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To: Secret_Agent_Man who wrote (339835)	8/5/2007 10:32:38 AM
From: Real Man	Read Replies (3) \| Respond to of 436258

I read Noland's CBB every Friday. No fire in crowded theater, but a very nasty outcome from all of this is unfortunately inevitable. If the Fed and other CBs come to emergency rescue now and succeed, which may happen, we'll only have a much bigger bubble to deal with later. Then we'll have to scream later for the Fed to come and save us from a much bigger bubble. We would be better off in the long run if we just let these bubbles pop, then deal with the consequences the best way we can. Very hard times ahead, thanks to AG Fed prolonging and extending the mess forever. Maybe, the Fed can extend the party once again, then we should be really thankful later. The market has become a pyramid scheme, it will end like all pyramid schemes do. No, it won't be much fun at all. That said, I expect the Fed to panic next week, but it remains to be seen if they can do anything. The only way to fix this for real is Volcker way. What has the Fed achieved? Let's see: they COMPLETELY destroyed US manufacturing, and created "Service" economy - banking, hedge funds, Real Estate and such, that feeds off the Fed's printing press and liquidity. This is NOT productive, in fact, we have been on the path of total economic destruction for a while now, thanks to the Fed. It will take a LONG time to rebuild US manufacturing base.

To: Secret_Agent_Man who wrote (339835)	8/5/2007 12:36:02 PM
From: maceng2	Respond to of 436258

yes, as I was about to say (from Aug 2nd) ft.com Trichet signals EU rate rise next month By Gerrit Wiesmann and Mark Schieritz in Frankfurt and John Thornhill in Paris Published: August 2 2007 10:06 \| Last updated: August 2 2007 18:31 The European Central Bank on Thursday signalled the cost of borrowing in the eurozone would rise again soon, with most economists tipping on a now-traditional quarter-point rise in the main rate to 4.25 per cent in early September. But the central bank for the 13-member currency bloc made no comment on the trajectory of monetary policy beyond next month, leaving the door open to more rate increases or to a pause as past moves stem the speed of price rises. Jean-Claude Trichet, the ECB president, said “strong vigilance” was essential to guard against excessive inflation, a term that has heralded a modest rate rise the following month ever since the bank started tightening in late 2005. Separately, Christian Noyer, the governor of the Bank of France and an ECB board member, fiercely defended the primacy of the ECB’s inflation-busting mandate, saying it was the “fruit of experience.” In a scarcely veiled rebuke to Nicolas Sarkozy, France’s president, who has been calling for a looser monetary regime, Mr Noyer said many countries had been tempted to stimulate economic growth by pursuing a more expansive monetary policy. “All these attempts have failed,” he wrote in a introductory letter to the Bank of France’s annual report addressed to Mr Sarkozy. “Inflation increased, sometimes to very high levels, without employment improving.” Given strong eurozone growth and inflation at the top end of the ECB’s comfort zone, central bank watchers had long anticipated the bank’s move, with hunches turning into near-certainties as the ECB on Thursday called a press conference at short notice. After speaking to fellow governors, Mr Trichet said rising oil prices, emerging constraints on manufacturing capacity, and the chances for strong wage rises given a strong eurozone economy implied “upside risks to price-stability”. Although inflation in the eurozone has recently dipped to 1.8 per cent, the annual rate of price increases is expected by the end of this year to nudge 2 per cent, the level at which the ECB starts to worry about excessive inflation. Mr Trichet signalled comfort with recent losses on the financial markets as long as investors and regulators maintained “composure” and “sangfroid” as players “re-appreciated” previously under-assessed market risks. “This is a process of re-appreciation which can be interpreted as a phenomenon of normalisation,” he said, stressing that market participants and regulators now needed to proceed in an “orderly and smooth” fashion. Julian Callow at Barclays Capital Research said Mr Trichet’s comments about market jitters did not detract from his signals of a looming rate rise. “It seems very likely that the ECB will raise rates in September,” he said. In his letter, Mr Noyer warned that France’s public finances remained “fragile” and demanded “great vigilance”. The country’s credibility in Europe depended on it respecting the commitments it had made under the eurozone’s stability and growth pact. With a structural budget deficit of 2 per cent of GDP, the eurozone’s second biggest economy remained particularly vulnerable to a turn in the economic cycle.