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03/21/2011

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Gail

This is obviously a promotional video but has a few moments of levity (harhar):

http://www.stansberryresearch.com/pro/1011PSISBBVD/PPSIM309/PR

Gail

I forgot to add, he brings up the concept of "normalcy bias" which is something I hadn't heard of before, and, along with the notion of shifting baselines, explains quite a bit:

http://en.wikipedia.org/wiki/Normalcy_bias

Snow Pea

Bill Gross suddenly noticed are our biggest bond holders are China et al and expects to be taken seriously? Since this fact has never been a secret, I think he's full of it

Morocco Bama

I'm betting it won't be the guy in Libya.

Morocco Bama

Gail, that video was such disinformation, meaning truths mixed with half-truths mixed with misdirecting statements, it made my head swim. I had to shut it off when he started saying the U.S. was hostile to corporations and it had one of the highest tax rates.....then he went on to cite Japan as having a more business-friendly environment. Yeah, Japan's positively aglow to businesses right now.

Gail

Well, when he starts quoting Ron Paul you have to wonder...I think his approach is that the bad bad US is unfriendly to business because we restrict things that are so convenient to business, like, unregulated pollution, slavery and child labor - at least, more than some other countries.

Morocco Bama

I agree, Gail, and, of course, he's attempting to scare the hell out of potential clients in order to sell them safety.....as if there is any safety from what's to come. The most any of the scum at the top, and most likely they are not his clients, or his firm's clients, is a can hope to gain is a little more time....but a little more time for what? To watch the anguish a little longer and relish the masterpiece they have created? Sick.

Kostas Kalevras

Fed has a zero interest rate policy right now and is engaged in QE versioning. That means that it can add excess reserves to the banks balance sheets which, by definition, has to happen by bond purchases. The bonds are already there, they are just being replaced with zero maturity reserve accounts. How is that money printing?

Bonds will be bought by exporting countries because that is basically the only real thing they can do with their dollars.
Bonds will be bought by US banks because otherwise they will end up with excess reserves not earning any interest.

USA is not Greece. It does not face any threat on it's debt, just like Japan (with a 200% of GDP public debt) does not face any dangers.

Dave Cohen

Quantitative easing (QE) defined:

QE is an unconventional monetary policy used by some central banks to stimulate their economy. The central bank creates money which it uses to buy government bonds and other financial assets, in order to increase the money supply and the excess reserves of the banking system; this also raises the prices of the financial assets bought (which lowers their yield).

Technical note: the Fed buys the Treasuries via POMO, since they are forbidden by law to make purchases directly from the Treasury. Thus, the banks buy the T-bills, and sell them to the Fed, which has CREATED MONEY to buy them. This also allows the banks to front-run the Fed on the purchase price.

For all the details, see How Quantitative Easing Really Works by Ed Harrison

http://www.creditwritedowns.com/2011/03/how-quantitative-easing-really-works.html

Morocco Bama

You have to love Disaster Capitalism. As the world disintegrates before our very eyes, the Mullahs of High Finance continually trumpet that with calamity, there is growth and opportunity, all one needs to do is change their perspective, and filter out the bevy of disconfirming information. There's a new religion in town....it's called Cognitive Dissonance.

http://finance.yahoo.com/news/Buffett-Keen-on-tsmf-2736972723.html?x=0&sec=topStories&pos=3&asset=&ccode=

*******

Buffet Keen On Japan

Japan continues to be closely watched as the media and individuals around the globe struggle to sort out and gain a better understanding of the immediate and lasting impact of the devastating earthquake and tsunami which struck the nation earlier this month.

At the start of this week, famed investor, Warren Buffett weighed in on the situation. Speaking from South Korea, the Oracle of Omaha offered promising words for the nation's future. Rather than seeing the current disaster as a death knell for the nation, he insisted the subsequent drop in the Japanese stock market offered a great opportunity to gain exposure to the nation's marketplace.

This is not the first time that the head of Berkshire Hathaway has taken on a reassuring tone during tumultuous times. Rather, this is another example of Buffett standing by one of his most memorable quips: "Be fearful when others are greedy, and be greedy when others are fearful." Living by this credo, the investor has been able to profit even in the most dire of times.*******

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