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Joseph Stiglitz: "The Market Is Irrationally Exuberant"
The former chairman of the Council of Economic Advisors, Joseph Stiglitz, simplifies the current market situation quite candidly: "Irrational Exuberance." But just like the markets ignored the first iteration of this phrase so many years ago, so they will not care about this current warning, until it too late.
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I thought the spinning Cc's were awesome...I think I stared at it for an hour or more...kinda lost track of time after a while.
More like pumped up by GS... upgrading the large banks today, ROFL.... yes, backstopped by the US taxpayer no doubt so they can take any amount of risky plays they like
As regards the US empire, it is already finished. Very few nations have any respect for the US financially or politically. The US is conducting its affairs just like the Emperor who had no clothes. They are bankrupt financially and intellectually but they still believe that they are ruling the world. Don’t get me wrong, I love America and the American people but their country is in dire straits once the current crisis has settled, and it could take at least 20 years as I said in my Newsletter “The Dark Years Are Here”. It could also take longer. Remember that the Dark Ages lasted for 500 years.
- Egon von Greyerz, Managing Partner of Matterhorn Asset Management AG in Switzerland
http://www.mmnews.de/index.php/200910043905/Gold-Silber/Gold-vs.-Paper-M...
Remember the days? The song remains the same. Reminds me of a toy from years go called a close and play. Same same associate. Cheers
http://www.funrestarea.com/pages/snl_robert_deniro.shtml
are you chumbawamba?
Could someone please tell me where increased corporate revenues will come from with "official" unemployment at 9.8% and U-6 over 17% and rising? I thought the consumer was 70% of the economy.
It's my understanding that long term growth comes from increased revenue. Am I wrong? Sure, short term pops in corporate profitability can come from cost cutting. But there's only so much you can cut. And increased worker productivity will hit a wall as well at some point.
Eventually someone must spend some money somewhere, right? Or have we jumped the shark and we're now in The Twilight Zone?
If so, maybe I can finally meet Rod Serling in person.
All the way to the Outer Limits CD
Multinationals earn 50% of their profits oversees, a lower dollar and return to growth in the emerging markets improves the odds for increases in corporate profits no matter if the US economy recovers or not.
That's not necessarily true. In your perfect world, maybe.
I am Chumbawamba.
Chumbawamba, all we have to do is look at how cash for clunkers worked to see that process in action.
Wow, somebody still believes in decoupling.
US Multinationals gain 50% of their profits from oversees. A reduction in the dollar and a stabilized world economy vast improve their ability to increase the E to P/E no matter when the US economy recovers.
Stabilized world economy? Which world might that be? I happen to reside in that supposed basket of explosive growth, Asia, and have been here for more than two decades. TV talking heads can spout off all they want about recovery out here, but I can still fire off an AK-47 in just about any store in Japan, Hong Kong or Thailand and only break the noise laws. As for China, all they have done with their stimulus is make reckless loans to property developers, factory builders, and stock market speculators. They already had a housing and office space glut, as well as excess manufacturing capacity. Once that stimulus runs its course, it only gets uglier. And while I have finally come to place more trust in Chinese Government statistics than American ones, neither issuer would meet the requirements of Diogenes.
So that explains the 100-1000% increase in price for the sickest, most debt ridden stocks/companies on the NYSE/NASDAQ!?!?!!?
Dufus.
"irrational", yes most definitely
"exhuberance", a massive understatement!
“Exuberance” sort of depends, of course, on who Summers means as “we.” If it’s Goldman Sachs who’s exuberant, then, yes--broke in October of ’08 and flying high by October of ’09 as the fifth largest bank in the United States calls for exuberance. Thanks to guaranteed taxpayer bailout via the Federal Reserve that, according to the New York Times, signaled in ’08 “that it will not let Goldman or Morgan fail,” GS can afford to be “irrationally exuberant.”
During that same time, California legislator Jim Costa (D-Hanford) says unemployment of taxpayers in his district has reached 35 to 45 percent, while Goldman assets--now a massive bank--have reached $890 billion. And GS may reap another $1bn from a CIT bankruptcy.
And now, wanting to return to business as usual and not be subject either to limits on the amount of debt it can take on under a bank charter (the debt-to-equity ratio bomb that caused this mess) or on executive pay, Reuters says, “Some investors believe Goldman Sachs Group Inc may try to shed its commercial banking charter to sidestep U.S. government efforts to rein in exorbitant Wall Street pay…”
It should never be forgotten that the The NYFed, that makes all major Fed decisions and controls the “people’s trust” in AIG and is managing the $1.7 trillion of the Fed’s emergency lending programs, is Goldman Sachs. And it is not subject to federal restrictions.
Goldman was recipient of more than $8 billion of AIG’s bailout funds: AIG CEO Edward Liddy was on the board of GS when he became CEO of AIG.
