Investment

» 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:

--
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

» axolotl - THE FED IS NOT GOD

In response to THE FED IS NOT GOD posted by Normxxx:
I'm a taxpayer - the people on Wall Street are taxpayers - the people with all these 401ks and IRAs etc etc etc are taxpayers. My position is very clear - do not chance a recession - this credit problem is not resolved - it ain't over yet - this is not Jimmi Kotter's type of mess - the inflation dragon is not roaring - 2% growth probably going sub 2% now - a little cutting now will save a lot of cutting later when we are in a recesssion - you are a very confusing person, Normxxx - are you now or have you ever been a socialist? Remember, 1% on a 9 trillion dollar debt is $90 billion so lower rates here also help the Fed government - the one that you pay taxes to, Norm. I hope that Jimmi Rogers who is running to China either has to pay income taxes here or his citizenship needs to be revoked.

-- posted by axolotl

» success409 - THE FED IS NOT GOD

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

I am not sure I understand your comments but I do know this. A recession is restoring and helps clean up excesses and imbalances. Inflation is destructive to the economy, stock market, good business decisions, world trade, etc. There is no comparison between the two. This is mainly why the Fed has a bias to stop inflation. Price stability is essential to well being of our economy and can help to prevent recessions. The only thing worse than inflation would be deflation. The Fed can't be concerned enough about inflation. Without the macro economic reasons to cut interest rates it would be caving in to the finance power brokers on Wall Street and would send a strong signal to the world that the Fed can be bullied and may be weak on inflation when they are pressured. If the credit and liquidity crisis starts to shut down the markets and economic system, then the Fed will have no choice but to cut interest rates, but we aint there yet. Also, the Fed still has some more tools in its bag. Because of greed I am afraid the future does not look good. We could easily have inflation or a lot more regulation. Either could be bad.

-- posted by success409

» axolotl - THE FED IS NOT GOD

In response to THE FED IS NOT GOD posted by success409:

Again, I do not believe a recession is ever desirable unless inflation is huge and in danger of runaway. Some people may bang on their thumb with a hammer because it feels so good when they stop. The FED has a history of waiting until it is too late and cutting after recession is obvious. It is not personal - it is not about Bernanke - it is not about the FED - it is about the economy. The real job of the FED is to monitor economic statistics and set policy to keep the economy on track and inflation under control. Their jobs are computer like to a large extent. The clamor for a cut is not without reason. Bernanke being stubborn when a cut is needed is not being intelligent.

-- posted by axolotl