Yeah, I crossed over more than a few people. Great handles. Shot was not so great though. Sam, in your lawyering, would you define your greatest skill as detecting the slightest crack at a rebuttal, and jumping on it? did you have someone else read the entire case or something. they would draft the arguments to everything else, and you would go for the Achilles heel, and be like "WHAT IS WITH THIS ON P.1!"...except it's only page 1 to you, since your partner had already read all 15 other pages?
The only "stimulus" that would really get the economy moving would be a mass infusion of cash to the lower and middle classes - everyone's broke, to some extent, and the majority of that money would go directly back into the economy in short order - people would pay debts, buy groceries, fix cars, and so forth. Much of this money will go directly to small, local businesses (to the extent that they still exist). Pumping cash into giant institutions that are more likely to hold the cash and slowly, if at all, distribute it to people who have the capital to secure a loan will not solve anything. You want to stimulate the economy, then you have to give that cash to people who will actually spend the money.
Sam, was this you? just curious. at this point, if it is, you're throwing arcane references to me. I'm sorry, not of the Shake and Palmer generation. but your posts with regards to me on economic matters remind me distinctly of a deadmau5 rick roll.
Dunno, is that your conscience telling you that you should stop dragging up age-old threads for petty grudges? As Lady Macbeth, perhaps your compulsive actions are the root of a deeper anger? did you get beat up by inflation hawks or something? meh. here, have some happiness tunes if you were. <iframe width="560" height="349" src="http://www.youtube.com/embed/7xzU9Qqdqww" frameborder="0" allowfullscreen></iframe>
Here, just to amuse myself. The fact that the Fed is the largest holder of American public debt is an indication that other countries, most notably China and Japan, no longer have the voracious appetite for American debt that they once had. This is bad for a lot of reasons, but I'll explain it in the simplest way; American debt is not as appealing to these large investors now. That is bad for politicians who want to increase American debt, because who will buy it other than the Fed in such large numbers?
Right, Harry, that's why treasury yields are.... the same... since it started. You can figure out the rest on the way to your next male modeling job.
Deflation is a threat that's always worth fighting aggressively. It's arguably the single worst thing that could happen to a debt-ridden country. Presidencies certainly are won or lost based on high oil prices. The problem is that you haven't correlated the high prices to QE2. If QE2 was inflationary, you'd see prices rise for all goods - not just oil and food. And you wouldn't see those prices increase globally in other currencies. What you saw with oil and food prices can be explained much more simply: a global economic recovery increased demand which increased price of core commodities. It also explains why prices of other things didn't go up. Bernanke mentioned a lot of things - his job is provide facts and data. He doesn't need to justify QE2 to Congress. Of course it has - again, that doesn't imply causation. The economy slowed a lot this year and there have been lots of tornadoes this year - it doesn't mean the two are correlated. QE2 is one piece of a much larger puzzle. Food prices were skyrocketing long before QE2, originally starting up back before QE1 too - and actually have been flat over the last 6 months or so during QE2. The critics of QE2 generally claim that it didn't work because there wasn't a lot of velocity to the money injected - that is considered the biggest failure of the program. Do you disagree with that? That seems the opposite of what you said earlier? It doesn't increase it indirectly either. If we're talking indirect, it arguably lowers deficits. No it's not. It lowers interest rates the government has to pay on debt, which keeps government expenditures lower. If government can issue debt at 3% instead of 5%, that benefits everyone. And by paying the money to itself, it gives the Fed a very simple way to quietly take money out of circulation whenever it wants by not reinvesting that money when the debt matures. There doesn't seem to be any evidence in Washington that politicians are treating the debt situation differently as a result of QE2.
Treasury yields are the same because for the average individual investor, US Treasury Bonds are still like manna from the heavens, and are as good as gold in their minds. Of course, in the market's mind, buying dot com companies with sky-high price/earnings ratios made sense too. However, major countries---i.e the ones lifting the bulk of the debt load are showing a willingness to divest... http://www.cnsnews.com/news/article/china-has-divested-97-percent-its-holdin China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills The fact that the Fed is now by far the largest holder of US debt (more than Japan and China combined) is unhealthy and indicative of this general malaise with American debt that the important investors...the ones that matter and actually finance most of American debt...may no longer be willing to do so. now now Sam, let's not get too personal. You show a ready willingness to cross into real life. slow down buddy, we haven't ever met. I'll take the male modeling as a sign of your deep attraction to me, but really, two things---first, I'm not homosexual (sorry) and second, one step at a time even if I were.
No, stagflation caused by supply shocks are the worst thing that could happen. There's a higher chance of that then deflation at this point, what with the Middle East threatening to blow up at any moment. Some of it is due to QE2. I won't say all...but some. http://news.alibaba.com/article/detail/markets/100400001-1-quantitative-easing-could-boost-oil.html Core inflation is rising steadily,enough to outpace the very slow real wage growth, which is a cause for control. The picture just looks much worse with headline inflation. He sure does if he wants Congress to balance the budget, and not blame the Fed for QE2, as he's been pushing lately. http://www.businessweek.com/news/20...reminds-congress-deficit-bigger-than-qe2.html Feb. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke is trying to make sure the U.S. central bank doesn’t become a scapegoat for fiscal profligacy. Yes, yes, there's erratic weather patterns, Japan, the Arab Spring, but all things equal you certainly would have a better case saying QE2 caused economic contraction rather than expansion. And even if it caused expansion, it's in such a small increment that it is inefficient and useless, effectively. http://www.ibtimes.com/articles/108687/20110203/food-inflation-qe2.htm Look, money printed is still money added to the money supply no matter where it goes. When I say "clogged", I mean the money is filling up the money supply, and that the money supply is expanded with more money. I don't mean it's stuck, sorry if you misunderstood that. In this case, the failing is twofold---namely, that the money was printed in the first place when it didn't really need to be, and secondly, was then used inefficiently because it was given to big institutions that impaired the velocity of liquidity by refusing to loan to good honest American businesses and people, and instead took what was essentially a zero-interest line of credit, and spent it on speculative options and asset bubbles abroad. It's a bit like giving your best stoner friend your credit card, and suddenly finding it back with $1200 of charges for Lays Chips, instead of his textbooks. then being surprised about it. I was actually referring to stimulus in general rather than QE2 in this case. I misspoke, but wasn't sure about it...but yeah, I misspoke. Looking back, I consistently mentioned printing money until that one time I said adding onto the deficit. However, having the Fed guarantee your debt, and monetize it, isn't exactly the best solution I might add. Yeah, well, now it's balance budget here and there, and budget cuts everywhere, but call me in 4 or 5 years when the US is still running a deficit and asking Father Fed to help out, time and again.
