Keep in mind that Pimpco always, ALWAYS talks its book. It is a large player who attempts to move the market and may not necessarily actually be betting the way its statements make it seem (Did Pimpco say it was actually long or short the dollar?)
When discussing inflation and the dollar, always also keep in mind that there is a third side to the triangle, and that is -- other currencies. For example, here is a link to an updated graph of Oil in dollar terms and also euro terms:
You can see that Oil has moved up in euro terms as well, albeit not so much as the dollar. Simply put, every government in the planet is engaged in competitive devaluation of their currencies: as to stuff, their currencies will devalue, but as among currencies themselves, not so much.
it is astonishing. Between last summer and the end of this year the U.S. Treasury will expand its marketable debt liabilities by $2.5 trillion--an amount equal to more than 20% of all equities in America, an amount equal to 8% of all traded dollar-denominated securities. And yet the market has swallowed it all without a burp...
....
Last fall I had a large number of conversations with bond market observers who said things like: "Interest rates are low now, but look at how much the Treasury is going to borrow over the next eighteen months. When those borrowings hit the market, Treasury bond prices are going to fall bigtime and interest rates rise. At the moment bond prices are high and interest rates are low, but that's only because finance firms' top management aren't letting traders off their leash to short Treasuries. The traders all expect Treasury prices to fall and interest rates to rise. Mark my words: when the Treasury tries to sell all those bonds next year, it won't find buyers at anything near current prices. Where will all the extra savings to buy those bonds come from?..."
....
Yet: Hasn't happened. Hasn't happened at all:
....
I knew that this was going to be what would happen--or, rather, I strongly believed that this was going to be what would happen--and all because I had read John Hicks (1937).
Let me give you the Hicksian argument about what happens in a financial crisis--a sudden flight to safety that greatly raises interest rate spreads, and as a result diminishes firms' desires to sell bonds to raise capital for expansion and at the same time leads individuals to wish to save more and spend less on consumer goods as they, too, try to hunker down.
In Hicks's model, the immediate consequence is an excess demand for (safe) bonds in the hands of investment banks: bond prices rise, and interest rates falls. As interest rates fall, (a) firms see that they can get capital on more attractive terms adn so seek to issue more bonds, and (b) households see the interest rate they can get on their savings fall, and so lose some of their desire to save. The market heads toward equilibrium. But as the market heads toward equilibrium, something else happens as well: the fall in interest rates and the rise in savings is accompanied by a greater desire on the part of households and businesses to hold more of their wealth safely--in pure cash. And so the speed with which cash turns over in the economy, the velocity of money, falls. And as the velocity of money falls, total spending falls, and workers are fired, and as workers are fired and lose their incomes their saving goes from positive to negative.
....
In normal times, the correct policy response is for the Federal Reserve to inject more money into the economy....
A little thought, however, will lead us to the conclusion that such open-market operations may fail. In them, the Federal Reserve is buying bonds, shrinking the supply of bonds out there--and thus pushing up their price and pushing down interest rates. For each amount that the Federal Reserve expands the money stock, therefore, it puts downward pressure on interest rates and thus on monetary velocity. In the limit where interest rates are so low that people don't really see a difference between cash and short-term government bonds like Treasury bills, open-market operations have no effect because they simply swap one zero-yielding government asset for another.
It is in this situation that a government deficit can be useful. A government deficit means that the government is printing and issuing a lot of bonds at exactly the same moment that private investors are looking for a safe asset to hold. As these bonds hit the market, people who otherwise would have socked their money away in cash--thus diminishing monetary velocity and slowing spending--buy the bonds instead. A large and timely government deficit thus short-circuits the adjustment mechanism, and avoids the collapse in monetary velocity that was the source of all the trouble.
Thus a Hicksian analysis last fall would have said--did say--"don't worry: a large flood of government bond issues won't push up interest rates; it will stem a collapse in monetary velocity instead as people who want to hold their wealth in safe form and would otherwise be holding money find themselves happy holding government bonds instead."
If China dumps U.S. debt, implies interest rates must rise to monetize the debt further. but, that said, I just wrote up something which implies in spite of this beyond belief increase in the monetary base/money supply, we still have deflationary pressures on the economy....
so does China trump U.S. economic conditions on the devaluation of the dollar?
I don't have any answer, I'm digging around for some.
Go down memory lane and think back to your sophomore undergraduate class introducing a delta function.....
how many got a "F" on that test? Don't even ask them to do a LaPlace Transform on it....just the concept of delta t blew their minds.
