˙ʇı oʇ ʇuǝq ןɐɔıʇıןod ɐ ʇǝƃ oʇ pǝʇɹɐʇs ǝʌɐɥ ʇsnɯ ʇı ʇnq ʎɐpɹǝʇsǝʎ ʇsɐd pɐǝɹɥʇ ǝɥʇ pɐǝɹ ʇ,upıp ı ˙pǝʇǝןǝp ƃuıʇʇǝƃ ɯǝɥʇ ʇnoqɐ pǝıɹɹoʍ ǝɹɐ noʎ ɟı sıɥʇ ǝʞıן sʇsod ɹnoʎ ɟo ןןɐ ǝʞɐɯ ʇsnɾ
quote:
Originally posted by wine+art:
Did something happen to cause the Bear Market thread to get deleted? Confused

Looks like in about an hour or so it will be official. Frown


perhaps it was my comment about how you were a fool not to live double your lifestyle when the govt would bail you out?
quote:
Originally posted by cdr:
A stronger dollar should get investors pulling from commodities and reallocating those assets to equities. I am a little surprised that the Fed didn't kick rates up at least .25 or at least jawbone a little for a stronger dollar.


I was thinking that would happen with the last proclamation, but Fed seems a little reticent to me.
quote:
Originally posted by cdr:
A stronger dollar should get investors pulling from commodities and reallocating those assets to equities. I am a little surprised that the Fed didn't kick rates up at least .25 or at least jawbone a little for a stronger dollar.


The fed kicking up rates stops the flow of money into the economy. If the dollar gets stronger, corporate profits also shrink as the dollar becomes stronger. Foreign money that is still flowing into this market might hestitate a little more with a stronger dollar.
Your banks, which is the crux of your financial markets who are already in deep trouble, have to pay .25% more money to borrow money.

You walk a vicious line between inflation and recession.
There are just too many forces at work here. Quite frankly, I believe that the Fed is a little scared at what's all happening, because they know even the slightest wrong move could really throw a wrench into things.

Not sure where the other thread went. It was the most interesting thing on this forum in months. Confused
quote:
Originally posted by cdr:
It's qute confusing. When the market sold off several months back, the Fed was active and prompt, dropping rates without any notice to lower the heat. Their timidity here is odd.

Clearly, there's a 'bigger picture' that is more desireable to maintain for them. I do tend to agree with Foghorn, though. There are several factors all taking shape simultaneously right now. Interesting,surely. Dangerous waters to say the least....
quote:
Originally posted by Foghorn Leghorn:
There are just too many forces at work here. Quite frankly, I believe that the Fed is a little scared at what's all happening, because they know even the slightest wrong move could really throw a wrench into things.

Not sure where the other thread went. It was the most interesting thing on this forum in months. Confused


I agree, and unless I missed something that happened late ( it happens) I'm surprised it was deleted.
Traditionally, I believe that the Fed has avoided commentary on the dollar, so Bernanke's comments about it at the beginning of June were unusual. The problem is that the weak dollar has created additional inflationary pressures (inflation being the one of, if not the, chief concern of the Fed), so one could argue that it makes sense to "talk it up" a little. However, he has to be careful with jawboning though. The markets may expect him to take action if he continues to do this.
One way to do this is to raise rates. As g-man pointed out, raising rates right now is problematic. Although it could potentially help bolster the dollar, it puts more pressure on the economy. Banks have to pay more to borrow, and as a result, so does everyone else. As someone who works for a bank (that has actually faired pretty well despite this mess), it seems that a lot of our competition is really clamping down on lending policies, particularly on real estate. Higher rates coupled with tighter guidelines makes it more difficult for consumers to borrow.
As g-man pointed out, you walk a fine line between inflation and recession. I think the Fed is stuck between a rock and a hard place right now.
When does it become 'officially' inflationary? We're seeing it now, and the recent surge in petroleum pricing will surely ripple through to everything else within months. It's inevitable. Call it now or call it later. Prices are on the move up and the pace will only quicken.
quote:
Originally posted by KSC02:
When does it become 'officially' inflationary? We're seeing it now, and the recent surge in petroleum pricing will surely ripple through to everything else within months. It's inevitable. Call it now or call it later. Prices are on the move up and the pace will only quicken.


