By: ang101000
22/10/2009
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Menta,
Sorry I can't access the link
http://www.youtube.com/watch?v=xP9EDxwPTdA&NR=1
Are you able to give me some particulars as to what is in the report? I will try to find it some other way. |
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By: mentawaisurf
22/10/2009
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Here's how the US housing bubble is being re-inflated (click and read through the 11 slides).
This will make subprime merely the warning tremor before the earthquake.
http://www.businessinsider.com/the-next-housing-bu bble-is-here-2009-10#it-starts-with-cheap-money-1
Sound familiar? |
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By: mentawaisurf
22/10/2009
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Pete, actually Robert Prechter was the most accurate in warning of the initial GFC. He called it and explained why back in 2007 and he's doing it again;
http://www.youtube.com/watch?v=xP9EDxwPTdA&NR=1
And if you want to know what the RBA will do with interest rates moving forward, just watch government bond yield movements. |
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By: ang101000
22/10/2009
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Hi Billy,
IN regards to Goldman, some (including myself) have a very different view from yours. I think, they are one of the "too big to fall' and "too close to power" to not know company.
Rather than writing a diatribe myself here are the links to the article(s) that I mostly reflect my own opinion.
Good to disagree with you (:
1)'Inside The Great American Bubble Machine'
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression (Rolling Stones Magazine)
link ;
http://www.rollingstone.com/politics/story/2881632 1/inside_the_great_american_bubble_machine
if you have problems with that try via; (goole it)
The New York Times
Op-Ed Columnist, By FRANK RICH
'Goldman Can Spare You a Dime' it has the link to the other article.
http://www.rollingstone.com/politics/story/2881632 1/inside_the_great_american_bubble_machine
I think you will enjoy reading these.
Ang |
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By: billy.holliday@rocketmail.com
22/10/2009
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Sorry, I forgot: Goldman Sachs actually did "see it coming". They went short the sub prime market while all the other Wall St firms were still getting long at LIBOR+5 bps (!). Thats why they are in such good shape today, and the only Wall St investment bank to survive as a pure investment bank.
What people completely underestimated was the extent of the fraud in sub prime. The economy was doing fine: not over heating at all- except on Keens endogenous money...lending had become a "business" in its own right, driving the borrowing, not the other neo-classical way around. The crisis that started in the credit markets very nearly took down the financial system which dominoed into the real economy and crushed confidence. If you were looking at the share market or the eonomy, you would never have seen it coming. There is a gathering view that "banks" are like utilities: conduits for credit and should
not, going forward, do any of the other very risky stuff. Thats now over.
I think what the US taxpayer finds hard to stomach is that TARP money that went in to save various banks, only to be paid straight out as "bonuses" to execs.
The GFC was caused by a Keens endogenous money made possible by massive institutionalised fraud.
The endogenous money driver has now gone(and so has the non bank lending and securitisation market)
so things will get better, but gee its been a long time !!! |
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By: ang101000
21/10/2009
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Hiee Billy,
Thank you for your inflation analysis (yes, surfers
have a hidden talent for clear thinking (:).
Seriously Billy, whenever you are bored, tired, upset, depressed (or all four at the same time) while thinking about the state of economy/finance please, please write a few lines.
Before I forget, if you hear of any 'must read', book please let me know. I'm always happy to share.
Ang |
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By: firefly_au
21/10/2009
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Hi Billy :)
Thanks mate:)
Yes I agree with you again on the cause of the collapse as you say it was not the debt level as such it was the loose lending practices and selling the risk to unsuspecting creditors that were not prepared for the risk because thought they were buying prime debt due to the fallacious rating and selling of the debt risk hidden in a package so it was nearly impossible to spot until it was too late as an investor or economist....
On the inflation issue - I don't thinks it is going to be a problem. In many places around the world deflation is under-way and will run its course despite the best efforts to mitigate it. It has not taken hold here yet and may not due to early action to prevent it (I hope). However I expect that inflation will be strongly moderated regardless and as such will not be a problem at least in the next year or two. That is my 2 cent worth hopefully I didn't ramble too much he he :)
BYE :) |
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By: billy.holliday@rocketmail.com
21/10/2009
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fire...the question was "So what is your view of short term/long term inflation?".
