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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (3980)	4/8/2004 6:10:24 PM
From: yard_man	Read Replies (3) \| Respond to of 116555

>>fiscal stimulus that we have seen has been misdirected<< fiscal stimulus == government deciding better than the markets where money should be spent -- is always misdirected -- that's what we have now. Now you are positing that the current economy has not distributed wealth correctly and you will insert more government control to accomplish a better distribution?? get out of town!! We need to let markets work and stop the meddling.

To: CalculatedRisk who wrote (3980)	4/8/2004 6:50:19 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

3) slowly tighten monetary policy to slow the growth of debt. A series of 3/4 hikes is NOT slow. Even a single sudden 3/4 hike might do the following 1) bankrupt JPM 2) bankrupt a bunch of hedge funds overloaded in options 3) kill gold and silver and god knows what else 4) bankrupt a bunch of hedge funds overloaded in the carry trade 5) immediately kill housing 6) immediately kill housing related jobs 7) kill the stock market 8) god knows what else Quite honestly I do not think that anyone proposing 3/4 point hikes, a series of them, a massive 2 point hike or anything like that have any frigging idea what they are suggesting. A massive hike or series of moderate hikes will cause a global depression. What will it solve. 1) It will stop speculation in housing, but the banks will onwn them all as no one will have a job 2) It will cool off the price of copper 3) I have no idea what it will do to the price of soybeans, those could skyrocket higher for all I know Everyone keeps overlooking the results. Yes it will stop the rise of commodities at the expense of plunging the world into an instant depression and bankrupt some major banks in the process. Quite literally it is stupid. Here let me scream: A MAMMOTH RATE HIKE IS THE SINGLE STUPIDEST THING THE FED COULD DO RIGHT NOW and I would expect any jackass (even golden ones) to see it. If someone disagrees with what I laid out would happen then state the case please. Mish