Fed Suggests Economy Is Stabilizing

The monetary aggregates have been flat for months, the problem will come when it is time to drain 1.5 trillion in liquidity from the market to return to a normal fed balance sheet and at the same time purchase a little over 1 trillion in mortgage back securities adding an equal amount of money back. One finds it difficult to think removing almost 3 trillion is very practical. A 1 per cent change in a 30 treasury will change the price almost 20 per cent for a retail investor and crush PE multiples when the yield curves shifts up from 0.

Cash for Clunkers

Yeppers, the program works really well. I open up government store and give away $4,500 checks. Might have a line several miles long, as long as the government is giving away money it will work until all the people who can afford to buy cars have done so; then demand will dive. No cars will be sold! Why? Demand has artificially been pulled forward, creating a void in the future. At 5% interest on 30 years bonds x how much money.

As to the enviorment, buy the chucker, kill then engine, separate it from the body, crush it, put it on a ship, so China can melt it down, make it back into cars which will be sold back to us by GM in China, now let us pay the interest on the money for 30 years at 5%. Where does the solvent go after the engine is killed? Does is cost any co2 to ship the cars, energy to crush, gas to ship them to the crusher. Brilliant. You really believe the process saves anything.

Think people, think!

Another bight idea sponsored by the government. Kick em all out!

Obama & his sovereign partners

Most nations are sovereign nations - meaning that the state come first at the expense of all else including citizens. This is how President Obama views his position in relation to the citizens. The basic tenant of the Democratic party is the leaders know better what the population needs. The evidence is the 21 czars he has appointed outside the 3 branches of government which have the claim of executive power and the right to withhold information with the same. The fact President Obama is coordinating with other sovereign leaders is no surprise.

Bird of a feather flock together!