reagan the ultimate socialist:the market’s performance has been so unique that many believe the market is being manipulated, This may sound absurd if it wasn’t for an executive order Reagan put into place to manipulate the stock market
Nickname unavailable
unique that many believe the market is being manipulated, This may
sound absurd if it wasn’t for an executive order Reagan put into place
to manipulate the stock market
http://www.etfguide.com/research/247/8/Is-The-Market-Rigged?/
Is The Market Rigged?
By, Simon Maierhofer
Dec 18, 2009
We are living in unique times. In fact, the market’s performance has
been so “unique” that many believe the market is being manipulated.
This may sound absurd if it wasn’t for an executive order Ronald
Reagan put into place, designed to manipulate the stock market.
The government is pumping trillions of dollars into the economy in an
effort to jump start business activity. Banks (NYSEArca: KBE)
gratefully take the money and either horde it or buy government
treasuries with short (NYSEArca: SHY) and long-term maturities
(NYSEArca: TLT).
Real estate prices are still falling, unemployment
is sky-high, consumer spending is down and corporate profits are
nowhere near to last year’s levels.
The only thing that provides
comfort for the masses is rising stock prices. The S&P 500 (SNP:
GSPC), Dow Jones (DJI: ^DJI) and Nasdaq (Nasdaq: ^IXIC) have gained in
excess of 65% in less than ten months against a backdrop of
continuously less than stellar news. The government, banks and other
financial institutions (NYSEArca: XLF) have a vested interest in
rising stock prices.
Things would look grim if it wasn’t for the hope
provided by the Dow and S&P’s of the world. But more than hope is at
stake. Another drop in investor's perception would send real estate
(NYSEArca: IYR) and equity prices (NYSEArca: IWV) tumbling. It could
also push many financial institutions to the brink of ruin and
discredit all government efforts.
Looking at what’s at stake and the
motivations involved, could it be that some of the big players are
manipulating the market to keep prices artificially afloat?
A big
surprise
Don’t you hate it when juicy news is making its rounds but
you are kept out of the loop? Welcome to the club. Already back in
1988, Ronald Reagan signed an executive order to establish a specific
committee designed to prevent major market collapses.
As per this
order, the Secretary of the Treasury, the chairman of the Federal
Reserve, the chairman of the SEC and the chairman of the commodity
futures trading commission make up the core of this team. By
extension, major financial institutions like JP Morgan Chase and
Goldman Sachs are used to execute their orders.
The existence of this
team is said to have been confirmed by former Clinton advisor George
Stephanopoulos on Good Morning America. Last year, former Treasury
Secretary Hank Paulson called for this “financial fraternity” to meet
with greater frequency and set up a command center at the U.S.
Treasury designed to track global markets and serve as headquarter for
the next crisis.
There is much more to this unique arrangement
designed to keep a lid an potential market meltdowns and use major
Wall Street firms as marionettes to accomplish this goal. A detailed
report about this secret team is available in the most recent issue of
the ETF Profit Strategy Newsletter.
Buoy the market, how?
Supply and
demand drives prices. Where the demand comes from does not matter. In
emergency situations, the Federal Reserve is said to lend money to
major banks, which serve as surrogates who will take the money and buy
markets, predominantly futures, through large unknown accounts.
The
timing of those buys will be such that those shorting the market will
be forced to buy back shares. In theory, this eliminates the most
pessimistic investors and causes others to buy. Soon sideline money
from mutual and hedge funds comes in and the rally gathers a life of
its own.
In Government Sachs we trust
One of the obvious suspects to
serve as surrogate and carry out the government’s plan would be
Goldman Sachs (NYSE: GS). For years, the ties between the U.S.
government and Sachs have been too close for comfort. Earlier this
year the ETF Profit Strategy Newsletter touched on a case of
“indiscretion” which never received much publicity.
Stephen
Friedman, the chairman of the New York fed was instrumental in
orchestrating the multi-billion bailout for Goldman and AIG. AIG
(NYSEArca: AIG) used nearly $10 billion of the initial $85 billion to
pay Goldman.
Chairman of the New York Fed was not the only title Mr.
Friedman held. He also happened to be on Goldman’s board during that
time and was Goldman’s CEO in the 1990s. Also during that time, Mr.
Friedman was actively buying Goldman stock and generated profits worth
millions of dollars.
Other ties between government and Sachs include
Hank Paulson, former Secretary of the Treasury and former Goldman CEO.
When Mr. Paulson needed someone to oversee see the government’s first
$700 billion bailout, Paulson recruited an inexperience, 35-year old,
former Goldman investment banker. The list continues, but we’ll stop
here.
A record winning streak and no taxes
The Financial Times
reported that Goldman Sachs suffered only one losing day during the 65
business days of the third quarter. On 36 separate days during the
quarter, the firm’s trades netted more than $100 million.
In
addition, Bloomberg reported that Goldman Sachs’ effective income tax
rate for 2008 was 1%. In dollars, Goldman’s tax liability was $14
million. For the same year, Goldman reported a $2.3 billion profit and
paid out $10.9 billion in bonuses.
One could argue that a record of
90%+ winning trades and a 1% tax rate could only be accomplished with
certain connections to high-ranking government personnel.
Too good to
be true
The notion that prices can be inflated artificially makes
sense and sounds good in theory. Based on the evidence, this kind of
maneuvering even seems to be more common than we think.
But a simple
look at the chart shows that even the government and big banks do not
have superhuman powers, at least not unconditionally.
In 2000, 2002,
2008 and 2009, the major indexes a la S&P 500 (NYSEArca: SPY), Dow
Jones (NYSEArca: DIA) and Nasdaq (Nasdaq: QQQQ) declined 30% or more.
