tag:blogger.com,1999:blog-8515247115132134144.post6957202855267284966..comments2024-02-17T12:34:01.400-08:00Comments on Illusion of Prosperity: Banks Don't Believe the Rising Interest Rate StoryStagflationary Markhttp://www.blogger.com/profile/04568993350246477976noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8515247115132134144.post-56018389937895164872014-03-22T14:29:42.365-07:002014-03-22T14:29:42.365-07:00TJandTheBear,
It's not about me not liking wh...TJandTheBear,<br /><br />It's not about me not liking what I hear. I often read the opinions of those who disagree with me.<br /><br />I strongly disagree with Calculated Risk that the future's so bright I gotta wear shades. Doesn't stop me from reading everything he writes though.<br /><br />The main problem I had with the video is that it started off cherry picking the goods and services that have been inflating the most to compare gold against. I could feel the bias seeping through at me, much like a <a href="http://youtu.be/t3UaTjzZFY0" rel="nofollow">Monex Commercial</a> would.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-35349522054471253032014-03-22T14:08:01.852-07:002014-03-22T14:08:01.852-07:00You wouldn't have liked what you heard anyway....You wouldn't have liked what you heard anyway.TJandTheBearhttps://www.blogger.com/profile/10735388072841457108noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-55315622908743748512014-03-22T13:54:39.982-07:002014-03-22T13:54:39.982-07:00And as a side note, I couldn't get past the tu...And as a side note, I couldn't get past the tuition and cash arguments. I therefore did not watch the entire video.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-56816702738910153942014-03-22T13:53:52.637-07:002014-03-22T13:53:52.637-07:00TJandTheBear,
I have no desire to own gold or tre...TJandTheBear,<br /><br />I have no desire to own gold or treasury bills.<br /><br />With short-term interest rates so low, treasury bills pretty much are cash.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-89587808192877217402014-03-22T13:51:32.438-07:002014-03-22T13:51:32.438-07:00Troy,
Interesting chart!Troy,<br /><br />Interesting chart!Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-35540007332098241272014-03-22T13:29:59.173-07:002014-03-22T13:29:59.173-07:00What? No comment on "Gold vs. T-bills"?...What? No comment on "Gold vs. T-bills"??TJandTheBearhttps://www.blogger.com/profile/10735388072841457108noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-422435117930123402014-03-22T13:10:03.218-07:002014-03-22T13:10:03.218-07:00http://research.stlouisfed.org/fred2/graph/?g=u2j
...<a href="http://research.stlouisfed.org/fred2/graph/?g=u2j" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=u2j</a><br /><br />Above graph with Scotty's QE efforts in red<br /><br />and debt axis flipped since debt is negative.Troynoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-6941961475038252902014-03-22T12:47:39.014-07:002014-03-22T12:47:39.014-07:00Troy,
I really thought QEn, n+1 would be the '...Troy,<br /><br /><i>I really thought QEn, n+1 would be the 'eject the cores' move, but maybe not.</i><br /><br />I saved your comment for last because I wanted to end on a laugh. Hahaha! Love the analogy.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-28278682543638709672014-03-22T12:44:10.831-07:002014-03-22T12:44:10.831-07:00Rob Dawg,
How do you accumulate $100k and be that...Rob Dawg,<br /><br /><i>How do you accumulate $100k and be that stupid?</i><br /><br />From 2002:<br /><br /><a href="https://www.stlouisfed.org/publications/re/articles/?id=436" rel="nofollow">Jumbo CDs Play Tiny Role in Policing Risky Banks ... So Far</a><br /><br /><i>The post-FDICIA numbers point to heightened exposure. In the three years running up to the act—1988 through 1990—jumbo-CD holders suffered losses in only 15 percent of 597 bank failures. But from 1993 to 1995, uninsured depositors lost money in 82 percent of the 60 failures.</i><br /><br />Funny that the FDIC limit was raised from $100k in recent years to help calm the "So Far" panic, lol. Sigh.<br /><br />One risk I was taking (before the limit was raised) was that a treasury bond that I owned would mature, the proceeds would be deposited in my bank, and my bank could fail in that small window before I could reinvest the money.