So you're saying is that we have to ignore the market for treasuries, if we simply just look at the market for treasuries, it will tell us what the market for treasuries doesn't tell us about the market for treasuries. God, MacBeth, you're a total tool. And enough with the homophobia, lame.
I'm saying if you ignore the market for treasuries for small-time individual investors, and then look at the big-time countries who are largely and traditionally the holders of American debt, then the Fed being the largest holder has some insight. You've nitpicked about this point for like 3 posts now. Difference between China/individual investor, do I have to spell it out for you? As for homophobia not being cool, well, buddy, a) I'm not homophobic. In fact, I'm a gay rights advocate, but that's neither here and there. I could give less of a two s**ts if you thought I was gay, or if you are gay. If you are gay though, thanks for the compliments, but not interested (sorry). and b) The guy who keeps on making Shakespeare references and Palmer is suddenly the judge on what's cool?
Alas, Poor Harry Palmer, you have now been backed into corner such that you are arguing that the instiitutional investor market which trades 99.99%+ of all US Treasuries doesn't determine market prices for U.S. bonds, it's the >0.01% of retail investors who do.... I haven't seen a brutal beating like this since that fateful night in Toronto with your walkman.
Nobody is saying anything about the market prices of bonds. However, the fact is, American debt typically has several large holders, of which many are sovereign countries. That these countries are divesting, and that the largest holder is now the Federal Reserve, is troubling, irrespective of what individual investors and the market thinks, because when push comes to shove, they are going to be hard-pressed to be able to buy the large amounts of debt Japan and China are now refusing to do. Sam, were you beaten up or something frequently? Just because it happened to you doesn't mean it happens to others. As for a beating, well, hell, even if I conceded this point and apologized for an error, where does that leave you? You beat a random internet user at one point of his spiel, and he more or less does not give a s**t. so...you win I guess? hope you find peace buddy. Incidentally, I never go to Toronto. Get your geography right, internet cool judge. Toronto is where all you Shakespeare quoters go regale themselves in Harry Palmer (???) books. Montreal is where we make love, smoke, drink, party, and live life. it's hella fun. Montreal= <iframe width="560" height="349" src="http://www.youtube.com/embed/9pSz1Hm3Z4k" frameborder="0" allowfullscreen></iframe> Toronto=
Except for you in the last 2 pages of you making an ass of yourself about the prices of U.S. Treasury Bonds. Why do you sell yourself short? You're not random, you're a legend of the BBS - winner of the "Best Poster Tourney" in the Hangout in 2003 or something.
OK, this isn't true. First off, the article you posted points directly to short-term US debt, of which it only started collecting in the last 2 years anyway. And second, the Fed has bought less debt than was issued over that time - which means that someone else is still buying the rest of that debt at very low rates. And even if China WERE divesting their debt - someone else has to be buying it. So some other institutional investor is buying our debt from China, again at very low rates of return, indicating high demand.
um, where did I mention US Treasury Bond prices. you're the only one doing that actually. Prices and yield curves are irrelevant to our discussion actually. Here, let me put it to you in straight terms. You'll have big institutional investors, but no one as big as the biggest. Sure, you have enough people keeping yield curves the way they are since US Treasury Bonds are still regarded as being as secure as Alcatraz. However, none of them have the clout of a China or a Japan. This is a problem, because if things go sour, you're left at the mercy of many uncoordinated little minds that will, for one quick example, determine Greece to be relatively risk-free one year, and than refuse to borrow it anything beyond a 10% credit spread over German bonds. The Fed is now the biggest. That's bad because that means China/Japan/sovereign nations aren't the biggest anymore. It's worse because China is actually divesting itself. So other than the Fed, who can carry the heavy load of American debt that a China or Japan can do? Or do we monetize our debt completely? I mentioned the devaluation of the dollar. Asset bubbles. Money supply expansion Possible inflationary fears/stagflation Increased food and fuel prices Questionable impact on the economy Fundamental differences between Japan and America You chose to quibble about a statement in the last paragraph of my post, while alleging it was the first. You're barely breaking even here, and you've failed to address any other points. thanks for the compliment, I guess?
Other institutional investors are still buying, since as I have to repeat again and again, American debt is still regarded as a safe-haven for whatever reason. However, you don't want to place your fate at the hands of individuals tossed to and fro by market waves. You want to have the big guns to keep your debt flow. In America's case, that was Japan and China for quite a while. However, even if there is strong demand from individual institutions, the demand from China and Japan are gone. This is a problem, because when push comes to shove, nobody will have the coordinated wherewithal of China and Japan to buy American debt. This is an unhealthy sign of malaise from the two countries that have been the largest holders of American debt. Now that the Fed has overtaken them furiously, this isn't a good situation. That is ALL I was trying to say on the one sentence Sam has nitpicked about for something like 2 pages.