It is now known, as it was back then, that the nation’s most powerful
financiers got together on October 24, 1929 to prevent a major
meltdown. Their plan succeeded on that very day which came to be known
as Black Thursday. The recovery on Black Thursday was as remarkable as
the selling that made it so Black.
On Friday, the Times reported that
the financial community felt “secure in the knowledge that the most
powerful banks in the country stood ready to prevent a recurrence of
panic.” In a concerted advertising campaign in Monday’s papers, stock
market firms urged to pick stocks at bargain prices. The rest is
history and the Great Depression unfolded in all its cruel ways.
On
of the flaws of artificial buying is that all the money used to buy
stocks will eventually have to be taken out. As we know, banks are not
immune to greed and once prices start declining, banks are likely to
be the first to cut their losses and flee the sinking ship.
There are
limits
In summary, we can conclude that there seems to be an
organized committee with the job description of lifting markets. Quite
likely, their efforts have contributed to the protracted rally in
stock prices. However, as we’ve seen, the market is too wild to be
contained. Normal market forces still apply.
One of those age-old
forces is investor sentiment, possibly the best known and most
accurate contrarian indicator around. Extreme levels of pessimism tend
to signal market bottoms while extreme levels of optimism tend to
signal tops.
The ETF Profit Strategy Newsletter used this contrarian
indicator as a foundation to issue the March 2nd Trend Change Alert
which foretold a massive rally with a target range of Dow 9,000 –
10,000 a mere seven days before the March lows were reached.
Now once
again, we see an extreme of investor sentiment – this time it’s
optimism. According to the Investors Intelligence survey, this week
saw the highest percentage of bulls since December 2007.
More
importantly, the major indexes are butting up against levels of
resistance that have been years, even decades in the making. Those
different resistance levels converge in the Dow 10,100 – Dow 10,500
range, which is the very range the Dow has been stuck in for over
three months.
The ETF Profit Strategy Newsletter includes an analysis
of predominant, and probably formidable, levels of resistance along
with a short, mid and long-term forecast, and a target range for the
ultimate market bottom. If history is a guide, and it usually is, the
market will do what it wants, regardless of the government’s efforts.
The question is this: Who are you putting your trust in, the market
or big banks?
Demon Buddha
> http://www.etfguide.com/research/247/8/Is-The-Market-Rigged?/
>
> Is The Market Rigged?
That is about the dumbest question I have ever seen.
Does the shit Pope in the woods?
Werner
> reagan the ultimate socialist:the market’s performance has been so
> unique that many believe the market is being manipulated, This may
> sound absurd if it wasn’t for an executive order Reagan put into place
> to manipulate the stock market
>
> http://www.etfguide.com/research/247/8/Is-The-Market-Rigged?/
>
> Is The Market Rigged?
> By, Simon Maierhofer
> Dec 18, 2009
> We are living in unique times. In fact, the market’s performance has
> been so “unique” that many believe the market is being manipulated.
Let's hope you will finally put blame on the 'free market' to rest. It
can't be both free and manipulated.
“The idea that you can fix a period of excess borrowing and excess
consumption by more borrowing and more consumption to me is just
ludicrous,”
Jim Rogers, an American
investment guru
"...government and the banking system have deliberately created
financial bubbles to shore up the economy, engender profits, and
maintain tax revenues."
http://www.youtube.com/watch?v=8vk91jU8Bt0
http://www.rense.com/general85/chall.htm
http://www.youtube.com/watch?v=9h2x7R8pxUs&feature=related
http://www.youtube.com/watch?v=Pt4VLX96VLM
The same people who complained about the widening wealth gap now
think
the new money printing and borrowing is such a wonderful and
necessary
policy forget it helps the rich the most. The policies are
intended
to
avoid depressing asset prices which has the effect of
shrinking the
wealth gap. Who owns most of the assets if not the
wealthy? How do
you
stop asset price deflation? By inflation. Who
suffers most from
inflation? Poor people. Who benefits most from
inflation? Rich people
who own assets.
Evidently change we can
believe in is no change. The rich get richer
and the poor get poorer
by government policy, just like always.
http://www.youtube.com/watch?v=CtllmgvoT_g
http://www.youtube.com/watch?v=9nU3fNh-PRk&feature=related
http://www.youtube.com/watch?v=qfoToPyae0s&feature=related
http://www.youtube.com/watch?v=LSqhrHIfJV0&NR=1&feature=fvwp
Nickname unavailable
> On Dec 21, 2:23 pm, Nickname unavailable <Vide...@tcq.net> wrote:
>
> > reagan the ultimate socialist:the market’s performance has been so
> > unique that many believe the market is being manipulated, This may
> > sound absurd if it wasn’t for an executive order Reagan put into place
> > to manipulate the stock market
>
> >http://www.etfguide.com/research/247/8/Is-The-Market-Rigged?/
>
> > Is The Market Rigged?
> > By, Simon Maierhofer
> > Dec 18, 2009
> > We are living in unique times. In fact, the market’s performance has
> > been so “unique” that many believe the market is being manipulated.
> >...
>
> Let's hope you will finally put blame on the 'free market' to rest. It
> can't be both free and manipulated.
