Posted on 07/31/2002 8:00:47 PM PDT by Axion
Richard W.
Well, he'll certainly tell you they are, anyway.
Just like the eternal bulls.
Is there any reason a varying message would be better?
I concede a varying message would serve short term traders better.
Source: Financial News, 29th July 2002
The housing market could crash even with continued population growth. Identifying a single dominant factor may be be an interesting exercise, however, both interest rates and population growth are factors. Another might be willingness of landowners to subdivide their parcel, to give up elbowroom in return for some temporary cash flow. Still another would be regional factors such as opening or closing of major employers. It's not simple, and it's not small in importance to the national economy.
These were "Democrat mortgages" designed to get Blacks, Mexicans, immigrants into the DemonCrat fold forever by snaring them a house they could not otherwise afford. That they really couldn't afford anyway but the FedGov was beating the drum on the "right to homeownership".
Sure looked great during the Clintoon years but will come back to bite the taxpayer who funded/subsidized this nonsense.
Although the market has probably put it a temporary low in the past few weeks, and despite the odds that are increasing that we're now in a climbing market (although slowly), the Oil Patch Gang will probably get the two things it needs in order to prevent a massive global economic meltdown. The two things? A rate reduction and a Middle East War. Why, you ask? Ah! Here's how it works.
The rate problem boils down to some pretty simple stuff, if you know where and what to read. The Financial Times of England ran a wonderfully enlightening piece this weekend with the title "Debt fuels US gas and power bankruptcy fears". Besides pointing out that there is $500 Billion of bad debt in the energy sector, the article quotes one time Enron European trading boss Karl Miller, who's now turned to consulting:
Well, yes, and no.
Let's pretend for a few minutes that you are the President of the most powerful nation in the history of the planet and that despite your sometimes clumsy image, you really remember some of the pieces from your MBA studies. You with me? If you were facing massive bankruptcies in the energy sector, what are two moves you could make that would tend to keep the failing energy traders alive long enough so you could structure a workout, or better, avoid bankruptcy altogether?
The first move would be to lower interest rates. Although Chairman Greenspan certainly doesn't want to lower rates, because it has let some of the air - OK, a lot of air out of the bubble - the President's argument to the Fed (and it will be confirmed by the in-house Fed Research Department) is that if rates don't come down, the energy traders will blow up and that as the Financial Times notes, will dwarf everything we've seen to date. The trouble in both Citi and JP Morgan have been related directly to the energy problems of the energy group.
The bottom line is simply this: The energy group must have the rates lowered and their debt briefly restructured in order to make it through the coming three month "window of pain".
The second step is to get that damn Middle East war going as quickly as possible, but again, not against the Saudi's because there are moves afoot in the Kingdom that may work out in favor of the oil patch gang. Here's how this one works to serve the needs of the energy traders: As we get closer to a war with Iraq, the prices of energy will be bid up worldwide. Under the cover of a war, energy traders will be able to bid up their prices to the point that they will be able to make profits - damn big profits - and keep everything under the covers. There will not be a public hue and cry about gas prices going back to $2.00 a gallon. The reason? Simply because people expect that gas prices will go up and it will all be because of that Saddam Hussein guy.
From urbansurvival.com
My note on the above, I don't know about the debt, will ask around the oil field.
Would someone mind explaining to me how lowering interest rates has caused the stock market to fall? (Or is there something else implied here that I'm missing?)
Seems like every time I read one of these doom and gloom stories, at the end of the web site there is a pot of gold to be sold.
Come on man, don't you know everything the Fed does is evil and is only done to suck the wealth out of this country.
Lowering rates could further weaken the dollar and foreign capital abandons US bond and stock markets and goes elsewhere. This is elementary.
Richard W.
Richard W.
Richard W.,p>Does a non-expert like me qualify?
I know from previous posts that you are more than smart enough to know that, so if you were joking, ... sorry.
Richard W.
Your HTML abilities alone qualify you. I'll put you on my "unofficial list" for now, but the official list keeper (rohry) is on a 5 week vacation. Mention it to him when he returns to posting the nightly Market WrapUp thread.
Richard W.
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