Welcome to the Recovery
By TIMOTHY F. GEITHNER
Published: August 2, 2010

http://www.nytimes.com/2010/08/03/opinion/03geithner.html

In case you haven't had a good laugh in a while. Geithner does make a few good points, though.

8/6/2010 3:54:58 AM

We've really fucked up when lawyers and doctors are looking up at the financiers in the income department

http://www.newyorker.com/talk/financial/2010/08/16/100816ta_talk_surowiecki

Quote :

"The explosion in wealth at the very top of the pyramid has given rise to what the commentator Matt Miller has called a “lower upper class”—doctors, lawyers, accountants, even some journalists, who make very good livings but enjoy nothing like the rewards that come to their peers in finance or in the executive suite."

8/9/2010 9:12:33 PM

Fed, Citing Slowdown, to Buy U.S. Debt
August 10, 2010

Quote :

"WASHINGTON — The Federal Reserve acknowledged on Tuesday that its confidence in the economic recovery had dimmed, and announced that it would use the proceeds from its huge mortgage-bond portfolio to buy long-term Treasury securities."

Quote :

"At its last meeting, in June, the committee downgraded its outlook and openly discussed the prospect of deflation — a declining spiral of demand, prices and wages — but cautioned that it was only likely to act if the situation took a serious turn for the worse."

Quote :

"The Federal Open Market Committee’s vote on Tuesday was 9 to 1. The dissenter was Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City."

http://www.nytimes.com/2010/08/11/business/economy/11fed.html

Told you so.

8/10/2010 5:57:39 PM

What...that the economy is IMPRESSIVE?

The good news just keeps rolling in.

[Edited on August 10, 2010 at 6:25 PM. Reason : ]

8/10/2010 6:23:07 PM

^ Yes, despite what the Obama administration and friends are trying to do to it. Lesser economies would have tanked by now.

8/10/2010 6:42:32 PM

So good to hear about deflation… very different than the rampant, spiraling inflation the right was claiming would result from the stimulus.

LOL

8/10/2010 7:47:08 PM

Yes, the Federal Reserve is going to start buying mother fucking U.S. government treasuries (oh, they already have been) and we're going to have deflation.

Let's just have the Fed buy all of our national debt. Problem solved, right? Nothing bad could come from it. Let's forget the fact that the Fed produces nothing. They're going to buy everything with the money they have! It's such an easy solution, it must have taken a economics professor to come up with it.

8/11/2010 12:07:06 AM

^^ Wow, you've focused on the your problem: the "right" that doesn't currently control anything. Nothing to say about the left that is, you know, actually in power (for now)?

Misdirect and attack.

^ Well, Ron Paul asked Bernanke about that:

http://www.youtube.com/watch?v=wQw-gLMUHFw

But it does seem that Bernanke has flip-flopped:

Bernanke delivers blunt warning on U.S. debt
Feb. 25, 2010

Quote :

"With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt."

Quote :

"'We're not going to monetize the debt,' Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed."

http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/

What would you have the Fed do, though? I mean, buying and selling securities is a big part of how they do what they do.

[Edited on August 11, 2010 at 3:54 AM. Reason : .]

8/11/2010 3:53:10 AM

Even conservatives recognize the sham that the GOP has been for the economy

http://www.nytimes.com/2010/08/01/opinion/01stockman.html

I don't remember which CONgressman was being interviewed yesterday on (I think) NPR, but he was a conservative and he simply kept repeating "I'm for lower taxes as it will spur growth" over and over when asked if tax cuts should come with spending cuts. He wouldn't say he was for spending cuts because he knows he'll lose votes for saying so. The GOP has let the country down in the worst way.

8/11/2010 6:43:40 AM

That is why we now have a tea party! This is how politics works. The rules have changed, but it takes an election or two before the ruling class can learn to trust it. Voters have changed their minds, but who the hell knows how until after the friggin' election? In 2012 the tea party will be history, with its constituent parts cut up and integrated into the two main parties.

[Edited on August 11, 2010 at 9:22 AM. Reason : .,.]

8/11/2010 9:20:30 AM

Quote :

"Wow, you've focused on the your problem: the "right" that doesn't currently control anything. Nothing to say about the left that is, you know, actually in power (for now)? Misdirect and attack. "

Actually, you missed the point. Not surprising…

The right was saying that just printing money to increase the money supply (which massive gov. deficit spending is) would lead to catastrophic spiraling inflation. Now that it’s obviously they were completely wrong about that, they’re trying to bash the deflationary economy, which has been very mild so far, which is expected and somewhat healthy after a bubble-induced recession.