>
> “The idea that you can fix a period of excess borrowing and excess
> consumption by more borrowing and more consumption to me is just
> ludicrous,” Jim Rogers, an American investment guru
> "...government and the banking system have deliberately created
> financial bubbles to shore up the economy, engender profits, and
> The same people who complained about the widening wealth gap now
> think the new money printing and borrowing is such a wonderful and
> necessary policy forget it helps the rich the most. The policies are
> intended to avoid depressing asset prices which has the effect of
> shrinking the wealth gap. Who owns most of the assets if not the
> wealthy? How do you stop asset price deflation? By inflation. Who
> suffers most from inflation? Poor people. Who benefits most from
> inflation? Rich people who own assets. Evidently change we can
> believe in is no change. The rich get richer and the poor get poorer
> by government policy, just like always. http://www.youtube.com/watch?v=CtllmgvoT_ghttp://www.youtube.com/watch?v=9nU3fNh-PRk&feature=relatedhttp://www.youtube.com/watch?v=qfoToPyae0s&feature=relatedhttp://www.youtube.com/watch?v=LSqhrHIfJV0&NR=1&feature=fvwp
who do you think he manipulated the markets for? martians, or the
free market? this is not a trick question.
Poetic Justice
Do Liberals Lie?
Is the sky blue?
Will the Sun rise tomorrow?
Will Obama spend more money?
Nickname unavailable
unique that many believe the market is being manipulated, This may
sound absurd if it wasn’t for an executive order Reagan put into place
to manipulate the stock market
http://www.etfguide.com/research/247/8/Is-The-Market-Rigged?/
Is The Market Rigged?
Demon Buddha
> The same people who complained about the widening wealth gap now
> think
the new money printing and borrowing is such a wonderful and
> necessary
policy forget it helps the rich the most.
Yes, by all means let us forget.
> The policies are
> intended
to
avoid depressing asset prices which has the effect of
> shrinking the
wealth gap. Who owns most of the assets if not the
> wealthy? How do
you
stop asset price deflation? By inflation.
I had another possibility cross my mind. What if the plan is precisely
the opposite? The economy is deflating, but the money supply has been
greatly inflated through printing trillions of dollars, the bulk of
which sits in the coffers of those who were bailed out, banks in
particular... or presumably banks since the recipients are largely being
kept secret. Because the funds are horded, the currency velocity
remains low and inflation is held down.
If the value of real assets continues to deflate, those with large cash
reserves will be in an ever improving position to buy up what they want
at ever improving prices. The wealth gap increases both in terms of
real assets and cash reserves. Perhaps this condition is maintained
until all the assets desired are acquired and thereafter the inflation
is induced to yank the rug out from under the Chinese, who hold so much
US paper, as well as putting a few more nails into the coffin of the
middle class. I would call this a win-win for the elite.
Nickname unavailable
that is where the buy low, sell high came from, the depression, after
the final collapse of the suckers markets. now is not the time to be
buying high priced so-called assets in a economy where cash is so
scarce. cash is king right now.
Werner
Very clever. You might be right. Yet, commodities and stocks have been
on the rise. And the Chinese can buy assets as well. So can oil sheiks
and whoever else holds all those dollars. In any case, however it
unfolds should be interesting - perhaps too interesting for most of
us.
Werner
> ...
>
> who do you think he manipulated the markets for? martians, or the
> free market? this is not a trick question.
Lets try this again. Look up 'free'. Look up 'manipulated'. It can't
be both free and manipulated. Now look up 'regulated'. It can't be
both free and regulated.
Les Cargill
> Werner wrote:
>
>> The same people who complained about the widening wealth gap now
>> think the new money printing and borrowing is such a wonderful and
>> necessary policy forget it helps the rich the most.
>
> Yes, by all means let us forget.
>
http://www.amazon.com/Obamanomics-Bankrupting-Enriching-Corporate-Lobbyists/dp/1596986123
> > The policies are
>> intended
to
avoid depressing asset prices which has the effect of
>> shrinking the
wealth gap. Who owns most of the assets if not the
>> wealthy? How do
you
stop asset price deflation? By inflation.
>
> I had another possibility cross my mind. What if the plan is
> precisely the opposite? The economy is deflating
was, really - it stopped a few weeks/months ago.
, but the money supply
> has been greatly inflated through printing trillions of dollars, the
> bulk of which sits in the coffers of those who were bailed out, banks in
> particular...
TARP is overwhelmingly being paid back now.
> or presumably banks since the recipients are largely being
> kept secret. Because the funds are horded, the currency velocity
> remains low and inflation is held down.
>
Relative to 2004, yes. In absolute terms, there's still plenty of
activity out there.
The thing worked - it allowed everybody to get book back in "shape"
while they spun a year's worth of adjusting to the new price
levels of those assets.
> If the value of real assets continues to deflate, those with large
> cash reserves will be in an ever improving position to buy up what they
> want at ever improving prices. The wealth gap increases both in terms
> of real assets and cash reserves.
Eh, not likely. Unless velocity starts up again, the wealth
gap shrinks. Much of it is simply overpriced assets. Right now,
the Dow is overpriced relative to GDP.
You have a serious period of adjustment while the
housing stock reprices. That'll take a while.
> Perhaps this condition is maintained
> until all the assets desired are acquired and thereafter the inflation
> is induced to yank the rug out from under the Chinese, who hold so much
> US paper, as well as putting a few more nails into the coffin of the
> middle class. I would call this a win-win for the elite.
I'm not sure it's *planned* that way, but I'd be interested
to see what could make it go any differently.
But remember - this is not on behalf of the elites. It's 1) money
stability (no deflation) 2) low inflation and 3) high employment,
the old three-legged stool. It's good old Progressive
grassroots stuff.
The elites are just rent-seeking that arrangement. The clever part is -
with production largely being offshore, said rent-seeking isn't as felt.
--
Les Cargill
Nickname unavailable
lets try a little logic. the free market, is free to bribe government
to manipulate the markets in favor of the free market.
Econotron
news:ZuKdncsNhOACtK3W...@giganews.com...
> Werner wrote:
>
>> The same people who complained about the widening wealth gap now
>> necessary ?policy forget it helps the rich the most.
>
> Yes, by all means let us forget.
