Central Banks Offer Extra Funds to Calm Money Markets (Update5): “The Federal Reserve almost quadrupled the amount of dollars central banks can auction around the world to $247 billion in a coordinated bid to ease the worst crisis facing financial markets since the 1920s.
The Fed increased the amount of dollars that the European Central Bank, the Bank of Japan and other counterparts can offer from $67 billion “to address the continued elevated pressures in U.S. dollar short-term funding markets.” The Bank of England, the Bank of Canada and the Swiss National Bank also participated.”
Wow. Just amazing. The futures popped early in the morning on the news… then started drifting down again. While still positive, the futures look and feel limp.
Basically this action is like taking the defibrillator to a patient and just ‘giving her’… and declaring that this will ‘heal’ the twitching patient… Unfortunately the patient is long dead, and the twitching will stop when the current from the defibrillator stops.
You can’t bring back the dead with a defibrillator.
You can’t bring back dead banks with more liquidity.
We are heading for Japan v2.0.
Think ZERO percent interest rates and think DEFLATION. Think LOST DECADE. Think DEPRESSION. Now make all that GLOBAL.
That is what we have to look forward to.
Thursday, September 18, 2008
Japan v2.0
Subscribe to:
Post Comments (Atom)
Posts
9 comments:
And a cheery good morning to you too.
Ten years sounds about right.
10 years...plus 10 wars.
So that's a buy?
Nick
So after all this who is to blame? I know there are many but is there one person or people that got us into this mess?
I see the point.
But why cant the US gov just fire up the printing-press?
the fed wants ("is worried about" wink wink) inflation. Anything to avoid zero bound. Cost to nationalize will be 1T - 2T. Some lessons learned from Japan though. Carnage but no lost decade. Lost 2-3 years maybe.
Ben,
What's your take on the argument that the US is more like Argentina than Japan because we are a net debtor (albeit in our own currency), whereas Japan was a net creditor and could fund it's own bailouts?
When petro and sino dollar flows collapse, who will buy our new bond runs?
If we are Argentina 2.0, then don't long bond rates spike and don't we get dollar flight again? Back to commodities maybe? Other currencies (which ones?). Sure the ruined economy kills demand, but that doesn't mean nominal prices in dollars can't be high.
I see you making lots of dollars, but I'm wondering where you see the purchasing power of the dollar going over the next, say, 2 years.
To bottom-line my question, would you buy or short the long bond over teh next 3-6 months?
As always, thanks for your wisdom.
Steve's got a good question.
What are the long-money guys thinking? They're usually not far wrong, IMO.
If you have been having no problems UGG Classic Short in running or racing, it would be hard to recommend a change of shoe. It is difficult, if not impossible to improve Classic Short Boots upon a situation in which all is going great. I would advise getting a few pairs of what seem to be your Classic Short ugg boots favorite shoes before the manufacturer changes the shoe. Historically unannounced changes are often made by manufacturers. This can vary from a subtle change in the cushioning around the heel to a major Classic Short uggs structural midsole change. Manufacturers have discontinued a model of shoe, only to resume production a few years later ugg 5825 with a line of shoes boasting the same name, but with completely different characteristics.
Post a Comment