8/11/2010 9:37:47 AM

^ Actually, no, it's you--once again--who has missed the point. You keep posting about "the right, the right"--but they don't control the White House or Congress!

The question is what are the Democrats going to do about the economic situation? From what I've seen, nothing more than tax, spend, and revert to the blame Bush default.

8/11/2010 4:21:02 PM

Quote :

"The right was saying that just printing money to increase the money supply (which massive gov. deficit spending is) would lead to catastrophic spiraling inflation. Now that it’s obviously they were completely wrong about that, they’re trying to bash the deflationary economy, which has been very mild so far, which is expected and somewhat healthy after a bubble-induced recession."

The money is still being held as excess reserves, and much of it has yet to make its way into circulation. We are not having deflation. We are having inflation. No matter how much misinformation you spread, those facts will not change. When China unpegs from the dollar, and the only buyer of U.S. treasuries is the Federal Reserve, we will have catastrophic inflation. I hope I'm wrong, but if I'm not, everyone here will suffer.

[Edited on August 11, 2010 at 4:28 PM. Reason : ]

8/11/2010 4:26:22 PM

^ ?

Quote :

"Yes, the Federal Reserve is going to start buying mother fucking U.S. government treasuries (oh, they already have been) and we're going to have deflation."

Quote :

"We are not having deflation. We are having inflation."

d357r0y3r

8/11/2010 4:57:18 PM

That's sarcasm.

8/11/2010 6:08:52 PM

More democratic uses of taxpayer monies.

Is there a liberal in here that can defend this shit

http://www.businessinsider.com/hud-announces-no-interest-loans-2010-8

Quote :

"Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners struggling to make their mortgage payments due to unemployment. Additionally, the U.S. Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance – for up to 24 months – to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition. "

8/11/2010 7:38:18 PM

Quote :

"We are not having deflation. We are having inflation. N"

We were marginally deflationary last year, and have been very minimally inflationary so far this year (essentially flat over the past 2 years).

And we might be heading into another deflationary period perhaps through next year.

8/11/2010 8:56:18 PM

just raise the fucking taxes on the scumbags who make over $10 million a year and pay down the fucking deficit already.

8/11/2010 10:00:49 PM

^ WTF? Why is someone who makes over $10 million a "scumbag"?

[Edited on August 12, 2010 at 6:09 PM. Reason : And I think you mean the debt. There's a difference. ]

8/12/2010 6:08:37 PM

Why are you taking it so personally? It's not like you make anywhere near that kind of money...

8/12/2010 6:18:50 PM

^ Answer the question. And address the fact that you don't know the debt from the deficit.

8/12/2010 6:25:10 PM

hooksaw is such a hack

8/13/2010 4:32:16 AM

http://www.marketwatch.com/story/reagan-insider-gop-destroyed-us-economy-2010-08-10

Reagan insider: 'GOP destroyed U.S. economy'

Quote :

"Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse." Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. "

8/13/2010 11:21:41 AM

Fed Official Warns of Starting a Cycle of Boom and Bust

Quote :

"In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of the Federal Reserve Bank of Kansas City, dissented on Tuesday when the Federal Open Market Committee, which sets monetary policy, voted 9 to 1 to invest proceeds from the Fed’s mortgage-bond portfolio in longer-term Treasury debt. The decision was the bank’s clearest signal yet that its confidence in the pace of the economic recovery was waning. “Monetary policy is a useful tool, but it cannot solve every problem faced by the United States,” Mr. Hoenig said in a town hall-style meeting in Lincoln, Neb. “In trying to use policy as a cure-all, we will repeat the cycle of severe recession and unemployment in a few short years by keeping rates too low for too long.” Mr. Hoenig added: “I wish free money was really free and that there was a painless way to move from severe recession and high leverage to robust and sustainable economic growth, but there is no short cut.”"

Continued at http://www.nytimes.com/2010/08/14/business/economy/14fed.html?_r=1

[Edited on August 13, 2010 at 4:15 PM. Reason : ]

8/13/2010 4:15:34 PM

Markets cling to the Fed as growth alert sounded
August 13 2010

Quote :