>
> > The policies are
>> shrinking the ?wealth gap. Who owns most of the assets if not the
>> wealthy? How do ?you ?stop asset price deflation? By inflation.
>
> I had another possibility cross my mind. What if the plan is precisely
> the opposite? The economy is deflating, but the money supply has been
> greatly inflated through printing trillions of dollars, the bulk of which
> sits in the coffers of those who were bailed out, banks in particular...
> or presumably banks since the recipients are largely being kept secret.
> Because the funds are horded, the currency velocity remains low and
> inflation is held down.
>
stricter lending requirements. The Fed gave banks money in exchange for
junk, which is now on its balance sheet. With that money the banks can repay
TARP, and buy real assets. They had a lot of houses, but sold them to the
Fed at inflated prices, so in the absence of a high borrowing activity, the
banks now put the proceeds into stocks and commodities, building another
bubble there. Thus no, the plan remains as originally stated :-)
>
> If the value of real assets continues to deflate, those with large cash
> reserves will be in an ever improving position to buy up what they want at
> ever improving prices. The wealth gap increases both in terms of real
> assets and cash reserves. Perhaps this condition is maintained until all
> the assets desired are acquired and thereafter the inflation is induced to
> yank the rug out from under the Chinese, who hold so much US paper, as
> well as putting a few more nails into the coffin of the middle class. I
> would call this a win-win for the elite.
>
do it directly. So, they inflate other assets, hoping to build people's
confidence via their pension plans. The reliance is still on the middle
class to start spending again, and thus letting the economy to catch up with
the stock market, rather than the other way around. I do not believe it will
work well, because with the greatly expanded monetary base, any pick up in
economic activity will cause disproportionably high inflation spike, which
in turn will dampen the upturn (and may greatly reduce it). Chinese will
still have the rug in place, since the US appetite for the debt financing
will only increase. And elites will always benefit - by definition :-)
e.
Werner
Bribing government is not limited to free markets. As the government
health legislation clearly shows even government can bribe
government .
Werner
> ...
>
> Currency velocity is held down because of the reduced loan demand and
> stricter lending requirements. The Fed gave banks money in exchange for
> junk, which is now on its balance sheet. With that money the banks can repay
> TARP, and buy real assets. They had a lot of houses, but sold them to the
> Fed at inflated prices, so in the absence of a high borrowing activity, the
> banks now put the proceeds into stocks and commodities, building another
> bubble there. Thus no, the plan remains as originally stated :-)
>
>
> What assets? The Fed would like to inflate housing prices too, but can not
> do it directly. So, they inflate other assets, hoping to build people's
> confidence via their pension plans. The reliance is still on the middle
> class to start spending again, and thus letting the economy to catch up with
> the stock market, rather than the other way around. I do not believe it will
> work well, because with the greatly expanded monetary base, any pick up in
> economic activity will cause disproportionably high inflation spike, which
> in turn will dampen the upturn (and may greatly reduce it). Chinese will
> still have the rug in place, since the US appetite for the debt financing
> will only increase. And elites will always benefit - by definition :-)
> e.
Concise explanation. I'm gonna keep it. Thanks. Here is another one I
found:
Repay TARP
Yet with a little creativity, it's easy to see how banks could sell
assets at extravagant prices -- perhaps 100 cents on the dollar --
while dumping most of the risk on taxpayers. Private investors who
participate in this plan, you see, have sole authority to set the bid
price on assets. As the Treasury's recent press release states:
The highest bid from the private sector … [will] define the total
price paid by the private investors and the Treasury.
Hence, banks have a huge incentive to get someone to bid exorbitant
prices. Who is that "someone"? Well, that's where things could get
shady.
According to the Treasury, investors who meet a few simple criteria
pre-qualify to participate in the plan. For example, pre-qualified
investors must have:
• Capacity to raise at least $500 million of private capital.
• Experience investing in eligible assets, including through
performance track records.
• A minimum of $10 billion of assets under management.
• Headquarters in the United States.
All pretty simple. Oodles and oodles of hedge funds and private equity
funds fit those requirements.
Trouble is, you can draw a straight line from banks to some of those
seemingly "independent" private investors. Hedge funds in particular
have extraordinarily tight relationships with investment banks like
JPMorgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), or Morgan
Stanley (NYSE: MS) that often play ball on the same court.
In fact, private investment partnerships can actually be owned by
banks themselves. For example, Lehman Brothers invested in, provided
management for, and supplied office space to a hedge fund called R3
Capital Partners last year. It then sold $4.5 billion worth of assets
to R3 at undisclosed prices. For whatever reason, Lehman essentially
sold assets to itself through an "independent" entity.
Welcome to the ingenuity of Wall Street -- throw in a little
creativity and fancy structuring, and suddenly the distinction between
banks selling assets and private investors buying assets is blurred.
Here's a simple example of how this could derail the success of
Geithner's plan:
• Bank A has a toxic asset no sane investor would pay more than $30
for.
• Bank A gets Private Investor B -- an entity with ties to Bank A
itself -- to participate in Geithner's plan and pay full price for the
asset -- $100, in this case.
• Bank A receives $100. Expect something similar to Citigroup's
(NYSE: C) famous "We're saved! Everything is fine!" memo to follow.
In due time, the asset's true value -- $30 -- is realized. Since
Private Investor B only put up a sliver of equity, it loses its $7 and
walks away. No biggie.
Now connect the dots:
• Bank A sold an asset worth $30 for $100 -- it made a $70 windfall.
• Private Investor B -- with ties to Bank A -- loses only $7 when
those assets go bad. Bank A happily repays $7 to Private Investor B
for the trouble. Everybody wins, except for …
… the taxpayer
Since government-issued nonrecourse leverage is
involved, banks can simply overbid for assets via "independent"
investors and funnel most of the risk onto taxpayers. Heads they win,
tails you lose.
