One of your most endearing traits is to put a gigantic foot in your mouth when you try to be a smart alec.

Frankly Homer, “I don’t give a damn”. Dude I read and re-read everything I said and can’t quite see what i said was wrong. You’re not going into skanky ho defense mode, are you?

I do not have the time nor the interest to point out how many errors you have made but just find someone who works in the financial markets and they will point it out.

Homes, how about you? Lol

By the way neither you nor anyone else would know the reaction of the market to a fed funds rats of 1%.

Oh But you do, Homer Greenspan. You do , right?

It could scarcely be worse

Your comments? I know.

One of your most endearing traits is to put a gigantic foot in your mouth when you try to be a smart alec.

I do not have the time nor the interest to point out how many errors you have made but just find someone who works in the financial markets and they will point it out.

By the way neither you nor anyone else would know the reaction of the market to a fed funds rats of 1%.

It could scarcely be worse

It is time to recognise that the producers in society need a direct claim upon how finance is distributed.

Wanna elaborate on that a little, NF as you seem to be getting awfully close to the One Nation’s/league of rights idea from decade ago wanting a zero interest policy.

Anyone might acknowledge that someone might want to take a risk by pledging money towards a damned good idea.
Stretch that towards getting others sucked in to investing more towards a good idea.
Take that one – or maybe eleven steps further – when the good idea is ditched, the money men have fleeced the turnout, departed the scene, and everyone in between is also left in the ditch – then we have compounded fraud.

What has happened recently is that fraud has suddenly become recognised as existing. Hells Teeth – there it is!
And it is endemic in the top three quarters of the money market.
Amazing that. Even the jaded press has been trying to draw this little detail to public attention these last many months.
It is time to recognise that the producers in society need a direct claim upon how finance is distributed.
By producers I mean the primary and secondary industries that keep society functioning.
Their asset is the modern equivalent of the Gold standard and should be recognised as worthhy of the same weight.

Not for nothing, but this why people always end up getting angry with you.

This is what you said at comment #8

The Fed should have cut the Federal funds rate to 1% as soon as possible and make the yield curve out to three years as steep as possible.

Theres no mention of this year, last year, 1850 or 1918.

When I explained to you nicely (I might add) the 3 month US bill is about .07% therefore making zero the appropriate fed funds rate in order to create a positive yield curve you went off into a tangent with this incoherent comment:

you are confusing the federal funds rate with treasury notes.

the Fed obviously didnt think of it otherwise they would have done it.

I then nicely explained to you that I wasnt confusing anything and that you should apologize to the readers for wasting their time. I didnt really expect an apology myself as I was just looking after everyone else. Do you notice how big hearted I am here, homes?

Proving ignorance is bliss you then made this comment:

are you that ignorant you really do not understand the difference between the federal funds rate which influences other similar financial instruments and where banks get their funding from on ewholesale markets and treasury notes.

Treasury notes went down in yield when market participants panicked and went for safety first.

It had nothing to do with Fed policy

Sequentially this was even more incoherent than the previous comment, by the way..

Suddenly without any warning whatsoever you introduce 2007 into the picture with this comment:

JC,

did you ever think of what would have happened if the FED had have cut the fed rate to 1% late last year

.

Again I was nice and calm with you as I politely explained what may have happened if the Fed had cut rates too far too soon.

Now your idiotic idea of a zero funds rate (bcause that what it would have to be) in order to achieve a positive yield curve morphs into a cut in 2007 rather than in 2008

See why everyone always gets cross and angry with you Homes? See why Im tired of always having to come out and patiently explain that youre smarter than what you normally appear. I feel like Im just always putting out fires for you Homes. No more Mr. Nice Guy from me now on.

What if the world has changed? What if the old rules don’t apply anymore? Maybe everything we think we know is really wrong. Say paradigm three times and call me in the morning.

I would argue that no country, nor empire in history has been able to escape a crisis by merely printing more money. Gamblers who regularly lose don’t suddenly start winning because they make bigger bets. A business that is unprofitable with a million dollar overdraft does not get profitable by clocking up a 10 or 100 million dollar overdraft… and so we go. Bad management does not turn into good management when handed a bigger budget.

What amazes me is that we have all this infrastructure built around financial indicators, and a worldwide system of tracking economic activity and when all those indicators point to a problem, we decide that the answer must be to tinker with the measurement. Think about a steam engine driver who is watching the dial on the boiler pressure go up and up. So the dial gets into the red zone and he knows that it should never get into the red zone so he just cracks the faceplate on the meter and pushes the needle back down to a “safe” level. That’s the sort of behaviour we are dealing with here.

Similarly, economic indicators are measurements (admittedly approximate measurements, but better than nothing) of a physical system. As mentioned above, the US is facing the problem that reducing interest to zero causes inflation to explode, while raising interest to even a few percent pushes it to recession (leaving them with almost no room to adjust). No one seems to believe that the approaching singularity is actually a needle on a dial that points to a problem in the physical world. Don’t look at what the economy is actually doing, just look at ways to tweak the indicators. It’s almost like the people who built the world economy secretly knew it was all a bit of a scam and they are now embarrassed to see that it is no longer possible to pick the answer that you desire and then make up a methodology to get to that answer.

This does not fulfill my definition of wise leadership.

only a genius could argue a yield curve the other day had any relevance to October or November last year.

well no it didn’t cause that at all.

If you had even had any idea of the yield curve back then you might have noted quite a steep yield curve.

Never mind go and ask some-one who actually works in the financial markets.

did you ever think of what would have happened if the FED had have cut the fed rate to 1% late last year.