"A run of bad data has raised the probability that the US economy, having dragged itself up a ladder, is about to slither back down a snake. And as the gap between actual and potential output grows larger, so does the small but non-negligible chance that the US will enter outright deflation. Just as during the last big deflation scare in 2003, uncertainty over monetary policy – particularly quantitative easing and other extraordinary measures – is catalysing violent market reactions. Two conclusions should be drawn. One, the Fed needs to be prepared for small changes in nuance provoking an outsize market response, sometimes in the wrong direction. Two, the field of play is a lonely place when monetary policy is struggling alone with fiscal policy sitting on the bench. Though the Fed's campaign to avoid deflation in 2003 was eventually successful, it wasn't flawless. At one point, through mishandled messaging provoking market reactions, the Fed pulled off an inadvertent two-part trick: loosening monetary conditions at a meeting in May that left interest rates on hold, and then accidentally tightening conditions via an FOMC meeting in June which cut them. The challenge only increases when markets are acting illogically, as they did this week. While a snapshot of current bond prices shows investors telling a fairly consistent and realistic story of low or no growth and inflation in the medium term, investors' reaction to Tuesday's announcement was not internally coherent."

Quote :

"Dissent within the Fed about more radical measures is confusing the message – and potentially circumscribing the policy – but some of it is still evidently getting through. More puzzling was the big reaction across lots of other markets – a general pullback from risk, with equities taking a battering. Looser monetary policy ought, if anything, to produce the opposite reaction. This looks like the work of one of the great investment fallacies – the false assumption of central bank omniscience, in this case that the Fed knows a lot more about the economy than anyone else."

Quote :

"Stasis and wrongheadedness in fiscal policy makes the Fed’s job harder. The FOMC is not just trying to operate in highly uncertain circumstances with highly uncertain instruments but also has too much of the burden. Central bankers are no more omnipotent than they are omniscient. Investors, the public and the Congress may be forced painfully to find that out."

http://www.ft.com/cms/s/0/acf9ba78-a70c-11df-90e5-00144feabdc0.html

The underlined portions refer to one of the issues I've been attempting to highlight.

8/13/2010 6:31:05 PM

Federal Reserve's Low Rate Policy Is A 'Dangerous Gamble,' Says Top Central Bank Official

Quote :

"A top regional Federal Reserve official sharply criticized Friday the Fed's ongoing policy of keeping interest rates near zero -- and at record lows -- as a "dangerous gamble." denounced the recently-enacted financial reform law for failing to end Too Big To Fail" the recent softening of international banking rules at the behest of large banks that "remain financially and politically powerful institutions." [DIVIDE] Federal Reserve Bank of Kansas City President Thomas M. Hoenig, the Fed's longest-serving policy maker and one of 10 people [TK] who decides the interest rate borrowers pay on mortgages, loans and other credit products, said that the Fed's policy of effectively guaranteeing zero percent interest rates for the foreseeable future is "risking a repeat of past errors and the consequences they bring." Hoenig, who's dissented from all five Federal Open Market Committee decisions this year to keep the rate at which banks lend to each other for overnight funds between 0 and 0.25 percent, said the economy is in a "modest recovery, with mixed results" and intimated that policy makers shouldn't be beholden to "volatile monthly data" nor should "market participants...direct policy." "Of course the market wants zero rates to continue indefinitely," Hoenig said in prepared remarks during a speech in Lincoln, Neb. "They are earning a guaranteed return on free money from the Fed by lending it back to the government through securities purchases.""

Quote :

""The recent financial crisis and recession was not caused by high interest rates but by low rates that contributed to excessive debt and leverage among consumers, businesses and government," Hoenig said. "Obviously, the effect of these trends on our economy has been significant and we must accept that they will not be corrected quickly." Hoenig wants the Fed to increase its rate from zero to 1 percent, keep it there while the economy adjusts, then raise it toward 2 percent. Then, the rate will move based on the economy. This will lead to a "more sustained recovery," Hoenig said. Debt will be paid down and economic imbalances -- like too-high housing prices, for example -- will rebalance. The economy will grow at a modest but sustainable pace and job growth will be "stable and resilient." It's a far cry from the policy of the last decade. To Hoenig, the Fed's policies are encouraging the kind of unsustainable practices that will lead to a cycle of perpetual booms and busts. For example, he notes that consumption had long been about 63 percent of gross domestic product. During the boom it rose to 70 percent, he said. That needs to come back down."

http://www.huffingtonpost.com/2010/08/13/federal-reserve-pursuing_n_681540.html

8/13/2010 6:33:14 PM

^ Look, man, it's obvious what you're trying to do. You won't last around here if you keep it up.

8/13/2010 6:34:48 PM

huh? would you like to respond to my point?

[Edited on August 13, 2010 at 6:35 PM. Reason : wat]

8/13/2010 6:35:31 PM

Quote :

"^ Look, man, it's obvious what you're trying to do. You won't last around here if you keep it up."

8/13/2010 6:36:48 PM

do you think hoening will be able to make an impact with regards to interest policy?