I know it is beyond belief difficult to translate concepts into English which are built upon mathematical concepts...
which is precisely how these models were even used in finance...
most people just cannot grasp them, hence they said "fine, sure thing, all good" and used them. Supposedly they created black box modeling where some analyst just plugs in the numbers and gets out an answer...very few even know what is inside the box....and how those models are mathematically invalid, based on the characteristics of the data and system itself.
Sorry about the MimeTeX -- seemed like overkill for simple subscripts. But yeah, maybe this was one of those "if you know the material this is too simple; if you don't this won't be useful" things. I was trying to keep things in English instead of math, and to provide some intuitive insight rather than derivations.
Re: delta function. Actually I had a section on that, digressed into a long discussion about functions vs distributions and cut it out. I seem to have cut out the definition as well -- oops. Fortunately any web trawl will bring up definition and use.
Here's the thing though. A model prediction with the wrong mechanism can match the data over a sufficiently limited (aka cherry-picked) domain. Attempting to extend the prediction beyond that domain is foolhardy.
There are two other wrinkles. First is that high (or more specifically variable) volatility means that the variance in the distribution is not constant -- it becomes "heteroskedastic" -- and if the volatility feeds on itself it becomes conditionally autoregressively heteroskedastic. Whether the distributions remain Gaussian under those circumstances is not clear to me.
Second thing is really a suspicion: that a model need not be accurate, but if the market is looking for an excuse to make money and the model provides it, it will be used until the failures become too great to overlook -- which may take a while since markets overshoot. I suspect -- but need to show -- that's what happened with Gaussian Copula.
Watching the stock market really is a good reinforcement of the fact that they are just protecting their profits. If the public option wasn't going to have a cost reducing effect then healthcare companies wouldn't really care about it. But the fact that they do care so very very much is testament to the fact that costs, and therefore their profits, would be reduced with a public option.
The defective Chinese drywall debacle has been making news for months now, with homeowners plagued by sulfur fumes that smell like “rotten eggs” and cause air conditioning coils to corrode. Residents complain of sinus and respiratory ailments, eye and skin irritation, persistent runny or bloody noses, headaches, and asthma. Some situations were so severe that residents had to vacate their homes. In some cases, victims have been harassed by builders into signing unfair, one-side remediation agreements. The issues surrounding defective Chinese drywall are confusing and worrisome. Here is a good blog that has been providing emerging and valuable information on the problems: www.chinese-drywall-answers.com
These FDIC deals were and still are despite this "clawback" very sweet to buyers - assets purchased at a deep discount and FDIC guaranteeing a good portion of any losses. That is why private equity firms want in on these deals. All upside very little downside.
FDIC knows eventually it will have to assume some the losses but FDIC is broke so we, the taxpayer, will be assuming the losses. So in an effort to avoid "political fallout" it has introduced a new provision, at least in the most recent deal with the sale of Colonial bank assets to BB&T.
If losses on Colonial assets are less than $5 billion, BB&T has agreed to pay some money to FDIC.
In case you are wondering about the downside:
FDIC agreed to reimburse BB&T for 80% of the first $5 billion in losses and 95% of further losses up to a ceiling of $14.3 billion
Oh yeah, BTW, BB&T bought the assets for $21.8 billion.
Shareholder based or not. Nationalization here in the good ol' US of A really means "how can I get taxpayer money to help my friends' pockets who then fill mine up." I hate to be the cynic here, but that seems to be the case everytime in the past decade. You will continue to see the same mess appear over and over again so long as you have an accomidating Federal Reserve that is about as independent as old JP Morgan was a Communist.
Secondly, and forgive me ManfromMiddletown because I think this is really the first time I'm disagreeing with you here, every institution is shareholder based. It just depends on who the majority shareholder is. I have no problem treating banks like public utilities, indeed reintroduce Glass Steagal as well.
How would a "centralized" Bank of the United States (our third, I believe) be any different than the Federal Reserve? You'll still end up with fiat money. And that is one of the biggest problems here. So long as you have fractional reserve banking and money not backed by anything, you will have the same problems. It won't matter if the shareholder is Uncle Sam or Goldman Sachs or individual investors, the temptation for cheap loans and mal investments will still be there until you fix the two ills I just mentioned.