Like I've said before, 2+2 is never going to equal 100, no matter how
many bells and whistles you slap on these bailouts. If the goal is to
recapitalize banks in an efficient manner, there are other sensible
ways to do it. Giving banks the ability to write their own ticket
isn't one of them.
http://www.fool.com/investing/dividends-income/2009/03/31/how-banks-can-exploit-geithners-plan.aspx
----
Nickname unavailable
ROTFLOL. the health care bill is a gift bought and paid for by the
free market. this stuff is simply over your head.
Michael Coburn
Yes. It worked to prevent a total collapse of real estate prices and the
bankrupting of people who should have been forced into bankruptcy. And
the fear was that capitalism (actually money-ism) itself would be dealt a
death blow. The _EXCUSE_ was the nonsense that American business would
totally cease. What was needed, of course, was a bailout of American
business using the smaller commercial banks while giving the green weenie
to Wall Street investment houses. What we have done is to reward the
people that caused the problem and increased the distance between the
very rich (money holders) and the producing class in the process.
>> If the value of real assets continues to deflate, those with large
>> cash reserves will be in an ever improving position to buy up what they
>> want at ever improving prices. The wealth gap increases both in terms
>> of real assets and cash reserves.
>
> Eh, not likely. Unless velocity starts up again, the wealth gap shrinks.
> Much of it is simply overpriced assets. Right now, the Dow is overpriced
> relative to GDP.
That is a bogus claim rooted in "money-ism" posing as "capitalism". When
you consider that a "financial institution" does nothing productive then
the current guise of "capitalism" is well exposed. Those with the most
money are moving away from the producer class at an increased speed as
money is not losing value fast enough.
> You have a serious period of adjustment while the housing stock
> reprices. That'll take a while.
It would have happened much more quickly had the financial weenies (other
than the _TRUE_ commercial banks) been allowed to go tits up. These
"money-ism" dinosaurs are now being preserved because they own the
politicians. The current path to "recovery" of some of what has been
stolen is to INFLATE a lot faster than what is currently being done.
>> Perhaps this condition is maintained
>> until all the assets desired are acquired and thereafter the inflation
>> is induced to yank the rug out from under the Chinese, who hold so much
>> US paper, as well as putting a few more nails into the coffin of the
>> middle class. I would call this a win-win for the elite.
>
>
> I'm not sure it's *planned* that way, but I'd be interested to see what
> could make it go any differently.
It can't go differently because the people who have all the money will be
controlling all the debate and all the politics. The "deficit" is now
the all consuming concern of the irrational public because that us what
they have been sold. They will continue to be sold on it because that is
what worries the people that have all the money. There is a mental block
about money having intrinsic value even though that went tits up in 1973.
> But remember - this is not on behalf of the elites.
If "elites" = "the money holders" then _all_ of this bullshit is on
behalf of the "elites".
> It's 1) money
> stability (no deflation)
"Deflation" is much too obvious even to the masses and cannot be sold
even to them.
2) low inflation
Low inflation is very much to the advantage of those who have all the
money and very much to the disadvantage of those who have only their
productive labor to offer. It is low inflation and low taxes that keeps
the rich in their rich status using only the return from government debt.
> and
3) high employment
Which is again, to the advantage of those who have all the money in that
the people are kept hard at work and they have no time to think and/or
become politically active. Bush thought that having two full time jobs
was a really good thing.
, the
> old three-legged stool. It's good old Progressive grassroots stuff.
Many of us who are branded as "progressives" simply aren't. We are
Liberals and there is a world of difference. "progressive" has become
the left hand mirror image of the "rightarded".
> The elites are just rent-seeking that arrangement. The clever part is -
> with production largely being offshore, said rent-seeking isn't as felt.
It isn't as obvious, perhaps. But it is "felt" even more.
--
"Senate rules don't trump the Constitution" -- http://GreaterVoice.org/60
Michael Coburn
The dollars need to be devalued.
Rod Speed
> Werner wrote:
>
>> The same people who complained about the widening wealth gap now
>> necessary ?policy forget it helps the rich the most.
>
> Yes, by all means let us forget.
>
>> The policies are
>> shrinking the ?wealth gap. Who owns most of the assets if not the
>> wealthy? How do ?you ?stop asset price deflation? By inflation.
>
> I had another possibility cross my mind. What if the plan is
> precisely the opposite? The economy is deflating, but the money
> supply has been greatly inflated through printing trillions of
> dollars, the bulk of which sits in the coffers of those who were
> bailed out, banks in particular... or presumably banks since the
> recipients are largely being kept secret. Because the funds are
> horded, the currency velocity remains low and inflation is held down.
>
> If the value of real assets continues to deflate, those with large
> cash reserves will be in an ever improving position to buy up what
> they want at ever improving prices. The wealth gap increases both in
> terms of real assets and cash reserves. Perhaps this condition is
> maintained until all the assets desired are acquired and thereafter
> the inflation is induced to yank the rug out from under the Chinese,
> who hold so much US paper, as well as putting a few more nails into
> the coffin of the middle class. I would call this a win-win for the elite.
There is no coffin of the middle class, they'll outlast everyone else.
Nickname unavailable
the federal reserve is not federal at all. its a private, for profit,
self policing, self regulating entity. so do not be to surprised, if
it acts in the best interest of those whom control the free market.
> > If the value of real assets continues to deflate, those with large cash
> > reserves will be in an ever improving position to buy up what they want at
> > ever improving prices. The wealth gap increases both in terms of real
> > assets and cash reserves. Perhaps this condition is maintained until all
> > the assets desired are acquired and thereafter the inflation is induced to
> > yank the rug out from under the Chinese, who hold so much US paper, as
> > well as putting a few more nails into the coffin of the middle class. I
> > would call this a win-win for the elite.
