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Van Hoisington Q4 Review And Outlook
Today we present yet another analysis of the complete failure of the QE framework, this time from Van Hoisington: "From the standpoint of most households, the home is the main component of wealth, not stock market investments. The continuing drop in housing prices serves to underscore the ill advised and likely temporary drop in the personal saving rate that was so critical to economic performance late last year." The problem is that with even the Fed itself confirming that it no longer cares to even attempt to reflate housing, and merely is seeking the make the wealthiest even wealthier, why bother? Why even speculate what the theoretical framework behind the Fed's actions and what proper policy should be, when Bernanke has now made it clear that the Fed cares not one bit about its two key mandates, both of which have been made irrelevant to its only real prerogative: inflating stock prices to as high levels as possible, asset bubbles be damned. Next month we will bring you the latest all time record high number of Americans on food stamps. And the same for the month after, and after, until eventually we get a replay of the Tunisian (French citizenship) candidate situation in our own country.
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Clearly savings rates must go high and stay high since returns to investment will be zero, at best. You only keep what you put away...and are allowed to keep is the new personal finance slogan.
That's the bottom line: Japanification in a flashy, trashy USA kinda way.
At least Van and Lacey are consistent. Still calling for lower yields on Treasury bonds.
I tend to agree, but believe the way there is going to be scary and messy.
Not as scary and messy as you might
think. It is already obvious the TBTFs
have no loan growth and adding debt
has always been the way out before.
We aren't gonna make it this time.
Look at JPM's earnings yesterday.Loan
loss reserves went back in as a booster masking a lame to weak
top line. Pushing on a friggin string.
Probably forever. Think nobody knows this in
Washington and New York? Think again.
If they really wanted to help housing they would drive mortgage rates to 1% or lower.......but your right they really don't want to help everybody.....just the select few.
Truly Ben has no real balls otherwise
he would announce a target rate on the
10 year of 2.5% and enforce it
with QE. He'd rather feed the banks than fix the
economy.
That wouldn't help; it would create an even bigger problem down the road unless they can keep rates at 1% for eternity. The only way to deal with the inventory is real price discovery under sustainable economic and monetary conditions.
I'm shocked that VH is bullish on long bonds and strips!
<sarcasm off>
Want to see an economic recovery? Bring back our industry, Remember? The ones you chased away with all of this "globalization" horseshit.
Instead of allowing our companies to offshore all productive work to slave wage workers in China and India, place a tarriff on them equal to the delta in wages paid to slaves, and the complete lack of environmental oversight whatsoever. I'm sure to get whacked with a record number of 'junks' on this but.....fuck it.
Why do people junk this? Seriously, i'm stupid, explain why please.
I dont junk, useless but...
Why? Because it is so ridiculous it cant be real.
Globalization horseshit? The US has been fathered by globalization. What the guy is lamenting is the end of globalization, not globalization itself.
Outsourcing? Buddy, the US has worked on making outsourcing the only way to deal with certain issues. The US has wanted outsourcing with all their hearts and have succeeded in getting it.
The whole national territory is shaped by the same forces that are pushing for outsourcing. Outsourcing is simply the US model extended to the world.
To each an environment corresponding to one's work output. Why did you want it to stop at the US borders?
Etc... So ridiculous. Because this guy laments on something he worked to make it come true.
Finally. Why waste bandwidth on speculating where this kabuki theater is going when we know that shtadlan Shalom Bernookystein is managed by and working for the hofjuden? That's what I want to know.