There is one piece of mythology I want to correct and that is that anyone saw it coming. no one did. there were a few (inc Keen) who had been calling the end of the world for a while, but people forget that the sub prime crisis gathered steam in the US due to defaults that came from poor/fraudulant lending and NOT from the level of debt. There was no one saying "Oh look, the sub prime lenders are lying on applications becasue they are sell allteh loans to teh CDO market...we'd better watch out!" the ratings on teh bonds were wrong becasue the data was a lie.
the closest anyone came was Taleb who just said tah Black Swans will come out of nowhere when you least expect it.
The RBA was reacting to what it knew at the time, not wghat was coming: again most "prediction" & "forecasting" is mere explapolation of the current situaion. It will always be a rear-view-mirror "reactive" exercise...it logically cant be anything else.
Right now everyone is reactive to prevent deflation. |
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By: firefly_au
21/10/2009
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Hi Billy :)
All of what you posted in your predicting attempt seems reasonable to me :) Please excuse me for being obtuse but what did Ang actually ask you about inflation?
One of the GoF he he :)
I liked that turn of phrase from Ang too :)
BYE :) |
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By: ecchi.gaijin
21/10/2009
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"Michael Hudson was one of only a handful of economists to warn of an impending debt crisis, along with our own Steve Keen of course, prior to the initial phase of the GFC."
Isn't being a doomsdayer the bestest fun. All you have todo is repeatedly rant about the sky falling and if you say it for long enough it will inevitably come true. Quick question, which one of them actually predicted the date it would occur? |
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By: ecchi.gaijin
21/10/2009
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"The RBA were raising rates right into the eye of the storm of the initial wave of the GFC"
If the market knows what is going on and the central banks are merely following like a stray dog, then how do explain the GCF actually happening? Surely if the market is in control they would have stopped it from occuring.
Alternatively no one knew when it was going to occur.
I suppose people would prefer a purely speculative central bank than the current "monitor and react" management method? |
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By: billy.holliday@rocketmail.com
21/10/2009
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GoF (Gang of Five :-))
Ang has asked me about inflation, and I have to confess that its a very very hard question. Firstly, trying to get agreemnet on what is meant by "inflation" after you adjust for this, and strip out that etc etc is hard enough.
My understanding is that CPI is still positive while GDP deflator is negative...I guess that means its about zero :-)
More seriously, I agree that deflation is our biggest worry but I also think that in complex systems things just dont unfold, Governments intervene and whatever happens evryone will be doing evrything they can to prevent it. Of course that doesnt mean they will, but my 100% core fundamantal belief is in the desire of individuals to improve their circumstances and therefor would only ever see it as temporary in any event.
I also agree that debt levels are very high and will have limited impact on property prices going forwards, but In Austtralia outr banks are solvent and still lending ( ie endogenous debt is not dead here), unemployment is still low by historical standards, and our export markets are holding up.
Inflation will not be a big issue (we might get back to 2-3% as measured by CPI) and rates are likley to be higher, but we do need to watch for deflation by any measure (but its not here yet!!!)
Thats the end of me doing what I accuse the K-man of doing:predicting !! |
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By: ang101000
20/10/2009
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Hi Billy,
I have all the books written by Bernstein. When I'm free from all my other engagements, I read (and write silly things to annoy the gang (:.
I can't believe, they still arguing about inflation. Last week I promised to write something about it but have given up for now (due to work commitments).
In regards to tiredness; I have been asked to take on more 'responsibilities' at work. Don't worry Billy, I have a reputation (well deserved) of being very-very tough. Of course, patience is not one of my virtues (nobody is perfect).
So what is your view of short term/long term inflation? Add a few lines to the ongoing comments (only if you feel like it).
Billy, keep in touch and stick with the site till December. Watching the market is as interesting as watching the moss grow...
Thanks for the link,
Ang |
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By: mentawaisurf
20/10/2009
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All we have is 'fear' of inflation - not 'real' inflation.