<br /><br />There was also a time when I had two large CDs from two different banks (both under the limit and fully insured). But what if both banks merged? Would I still be fully insured? I doubted it. At some point, I decided it was no longer worth the risk.<br /><br />There's plenty of risk out there, especially for those not bothering to look for it. Sigh.<br /><br />I do not understand why anyone would choose to buy the typical 5-year jumbo CD these days over a higher yielding 5-year treasury. You'd think a person with that much money would understand relative risk and relative value.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-17994100903401050912014-03-22T12:13:49.271-07:002014-03-22T12:13:49.271-07:00TJandTheBear,
Gold vs. tuition? That's certai...TJandTheBear,<br /><br />Gold vs. tuition? That's certainly a bit cherry picked. He picked one of the fastest rising services in our service economy (hardly representative).<br /><br />Gold vs. cash? Cash hasn't been a good store of value for a century. And I would argue that gold hasn't either. The former is extremely volatile as speculators rush in and out. It's had at least one bubble of epic proportions. The latter hasn't been a good store of value either for obvious reasons. Who would have hoarded cash when it could have been earning interest though?<br /><br />Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-50516001638015903332014-03-22T09:33:13.953-07:002014-03-22T09:33:13.953-07:00I can see parking 4-5 digits for 3 mo if you know ...I can see parking 4-5 digits for 3 mo if you know you are going to need it but are there really any jumbo CDs being written? How do you accumulate $100k and be that stupid? Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-70947967031955255292014-03-22T09:17:48.606-07:002014-03-22T09:17:48.606-07:00Is The Risk Warranted?<a href="https://www.youtube.com/watch?v=tGhp8aST6mo&list=WLV_Ud4jriPthHN3bzUImKaSdq7S-OKhcl" rel="nofollow">Is The Risk Warranted?</a>TJandTheBearhttps://www.blogger.com/profile/10735388072841457108noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-25586217217655590592014-03-21T22:12:30.856-07:002014-03-21T22:12:30.856-07:00Did not work out well for them,
http://en.wikipe...<i>Did not work out well for them, </i><br /><br /><a href="http://en.wikipedia.org/wiki/William_K._Black" rel="nofollow">http://en.wikipedia.org/wiki/William_K._Black</a><br /><br />As for higher interest rates:<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=tYV" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=tYV</a><br /><br />total debt ex-TBTF / GDP.<br /><br />zeroing out Fed-owned debt lowers this ratio to 2.3, but pull the other one anyway.<br /><br /><a href="https://www.youtube.com/watch?v=bO_rbg_fWaE" rel="nofollow">Star Trek XI Uss Enterprise Gets Caught In Black Hole</a><br /><br />I really thought QEn, n+1 would be the 'eject the cores' move, but maybe not.<br /><br />For that I'm going to actually have to move to Japan I guess.Troynoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-49323707069542107712014-03-21T20:49:46.332-07:002014-03-21T20:49:46.332-07:00Here is a bonus chart that compares the 3-month yi...<a href="http://research.stlouisfed.org/fred2/graph/?g=tYP" rel="nofollow">Here</a> is a bonus chart that compares the 3-month yields between treasuries and CDs.<br /><br />I would argue that the Fed's once "artificially low" interest rates are not looking as artificial any longer.<br /><br />If banks could find more qualified people to loan money to, then they would certainly raise interest rates to attract more depositors.<br /><br />Heading into the Great Recession, I moved money from my bank to Washington Mutual because they really wanted my money far more than my own bank did. They offered me 4% on my checking! (As expected, they were loaning that money out in a most risky way though (and with excessive leverage using all the powers of the fractional reserve lending system). Did not work out well for them, especially when people like me started moving deposits back out at the first sign of serious trouble.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.com