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

To: mishedlo who wrote (82615)	8/2/2008 2:03:16 AM
From: Sr K	Read Replies (1) \| Respond to of 116555

Mish, have you looked at the RMK Advantage Income Fund Inc. (NYSE: RMA)? Pay"s" 6 cents a month. Next XD 8/7. Current yield 34.78%. The name stands for Regions + Morgan Keegan. Regions is RF. If they don't make good for the bad paper in the fund, I don't know where it will end. But it wasn't an advantage for anyone holding it. If they do make good, on RMA and a few others, RF will need to raise more capital. They recently cut the dividend from 38 cents to 10 cents, to build capital. And Friday, August 1, 2008 - 10:25 AM CDT More lawsuits filed against Morgan Keegan for risky investments nashville.bizjournals.com

To: mishedlo who wrote (82615)	8/2/2008 10:08:09 AM
From: Dan3	Respond to of 116555

Re: Amazing number of comments tonight from people who STILL do not understand what deflation is. Mish, Well, yes and no. You're right that "deflation" outside of a clarifying context is probably best assumed to mean a reduction in the supply of money, but, like the term elasticity, it should really never be used outside of a specifying context. Similarly, we should talk about the price elasticity of demand or the price elasticity of supply but you'll often see the term "price elasticity" with the meaning assumed to be from context. You can have money supply deflation and you can have price deflation. You can have money supply inflation and price inflation. Most people are a lot more familiar with inflation than deflation (both the term and the event) where the general term, without context, is predominantly used in discussions to refer to price inflation rather than money supply inflation (even thought that may be, technically, incorrect). For casual discourse, then, it's not unreasonable to see many people treating the inverse term deflation as meaning price deflation. It's also worth noting that some of the key aspects of interest regarding monetary inflation/deflation are their effects on prices and that there tends to be a significant lag, typically 12-18 months, between monetary inflation and price inflation. In a period of low inflation expectations, such as we've had until recently, it may be that that lag is closer to 2 years. Once inflationary expectations become high, a similar lag can exist before money supply deflation begins to drive price deflation. At this point in time, money supply is actually still rising, and lagged money supply will keep on rising for a long time, which might be worth considering (and may be why people's "gut" reaction is that we are in a period of inflation, rather than deflation). Money supply doesn't really seem to have dropped, significantly, federalreserve.gov but what probably has dropped significantly is the velocity of money - and that can be even harder to casually discuss (and also harder to find a graph of, at least after a casual search...) Regards, Dan