Econophile's blog

The Fed is in for a big surprise when they realize that "excess capacity" has nothing to do with inflation. Their latest policy is founded on this concept. These pre-'Copernican' Fed economists need to understand that they create inflation. Perhaps they should just look at these charts. Good luck when they try to sell their toxic assets.

They key to recovery is debt: there is still too much of it. The Obama Administration's attempts to reinflate the housing market is causing massive distortions in that market and the data proves it. There is so much government manipulation of the housing market that much of the old risk still exists and they are creating new risks that are damaging the economy's ability to recover. Are you ready for a "bust-bust" cycle?

The problem with Greece is George Papandreou and his socialist party. For years they have been looting the country by transferring capital from the producers to government employees, national health care, and the unions. They've been borrowing to pay for it ever since capitalists found ways to hide capital from confiscation. Now he blames "speculators" for Greece's problems. He has no shame and he will take Greece and the eurozone down.

What do you think those bankers with perfect trading days in Q1 did with all the money they made? As Eli Broad said, "No one wants paper money — they want art.” This is the Fed's gift to these bankers.

Why the euro-bailout won't work, what will happen when it fails, and what they should do about it.

"The trading profits of the Street is just another way of measuring the subsidy the Fed is giving to the banks. It's a transfer from savers to banks."

Isn't $145 billion to save these relics enough? Why don't we ask instead: What good do they do? and, What was their role in causing the crisis? Get rid of Fannie and Freddie.

Two excellent commentaries on the euro bailout from an Austrian view. The folly of inflation.

This is supposed to calm down the markets Monday morning. The Fed opened its swap lines with other central banks and treasuries to provide dollar liquidity as investors flock to the euro. Mish says short squeeze.

Someone made money when the market plunged 700 points and someone made money when it went up 600 points. Liquidity has its good points and bad points. Without it the market would have cratered.

Bear's execs say, "We didn't do it. It's not our fault. Evil speculators conspired against us, and investors irrationally made a run on us." They have no clue and they sound pathetic. Perhaps they should have read two little books.

While the current economic data appears rosy, it won't be sustained without credit or rising wages or job growth. Much of existing spending is from a drawdown of savings and various transitory stimulus programs. These things won't last.

I like Mr. Buffett. I just don't believe everything that comes out of his mouth.

I'm tired of arguing about Goldman so here's something to amuse you.

Whether you like it or not, Goldman is THE scapegoat for what is perceived as capitalism's failures. Goldman was not the cause of the boom or the bust, but Congress is looking for heads. The threat of criminal indictment hangs over Wall Street. Let the bloodletting begin.