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

To: pogohere who wrote (101036)	8/20/2009 1:44:03 AM
From: mishedlo	1 Recommendation Read Replies (3) \| Respond to of 116555

Health Care - The Young and the Wealthy Subsidize Everyone Else in Obama's PPIP for Heathcare Proposal globaleconomicanalysis.blogspot.com According to my congressional representative, it's difficult to say exactly what is in the health care bill because there are three variations of the bill floating around Congress. Moreover, there is at least one version in the Senate and then whatever comes out of the House has to be Reconciled with the Senate version. However, there are several things we know for sure: 1) Taxes will go up 2) In everyone of the plans, young healthy workers and the wealthy (cutoff point unknown) will subsidize everyone else 3) Whatever passes will cost far more, perhaps double or triple whatever low-ball estimates Congress comes up with Obama has already stated taxes will go up. Indeed we knew that anyway as there is no such thing as free health care. What we do not know is how the cost is distributed. ... Mish

To: pogohere who wrote (101036)	8/20/2009 3:13:06 AM
From: Real Man	Respond to of 116555

Leverage. Banks too have the ability to create money out of thin air. If you think banks were hiding at the Fed from risk, which in part is true, why would they start doing so only after their decision to pay interest? There is a difference between a trillion hiding at the Fed or in Treasuries. It is also true that the. Fed completely stopped printing in 2007, while they lowered rates. As the Fed ran out of balance sheet for their programs, they needed the money, but by sucking it out of the banking system they created a crash.

To: pogohere who wrote (101036)	8/20/2009 3:42:43 AM
From: Real Man	Read Replies (1) \| Respond to of 116555

The Fed can tighten by increasing reserve requirements, or by creating insentives like that for banks to do so. They tightened in the midst of a crisis, causing the crash. Period. They did so because they ran out of balance sheet. The effect was that of a reverse coupon pass, sucking the money into the printing press. Was that intensional or a screw up? I don't know. They wanted to shore up the dollar, which entered uncontrollable slide once they started easing. I guess, tightening the usual way would create political fallout. Naturally, the dollar shot up.