The Pressure Begins As Morgan Stanley Calls Bernanke's Bluff
Now this is exactly what we've been worried about: that Wall Street would successfully push Obama for an early end to economic stimulus (which also includes extended unemployment benefits, by the way), just as bankers and Republicans did with FDR in 1937 - tipping the country right back into recession. (Krugman's been sounding the alarm for a while.)
I predict Bernanke will withdraw anything that makes it look like they don't have faith in a spring recovery, hoping to use it as a placebo effect.
And as to the millions of us still looking for work, and whose unemployment checks are about to run out? Morgan Stanley responds that there's "never an easy time to do it." I hope Mr. Roach has a big yard, since we're all going to be camping in it:
Jan. 5 (Bloomberg) -- Morgan Stanley Asia Ltd. Chairman Stephen Roach said U.S. policy makers should start to exit emergency stimulus measures now if the economic recovery is as strong as they say it is.
“There is never an easy time to do it,” Roach said on Bloomberg Television today. “The longer they wait, the greater the chance they sow the seeds for the next bubble. So I’m in favor of an early exit strategy.”
The Federal Reserve on Dec. 16 pledged to keep interest rates “exceptionally low” for an “extended period” even as officials said financial markets were healthy enough to allow most emergency lending programs to expire at the end of this month. Chairman Ben S. Bernanke and his fellow policy makers cut the benchmark rate almost to zero in December 2008.
“We’ve seen the most extraordinary monetary stimulus on the record in the 15, 16 months post-Lehman Brothers,” Roach said. “We’ll have to see the most extraordinary withdrawal of stimulus on record” and “if this recovery is as strong as Bernanke and markets think it is, the time to exit is now.”
Data since the Nov. 3-4 Fed meeting showed that “economic activity has continued to pick up and that the deterioration in the labor market is abating,” the Open Market Committee said in a Dec. 16 statement. “Financial market conditions have become more supportive of economic growth,” while the economy is “likely to remain weak for a time,” policy makers said.
They got their pie, so everyone else back off.
"If the US government enforced its banking laws like it did its park regulations, we wouldn't be
in this damn park in the first place." OCCUPY.!!
As long as you have some pie, they want it. It's the way unchecked capitalism works.
They weren't able to get at retirement funds, so they had the rules changed and got everyone to invest in 401k funds tied to the stock market... Someone got exceptionally rich off your hard-earned retirement funds, and I don't think it was you.
Upward movement of wealth was the standard in the last decade, I'm sure we're going to see more of the same.
Ban financial derivatives? Reinstate Glass-Steagall? Tear apart the oligarchy that is the "financial services industry"? Now you're living in the past, so sayeth the current administration...
All true.
It's better not to take the whole pie at once. They'll be back for more, later. Watch.
"If the US government enforced its banking laws like it did its park regulations, we wouldn't be
in this damn park in the first place." OCCUPY.!!
You don't get out a debt crisis by going deeper into debt. Since 2001 we paid have paid nearly $3.4 trillion on interest alone to date. That's just the interest people! Nearly 50% of the interest payments are now leaving the country, which is different from past years when interest was paid to U.S. citizens holding the public debt.
Wikipedia - Interest expense on national debt
http://en.wikipedia.org/wiki/United_States_pu...
Compare that to what we have spent on the war effort at $950 billion since 2001.
So I ask, what plausible reason does anyone think spending money we don't have (a.k.a borrow more) is going to help the US economy? Anyone here see the looming monster yet? It's near four times uglier than the war on terror. People like Paul Krugman call it a needed solution, that the problem of stimulus spending only creates a short term problem.
We haven't even paid off the Vietnam War yet, what makes anyone think we're going to reverse course after we get done maxing out our credit cards?
No this is the mother of all bubbles and it's headed for very ugly hard crash, you'll wish we were back in 2009 when that hen comes home to roost as it must and will. There is no painless solution. How long do you think we can keep robbing Peter to pay Paul?
Goodnight, Frau Blücher
The Great Depression teaches a different lesson.
You go into debt, but you use that debt to fund PUBLIC stimulus programs to get people back to work and create/shore up social programs to keep your people off the streets and fed.