No, but let’s go though it shall we.

gold $2000 an ounce.
Oil $200 buck a barrel
BHP $65 bucks a share

Euro/ US 1.75

Aussie 1.1

Yen 90

Imagine how that profitability would have helped the banks instead of being worried about inflation which was never going to impact core inflation.

umm okay. But look at what it also would have caused, dumphy.

That is one of the reasons why treasury notes fell to absurd levels.

Ummm Homes, you told us that the if the Fed had cut the Fed funds rate to 1% they would have engineered a positive yield curve. That wouldn’t have been possible according to the notes and bond strip i presented earlier. You’re wrong, so please apologize to the readers.

you are the idiot arguing that there was no full employment on Germany

Wtf. What’s germany got to do with the US yield curve, homester?

Have you been hitting the turps?

did you ever think of what would have happened if the FED had have cut the fed rate to 1% late last year.

Imagine how that profitability would have helped the banks instead of being worried about inflation which was never going to impact core inflation.

That is one of the reasons why treasury notes fell to absurd levels.

you are the idiot arguing that there was no full employment on Germany

What if the world has changed since then. Why assume that the ” carrying ‘ capacity for debt was much more appropriate then than now? Do you have any evidence to show you’re right?

Its pointless comparing the GDP of 1835 to 2008 – unless we can find a way of exchanging currency through a time machine it remains a fallacy.

I was not comparing GDP across time. I was comparing the unitless ratio of total debt to GDP. In other words, an estimate of a nation’s ability to service their debt. Like taxation rate, it is a timeless concept.

are you that ignorant you really do not understand the difference between the federal funds rate which influences other similar financial instruments and where banks get their funding from on ewholesale markets and treasury notes.

No Homes, i’m not ignorant, you are. I tabled the US interest rate out to 10 years.

You argued that the Fed’s objective should be a positive yield curve. I simply presented the fact that the Fed would have to have the Fed funds rates at zero in order to act on your recommendation.

Treasury notes went down in yield when market participants panicked and went for safety first.

yes and?

It had nothing to do with Fed policy

I never said it did, scooter. I merely presented evidence that your recommendation of a normal yield curve would require zero as the short term rate. This isn’t another one of those Nazi economics defense screeds of yours, is it, Homes? they’re so boring now.

Just accept that you latest recommendation is silly and apologize. I’m very forgiving of you. You know that.

are you that ignorant you really do not understand the difference between the federal funds rate which influences other similar financial instruments and where banks get their funding from on ewholesale markets and treasury notes.

Treasury notes went down in yield when market participants panicked and went for safety first.

It had nothing to do with Fed policy

In 1883 an FJ holden might well have been something that dreams are made of but without decent roads and a reliable fuel supply it would have been of no value at all.

So what was the means that GDP was measured in 1883?

US Total Debt peaks
1835 – 150pc of GDP
1933 – 270pc of GDP
2008 – 350pc of GDP and still rising at 20pc

Wednesday, the US senate put through another “emergency” spending bill to dump another 70 gigadollars into their oil wars. These expensive acquisitions don’t return a profit, except for the Afghan poppy fields. The cost of which is paid mostly by Europe (the profit goes in an unknown direction).

For Australia, the solution is simple: ease ourselves further away from the US economy and diversify our trade (and our loyalty) in as many directions worldwide as possible. Meanwhile make sure we have at least enough food, fuel and guns to be self-sufficient in the base essentials. The physical world always wins, the paperwork can say what it wants to.

the Fed obviously didnt think of it otherwise they would have done it.

here’s my bet, homes. I think the Fed would have thought of it before you did. I know that’s a 100 to 1 shot but I would still take the bet. :-)

Heres last nights US yield strip for US government paper

%
3 mth .7
6 mth .86
12 mth 1.52
2 year 1.90
3 year 2.16
5 year 3.6
10 year 4.12

To get a positive yield curve you would have to set the fed funds rate at zero? Dont be a dumphy, Homer.

But yes they do have room to lower rates a smidgeon but they have to be really careful as they could fire up commodities again.

Since the announcement of the RTC last night where the Treasury is going to create a toxic waste dump for those radioactive instruments they may not actually have to lower rates any more as this could stop the rout. Looking at Citigroups ongoing earnings from last quarter as an example they reported 6.5 billion in earnings before writeoffs so they are actually profitable from their ongoing operations.

now homes as an aside and away from the topic. Do you still think latham’s Skank Ho comment was referring to the Taiwanese president’s mistress or do you think Skany Ho was an pejorative American Ghetto reference to a woman. Also can you tell us who in the NSW Labor right thinks that reference meant the Taiwanese leaders mistress? Honest question here Homes.

the Fed obviously didn’t think of it otherwise they would have done it.

the Fed should have cut the Federal funds rate to 1% as soon as possible and make the yield curve out to three years as steep as possible.

90 day T notes were at a few basis points. How are you going to steepening things with those sorts of rates, “Michael”

Until Banks get profitable as soon as possible they will simply limp along.

ummmm Who would have thought. Thanks

As it is Rogoff and Reinhart are saying the US will have a number of sub-standard growth. This seems highly possible

Yes it’s possible it will be highly possible, “Mick”

Until Banks get profitable as soon as possible they will simply limp along.

As it is Rogoff and Reinhart are saying the US will have a number of sub-standard growth. This seems highly possible

It’s socialize the profits and privatize the losses. LOL.

The Fed is making out like a bandit.

The shareholders in these institutions have been wiped out. And rightfully so! They’ve only got themselves to blame. So massive private losses there. And of course a decent slab of the profits were socialised along the way through corporate and income taxation.

BBB