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Unread 06-01-2009, 03:33 PM
 
Location: New Jersey
1,395 posts, read 1,883,908 times
Reputation: 274
Quote:
Originally Posted by Lusitan View Post
If you think stagflation is the most likely scenario, then I agree with you.
actually, I got my terms mixed up... I meant to say disinflation.

Stagflation: a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation).

Disinflation: a process that commonly occurs during a recession whereby price increases slow down -- as sales decrease, retailers may not be able to pass on higher prices to customers.
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Unread 06-01-2009, 03:44 PM
 
1,529 posts, read 2,690,173 times
Reputation: 426
Quote:
Originally Posted by JG183 View Post
actually, I got my terms mixed up... I meant to say disinflation.
No, you were right the first time.
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Unread 06-01-2009, 04:45 PM
 
Location: Newport Jersey City,NJ
570 posts, read 1,132,312 times
Reputation: 268
Quote:
Originally Posted by JG183 View Post
actually, I got my terms mixed up...
too much copying/pasting from wikipedia will have that sideffect.
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Unread 06-01-2009, 07:32 PM
 
Location: Piscataway, New Jersey
524 posts, read 1,334,649 times
Reputation: 143
Quote:
Originally Posted by Lusitan View Post
... our pathetic chimp-in-chief
Wow, just wow.
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Unread 06-01-2009, 07:34 PM
 
Location: Piscataway, New Jersey
524 posts, read 1,334,649 times
Reputation: 143
Quote:
Originally Posted by MoorestownResident View Post
Lots of positive news out with the market up 200 points:

Residential home remodeling spending up much more than expected - which is coincident to Lowe's and Home Depot's better than expected earnings reports.

The PMI (purchasing managers index) up more than expected, the new orders component moved over 50 - for the first time in 17 months. Very notable. A level above 50 means expansion instead of contraction.

The DJIA is now at 8,700 with GM's Chapter 11 reorganization out of the way.

Jobless claims are falling; both new and existing homes sales posted small gains in the most recent months, albiet from very low bases.

Good post, MR!
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Unread 06-01-2009, 08:37 PM
 
Location: New Jersey
1,395 posts, read 1,883,908 times
Reputation: 274
Quote:
Originally Posted by syncmaster View Post
Wow, just wow.
yeah, I noticed that too, but didn't want to say anything...
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Unread 06-01-2009, 09:26 PM
 
744 posts, read 787,306 times
Reputation: 177
Quote:
Originally Posted by syncmaster View Post
Wow, just wow.
Its OK for Bush, but not for Obama?
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Unread 06-01-2009, 10:09 PM
 
1,529 posts, read 2,690,173 times
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Quote:
Originally Posted by syncmaster View Post
Wow, just wow.
Wow, just wow ... what short memories Dems have. Remember W, our former "chimp-in-chief"? (according to Dems)

LOL ... I know, I know ... "free speech for me but not for thee", the libs' favorite tune.

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Unread 06-01-2009, 10:35 PM
 
Location: Montgomery County, PA
2,771 posts, read 3,382,156 times
Reputation: 588
Quote:
Originally Posted by sholden View Post
Except this time round, they bought "toxic" securities with that printed money and overpaid for them too, when the recession is over no one is going to want to buy them back - since they will still be basically worthless.
Sorry, you kind of lost me here -- it's difficult to keep track of all the acronyms and all the hundreds of billions thrown at this, but my understanding is that the TARP money ended up going to direct capital injections (they didn't buy toxic assets), and for the most part, everyone is chomping at the bit to give it back.

They announced two other programs that are in their infancy -- the TALF program (collateralized loans -- they get that money back as long as the borrower is solvent and the collateral doesn't drop in value much more), and the P-PIP (which includes a price discovery mechanism)

The P-PIP sounds like a program that would have them overpaying for assets, but I thought most of the money was elsewhere (e.g. direct capital injections via the misnamed TARP)
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Unread 06-02-2009, 01:50 AM
 
744 posts, read 787,306 times
Reputation: 177
Quote:
Originally Posted by elflord1973 View Post
Sorry, you kind of lost me here -- it's difficult to keep track of all the acronyms and all the hundreds of billions thrown at this, but my understanding is that the TARP money ended up going to direct capital injections (they didn't buy toxic assets), and for the most part, everyone is chomping at the bit to give it back.

They announced two other programs that are in their infancy -- the TALF program (collateralized loans -- they get that money back as long as the borrower is solvent and the collateral doesn't drop in value much more), and the P-PIP (which includes a price discovery mechanism)

The P-PIP sounds like a program that would have them overpaying for assets, but I thought most of the money was elsewhere (e.g. direct capital injections via the misnamed TARP)
The Fed can't just do "direct capital injections" - the balance sheet has to balance after all. It can hand out cash in return for assets or it can hand out loans - obviously loans give it more bang per buck so to speak. But those loans are then "assets".

If the Fed loans $1 billion to Merrill Lynch (as a random example) then the asset side of the balance sheet is that $1 billion MER owes them - a MER bond in effect. Obviously $1 billion in US Treasuries would be less risky than $1 billion in MER bonds so the Feds assets are now riskier (some would say toxic given the state of the financial sector).

The Fed's taken toxic garbage as collateral on lots of those loans, the borrowers would be fools not walk away. Then there the Maiden Lanes (for Bear Stearns and AIG bailouts) which are pure toxic asset holdings.

In 2006 the Fed's asset half of balance sheet looked like:

Government Securities 784
Liquidity providing repos 41
Foreign Exchange 21
Gold 11
Other assets (net) 11

Total 868


By the end of 2008 it was:


Government and GSE Securities 502
Foreign Exchange Swaps 554
Term Auction Credit 450
Commercial paper funding facility 335
Other loans 194
Liquidity providing repos 80
Maiden Lane LLC holdings 77
Foreign Exchange (other) 27
Gold 11

Total 2230

Which is way riskier and much less liquid than the 90% US Treasuries it used to be...

Unwinding is going to fun.
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