The European banks aren't as altruistic as you think they are. Indeed, if I may, my good man, point you in the direction if Islamic Finance. Everything from social obligations to long term profits are just about basic requirements under Islamic banking. Under such a system, even on a loan for a car, it is forbidden for the bank (actually there are cases where this isn't true and they do just rewording it, to be completely honest) to even collect interest. You don't have to change your religion (if you have one). There are many great books on it. And no, incase you're wondering, I'm not a Muslim, but I am an econ nerd like the rest of you on this site and study alternative systems as well.
I'd recommend Muhammad Ayub's book for starters, or Mahmoud El-Gamal's book (I have this on the kindle, infact, start with this one). There are other religious based finance as well in operation now or in the past. The general themes have been:
1)Controled usury, that is nothing excessive (though that term is subjective).
2)Established benefit for the user beyond luxury
3)Investment for some sort of production
4)Scrutiny based on a moral code or religious text
5)Dissuation towards the development of a consumer culture
Once more, I'm not advocating theocracy or something. I know Seebert has hinted on a similar topic. You can strip away, for example, #4 on that list above. The early 18th Century, just prior to the Revolution, you had a similar financial ethos in many of the colonies. Also, if you can, find the book "The Merchant Class of Medival London", by Sylvia Thrupp.
--------------------------------------------
It is no wonder they are out of money. Blair seemed to think early on that she should be leading the mortgage reform efforts and used FDIC funds to modify mortgages. I would like to know how much she wasted on this effort and why she didn't have the brains to realize that it was just beginning it was going to be hard to keep the FDIC in the green. Another example of a incompetence.
Did CIT get bailed out by the fed or not? There is no coverage of it at all but it appears that the fed did come to the rescue with tax payer dollars. I guess CIT execs will be getting million dollar bonuses next year...
you didn't use the mimetex that is available on the site! ;(
Well, sure it's ok for EP, we can cover a variety of topics here and if they cannot understand your critique, oh well, they don't have to read it. Would be interesting if we got some structured finance people here.
What was that phrase? In 100 years who cares because now we are all dead? (in trying to obtain a stationary process via time window segmentation).
I don't know if this is econometric, but more structured finance where they are trying to use modeling where, as you point out, their assumptions are quite often not valid.
I don't know if anyone could follow you though. I'd say please define a delta function to explain the time dependencies and system memory issue...
but honestly if they got that far I think they know what was is.
I think we need to cross post this in "geeks wonder what are these structured finance dudes thinking" somewhere.
I think Mr Oak makes some interesting points...I wrote a post today at http://realestateconsumernews.com/real-estate-market/new-home-constructi... about the new home stats and pointed out that something to remember is all the numbers above are “seasonally adjusted” annual rates and the year over year comparisons are just comparing the numbers for July 2009 versus July 2008. Another way to take a look at where things stand would simply be the year to date data, actual numbers and not seasonally adjusted, compared to last years ytd numbers at this same time. I think this may give a little better comparison so those numbers are below:
Through July 2009 there have been 248,900 permits issued for new homes compared with 387,400 this time last year for a decline of over 35%.
Through July 2009 there have been 250,400 new homes started compared with 415,700 this time last year for a decline of 39.8%.
There have been 285,400 new homes completed through July 2009, compared with 479,500 this time last year for a decline of 40.5%
So, while the current trend, based upon seasonally adjusted numbers is upward, as you can see the new home market so far this year is way off from last year and last year was not good. Having said this, even though I feel for everyone affected by the downturn in construction, from the standpoint of the real estate market, I think this is necessary. We have an excessive inventory of new and existing homes on the market so there is no point adding to it substantially at this point. We need to let the sales numbers continue to increase, get the foreclosure rate out of high gear and let the inventory fall to a number that is more appropriate for the market demand. Then, and only then, do I think we want to see significant increases in new home construction.
I hate to say that I was shocked to read your post title here.
Shocked because I should have seen this coming.
I don't know if you've ever read any of the "Varieties of Capitalism" literature that deals with the institutional differences between the advanced industrial economies.
One of the big advantages that European industry has is that finance capital is bank based, not shareholder based. And banks are much more heavily regulated, they are treated like public utilities, and managers have social obligations under the law. A major consequence of this is that industrial investment in Europe is made with a long term view on creating value, not immediate profits.
It seems that the iron is hot for the US government to strike now by nationalizing these underwater banks and reshaping the national finance system. With a centralized Bank of the United States that handles interbank transfers and major cross-state loans, and a number of locally based in which equity is held by a mix of local governments, depositors, and a greatly limited shareholder base that must fall below a 1/3 threshold.
