tag:blogger.com,1999:blog-6492542366661862113.post828059484664054434..comments2023-10-31T01:32:09.169-07:00Comments on The Housing Time Bomb: Merrill's Rosenberg: Deflation is Here!Jeffhttp://www.blogger.com/profile/04450070920047311928noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6492542366661862113.post-18388105855267796432008-11-22T14:12:00.000-08:002008-11-22T14:12:00.000-08:00Bill FLeckenstein has a great commentary on this s...Bill FLeckenstein has a great commentary on this same subject of market manipulation. Unintended consequences anyone?:<BR/><BR/>"Capitalism, free enterprise and free markets have all been given a bad name. Not because they are inherently bad but because of the people who have meddled with them.<BR/><BR/>When government knuckleheads interfere with capitalism, you can bet the law of unintended consequences will be quick to rear its head. <BR/><BR/>Interfering with the markets was a function of the Federal Reserve during Alan Greenspan's reign. That meddling was a major contributor to the tremendous edifice of debt and speculation that had built up over the past 20 years."<BR/><BR/> http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/the-meddlers-cant-tame-the-market.aspxJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-45290266214714023912008-11-22T14:06:00.000-08:002008-11-22T14:06:00.000-08:00AnonThe US markets.I will still dable in them but ...Anon<BR/><BR/>The US markets.<BR/><BR/>I will still dable in them but for the most part my money will stay on the sidelines.<BR/><BR/>The manipulation and desperation in the US markets is at unprecedented levels. <BR/><BR/>The economic nimbers are going to continue to look terrible and get much worse. <BR/><BR/>The Fed and Treasury will take riskier and riskier chances as they attempt to save the economy.<BR/><BR/>This will result in crazy, unpredictable moves in the stock market and also increase the chances of some type of economic disaster like a bond market dislocation.<BR/><BR/>Note what Roubini said yesterday:<BR/><BR/>"This is why now a desperate Treasury is starting to think about using the remaining TARP funds to directly unclog the unsecured consumer debt (credit cards, student loans, auto loans) market and the securitization of such debt. Desperate times required desperate and extreme actions.<BR/><BR/>Even “Crazier” Policy Actions Are Required to Reduce Long Term Market Interest Rates<BR/><BR/>But even more desperate or “crazier” monetary actions are needed to address the increase in real long term market rates. These actions are needed to prevent deflation from setting in, to reduce the credit spread (the difference between long term market rates and long term government bond yields) and to reduce the yield curve spread (the difference between long term government bond yields and the policy rate).<BR/><BR/>Thus, dealing with this deadly combination of deflation, liquidity traps, debt deflation and defaults that I termed as global stag-deflation may be the biggest challenge that U.S. and global policy makers may have to face in 2009. It will not be easy to prevent this toxic vicious circle unless the process of recapitalizing financial institutions via temporary partial nationalization of them is accelerated and performed in a consistent and credible way; unless such actions are combined with massive fiscal stimulus to prop up aggregate demand while private demand is in free fall; unless the debt burden of insolvent households is sharply reduced via outright large debt reduction (not cosmetic and ineffective “loan modifications”); and unless even more unorthodox and radical monetary policy actions are undertaken to prevent pervasive deflation from setting in.<BR/><BR/>Thus, while the Fed may pursue radical, “crazy” and “crazier” monetary policy actions the true policy responses to the risk of deflation may lie elsewhere: when monetary policy is in a liquidity trap a properly-targeted fiscal stimulus is more appropriate and effective; cleaning up the financial system and properly recapitalize it is necessary"<BR/><BR/>http://www.rgemonitor.com/roubini-monitor/254515/the_deadly_dirty_d-words__deflation_debt_deflation_and_defaults__and_how_central_banks_will_have_to_resort_to_crazy_policies_as_we_have_reached_such_bermuda_triangle_of_a_liquidity_trapJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-31063670351848743662008-11-22T13:57:00.000-08:002008-11-22T13:57:00.000-08:00What do you mean by "over here"?What do you mean by "<I>over here</I>"?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-28717032583292881422008-11-22T13:50:00.000-08:002008-11-22T13:50:00.000-08:00AnonOh yeah.I totally agree. What made it even wo...Anon<BR/><BR/>Oh yeah.<BR/><BR/>I totally agree. What made it even worse is it was options Opex which killed many bears holding short options.<BR/><BR/>That was a pretty shady move. Just what we need! More games and less transparency! <BR/><BR/>Thats why I am putting my focus elsewhere. I am starting to get into gold as you can see. I am also starting to look at natural resouce stocks. <BR/><BR/>Once the VIX drops I am justg to buy a bunch of long term PUTS so I can avoid this volatility.<BR/><BR/>This is becoming a joke over here.Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-25627464539868635292008-11-22T13:36:00.000-08:002008-11-22T13:36:00.000-08:00Jeff, you are talking about rigged games? You must...Jeff, you are talking about rigged games? You must be kidding me. Guess what happened on Friday afternoon? Our president-elect Obama and his team short squeezed the hell out of the bears. This was done on purpose. Candidate of change? Oh yeah! I would say same ol', same ol'.Anonymousnoreply@blogger.com