Going into debt to shore up banks in the hopes that it will trickle down is wrong, but in order to survive and recreate growth debt MUST be incurred. But it must be incurred for the right reasons, not to make the already rich even wealthier.
the new deal didn't. Also the US wasn't already deeply in debt at that time. It wasn't until the other side of the world started to buy our weapons to kill each other and we took their gold that we started pull out of it. That is also largely how America became the richest most powerful nation in the world.
Also FDR outlawed gold, forbade people from using it and had a gold exchange program for people to convert their metal to dollars. We we're on a 40% gold exchange standard then, so they're some big differences between then and now.
Today we have no idea what a dollar is worth because it's not a dollar, it's note of credit (you can thank Nixon for that). The dollar itself is literally a liability. We pay interest on our very money we use, it's intrinsic value is zero. So the lines between price and value are meaningless now, you have to compare different asset classes to even know what something actually worth.
What they are doing today with the printing press is called debasing a currency via monetary inflation. And Keynes was very clear on that.
When you are trillions in the hole already, you don't borrow more.
Goodnight, Frau Blücher
That bit of "conventional wisdom" is trash (like most "conventional wisdom tends to be). That one is a favorite of the Republicans, I think that should tell you exactly how reliable that view point is right there.
Wars don't make countries money, they cost countries money.
Only if you actually take and exploit territories does war pay, and not even that much if you count the costs of subduing the populace who hates your guts.
I would think you would have had enough examples, or was WWII just the one single anomaly in all of history?
is on board with WWII as what brought us out of the depression.
From C&L's own video cafe
http://crooksandliars.com/medialoader/6809/0c...
At the end of the video Krugman says "it took an enormous public works program known as WWII to bring the economy out of the depression"
The new deal didn't do it.
Goodnight, Frau Blücher
http://www.youtube.com/watch?v=PSFO50Gk1YI&fe...
Diabolus est Deus Inversus
great seen
Wall Street doesn't give a shit about you!
I know, it's amazing.
Why the hell are we always surprised when a news story breaks like this? These guys want to get back to bending you and I over with as little government intervention as possible. Unless you count us bailing their insolvent craphole companies out for making bad book.
Damn. Another day I'm ashamed at the horrific farce that are our elected representatives. The best Congress and President that money can buy.
Whatever he wants for his company is bad for America and Americans.
We are going to repeat history. Someone needs to send Obama some history books because clearly he and the rest have taken that look forward crap too far.
If the President doesn't listen to folks like yourself and Vegasrage, he will repeat history and succeed.
The stimulus was too small and even discussions about ending it have a negative effect on the economy. You SPEND your way out of a recession, even if you have to borrow to do it. It worked before, it will work again.
How were the auto companies doing up to the point that the GOP got the Cash for Clunkers program shut down. Very well...thank you very much. There were also ancillary benefits from the program such as taking less fuel efficient cars off the road and decreased exhaust pollution.
"Anyone that makes less than $150K in this country, has no business voting Republican."
...i just wonder what they'll do. It's vexing. Will Obama tow the Wall Street line or support the American people. It's a nail biter for sure.......yeah right. I'm waiting for the inevitable inflation.
and tripled in 9 years, false, fraudulently overvalued "assets" (homes for example), decaying employment scenario, worst winter in 30 years hitting the country square in the face, it's not not a pretty picture.
Benanke was re-nominated. Just how much more obvious does this set up need to be?
We're to believe there's an actual battle within Wall Street? Sure, the dividing issue is whether to make tons of cash or metric tons of cash.
Corruption favors the wealthy.
In fact another round of stimulus is needed because this has so far been a jobless recovery and could stay that way for 5 or 6 more years.
Banks and big business love high unemployment. Keeps wages and benefits low and flat.
This is greed of diabolical proportions.
Perfect!
Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.
CockROACH wants an exit strategy?
I'd love to give it to him.
The people of privilege will always risk their complete destruction rather than surrender any material part of their advantage." J.K. Galbraith
C'mon now, be fair.
They've got all that taxpayer bonus money burning a hole in their pocket, how are they going to scoop up bargains if the economy is "recovering"? You don't expect 'em to pay retail do you? Repeat their mantra, boom/bust, boom/bust...
The problem is it's always their boom and our bust.
Don't you know, Obama just HAS to start being concerned about deficits now, the teabaggers told him to. You can't seriously expect him to cut any of that $150 billion we're flushing down Iraqistan every year, do you? Dirty reds.