Mandate the banks to make handle loans and their investment function on a local basis, so that they must receive approval from the national Bank of the United States in order to make a loan outside of the geographic area that they are commissioned to operate in.
They are one of the most "underwater" TARP recipients from the stress tests. Just send them to liquidation, recapture the TARP funds and then redistribute among some small banks, who through no fault of their own are going under and mainly because the middle class is going under with record foreclosures and loans in distress.
Seriously, Citigroup also lobbied for and won so much bad policy which has hurt the economy...if the entire thing burned to the ground I'll bring the marshmallows.
So much for our previous analysis that the FDIC would not run out of money from the Great Depression numbers!
I think that was the opinion of Phil Gramm, husband of the former CFTC Chair Wendy Gramm. So we can possibly hope the reason commodity prices are inflated is psychological, and we'll feel better in the morning. If I am not mistaken, he once held the senate seat that was held by Ralph Yarborough, who is turning over in this grave.
Sell you a t-shirt with a political slogan, mister?
Frank T.
A lot of the credit that never should have been created is being extinguished. Not sure how big the number is, but this is demand that is not coming back. Credit limits lowered -- and wage garnishment for some unsecured debtors. Not a good outlook.
Frank T.
M2 is up 10%, the monetary base 100%, we're deleveraging by feeding the denominator. What a deal. We'd better get that back with interest.
Also, was Buffett really calling for more taxes in that op-ed? People are going to start asking about his birth certificate pretty soon.
Keep in mind that Pimpco always, ALWAYS talks its book. It is a large player who attempts to move the market and may not necessarily actually be betting the way its statements make it seem (Did Pimpco say it was actually long or short the dollar?)
When discussing inflation and the dollar, always also keep in mind that there is a third side to the triangle, and that is -- other currencies. For example, here is a link to an updated graph of Oil in dollar terms and also euro terms:
http://allfinancialmatters.com/wp-content/uploads/2009/08/crudevseuro.gif
You can see that Oil has moved up in euro terms as well, albeit not so much as the dollar. Simply put, every government in the planet is engaged in competitive devaluation of their currencies: as to stuff, their currencies will devalue, but as among currencies themselves, not so much.
Brad De Long points out that:
QED
If China dumps U.S. debt, implies interest rates must rise to monetize the debt further. but, that said, I just wrote up something which implies in spite of this beyond belief increase in the monetary base/money supply, we still have deflationary pressures on the economy....
so does China trump U.S. economic conditions on the devaluation of the dollar?
I don't have any answer, I'm digging around for some.
Go down memory lane and think back to your sophomore undergraduate class introducing a delta function.....
how many got a "F" on that test? Don't even ask them to do a LaPlace Transform on it....just the concept of delta t blew their minds.
I know it is beyond belief difficult to translate concepts into English which are built upon mathematical concepts...
which is precisely how these models were even used in finance...
most people just cannot grasp them, hence they said "fine, sure thing, all good" and used them. Supposedly they created black box modeling where some analyst just plugs in the numbers and gets out an answer...very few even know what is inside the box....and how those models are mathematically invalid, based on the characteristics of the data and system itself.
what these dudes are thinking" section.
Sorry about the MimeTeX -- seemed like overkill for simple subscripts. But yeah, maybe this was one of those "if you know the material this is too simple; if you don't this won't be useful" things. I was trying to keep things in English instead of math, and to provide some intuitive insight rather than derivations.
Re: delta function. Actually I had a section on that, digressed into a long discussion about functions vs distributions and cut it out. I seem to have cut out the definition as well -- oops. Fortunately any web trawl will bring up definition and use.
are the stochastic variable that's correct.
Here's the thing though. A model prediction with the wrong mechanism can match the data over a sufficiently limited (aka cherry-picked) domain. Attempting to extend the prediction beyond that domain is foolhardy.
There are two other wrinkles. First is that high (or more specifically variable) volatility means that the variance in the distribution is not constant -- it becomes "heteroskedastic" -- and if the volatility feeds on itself it becomes conditionally autoregressively heteroskedastic. Whether the distributions remain Gaussian under those circumstances is not clear to me.
Second thing is really a suspicion: that a model need not be accurate, but if the market is looking for an excuse to make money and the model provides it, it will be used until the failures become too great to overlook -- which may take a while since markets overshoot. I suspect -- but need to show -- that's what happened with Gaussian Copula.
