“Great question, let's see if a discussion gets going here on this. But I suspect not as this board's quality has really fallen of late, and I've about had it. And if this continues to be the case, would you mind commenting at my blog, and we can just move it over there?”
I would love to move it to your blog. I am myself getting tired with people's hype being thrown around without any substantial back up. I don’t write here to spread my gospel but to exchange information, point of views so I can make educated investment decisions. If facts support the view that the FED can reflate the households and create consumer inflation I will burn my money, borrow as much as I can and buy hard assets with it. If the opposite is true then I’ll keep my money and buy assets at the bottom of the recession like I did in 1985. I am totally open-minded. I am looking for answers.
“-I suspect that consumer credit (Kasriel chart 2 and 10)is now hanging tough, given the mini-refi boomlet into fixed rate mortgages. Some people are being bailed out of dire trouble as a result.”
This boomlet is born of desperation. The last gasp of cash before the RE values submerge and easy credit disappears. The litmus test is going to be the Spring house selling season. Watch out below if listings swamp the remaining buyers. Bottom is gone fall out of the builders, mortgage lenders, retailers etc. stocks. This is where the households stop hanging tough and give up.
“They are going to get buried.”
Do FCB really care? They spend the money created out of thin air anyway. Do they truly sustain loses, and if they do, does it matter? They just print few more gazillions of yen, remimbi, euro etc.
“-Chart 11 is hard to judge because the Bully class has actually strengthened (stock market rally), and the Gini Coefficient has worsened.”
Since we know that the primery liquidity spigot of the households is borrowing against the RE, I can’t wait to see the Q4 Flow of Funds. Can we monitor it monthly?
“Basically the story of the 4Q is deteriorating assets for most consumers, but little change in credit growth because of relentless foreign subsidies. Actual credit conditions are getting steadily worse, but the massive foreign subsidy has largely trumped it so far”
But from my understanding the liquidity isn’t going to where the FED wants it to go. |
