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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (9983)	3/11/2004 8:26:51 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

<You expect the FED to hike into a sinking stock market with consumer sentiment already falling off the cliff over jobs?.> Yes absolutely, zero doubt in my mind. Easy money is having the complete opposite adverse effect, than what you think it's having. It's not helping anything, it's like treating VD by sending the patient hookers to have unprotected sex with. Result: a VD epidemic. You seem to forget that the primary function of a good, credible central banker (as opposed to sycophants and "the Wizard of Oz") is price stability and preventing overheating, not always just pleasing consumers, politicians, and speculators. By your standard they would always be easy, apparently rarely if ever tightening. So let me ask you, when would a central bank ever tighten by your theory? Would 4% negative real rates be enough? 5%, 7%, 10%? I think negative real rates are probably pushing 6-7% right now, and worse the "market" feedback is being masked by the BOJ manipulating the markets. People like you think 3.75% 10 UST is because of deflation, that "the market is telling us something", anything but. There is always some pain with a tightening and it will be especially so with this one, but to hear you, tightenings have never happened in the past, and inflation no matter how bad is irrelevant. I'm in the process of reading The Triumph of the Optimists, that will really change your thinking about inflations, they can really spiral out quickly and wreck everything. Put that book on the top of your reading list, along with James Grant's The Trouble with Prosperity. And until you've at least read those books, don't waste my time with these circular questions? I've had to painfully read Greenspan's and Bernanke's clap trap regularly that you've been posting here, so now it's your turn to read something worthwhile to counterbalance your (and the Wizards) mad thinking. I was around when rates were tightened to double digits, so what's the big deal, you get a slow down, there may be further job loss (mostly in maladjusted bloated industries like financial services, where it's needed anyway) and speculators and moral hazard types lose money. BFD, bring it on, it's necessary. If it was me I'd just bring down a couple of these leveraged institutions while I was at it, that would change the tenor of things. They are way behind the curve. The Fed should raise rates(along with the Chinese and Japanese) aggressively and immediately to prevent a much, much worse economic calamity.