it for a long time as a child. We made a vow to never go there again. Spent a winter in Germany...dad was deployed...base housing full...we were living in a small village a few ks from base...didn't know the heating oil bill was due all at once, and there was a mark rate fluctuation that made the dollar worth a lot less that month vs the mark. Savings was depleted on the security deposit on the house. My mom and I lived in the first floor bathroom (had heated floors, it was very cold that year) in sleeping bags on top ramen, hormel chili, and vienna sausages. That was a long year. Nothing like standing in a blizzard waiting for the school bus at 5 am.
Demand for H-1B visas has accelerated over the last six to eight weeks after being flat for months. This comes as the number of companies planning to increase college hiring is also on the rise.
how much of that is coming from the banks who having repaid the TARP funds are free once again to apply for H1B?
HollywoodHack wrote:
HA! so true!
kidbuck wrote:
d) Do what is required not to spread panic amongst the teaming-masses.