Fuck the Fed

[Core Shot]

I can't believe they are expected to make another 0.25 cut in rates.
The market figures its a done deal - dow is soaring on the expectation.
Nevermind the crushing effect it has on the US dollar.
Nevermind oil at $90, gas at $3.00 and a ridculously expensive winter heating season coming up. Jobs data aint that bad, but the real estate crunch has yet to take hold.


And what the fuck happened to M3??
Not the car, but the money supply. I just found out that doesn't exist anymore. WTF!?

I am no economic genius, but what the fuck is going on here?

[skier666]

I can't wait for the Peso to be worth more than our dollar....

[Mannix]

It'll fix the housing/liquidity crisis!

Duh.


Iain (I'm with you....)

[RootSkier]

PADDED ROOM YOU DUMB ASSHAT!!!!

[orange]

I am making money in the market, thats what is going on here. You could be too.

[uglymoney]

Exactly the thoughts that were going through my head earlier today. Here we come $100 oil.

Look out above.

[Core Shot]

I like this guy:
http://www.kitco.com/ind/Schiff/oct192007.html

These items are priceless:

Priced in gold, euros, or Canadian dollars, both the U.S. stock market and U.S. GDP have declined by approximately 58 %, 17 % and 21% respectively since January 2000. No wonder the government and Wall Street hang their hats on official inflation measures.

For example, on Wednesday the government told us that consumer prices as measured by the CPI rose by only 2.8% over the past year. My estimate is that the actual rise was at least three times as great. The report showed that energy prices only rose by only 5.3%. Given that crude oil prices are up over 35% and heating oil prices are up 20% during that time period, how is it possible that energy prices are up only 5%? Are other energy costs falling to compensate -- firewood perhaps?
The same CPI report claimed that medical costs rose by 4.6%. As a small business owner, I can't remember the last time my company’s health insurance premiums rose less than 5% per year, and they typically rise at an annual rate of more than twice that.
Perhaps the most incredulous of all the data in this week's CPI report is that food prices only rose by 4.5% during the past year. I don’t know where the guys at the Bureau of Labor Statistics buy their groceries, but I’m spending at least 15% - 20% more for food this year than last. Wheat prices alone have practically doubled in the past year! The last time I checked, people tend to eat a lot of wheat. Does anyone really believe food prices are only up 4.5%?

Anyone know if "shadowstats" are any good - or are they just nutjobs?
http://www.shadowstats.com/cgi-bin/sgs/data

They have their own estimate of M3 that is frightening if true:


They also have their own inflation chart that seems more plausible than the government data.

[BLOOD SWEAT STEEL]

The Creature From Jekyll Island should be required reading around here.

[chaka]

just wait for the impact on the market when Bush declares war on Iran

[neck beard]

>I am no economic genius, but what the fuck is going on here?

Things in the core of the interbank money market are rotten, and with year end on its way - a traditionally bad time for liquidity shortages - things will only get worse. Last week a small European bank paid 15% for Fed funds (overnight). The interbank MM is half fucked right now, like it has been for 3 months, globally. Not to mention ABCP and SIV conduit nightmares building for year end. Its a disaster. The sub prime crisis impact hasn't even been partially played out yet.

With 25 priced in, I'd be betting on 50bps this FOMC, with no downside if he only goes 25.

The USD has been trending this way for years. No one complained when rates were far lower than this, no one feared greater USD weakness. Same for crude at $100. Thats been coming for 5 years now.

Low rates wont help, but they aren't the cause.

[Kevo]

Lets just get a vast portion of the population to buy euros...

[jSki]

This really belongs in the Padded Room, but I'll bite. There is only one candidate that has discussed the relationship between the Fed and the failing dollar. It amazes me that an issue of such importance is never discussed in the MSM or with any of the presidential candidates.

The dollar of today is worth just 4 cents to the dollar of 1913.

http://www.lewrockwell.com/paul/paul53.html
http://www.youtube.com/watch?v=A4kxTkhwR_Q

[Blurred]

CoreShot, frootskier called you an asshat.

Settle this shit right here with a good flaming.

[Core Shot]

Low rates wont help, but they aren't the cause.

Not cause and effect. I meant that this can't really help long term dollar strength or inflation risks.

And yes, Rootskier, I am clearly an Asshat. If I had been called a chicken-fucker, then there would have to be a flame war and possibly a chinese downhill skioff.

Oh, and thanks Blood Sweat Steel for the mention of "The Creature from Jekyl Island"
I was not aware of that book, or that unique history of the creation of the Fed on jekyl Island.
Pretty succint summary in a speech by Griffen right here:
http://www.bigeye.com/griffin.htm

[mrw]

The Creature From Jekyll Island should be required reading around here.

YES! a great book.

[jepilot]

Oil is not as bad an economic issue as it is a security issue. Although it's getting higher, it's still not as high as it was in 1980 ($100/barrel) but I guess it could get there eventually. Since it's pegged to the dollar though, the cost of oil at the consumer level isn't going to be affected too much. As far as the M3; Bernanke is supposed to be a Great Depression scholar, doesn't he know the reason for a rainy day fund? Fuck

[arbuckle]

unfortunately rates need to be lowered. its an issue of the lesser of the two evils here. lower rates will boost spending/growth which is more important than inflation and the value of our dollar right now. the credit crunch carries way too much weight on the economy not to lower rates.

[moosehog]

This is the 1st time I can remember that the US dollar is worth less than a canadian dollar. Primary reason that I'm not making a big trip to Whistler this year. What used to be a good value isn't now.

[AstroPax]

This is the 1st time I can remember that the US dollar is worth less than a canadian dollar. Primary reason that I'm not making a big trip to Whistler this year. What used to be a good value isn't now.

Look at the 50's and the 70's.

[ak_powder_monkey]

note to self change savings accounts to european banks...

[neck beard]

They are in more trouble than American banks. Try Australia.

[snowranger]

YES! a great book.

If half of what is written in that book is true, we should all be very scared.

[AstroPax]

what the fuck is going on here?

Americans maxing-out their credit cards and home equity loans to buy a bunch of shit that is made in China.

[arbuckle]

something like 6 million americans got mortgages last year that could not have even gotten credit cards. blame the "american dream" of everyone owning a home.

americans cant pay mortgages -->
banks lose billions on "subprime market", get stricter loan policies -->
spending decreases because less people can borrow money -->
economic growth down because spending down -->
fed lowers rates to try and increase spending/borrowing -->
inflation & stock prices up until the fed gets caught and can't lower rates anymore -->
stocks dip and recession in 2008.

[Skidog]

F anyone who bought a friggin house they couldnt afford and F them for not reading the terms of their loans....

They should all lose their homes and be out on the street....you CANT BE THAT NAIVE..

M