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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (10063)	12/6/2002 9:45:00 PM
From: orkrious	Read Replies (2) \| Respond to of 89467

a few choice nuggests from Noland tonight prudentbear.com During the third quarter, Total Mortgage (household, multi-family, commercial) Credit expanded by $235 billion - a stunning annualized pace of $941 billion (12.4%) to $8.2 Trillion... And for those that missed it, CNBC should have provided a viewer warning label for the other night’s “housing is a sound investment” tirade courtesy of Kudlow & Cramer. With Mr. Cramer professing “housing will always be a great investment” and Mr. Kudlow spouting the virtues of the sector’s “wealth creation,” we haven’t seen such fervent propaganda since the heyday of the Internet/technology Bubble. If we’ve learned anything, it’s that when it has reached the point where we are subjected to the old “you’ve gotta own ‘em at any price,” it is time for us buyers to beware (and hide our wallets!)... To those that continue to trumpet the “underlying soundness of the U.S. economy,” we suggest digging deeper. Indeed, 28 straight months of declining employment has reduced the number of manufacturing jobs back to the level from November 1961... While not appreciated by the bullish consensus, today’s extraordinary global backdrop increasingly places the U.S. financial sector directly in harms way. It has no alternative than to perpetuate the Great Mortgage Finance Bubble, but this entails the unending creation of massive amounts of non-productive, volatility-inducing, economic distorting debt. Regrettably, previous Credit excess has made profitable U.S. productive investment largely a thing of the past. Not only has distorted investment flows throughout Asia created enormous over-capacity, inflating U.S. wages and other costs have priced the U.S. out of the global manufacturing marketplace. And this will prove a rather tough structural sticking point for the inflationists. To sustain a level of household income growth necessary to support inflating (largely mortgage) debt levels only widens the competitive disadvantage of U.S. producers and fosters further manufacturing atrophy. While they don’t realize as much, the inflationists are fighting a losing war – fighting fevers with ice baths. To dream that we will forever enjoy the capacity to trade newly created (electronic) dollar balances (financial sector IOUs) for foreign-produced goods becomes only more fanciful in an era of out of control current account deficits, an acceleration of manufacturing winnowing, a heightened loss of global competitiveness, and, not unimportantly, Fed governor references to “printing presses.” What about the quality of these inflating quantities of financial sector IOUs? We have watched over the past decade repeated episodes of bursting Credit and speculative Bubbles. There are, virtually by “design,” many consequent examples of faltering currencies. Not many have been orderly, and most can be appropriately described as collapses.

To: stockman_scott who wrote (10063)	12/7/2002 12:12:21 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Krugman pats himself nicely on back re: ONeill but in mid-2001 he was still a fan of Greenscheisspin he believed in AG's interventionist approach he expected AG to prevail in Sept2001 Krugman called him Atlas, carrying the world I wrote a stern dissenting letter to editor in Pitt now Krugman is echoing my main points of agreement so now K is brilliant ? NOT no, he had a good gut on ONeill's weakness when many did also but he had the wrong gut on AGman for a long time I expect Bushy to appoint an even weaker team but a bunch of guys who will take greater risks and probably make bigger mistakes they will now forge onward to make huge intervention moves I expect the press/media will judge the appointments more on how much risk they are willing to take NOT on their ability to manage thru this Perfect Storm brewing !!! the USDollar is the meter for their success / jim