The banking crisis is a mere symptom of a fraudulent monetary system based on fractional reserve lending practices and questionable bookkeeping used to create money out of nothing as the principal of loans. In the US, three entities have the legal authority to issue America’s money: the US government, the Federal Reserve and commercial banks.
These three entities have created an estimated $54 trillion. According to the June 30, 2009 US Coin and Currency report, the breakdown is as follows: the government minted and circulated coins worth $39,8 billion, comprising 0.07% of the money supply; the Federal Reserve issued paper money, Federal Reserve notes, in the amount of $1,05 trillion, comprising 2.02% of the money supply, commercial banks create checkbook money in the amount of $52.9 trillion comprising 97.98% of the money supply.
Both the Federal Reserve and commercial banks create money as the principal of loans: the Federal Reserve extends credit directly to the US government in exchange for government bonds which form the reserves they use to issue currency in the form of Federal Reserve Notes, and the commercial banks use fractional lending procedures extending credit to the general public that they use to create “check book money.” Combined these two account for 99.9% of the US money supply.
With the exception of coins, every dollar in our economy has a contractual date-certain when it must be repaid and therefore disappear from the money supply. In addition to repaying the principal, interest must be paid to fulfill the loan contracts. But, because no one creates the money required to pay the interest on those loans, fulfilling the loan contracts is impossible when taken as a whole. For, if all loans are repaid, there is no money remaining to pay interest; and if the interest is paid from the money supply, the remaining money is insufficient to repay the loans. In either case, it is not possible to repay the loans and pay the required interest.
To cover this shortfall, banks continually originate more and larger loans, using the newly created money to service older loans, giving their operations an appearance of solvency. This pattern of pyramidal growth is so common in investment frauds as to be given its own name: Ponzi Scheme.
p61penn62prin64
With a little luck - no one is listening to this idiot.
*
these motherfuckers got bailed out w/ our tax dollars and now that they're flush in ill-gotten riches, it's time to pull the plug on the pittance "given" to main street? obama better not fuck around here, or i'm going to be leading a pitchfork brigade w/ those stupid-assed tea-bagging bastards!
Th "bubble" isn't even remotely been burst yet, they just let some air out.
As long as they continue to hold and trade in the dodgey paper they created that caused the original crash then the bubble is still floating along albeit a bit smaller than it was 3 years ago.
And as soon as the all clear is sounded it will be business as usual trading and selling paper that entire teams of lawyers can't figure out.
They must be forced to deleverage, the paper must be marked down to value and taken out of circulation and there must be regulations put in place that state any security that can't be easily understood by a single lawyer is not a security and can't be traded. And no more insuring securities, that bit of BS should never have been allowed to start with. It's called risk for a reason.
Until these things happen you are staring down the barrel of a loaded gun manned by drunk chimps.
Step up to the guilotine Mr. Roach.
Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.
If all stimulus disappears we're in for big trouble. Of course those sitting on the side with loads of cash will make out. All the states are currently looking at deficits and barring any more stimulus money (even with) will be putting a new wave of people out of work. This will crash the economy again. Where were all these deficit hawks three years ago ? Remind them Cheney said "deficits don't matter" and ask them for their quotes when he said this.
Because the cash will become worthless. What good is money if there is nothing you can buy with it?
It is really the thing that has brought me to the understanding that republicanism/conservatism is a mental illness that is killing America!
You see the greed thing is the end. If one person has all the money it is worthless! The only way money is any good is if everyone has some. Then you can buy things but if you are the only one with money why would anyone make anything if you were the only person they stood a chance of selling it to. What good would the money do the person that made the object?
What could he do with the money? Give it back to the person he got it from?
This whole stockmarket is nothing but a ponzzi scheme set up to seperate people from their money. But the people that set it up are not intelligent enough to understand or care about all the things they have done wrong.
Is one find the neighborhood these people live in and get a huge crowd of people and have a riot in that neighborhood.
By god just take whatever they have! It is stolen any way what difference does it make.
They will have private security. Well armed. And of course, the 'law' will be on their side. They will use their money to split the mob. One group to be carrot-chasers, the other, carrots being chased. Arm up.
A little lesson for Mr. Roach and the rest of the dead end supply side free marketers.
Inflation is not evil. It is a sign of a GROWING economy. Take a look at inflation rates in China and India. Those economies do not appear to be struggling.
"Anyone that makes less than $150K in this country, has no business voting Republican."
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