Watching the stock market really is a good reinforcement of the fact that they are just protecting their profits. If the public option wasn't going to have a cost reducing effect then healthcare companies wouldn't really care about it. But the fact that they do care so very very much is testament to the fact that costs, and therefore their profits, would be reduced with a public option.
The defective Chinese drywall debacle has been making news for months now, with homeowners plagued by sulfur fumes that smell like “rotten eggs” and cause air conditioning coils to corrode. Residents complain of sinus and respiratory ailments, eye and skin irritation, persistent runny or bloody noses, headaches, and asthma. Some situations were so severe that residents had to vacate their homes. In some cases, victims have been harassed by builders into signing unfair, one-side remediation agreements. The issues surrounding defective Chinese drywall are confusing and worrisome. Here is a good blog that has been providing emerging and valuable information on the problems: www.chinese-drywall-answers.com
These FDIC deals were and still are despite this "clawback" very sweet to buyers - assets purchased at a deep discount and FDIC guaranteeing a good portion of any losses. That is why private equity firms want in on these deals. All upside very little downside.
FDIC knows eventually it will have to assume some the losses but FDIC is broke so we, the taxpayer, will be assuming the losses. So in an effort to avoid "political fallout" it has introduced a new provision, at least in the most recent deal with the sale of Colonial bank assets to BB&T.
In case you are wondering about the downside:
Oh yeah, BTW, BB&T bought the assets for $21.8 billion.
FT link
RebelCapitalist.com - Financial Information for the Rest of Us.
A Markov model will have problems modeling huge swings in bond yields.
RebelCapitalist.com - Financial Information for the Rest of Us.
Shareholder based or not. Nationalization here in the good ol' US of A really means "how can I get taxpayer money to help my friends' pockets who then fill mine up." I hate to be the cynic here, but that seems to be the case everytime in the past decade. You will continue to see the same mess appear over and over again so long as you have an accomidating Federal Reserve that is about as independent as old JP Morgan was a Communist.
Secondly, and forgive me ManfromMiddletown because I think this is really the first time I'm disagreeing with you here, every institution is shareholder based. It just depends on who the majority shareholder is. I have no problem treating banks like public utilities, indeed reintroduce Glass Steagal as well.
How would a "centralized" Bank of the United States (our third, I believe) be any different than the Federal Reserve? You'll still end up with fiat money. And that is one of the biggest problems here. So long as you have fractional reserve banking and money not backed by anything, you will have the same problems. It won't matter if the shareholder is Uncle Sam or Goldman Sachs or individual investors, the temptation for cheap loans and mal investments will still be there until you fix the two ills I just mentioned.
The European banks aren't as altruistic as you think they are. Indeed, if I may, my good man, point you in the direction if Islamic Finance. Everything from social obligations to long term profits are just about basic requirements under Islamic banking. Under such a system, even on a loan for a car, it is forbidden for the bank (actually there are cases where this isn't true and they do just rewording it, to be completely honest) to even collect interest. You don't have to change your religion (if you have one). There are many great books on it. And no, incase you're wondering, I'm not a Muslim, but I am an econ nerd like the rest of you on this site and study alternative systems as well.
I'd recommend Muhammad Ayub's book for starters, or Mahmoud El-Gamal's book (I have this on the kindle, infact, start with this one). There are other religious based finance as well in operation now or in the past. The general themes have been:
1)Controled usury, that is nothing excessive (though that term is subjective).
2)Established benefit for the user beyond luxury
3)Investment for some sort of production
4)Scrutiny based on a moral code or religious text
5)Dissuation towards the development of a consumer culture
Once more, I'm not advocating theocracy or something. I know Seebert has hinted on a similar topic. You can strip away, for example, #4 on that list above. The early 18th Century, just prior to the Revolution, you had a similar financial ethos in many of the colonies. Also, if you can, find the book "The Merchant Class of Medival London", by Sylvia Thrupp.
--------------------------------------------
www.venomopolis.com
It is no wonder they are out of money. Blair seemed to think early on that she should be leading the mortgage reform efforts and used FDIC funds to modify mortgages. I would like to know how much she wasted on this effort and why she didn't have the brains to realize that it was just beginning it was going to be hard to keep the FDIC in the green. Another example of a incompetence.
