Investment

» allancoleman - Volatility Continues

In response to Volatility Continues posted by success409:

Excellent post , success409 . So much of the Fed fight against inflation is " expectation " . And you are right , the fundamentals don't support a rate cut IMO too .

And you are also right , if the Fed makes Fed funds rate decisions based on the market performance instead of their main target of economic growth and jobs , we'll soon return to the double digit inflation of old . Then it'll take another round of double digit interest rate increases to get us back to where we are now with slower sustainable growth over the longer term .

It'll be interesting to watch greed versus need . Usually when we've gone too far in one direction , it's too late to fix it and return to normal without dire consquences .

-- posted by allancoleman

» mitelo - Volatility Continues

In response to Volatility Continues posted by allancoleman:

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"Usually........without dire consequences."
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Can you give four or five examples, Prof. Coleman? TIA.

-- posted by mitelo

» allancoleman - Volatility Continues

In response to Volatility Continues posted by mitelo:

If you were old enough , mitelo , to remember presedent Jimmy Carter days when I personally paid 21% interest rates for a short term bank loan from a bank for building materials to build a house at the time . And nobody seemed upset at the time . . And I regularily paid double digit interest on six month demand notes to buy property at the time . That was way before liar loans and easy free money that was available as late as last year .

Thank God I got sold of all my residential real estate a couple of years ago . They were giving money away to my buyers . One hadn't worked in three years . Was upside down in a brand new truck and owned and was making payments on two other prefectly good vehicles . And the local credit union loaned them 125% money with zero down on a VA loan .

They closed on the deal , took the extra money off the table at escrow , went to Vegas on a vacation , and came back to a higher mortgage payment then they would of had with some kind of reasonable down payment .

-- posted by allancoleman

» success409 - Volatility Continues

In response to Volatility Continues posted by allancoleman:

I had a 14% 30 year fixed mortgage. The stock market didn't return anything above inflation for about 14 years. Treasuries were paying way better than the stock market for about 10 years. Something like 11%. The economic world was sort of upside down. Volker came along and saved the day with tight money and high federal funds rate.

-- posted by success409

» axolotl - THE FED IS NOT GOD

Several FED Governors were supposedly in favor of a rate INCREASE before the recent unpleasantness. How wrong can they be? The FED is at 5.25% and probably should be at 3.5%. The stock market was near a really big fall recently in my opinion - that little FED action saved the day from a BIG TUMBLE.

-- posted by axolotl

» allancoleman - Volatility Continues

In response to Volatility Continues posted by success409:

When I was shorter in the tooth , success409 , and recently hired for my first real job in the corporate world with a 401(k) in 1972 , inspite of plowing all my earnings into my pension plan for ten full years , my performance stayed pretty much flat until 1982 . Volker did what he had to do at that time and if Bernanke is still around later , he'll have to do the same to fix this mess if he doesn't hold tight right now . It's not that Bernanke can't cut rates later . But he dang sure better wait until the data supports that move instead of caving in to greed in the stock and bond market right now .

-- posted by allancoleman

» mitelo - Volatility Continues

In response to Volatility Continues posted by allancoleman:

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The high rates were the response to inflation from a long peiod of growth, rising energy prices, the Great Society, and the war, so we thought. The FED acted in response to the conditions.

-- posted by mitelo

» allancoleman - Volatility Continues

In response to Volatility Continues posted by mitelo:

Thank you , Prof. mitelo .

I agree with you , mitelo . And if the FED doesn't hold tough in here until this greed settles down , they'll have to act in response again at some point in the future .

Normxxx was right that after you get old enough , you begin to see the same things happen over again . Sometimes they happen for alittle different reasons , but the same market cycles appear again and again .

-- posted by allancoleman

» Normxxx - What's going on?

In response to What's going on? posted by success409:

It's called human nature! Remember, when you were a kid and you pushed the limits until even you were hoping-- begging-- for someone to stop you? Your behavior got more and more outragious, hoping someone-- anyone-- would notice. That's why we need laws, and need to ostentatiously enforce them now and again.

Normxxx    
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The contents of any third-party letters/reports above do not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of any message or post by normxxx anywhere on this site is not to be construed as constituting market or investment advice. Such is intended for educational purposes only. Individuals should always consult with their own advisors for specific investment advice.

-- posted by Normxxx

» Normxxx - THE FED IS NOT GOD

In response to THE FED IS NOT GOD posted by axolotl:

So you expect the tax payer to bail out the stock market?
We don't have enough legitimate government expenses? Sounds like you are contending for the next post to W's CEA.

-- posted by Normxxx