tag:blogger.com,1999:blog-11719208.post114231520450676811..comments2023-11-05T04:36:14.223-08:00Comments on The Mess That Greenspan Made: A Game of ConfidenceTimhttp://www.blogger.com/profile/16530974968126497397noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-11719208.post-1142443361290556852006-03-15T09:22:00.000-08:002006-03-15T09:22:00.000-08:00The price of money, interest rate(s), is the most ...The price of money, interest rate(s), is the most obvious example where central planning attempts to set a price different from a free market. Banking interests are the chief beneficiaries here. There are other examples. In time, the result is always an unsustainable imbalance that ends with a dislocation - currency crises in Mexico/Thailand/Argentina, collapse of Soviet Union, etc. The Chinese saw this coming and decided that a looser grip on something was better than a tight grip on nothing. The hand around here is firming.<BR/><BR/>Cor: Consider where the SP500 and house prices would be if interest rates were neutral with real inflation at, say, 8%-9%.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142376434668831322006-03-14T14:47:00.000-08:002006-03-14T14:47:00.000-08:00If anything has been artificially bolstering the m...If anything has been artificially bolstering the market, it is the propping-up of consumer spending. I've heard that 75% of the domestic economy is based on consumer spending. This open trend must be orders of magnitude more influential than any deus ex machina "market agent" interventions.<BR/><BR/>The upshot is I don't think this pattern has a much longer lifespan. 1-2 years, I'd bet. There is too much conspiring against consumer spending; too much coming back down to earth.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142372634820615882006-03-14T13:43:00.000-08:002006-03-14T13:43:00.000-08:00Those in charge will do everything in their power ...Those in charge will do everything in their power to prevent a significant decline in all inflated asset classes. It is in no one's interest to see the DOW back at 6 or 7 thousand or for U.S. home prices to revert to 2000 levels - the only winners would be short sellers and renters. <BR/><BR/>The tools are available to prevent this from happening, unlike in 1929, so as long as Asia complies and the currency debasement can be spread around, things will go on. The only reason Asia wouldn't comply would be if some major geopolitical shit hits the fan, and even then probably not until after the 2008 Olympics, as 2008 is China's emergence onto the world stage in a big way and they'll be happy to do whatever is necessary to preserve the status quo until then. <BR/><BR/>Lacking some significant catalyst, it seems more likely that all asset markets will be kept afloat for the next ten or fifteen years, kind of like equities in the seventies, and inflation will rage, but somehow the people will be told othewise as they get squeezed, and then squeezed some more, and the U.S. will slowly adjust to more moderate standards of living.<BR/><BR/>At least, that's the best case scenario.Timhttps://www.blogger.com/profile/16530974968126497397noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142363097418023652006-03-14T11:04:00.000-08:002006-03-14T11:04:00.000-08:00Market manipulation will always exist.Manipulation...Market manipulation will always exist.<BR/><BR/>Manipulation is a fundamental game that we see in nature everyday. (venus fly trap, cameleon) on and on. Its a very important strategy in survival.<BR/><BR/>SBC didn't buy up 70% of the bells to let the "free market" determine future price of broadband.<BR/><BR/>Lowering their current DSL prices to dirt cheap levels, definately helped manipulate the market/public into approving of the mergers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142359886104595942006-03-14T10:11:00.000-08:002006-03-14T10:11:00.000-08:00The bigger issue I've seen with the description of...The bigger issue I've seen with the description of the actions of the PPT is that it would require an enormous amount of money to make it happen across all these different investment vehicles.<BR/><BR/>I don't have a strong opinion on the theory either way, but it does seem to me as unlikely that the government would be able to inject that amount of capital from a dollar perspective and it also seems unlikely that they would be able to "cover their tracks" - someone would let the cat out of the bag.Damianhttps://www.blogger.com/profile/16016686632386396090noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142355353061468232006-03-14T08:55:00.000-08:002006-03-14T08:55:00.000-08:00What would expect the market to be corrected to? ...What would expect the market to be corrected to? Trading at 30x earnings for an extended period would be irrational given historical multiples, but when the current multiple on the S&P is near historically average levels, why would we need to look for conspiracy theories to explain why its staying in the 9k-12k range?Worker 17https://www.blogger.com/profile/11311854874493560068noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-1142355077808356242006-03-14T08:51:00.000-08:002006-03-14T08:51:00.000-08:00Tim,I think your assessment here hits the mark. F...Tim,<BR/><BR/>I think your assessment here hits the mark. Further, market manipulation (central planning) is done to benefit statists, who 'earn' theirs by courting government favor. For the rest of us, perhaps there can be some solace in a well-placed bet on the right side of the eventual price dislocations.Anonymousnoreply@blogger.com