November 21, 2002
Deflation: Making Sure "It" Doesn't Happen Here
We were told deflation wouldn't happen here. Six years later we got deflation on a massive scale.
July 28, 2009
Yellen: Fed won't make 70s-style inflation blunder
We are now told stagflation won't happen here. What are we going to be getting in six more years?
That's just a silly question of course. I always have complete confidence in the Fed.
June 15, 2006
Stocks surge as Bernanke says high energy prices have had limited impact
"In the long run, higher energy prices are likely to reduce somewhat the productive capacity of the U.S. economy," Bernanke said. "Under the assumption that energy prices do not move sharply higher from their already high levels, these long-run effects, though clearly negative, appear to be manageable."
So what if energy prices nearly doubled from their "already high levels" only to crash hard along with housing prices and everything else. So what if energy prices are almost back to those "already high levels" while unemployment is now a whopping 9.5% and rising.
There is probably an element of malice in our readiness to overestimate people - we are, as it were, laying up for ourselves the pleasure of later cutting them down to size. - Eric Hoffer
Oops!
Stag,
ReplyDeleteTo instill CONfidence in a CONfidence scam you need a CONfidence man. Bernanke's deflation speech seemingly gave the banking industry a great deal of CONfidence in his abilities.
I have to say, Bernanke has held up his end of the bargain. Bernanke has certainly created plenty of reserves. The lending should start any day now. I totally believe Bernanke when he says he is going to get credit flowing again.
And like Bernanke, I just don't understand why a bank wouldn't want to lend money to people that can't pay it back? And what bank wouldn't want to lend against declining property values? No way would banks prefer to lend to their trading desks and hedge funds. That wouldn't be in the spirit of the bailouts.
Did I mention that total bank credit is lower today than in Oct 2008?
http://research.stlouisfed.org//fred2/data/TOTBKCR.txt
Ken Fisher circa 1/2008. Priceless, not to mention priced less. Waaaayyyyyy less!
ReplyDeletehttp://www.forbes.com/forbes/2008/0128/106.html
Giant insurer AIG (57, AIG)is lower than it was one, three, five or even eight years ago--back when it sold for 40 times earnings. Now it is just 8 times earnings and 1.2 times annual revenue. But with an exceptionally strong presence in insurance and broader finance and slow but steady growth, it will enjoy a good run in the stock market in 2008.
Mark,
ReplyDeleteThat video was at once both hilarious and disturbing! Good to see you, as always.
mab,
ReplyDeleteYour last from Forbes reminds me that a rising tide lifts all boats, especially if one sells heavily leveraged snake oil boats as a living. ;)
GYSC,
"That video was at once both hilarious and disturbing!"
I was trying to find a video that would show how much confidence I have in the Fed but what you are saying is that I have made a mockery of the entire topic. Hahaha! ;)