>
> What assets? The Fed would like to inflate housing prices too, but can not
> do it directly. So, they inflate other assets, hoping to build people's
> confidence via their pension plans.
true to a point. only its not working. demand which is wage driven,
has been destroyed by market fundamentalism. with close to 20% real
unemployment, and the stock market blowout, many who were forced into
the 401k private sector scams, will never see their original
investments come back, let alone any gains.
The reliance is still on the middle
> class to start spending again, and thus letting the economy to catch up with
> the stock market, rather than the other way around.
correct.
I do not believe it will
> work well,
agreed.
because with the greatly expanded monetary base, any pick up in
> economic activity will cause disproportionably high inflation spike,
could be true, except, with the real unemployment rate closer to 20%,
and the wages of labor having been ground down under the feverish heel
of market fundamentalism, unable to consume, save, and service their
debts, do not be to surprised that consumptions does not pick up in
the short term, maybe long term.
inflation is when way to many dollars chase to few goods and
services. deflation is when way to many goods and services chase to
few dollars.
to get inflation, would mean that banks would have to loan out
massive amounts of money. the idiots in charge in both the private
sector, and government, simply cannot understand simple demand
scenarios.
with plummeting demand, who is going to take out loans in mass,
except hedge funds, other market fundamentalists, and wall street and
banking parasites.
today i read that inventories were reduced again, in a vain attempt
to match inventories to plummeting demand. its a spiral that will be
hard to win.
the powers that be, think this will mean a strong rebound because
inventories will have to be restocked when things pick up. but what if
they do not pick up for the above reasons?
which
> in turn will dampen the upturn (and may greatly reduce it).
unless there is no rebound.
Chinese will
> still have the rug in place,
they are idiots, that will have their hands full in the future.
since the US appetite for the debt financing
> will only increase. And elites will always benefit - by definition :-)
do not be to surprised if things change on that front.
> e.
Nickname unavailable
must have been reading my mind, or post.
hyper inflationary?:Americans without jobs or fearful of losing them
aren't likely to splurge anytime soon, Unemployment has hit double
digits, Households are trimming debt, With consumer spending subdued,
companies won't have to keep boosting their inventories
Strong economic rebound depends on more than Santa
Strong economic recovery will depend on more than a bright holiday
shopping season
By Jeannine Aversa, AP Economics Writer , On Tuesday December 22,
2009, 3:38 pm EST
WASHINGTON (AP) -- Don't count on holiday shoppers to fuel the
economic recovery.
Sales this time of year are vital to retailers, of course. But they're
not nearly enough to drive the economy. Even if holiday sales exceed
expectations, the broader recovery is expected to remain weak -- for
the rest of the year and beyond.
Here's why holiday purchases won't save the day:
-- They make up a surprisingly small share of the economy. Last year,
gift sales were estimated to account for less than 13 percent of the
fourth quarter's gross domestic product. And Mark Zandi, chief
economist at Moody's Economy.com, thinks they'll account for about the
same share of this quarter's GDP -- the value of all goods and
services produced in the United States.
-- Many consumers can't get loans. That makes it hard to buy costly
items -- from cars and homes to appliances and jewelry -- related or
unrelated to the holidays. Even as the economy returned to growth last
summer, consumers borrowed 0.6 percent less from July through October,
according to data from the Federal Reserve. Even if holiday sales
shine, tight credit will hold back spending in coming months.
-- Unemployment has hit double digits and is expected to remain near
or above 10 percent well into next year, far above a "normal" rate of
5 or 6 percent. The Federal Reserve says the rate could hover around 8
percent into 2012. Americans without jobs or fearful of losing them
aren't likely to splurge anytime soon.
-- Households are trimming debt. Total household debt, including
mortgages, credit cards, autos and other consumer loans, stood at
$13.6 trillion in the third quarter of this year, according to the
Fed. That's down from $13.7 trillion in the second quarter. Debt
reduction is healthy for personal finances but not for economic
growth: Consumers pare debt with money they might otherwise spend.
-- Most Americans -- 80 percent -- plan to use cash for all their
holiday purchases, according to an Associated Press-Gfk poll. Using
cash is a way to stick to budgets and avoid impulse purchases. It
suggests consumers are wary of spending freely -- whether for gifts or
other purchases.
While holiday sales aren't vital to economic growth, consumer spending
as a whole is: It accounts for about 70 percent of it.
And usually as recoveries begin, the economy roars to life as pent-up
spending is lavished on cars, clothes, homes and appliances. Consumers
become an engine of economic strength.
Not likely this time.
With credit tight and joblessness high, no one expects shoppers to
provide enough punch to power the recovery. The government's
surprisingly strong retail sales report for November -- and a decent
holiday shopping season -- could turn out to be a last hurrah.
"Despite the glimmer of optimism on the surface ... the economic
fundamentals are weak," said Sung Won Sohn, economist at California
State University's Smith School of Business.
Many economists do think the economy is growing faster now than it did
last quarter. JPMorgan Chase Bank, for instance, has bumped up its
forecast for growth this quarter from 3.5 percent to 4.5 percent. But
that's no thanks to consumer spending, which is forecast to slow
compared with last quarter. Growth is instead being driven by
companies restocking shrunken stockpiles of goods.
Yet that benefit could be fleeting. With consumer spending subdued,
companies won't have to keep boosting their inventories.
In part, that's why growth next quarter is expected to slow to 2.5
percent to 3 percent. Under some estimates, consumer spending could
grow just 1 percent.
The economy isn't usually this weak early in recoveries.
