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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: wildandwonderful who wrote (6732)	10/20/2007 12:47:18 PM
From: Nihontochicken	Respond to of 50756

If interested, here's the PIMCO opinion re the probability of a Fed raise/cut, a good article by Paul McCulley, a bit long and dry at the start, but well worth the read: pimco.com Some excerpts: John Maynard Keynes: "A collapse in the price of equities, which has had disastrous reactions on the marginal efficiency of capital, may have been due to the weakening either of speculative confidence or of the state of credit. But whereas the weakening of either is enough to cause a collapse, recovery requires the revival of both. For whilst the weakening of credit is sufficient to bring about a collapse, its strengthening, though a necessary condition of recovery, is not a sufficient condition." McCulley: "There are many, many basis points of easing to come, as time and credit market dynamics prove that liquidity is indeed a state of mind, not some abstract measure of the money stock or pool of money putatively on the sidelines, ready to be put to work. Liquidity is all about the appetite of investors to assume risk with levered money and the appetite of savers to provide such investors the leverage they seek." Click also on footnote #3 at the end of this article for explanation of the "Plankton Effect" and the "Minsky Journey". McCulley's opinion would appear to imply a Fed cut induced market blow off top, concurrent with a big rise in the PMs as the $USDollar continues south. But will the PMs hold their value when the Fed finally runs out of gasoline to pour on the fire? Down the pike it may come time to listen for the tune of golden musical chairs??? NC ;o)

To: wildandwonderful who wrote (6732)	10/20/2007 1:24:59 PM
From: rich evans	Respond to of 50756

Paulson repeated that while a ``strong dollar is in our nation's interest'' he wants exchange rates to be set in free markets. Europe's G-7 members are also divided with German Finance Minister Peer Steinbrueck telling reporters that the euro's value is ``nothing dramatic.'' About 10 years ago the Euro was started at a price of 1.21 . Now it is at 1.41 . This is not a dramatic increase in 10 years. What is dramatic was the euro fall to .83 during the tech bubble days as everyone was buying US stocks. Maybe the problem was the dollar increase in value was unwarranted then and now the dollar is at an appropriate price. Rich