On Apr 23, 4:16=A0pm, solon fox <solon...@[EMAIL PROTECTED]
> wrote:
> On Apr 22, 12:07=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
>
> You believe that the DJI would have to more than double in order to
> signify an upcoming recovery? Nonsense! Stocks were moderately
> overvalued prior to the subprime mortgage crisis. The dollar has been
> extraordinarily devalued. All the is required for a slow recovery (we
> don't want a fast inflationary recovery) is for the dollar to
> strengthen and for the DJI to trend upwards from 12,200 where it was
> trading in spring of '07. The DJI is already trending upward from a
> low of 11,508 in March '08 to > 12,700 today.
>
> Long term bonds are holding flat at the moment indicating that
> investors are beginning to predict the end of interest rate cuts. The
> bond yield curve points smoothly upwards with 20 yr and 30 yr bonds
> trading even. This indicates a slow desired recovery.
>
> > There is no massive housing crisis in Europe. =A0Just in some areas
too
> > closely tied to the U.S. market, like Switzerland, Ireland, Spain.
> > Not Britain, France or Germany. =A0Their economic growth will be
slowed
> > by the problems in the U.S., but their currency will remain stable.
> > Because socialism works better than capitalism. =A0As you are
currently
> > observing.- Hide quoted text -
>
> > - Show quoted text -
>
> You are correct about the uneven housing market in the EU (and I am
> glad that you recognized the declines which I referenced). The ECB is
> in a tough spot wanting to lower interest rates in order to relieve
> the credit crunch. The Bank of England announced a bailout program
> yesterday due to the tightened credit market. But, the ECB faces
> stagflation with wage inflation in Germany and France also suffering
> from consumer product inflation. It's a bit touch and go. The ECB
> would like to lower interest rates, freeing up credit (and weakening
> the Euro, which they believe to be too strong) and at the same time
> they are worried about inflation the same as the Fed.
>
> Nonetheless, credit is tight and depreciation in real estate will
> spread if the ECB doesn't act to lower rates. Pressure is mounting as
> most european analysts are looking for lower rates.
>
> Things were simpler before globalization. It isn't just the ties to
> the US, it is the banking problem that has created a EU credit crunch.
> Ultimately, the ECB will act to protect their economy, which means
> lowering interest rates, releasing credit, stimulating economic growth
> (and suffering inflation). All of which will help to strengthen the US
> dollar, enable the Fed to begin raising rates to fight inflation and
> so on.
>
> Lather, rinse, repeat.
>
> I see nothing remarkable or distingui****ng about the current economic
> crisis and past recessions. Hence, the pattern will be replayed.
>
> One of the primary reasons that recessions aren't endless downward
> spirals is because people are simply motivated to work and improve
> their own standing. People are always trying to do better and more
> often than not, their efforts give results.
>
> Bears are always bearish in a bear market and bulls are always bullish
> in a bull market.
>
> -solon fox
>
> BTW My dreams never become nightmares. Dreams are just dreams.
> Nightmares are what happens in real life.- Hide quoted text -
>
> - Show quoted text -
If by "recovery" you mean some slight growth -- 1% or so -- in the
current massively depressed economy, where the fall in the dollar
means that our GDP is effectively down as much as it was in the
Depression -- about 50% -- sure, that's a possibility.
If you want to say everything's is wonderful, there is no depression,
it doesn't matter that 10 trillion dollars in debt is going unpaid,
ever, it doesn't matter that truck drivers can't afford to put gas in
their trucks, it doesn't matter that 20% of the population will lose
their homes, it doesn't matter that it is currently impossible to hang
onto wealth in any form -- well, enjoy your fantasy world.
I'd like to see some changes, myself. And not your desired "slow
recovery". This sucks.
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