Even more Economic Good News: Dow Jones up 28% since January

[Oddball]

Bernanke is not a foremost genius on inflation. He is a foremost genius on the Great Depression.

Genius my ass....If Baghdad Ben has shown anything, it's that he learned next to nothing about monetary buffoonery that brought about the depression. Peter Schiff has eaten his lunch as the know-nothing he is at virtually every turn.

Also, ol' Ben has been lying out his ass about the Fed not monetizing the debt.

If we listened to Peter Schiff, we would be in another Great Depression. Raising interest rates now is absolutely insane.

Re-inflating price bubbles is insane.

There's a reason banks aren't lending...They can't get any ROI and they have no idea wheter or not some political despot is just going to walk in and void their contracts. Moreover, they all know that everyone else is holding borderline paper.

If the wannabe "genius" Baghdad Ben gave a shit about anything, he'd let the market clear out all the bad paper and quit artificially screwing with interest rates.

 

[Toro]

Re-inflating price bubbles is insane.

There's a reason banks aren't lending...They can't get any ROI and they have no idea wheter or not some political despot is just going to walk in and void their contracts. Moreover, they all know that everyone else is holding borderline paper.

If the wannabe "genius" Baghdad Ben gave a shit about anything, he'd let the market clear out all the bad paper and quit artificially screwing with interest rates.

And you think raising interest rates so banks NIM is squeezed is a good idea? The banks aren't lending because they are paying 0% for funding and investing in Treasury debt at 4% to rebuild their balance sheets, just like they did in the early 90s after the S&L crisis.

The real interest rate is, or at least was, a lot higher than 0%, given the deflation in the system, so money is still tight. Making it even tighter makes no sense.

 

[Oddball]

Making it cheap when cheap money is what got us into this mess is insanity.

Contrary to the "wisdom" of the drunk, hair of the dog only postpones the hangover, and indeed makes it worse in the end.

 

[The T]

Genius my ass....If Baghdad Ben has shown anything, it's that he learned next to nothing about monetary buffoonery that brought about the depression. Peter Schiff has eaten his lunch as the know-nothing he is at virtually every turn.

Also, ol' Ben has been lying out his ass about the Fed not monetizing the debt.

If we listened to Peter Schiff, we would be in another Great Depression. Raising interest rates now is absolutely insane.

Re-inflating price bubbles is insane.

There's a reason banks aren't lending...They can't get any ROI and they have no idea wheter or not some political despot is just going to walk in and void their contracts. Moreover, they all know that everyone else is holding borderline paper.

If the wannabe "genius" Baghdad Ben gave a shit about anything, he'd let the market clear out all the bad paper and quit artificially screwing with interest rates.

With the way the Congress is spending willy-nilly...and with the proposed legislation impending? I find this post to be of import, and highly accurate to the mind set of the players involved.

We have LOTS of impending DEBT that may-or-may-NOT be ABLE to be repayed...

 

[Toro]

Making it cheap when cheap money is what got us into this mess is insanity.

Contrary to the "wisdom" of the drunk, hair of the dog only postpones the hangover, and indeed makes it worse in the end.

Keeping money cheap is what got us into this mess. But in a debt deflation, why would short-term interest rates be positive?

 

[rightwinger]

Just in time for the holiday season..

Dow at 8150 in late January

Up to 10460 today!

The Dow is up 49% since the passing of the stimulus in February!

While I'm extremely happy that the Dow is up I thought the thrust of the Stimulus was to get the economy moving and primarily to get the American people jobs.

The President and the Libs are patting themselves on the back, look at Mr. B+ himself....
Before this guy gets another award as the greatest President ever let's get the people working then they can praise themselves all they want.

I agree

Since jobs are always the last indicator to recover from a recession, its time to start attacking employment now that other sectors of the economy are recovering.

The rest of the stimulus package will kick in this year and I expect employment to come into full swing by September 2010. Just in time for the elections

 

[Paulie]

The question is, considering Bernanke is the foremost genius on inflation, and the Fed has been through many-a-bubble, were they "blind to the risks", or did they perhaps know EXACTLY what they were doing?

How many times can the Fed screw things up this badly before one starts to wonder whether or not they're knowingly complicit?

They are not knowingly complicit. It is silly to imply a conspiracy theory.

Bernanke is not a foremost genius on inflation. He is a foremost genius on the Great Depression.

And I don't give Greenspan any less credit than I do Bernanke. Greenspan was a student of Austrian econ at one point. He knows EXACTLY how and why bubbles form. For him to have gone and done what he did monetarily before Bernanke, it makes me wonder if these bastards shouldn't be in prison right now.

You assume that the Austrian school of economics has all the answers, and thus Greenspan should have discarded everything he learned beyond the Austrian school.

The academics who believe strongly in the efficacy of free markets believe that bubbles either cannot happen or cannot be identified. This line of thinking assumes that people are rational and that markets are rational, and rational markets do not have bubbles. Greenspan made numerous statements to this effect over the years as Chairman of the FOMC.

I am of the opinion that the Fed is the number one cause of this mess. However, I do have some sympathy for Greenspan and Bernanke. They believe, with good reason, that the Great Depression was triggered by the Fed. They also believed, again with good reason, that using the Fed to pop a bubble could have enormous negative ramifications for the economy far beyond the damage of a collapsed bubble. Their example was the Great Depression.

I was speaking of his book "Inflation Targeting ..." and the fact that when he originally took the seat at the Fed, his stated goal to the FOMC was establishing a viable target. Perhaps "foremost genius" wasn't the proper designation. But he knows what causes bubbles, he knows they exist.

As far as Greenspan, to even assume that he didn't have at least a rudimentary grasp on the concept of bubbles is willful ignorance if you ask me. I'm not saying that ONLY Austrians understand bubbles, but they seem to have the best idea on how and why they occur.

You say the Fed was mainly to blame for the housing bubble, and that's ONLY the position of Austrians as far as I've seen. Ask the Keynesians what caused the housing bubble, and see if ANY of the notable names implicate the Fed.

I'm not necessarily implying a conspiracy theory, but these guys are supposed to be the most brilliant minds on Earth when it comes to monetary policy and economics in general.

If the definition of insanity is doing the same thing over and over expecting a different result, then these guys are either insane or knowingly corrupt. Because as far as I can tell, they do the same damn thing over and over again.

Maybe it's time to try something different. If you don't agree now, will you consider agreeing when/if the NEXT bubble forms and subsequently bursts?