Did CIT get bailed out by the fed or not? There is no coverage of it at all but it appears that the fed did come to the rescue with tax payer dollars. I guess CIT execs will be getting million dollar bonuses next year...
you didn't use the mimetex that is available on the site! ;(
Well, sure it's ok for EP, we can cover a variety of topics here and if they cannot understand your critique, oh well, they don't have to read it. Would be interesting if we got some structured finance people here.
What was that phrase? In 100 years who cares because now we are all dead? (in trying to obtain a stationary process via time window segmentation).
I don't know if this is econometric, but more structured finance where they are trying to use modeling where, as you point out, their assumptions are quite often not valid.
I don't know if anyone could follow you though. I'd say please define a delta function to explain the time dependencies and system memory issue...
but honestly if they got that far I think they know what was is.
I think we need to cross post this in "geeks wonder what are these structured finance dudes thinking" somewhere.
I think Mr Oak makes some interesting points...I wrote a post today at http://realestateconsumernews.com/real-estate-market/new-home-constructi... about the new home stats and pointed out that something to remember is all the numbers above are “seasonally adjusted” annual rates and the year over year comparisons are just comparing the numbers for July 2009 versus July 2008. Another way to take a look at where things stand would simply be the year to date data, actual numbers and not seasonally adjusted, compared to last years ytd numbers at this same time. I think this may give a little better comparison so those numbers are below:
Through July 2009 there have been 248,900 permits issued for new homes compared with 387,400 this time last year for a decline of over 35%.
Through July 2009 there have been 250,400 new homes started compared with 415,700 this time last year for a decline of 39.8%.
There have been 285,400 new homes completed through July 2009, compared with 479,500 this time last year for a decline of 40.5%
So, while the current trend, based upon seasonally adjusted numbers is upward, as you can see the new home market so far this year is way off from last year and last year was not good. Having said this, even though I feel for everyone affected by the downturn in construction, from the standpoint of the real estate market, I think this is necessary. We have an excessive inventory of new and existing homes on the market so there is no point adding to it substantially at this point. We need to let the sales numbers continue to increase, get the foreclosure rate out of high gear and let the inventory fall to a number that is more appropriate for the market demand. Then, and only then, do I think we want to see significant increases in new home construction.
I hate to say that I was shocked to read your post title here.
Shocked because I should have seen this coming.
I don't know if you've ever read any of the "Varieties of Capitalism" literature that deals with the institutional differences between the advanced industrial economies.
One of the big advantages that European industry has is that finance capital is bank based, not shareholder based. And banks are much more heavily regulated, they are treated like public utilities, and managers have social obligations under the law. A major consequence of this is that industrial investment in Europe is made with a long term view on creating value, not immediate profits.
It seems that the iron is hot for the US government to strike now by nationalizing these underwater banks and reshaping the national finance system. With a centralized Bank of the United States that handles interbank transfers and major cross-state loans, and a number of locally based in which equity is held by a mix of local governments, depositors, and a greatly limited shareholder base that must fall below a 1/3 threshold.
Mandate the banks to make handle loans and their investment function on a local basis, so that they must receive approval from the national Bank of the United States in order to make a loan outside of the geographic area that they are commissioned to operate in.
As are the comments. But why is the stock market the arbiter of everything? Why this Divine Right of Capital?
(That would be a good addition to your "Reads" tab, IMO)
It appears Minyanville is picking up our news feed. (that's good!)
They are one of the most "underwater" TARP recipients from the stress tests. Just send them to liquidation, recapture the TARP funds and then redistribute among some small banks, who through no fault of their own are going under and mainly because the middle class is going under with record foreclosures and loans in distress.
Seriously, Citigroup also lobbied for and won so much bad policy which has hurt the economy...if the entire thing burned to the ground I'll bring the marshmallows.
So much for our previous analysis that the FDIC would not run out of money from the Great Depression numbers!
I think that was the opinion of Phil Gramm, husband of the former CFTC Chair Wendy Gramm. So we can possibly hope the reason commodity prices are inflated is psychological, and we'll feel better in the morning. If I am not mistaken, he once held the senate seat that was held by Ralph Yarborough, who is turning over in this grave.
Sell you a t-shirt with a political slogan, mister?
Frank T.
A lot of the credit that never should have been created is being extinguished. Not sure how big the number is, but this is demand that is not coming back. Credit limits lowered -- and wage garnishment for some unsecured debtors. Not a good outlook.
Frank T.
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