After the severe 1981-82 recession, for instance, consumer spending
rocketed at a 7.5 pace in the last quarter of 1982, when the recovery
began. It averaged a robust 6.5 percent quarterly growth in 1983. And
the economy surged at a blistering quarterly pace of nearly 8 percent
that year.
By contrast, when the economy returned to growth in the third quarter
of this year, consumer spending rose at a tepid pace: just 2.8
percent. And the overall economy grew just 2.2 percent.
And even that growth owed much to help from Uncle Sam, in the form of
tax breaks to buy homes and cars.
Economists were heartened by news that retail sales grew to $352
billion in November. But historically, that figure isn't much to
cheer. By comparison, retail sales peaked at nearly $380 billion in
November 2007. And that was the month before the economy officially
sank into the worst recession since the 1930s.
As long as consumers and small businesses remain unable or too
cautious to borrow and spend -- during and after the holidays -- the
recovery is likely to make only fitful gains.
"Unless banks become more willing to lend, there is just no way we can
have a durable economic recovery," said Bernard Baumohl, chief global
economist at the Economic Outlook Group.
Econotron
news:ZuKdncsNhOACtK3W...@giganews.com...
>
>> The same people who complained about the widening wealth gap now
>> necessary ?policy forget it helps the rich the most.
>
> Yes, by all means let us forget.
>
> > The policies are
>> shrinking the ?wealth gap. Who owns most of the assets if not the
>> wealthy? How do ?you ?stop asset price deflation? By inflation.
>
> I had another possibility cross my mind. What if the plan is precisely
> the opposite? The economy is deflating, but the money supply has been
> greatly inflated through printing trillions of dollars, the bulk of which
> sits in the coffers of those who were bailed out, banks in particular...
> or presumably banks since the recipients are largely being kept secret.
> Because the funds are horded, the currency velocity remains low and
> inflation is held down.
>
stricter lending requirements. The Fed gave banks money in exchange for
junk, which is now on its balance sheet. With that money the banks can repay
TARP, and buy real assets. They had a lot of houses, but sold them to the
Fed at inflated prices, so in the absence of a high borrowing activity, the
banks now put the proceeds into stocks and commodities, building another
bubble there. Thus no, the plan remains as originally stated :-)
>
> reserves will be in an ever improving position to buy up what they want at
> ever improving prices. The wealth gap increases both in terms of real
> assets and cash reserves. Perhaps this condition is maintained until all
> the assets desired are acquired and thereafter the inflation is induced to
> yank the rug out from under the Chinese, who hold so much US paper, as
> well as putting a few more nails into the coffin of the middle class. I
> would call this a win-win for the elite.
>
do it directly. So, they inflate other assets, hoping to build people's
work well, because with the greatly expanded monetary base, any pick up in
economic activity will cause disproportionably high inflation spike, which
in turn will dampen the upturn (and may greatly reduce it). Chinese will
still have the rug in place, since the US appetite for the debt financing
Demon Buddha
>> If the value of real assets continues to deflate, those with large cash
>> reserves will be in an ever improving position to buy up what they want
>> at ever improving prices. The wealth gap increases both in terms of
>> real assets and cash reserves. Perhaps this condition is maintained
>> until all the assets desired are acquired and thereafter the inflation
>> is induced to yank the rug out from under the Chinese, who hold so much
>> US paper, as well as putting a few more nails into the coffin of the
>> middle class. I would call this a win-win for the elite.
>
>
> Very clever. You might be right. Yet, commodities and stocks have been
> on the rise.
A meaningless ruse to prop up a failing market/economy. In 99.99% of
those cases, the "security" is paper. IOW it is meaningless if the
underlying asset is not there to be collected. If I buy 1000 ozt of
gold for $1MM, I technically own that gold. But if everything turns to
shit and I cannot take physical possession, I own nothing but a piece of
paper. Any appreciation in gold's commodity value is therefore
meaningless.
> And the Chinese can buy assets as well.
But the Chinese aren't holding dollars - they are mostly holding
Treasury paper, which was bought with either $$ or RMB. Those notes are
a promise to pay X% on coupon payments or as zero-coupons(usu. the
latter, as I recall). Those range from 5 to 100 years. If China needs
cash now, they can sell those bonds, usually at a discount, though a
premium may be in order depending on the state of the economy and the
notes themselves (demand v. supply). But if the confidence in the notes
is shit, which today it is, their value drops notably. China can sell
them, but only at deep discounts. They eat a bullet, so to speak. So
yes, they can buy real assets, but much of the financing of those
purchases would probaby come from the sale of US paper, most likely at
significant discounts. If real holes get punched in those noted, China
could be looking at the choice of sustaining devastating losses now, or
sitting things out in the hope that confidence improves.
> So can oil sheiks
> and whoever else holds all those dollars. In any case, however it
> unfolds should be interesting - perhaps too interesting for most of
> us.
Too rich for my blood anymore. Who needs this crap anyway?
Demon Buddha
> It would have happened much more quickly had the financial weenies (other
> than the _TRUE_ commercial banks) been allowed to go tits up.
Sacrilege! Didn't you hear? They're TOO BIG TO FAIL.
Excuse me a minute...
<BARF>
Ah, that's better. Now, where were we?
> These
> "money-ism" dinosaurs are now being preserved because they own the
> politicians.
The central pillar of fascism.
> The current path to "recovery" of some of what has been
> stolen is to INFLATE a lot faster than what is currently being done.
And it seems to me that this is being artificially suppressed. It
seems unlikely to me that one can dump trillions of dollars into a
global economy estimated to be worth about $52T and not see some
indications of inflationary action if the economy is au-naturel.