8/13/2010 6:45:18 PM

^ We'll see, won't we?

And "with regards to" (sic).

8/13/2010 6:53:44 PM

Quote :

"You won't last around here if you keep it up."

HAHAHAHA

HEY GUISE WATCH OUT FUR HOOKSAW HES A TOUGH GUY

8/13/2010 7:09:08 PM

^ I'm tough enough, but that wasn't my point at all. This, of course, is self-evident.

[Edited on August 13, 2010 at 8:22 PM. Reason : Nothing on getting pwnt about deflation? NO?! ]

8/13/2010 8:22:04 PM

he means that he will keep pm'ing qtmnfred

8/13/2010 8:44:22 PM

Quote :

"Nothing on getting pwnt about deflation?"

from who? you were arguing against no one in that thread everyone but destroyer agreed that deflation is bad and entirely possible.

Quote :

"he means that he will keep pm'ing qtmnfred"

yeah I could see that.

8/13/2010 9:24:51 PM

^^ and ^ I could've done worse. And I consider it a public service.

8/14/2010 6:33:59 AM

another threat?

OH SHIT ARE YOU GOING TO WHINE TO ANOTHER MODERATOR!!!!????

MOMMY HE IS SAYING MEAN THINGS

8/14/2010 2:45:58 PM

Quote :

" MARKETS ACTING ILLOGICALLY "

8/14/2010 2:51:10 PM

Quote :

"^^ and ^ I could've done worse. And I consider it a public service."

haha is that a threat? knock yourself out chief, go for it.

8/14/2010 4:13:29 PM

^^^ and ^ Actually, I meant starting a suspension thread in FF or something along those lines. But don't let me stand in the way of your paranoia.

And I doubt that Ken prefers to be referred to as "Mommy." I don't know, though--you could check with him on this.

I wish some of you would just stop trying to do nothing more than disrupt and attack here. But it'll never happen.

8/14/2010 4:39:27 PM

hahaha

8/14/2010 8:45:10 PM

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” – Ben Bernanke – 2005

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.” - Ben Bernanke – 2005

Taken from http://www.zerohedge.com/article/guest-post-mass-delusion-american-style. I suggest reading the whole thing.

For those of sucking the Fed's dick, what's your response? The guy orchestrating our monetary policy said these things before the housing bubble burst. How can you possibly believe a word that comes out of his mouth? He's either evil or incompetent.

8/15/2010 12:41:14 PM

^ I hope that's not directed at me, because I've done nothing of the sort.

8/16/2010 5:25:49 AM

8/23/2010 9:50:55 PM

^ So, the point of your post is that the deficits under Obama would have gotten worse regardless of Iraq war spending? If so, most rational people already knew that.

[Edited on August 24, 2010 at 4:10 PM. Reason : And I'm not trying to be nasty. It is an illustrative graph. ]

8/24/2010 4:03:50 PM

Why would you assume that is the point? If we're being partisan about this shit, you can just as easily condemn Bush for still managing to run a deficit in the most prosperous years of the economy over the past decade. Hey, tax cuts all around, deficits don't matter, Reaganomics ft...l.

8/24/2010 4:53:49 PM

Quote :

"Colorado gov. says pot fees helping budget deficit (AP) – 1 day ago DENVER — Gov. Bill Ritter is using $9 million from medical marijuana registrations to help the state meet a $60 million fiscal emergency. The state anticipates ending the year with 150,000 applicants for medical marijuana cards, up from 41,000 in 2009. A marijuana card costs $90 per year. Backers of medical marijuana legislation in a number of states and cities have touted revenue from possible taxes and other fees as a selling point at a time of tight fiscal funding. Copyright © 2010 The Associated Press. All rights reserved."

tax it just like they do alcohol and cigarettes....

8/24/2010 5:23:08 PM

^^ I didn't assume anything. You assumed that you knew what the hell you were babbling about--but everyone here knows that you don't.

That was the point Randall Hoven made in his American Thinker piece "Iraq: The War That Broke Us -- Not": that Bush didn't break us with Iraq war spending; the Democrat takeover and resulting spending did.

http://www.americanthinker.com/2010/08/iraq_the_war_that_broke_us_not.html

8/24/2010 5:58:35 PM

Obama had to spend to help the economy, GWB didn't have to go kill brown people.

8/24/2010 6:02:05 PM

^^ Were you born stupid or do you practice it daily to keep your skills sharp? How was I supposed to know you were making a reference to the article that graph came from? How do you even know jcashfan took it from that article (hint...YOU DONT)?

8/24/2010 6:12:43 PM