I agree. That's why it is so tough to raise rates right now. It eases inflationary pressures at the expense of growth.
quote:
Originally posted by steve8:
3 words. Shiny yellow metal. After a little pause, it's now onward and upward to $1500/oz.


Curious... gold had treated me well, and has treated me poorly.

Either way, ALWAYS good to have a little.

Can we just turn back the clock to 1999 again. I swear I will sell ALL of my Cisco stock at $131, I SWEAR! Big Grin
quote:
Originally posted by steve8:
3 words. Shiny yellow metal. After a little pause, it's now onward and upward to $1500/oz.


if you feel the fed is going to start raising interest rates in the future, then gold would be a very poor investment.

In the short term "stagflation" environment though, it does make a safe haven. I'd personally wouldn't take the risk and have just ended up buying short term CDs that are insured by the govie but offered at higher rates from these "problem" banks.
quote:
Originally posted by g-man:

if you feel the fed is going to start raising interest rates in the future, then gold would be a very poor investment.


You might want to check the historical performance. In 1980 gold was at $850 and the interest rate was 14%. Take a look at the period from 72-75 also. I assume you think increasing rates will help your dollar, which will hurt gold? It didn't do much between 2004 and 2006 did it?

I'm bullish on gold because I think inflation is really going to accelerate now. It has already started, but the Fed plays hide the weenie by excluding several things when it reports it's numbers.
quote:
Originally posted by steve8:
quote:
Originally posted by g-man:

if you feel the fed is going to start raising interest rates in the future, then gold would be a very poor investment.


You might want to check the historical performance. In 1980 gold was at $850 and the interest rate was 14%. Take a look at the period from 72-75 also. I assume you think increasing rates will help your dollar, which will hurt gold? It didn't do much between 2004 and 2006 did it?

I'm bullish on gold because I think inflation is really going to accelerate now. It has already started, but the Fed plays hide the weenie by excluding several things when it reports it's numbers.


in 1980, inflation was at an INSANELY high level so the run up of gold was there already before interest rates were jacked up to 14% but look at the clamp down affect it had from the 88-2000 periods, record low inflation and record low gold prices.

I'm just pointing out there is a correlation between inflation and gold. And there is a correlation between inflation and fed rates. They may disconnect temporarily, but they do fall in line afterwards as there is a lag effect.

If you forgot in 2003-2004 Greenspan was worried about "Deflation" and aggressively lowered interest rates, leading to, arguably, our housing bubble and current inflationary environment.

As with historical performance.
If you had bought gold in 1987 as you thought inflation was going to shoot up, you would have been very upset that gold would have lost you money until 2004 where gold finally made back it's high in 87.

Fed fund rates have a lag effect that people don't consider when they think "raise rates... fight inflation".

Anyhow if I had a crystal ball, I would have bought dell at 1$ and not be worried about this "Credit crisis"
To make lots of money in the long run requires buying low and selling high. Seems obvious, doesn't it? The problem is the potential short term damage if one is too early.

For myself, I am not buying anything yet. But if one were interested in trying to catch a falling knife, one has to be intrigued by the possibility of investing in SUVs right now. Eek Big Grin

Ducking to avoid the rants of those who think recent trends will continue forever into the future. Razz

Moo
quote:
Originally posted by Sacred Cow:
But if one were interested in trying to catch a falling knife, one has to be intrigued by the possibility of investing in SUVs right now. Eek Big Grin


Actually.....for the last several months I have been looking for some bargains. Not SUV's, but big, fullsize, diesel guzzling trucks. Surprisingly, people are still willing to buy these, and are paying too much for them. Confused I can't even find a deal. Frown What's wrong with these people, don't they realize that diesel is more than gas?

Add Reply

Likes (0)
×
×
×
×