As we've already established, central banks don't lead the market, they merely follow the market (like driving a bus while looking in the rear-view mirror). The RBA were raising rates right into the eye of the storm of the initial wave of the GFC. Likewise, when government bond yields fall, due to a rush back to safety as the bear market resumes, the RBA will be forced into yet another backflip and cut rates through 2010. |
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By: lasty49
20/10/2009
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Inflation ahead in Australia?
Have a read..
http://www.smh.com.au/business/inflation-worries-t riggered-rate-rise-20091020-h5w9.html
The difference with the likes of Keen and Hudson is that these guys are at the control of the levers.
Until Hudson or Keen are at the helm, I listen to those who actually drive the bus and not the passengers. |
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By: mentawaisurf
20/10/2009
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Michael Hudson was one of only a handful of economists to warn of an impending debt crisis, along with our own Steve Keen of course, prior to the initial phase of the GFC.
Hudson was recently on the Business Show warning that Australia has one of the largest housing bubbles in the world and that Australian's have among the highest level of household debt to income in the world. When asked if Australia's housing shortage would prevent a collapse in housing prices he replied that supply and demand and investment mania can only drive prices so high. It is the ability to service the debt that places limits on asset prices and supply shortages do not prevent a housing bubble from bursting. Those who ignored his warnings in the US prior to their housing market collapse would advise that we do not do the same here.
For more frank common sense from Michael Hudson see this interview;
http://www.youtube.com/watch?v=3pwAFohWBL4 |
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By: billy.holliday@rocketmail.com
20/10/2009
10:59 am Yahoo! Profile:
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Ang
Thanks for all the links...all great stuff and should keep us off line for a while! Sounds like you must look after yourself a but better though...chronic tiredness will make you very ineffective.
I love Berstein and it is a real loss that he die recently. "Agaisnt the Gods" is a classic but I also really like a book a co-wrote with Damodaran called "Investment Management". Its not really a text book, more like a really acessible series of essays.
One for the Gang of Five:
Link to a Dan Ariely speech.Its really good.
http://www.ted.com/talks/dan_ariely_asks_are_we_in _control_of_our_own_decisions.html
Billy |
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By: ang101000
19/10/2009
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Lasty,
Drew Gilpin Faust, the president of Harvard, wrote a rather good article about education entitled:
'The University’s Crisis of Purpose'
http://www.nytimes.com/2009/09/06/books/review/Fau st-t.html
I think it is worth a reading. |
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By: ang101000
19/10/2009
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should be; I may ( I'm ready fall off my chair, so tired)
Bye now,
Ang |
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By: ang101000
19/10/2009
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Not if you following Lasty's advise and use the 'dart method' of investing.
I checked the Sunday Sun Herald, guess who is the first with their portfolio return?
That is right; the dartist, sorry Menta, chartist only third place.
I amy have to bake more fortune cookies to find my niche of investment schools. |
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By: mentawaisurf
19/10/2009
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| Ang, it's actually a suckers rally in a suckers market for suckers :) |
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By: ang101000
19/10/2009
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'Shame on them and a waste of their parents money.'
Yes and no. There are two schools of thought;
1) spend your money on cosmetic surgery, cars (MG), clothes, castles, (ie be a James Bond) _ at least people can see your success.
2) spend on education (nobody can tell) and be a nerd.
Which option appeals more to you? |
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By: lasty49
19/10/2009
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Ang,
haha... The Harvard dudes have connections and still get it wrong.. Shame on them and a waste of their parents money.. |
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By: ang101000
19/10/2009
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Hi Lasty,
I keep telling you it is a suckers market. The people at Harvard are humans too, of course they make mistakes.
I prefer Berkley any day. |
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By: ang101000
19/10/2009
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Hiee Billy,
here are the other two just for you (in PDF same place ifile.it);
http://ifile.it/ayegpzo
http://ifile.it/1iwgs05 (same in long)
http://ifile.it/1iwgs05/Chaos%20and%20Fractals%20N ew%20Frontiers%20of%20Science.pdf
Billy,
So sorry for being grumpy. I'll work every day this week from early morning (8-ish till 6-7ish) and I am not used to long hours and concentration....(Bummer, I am blond).
I'm so tired could sleep on my computer keyboard and wake up with letters on my forehead...
Anyway, I am happy to send you any files you want. (: |
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