As for Larry Summers…
Timothy Geithner, formerly of Goldman Sachs, was president of the NYFed when selected to be current Secretary of the Treasury. He was Under Secretary of the Treasury for International Affairs under then Treasury Secretaries Robert Rubin (26 years at Goldman Sachs) and Lawrence Summers, consultant to Goldman Sachs.
Current NYFed President William Dudley, replacing former Goldman Sachs CEO Stephen Friedmanwho sat on the Goldman Sachs Board while NYFed chairman, worked until 2007 as Goldman Sachs’s chief economist.
And it was former Treasury Secretary Larry Summers, chief economist at the World Bank in 1990, who passed the Russian "cookie plate to Goldman Sachs," in a Russian money-laundering scheme where billions of U.S. taxpayer dollars were transferred to the International Monetary Fund and then filtered through a small number of well-placed people - only a few dozen, in Russia, New York, Washington, and Boston - who laundered the money into private accounts on Wall Street and into the coffers of some of the world's major banks. For a story on the House Banking Committee hearings (Sept. 21st-22nd 2001) here is the link:
http://www.apfn.org/APFN/taxpayer.htm
great post JR.
indeed
"It should never be forgotten that the The NYFed, that makes all major Fed decisions and controls the “people’s trust” in AIG and is managing the $1.7 trillion of the Fed’s emergency lending programs, is Goldman Sachs."
don't forget great morgan's ghost & queen jamieD
funny how the hearing was 10 days after 9.11.01, ain't it?
reminds us of that rumsfeld speech on 9.10 where he divulged $2.3T missing from the Pentagon:
http://www.youtube.com/watch?v=3kpWqdPMjmo
{things that make you go hmmmmmmmmm}
be interesting to read the transcript of that hearing, especially since fat larry & tiny tim still seem to be using the old playbook tried & true.
public information yes?
OK...unrelated to this...but fuckin' GOLD is ROCKETING today! And it is DEFINITELY NOT irrationally exuberant. In fact, it is THE most undervalued asset on the planet right now.
+14 today. Fuck yeah. Someone is loading up the galleon.
Gold/Guns/Garden, baby!
I am Chumbawamba.
What's your guess when the market corrects/plunges. Will gold go up more, or decrease?
Go up more.
If you think a "plunge" is kicking off then <long gold & short silver> is the play.
That is what happens when you tank the dollar to prevent another day of losses on the stock market.
http://www.bloomberg.com/apps/quote?ticker=DXY%3AIND
At some point soon, the price of gold relatively to the USD will become irrelevant, what will be relevant is the purchasing power of gold, as the USD is thrown on the scrap heap of failed fiat currencies.
to all the non-gloomberg junkies:
any1 know of an online tracking of GLD v. SDR?
was tracking for awhile, but the only site i knew of went down
(surprise, surprise)
it's an interesting one to watch...
I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought.
The most valuable commodity I know of is information
They are not irrationally exuberant about the price of a carbon credit. Money talks bullshit walks. Just my ten cents.
Carbon Credit Market Imploding: CCX now 10 cents a tonne
http://wattsupwiththat.com/2009/10/01/carbon-credit-market-imploding-ccx-now-10-cents-a-tonne/
interesting link Michael especially when considering GW's 1984 contribution and wondering which bodies the boys are looking to climb over to dig out of their latest ditch.
betya Crazy Al got out at $7 and is probably looking to get in again.
This is a pretty good commentary too.
http://www.atimes.com/atimes/Global_Economy/KJ06Dj04.html
Stiglitz maybe a smart economist but as far as I see he doesn't understand jack about the markets. At the IMF he was a disaster.Tell me one good call made by this guy....
Long-term treasuries are keeping a bid in spite of the market ramp. Obviously the UST market isn't buying the irrational exuberance.
If this recovery continues much longer were all going to be in deep yogart.
Gold and Silver I rockon
Joseph Stiglitz must be read in context and over the decades you will see how he ticks.
He is a socialist tick with only clever verbiage as in enough rope to tie himself permanently to public coffers. Unrepentant and adding zero value as always in his wandering quest to nirvana of his own devise funded by others. Fundamentals in a Political Economy are that -Political - at your peril. Realy, over the many years I like him not, but read him only to see how devoid they are.
Stiglitz is a great economist but I wouldn't have him manage my money. Love his theoretical economic papers and I think he should be part of the president's economic advisors (if he isn't already one of them).
There will always be gamblers among us. The question is how many and how much.
as an aside...how fucking dumb are MS not to bet the farm like GS did with all the free money they got ?
instead they choose to "focus on retail" who are tapped out with negative to negligible net worth and no particular propensity to buy shares it would seem
nomura and macquarie launching a new aggressive strategy into the overbanked 0 growth market that is the US....ha !