>
>>> Perhaps this condition is maintained
>>> until all the assets desired are acquired and thereafter the inflation
>>> is induced to yank the rug out from under the Chinese, who hold so much
>>> US paper, as well as putting a few more nails into the coffin of the
>>> middle class. I would call this a win-win for the elite.
>>
>> I'm not sure it's *planned* that way, but I'd be interested to see what
>> could make it go any differently.
>
> It can't go differently because the people who have all the money will be
> controlling all the debate and all the politics.
They also control most or all of the most vital perishable/consumable
commodities such as foods, petroleum, etc., the most vital of which are
highly inelastic.
> The "deficit" is now
> the all consuming concern of the irrational public because that us what
> they have been sold.
Well, they don't know their economic asses from their elbows. What
would you expect?
> They will continue to be sold on it because that is
> what worries the people that have all the money. There is a mental block
> about money having intrinsic value even though that went tits up in 1973.
>
>> But remember - this is not on behalf of the elites.
>
> If "elites" = "the money holders" then _all_ of this bullshit is on
> behalf of the "elites".
I'd have to agree with this. To think that those at the top are not
looking out for #1 is painfully naive at best. I'm not talking about
the Bill Gates and Warren Buffets of the world. I'm talking about those
who could buy them for their very own shoe-shine bitches with the chump
change they carry around.
> Many of us who are branded as "progressives" simply aren't. We are
> Liberals and there is a world of difference. "progressive" has become
> the left hand mirror image of the "rightarded".
Most "liberals" are not liberal either. Classic liberals were what we
would call libertarian today. So-called "liberal" as used today is a
shorthand for "social liberal", which for all intents and purposes is a
euphemism for authoritarian socialism.
Demon Buddha
> "Demon Buddha" <Nob...@no.where> wrote in message
> news:ZuKdncsNhOACtK3W...@giganews.com...
>> Werner wrote:
>>
>>> The same people who complained about the widening wealth gap now
>>> think ?the new money printing and borrowing is such a wonderful and
>>> necessary ?policy forget it helps the rich the most.
>> Yes, by all means let us forget.
>>
>>> The policies are
>>> intended ?to ?avoid depressing asset prices which has the effect of
>>> shrinking the ?wealth gap. Who owns most of the assets if not the
>>> wealthy? How do ?you ?stop asset price deflation? By inflation.
>> I had another possibility cross my mind. What if the plan is precisely
>> the opposite? The economy is deflating, but the money supply has been
>> greatly inflated through printing trillions of dollars, the bulk of which
>> sits in the coffers of those who were bailed out, banks in particular...
>> or presumably banks since the recipients are largely being kept secret.
>> Because the funds are horded, the currency velocity remains low and
>> inflation is held down.
>>
> Currency velocity is held down because of the reduced loan demand and
> stricter lending requirements.
Lower demand? How do you come to that conclusion? Seems to me that
demand is quite high and the banks simply are not lending - which I
cannot blame them for. The government bails their sorry asses out, they
return to a state of relative stability in the face of an economy
seemingly about to go toe-up. I wouldn't lend under those conditions,
either.
> The Fed gave banks money in exchange for
> junk, which is now on its balance sheet. With that money the banks can repay
> TARP, and buy real assets. They had a lot of houses, but sold them to the
> Fed at inflated prices, so in the absence of a high borrowing activity, the
> banks now put the proceeds into stocks and commodities, building another
> bubble there. Thus no, the plan remains as originally stated :-)
Forgetting the new bubbles, it shall be interesting to see how the
rotten asset thing plays out. The "government" (i.e. you and I) has
purchased these worthless pieces of junk. Now what? Take the loss?
Squeeze the so-called "middle-class" for more tax money when half the
able-bodied population have no jobs? That should go over like a lead
balloon.
>> If the value of real assets continues to deflate, those with large cash
>> reserves will be in an ever improving position to buy up what they want at
>> ever improving prices. The wealth gap increases both in terms of real
>> assets and cash reserves. Perhaps this condition is maintained until all
>> the assets desired are acquired and thereafter the inflation is induced to
>> yank the rug out from under the Chinese, who hold so much US paper, as
>> well as putting a few more nails into the coffin of the middle class. I
>> would call this a win-win for the elite.
>>
> What assets?
Whatever assets the elite care to have more control over. Real estate
would be a good one. People need housing no matter what shape in which
the economy may find itself. Rent vacant housing to those needing
homes. I dunno... I see many opportunities for those with economic
power to squeeze various markets as they see fit. How about gold? Is
it in a bubble? Probably, if the history of precious metals is any
indication. Contrary to what some say, I believe gold is indeed
valuable, if nowhere else than in the minds of some. Let the prices
rocket upward, haul in the cash, pop the bubble, and buy back for
pennies on the dollar when the panic sets in. It's an old game, but
still seems to work rather neatly for those who are well positioned.
> The Fed would like to inflate housing prices too, but can not
> do it directly. So, they inflate other assets, hoping to build people's
> confidence via their pension plans. The reliance is still on the middle
> class to start spending again, and thus letting the economy to catch up with
> the stock market, rather than the other way around. I do not believe it will
> work well, because with the greatly expanded monetary base, any pick up in
> economic activity will cause disproportionably high inflation spike, which
> in turn will dampen the upturn (and may greatly reduce it).
Not to mention than people without jobs find it difficult to go out and
spend, especially when each of their 29 credit cards are blown out.
> Chinese will
> still have the rug in place, since the US appetite for the debt financing
> will only increase. And elites will always benefit - by definition :-)
That may be so... I suppose it depends on the real nature of the
relationship between China and the elites. I can readily see that the
elites may regard China as an element that will eventually have to be
humbled - "reeled in" if you please. I doubt they are in any humor to
share power with the Chinese.