Thank You, QE II!

what happens now?

qe3-20

ab, maybe, but it seems politically very difficult, from all sides of the political spectrum.

what's particularly telling is that this slow down has been occurring DURING QEII. not after, not even as it approaches its end. the revisions to 4th quarter income gains were gruesome. and a number of issues seem to be arising rather quickly in the emerging markets.

The financial asset bubble raised the price of oil from $60 a barrel to $110 - at the same time as demand was falling! It was a completely failed experiment, and the Fed knows it. But NOW WHAT DO THEY DO?

Draining liquidity will cause financial assets to fall 40% or more. Not draining liquidity will cause inflation and unemployment to rise. It is an impossible situation.

What a panic!!!

QE2 is a failure. Bank stocks went down, Commodity prices went up, Consumer spending went down. Perhaps the income effect of lower interest rates offset the wealth effect from higher stock prices..

Sorry to show my ignorance, but what does QE2 stand for?

Quantitative Easing -- the government printing money to pump up the economy.

Commodity prices are going up because every time govts print money -- and we are at a historical record for govts on most continents--hard asset prices always go up. Speculators jump in because this is a well established economic model. Inflation will go up in spite of wage pressures and the disastrous housing industry.

Everytime economic statistics get released, they suck just as bad as the previous month.

What's surprising is that people continue to be surprised by the bad news.

could spell trouble for residential real estate.

everywhere except Manhattan...

buy now or be priced out forever.

Undoing the damage started with Greenspan is going to take a long time. Nothing the Fed can do about it now but let it happen, or push it down the road. But pushing it down the road - QEII - only causes inflation because the money has no place to go.

1. Americans really don't understand inflation and how damaging it can be - this includes our policy makers.

2. Given their ignorance, what makes you think that the FED and policy makers don't WANT to induce higher-than-average inflation?

3. Answer to 2: They do. Partly because they are criminals that can't accept normal economic consequences for supporting bubbles and partly b/c they are ignorant and lastly because they are gutless cowards that can't do the right thing and let our economy restructure away from being a oligarchy ponzi scheme where the top 2% steal everything.

the unknown is what would happen if the fed actually did let it happen. seems safe to assume that unemployment would get considerably worse. if there are three choices: inflation, deflation or just right and just right gets taken off the table, what would you choose?

Well,
As long as older Americans can continue to milk the system dry I think we should dig down and make the sacrifices necessary so that retirees can continue to live the lifestyle only THEY deserve. It was they who were alive during WWII although, too young to serve that sacrificed so much for us. My father seems to remember something about gas rationing. The generation that smoked, drank and whored with reckless abandon prior to lung cancer, alcoholism/diabetes, and STD's that kill. The generation of free love. Pot smoking, LSD taking dirty hippies who, when the party was over, did little to pass the mantel forward. The all about ME generation....It's like they got theirs and pulled the ladder up behind.

Oh yeah,
You go ahead...we'll pick up the check.

Answer: DEFLATION

You had an economy that went on a 13 yr party that included a 6 year orgy from 2002-2007.

Not only did RE prices shoot up over 100% in many markets but supply exploded as well.

Now we are stuck with more supply than ever and lower prices - and people are wondering why RE hasn't recovered yet.

If you want to clear the market, you have to let prices fall to an equilibrium point - but our gov't is in denial of basic economics and would rather pretend that it can maintain inflated RE prices using policies that are rewarding the very institutions and investors that helped create the mess in the first place. They keep on claiming that deflation would devastate our economy but what they really are doing is preserving the wealth of the top 5% of our population.

Do you REALLY think that people who are in risk of foreclosure are going to be saved in the long-run by our economic policies? Do you really think that we have an economy that is structured so the average Joe and Jane have a real fighting chance at earning a real income?

Who really benefits from our super-low interest rate policies and free-gov't money bailouts? The financial institutions that are defrauding borrowers and our courts via the corrupted foreclosure process while continuing to rip off clients with ridiculous fee and interest rate practices.

Our gov't is supporting a house of cards made up of institutions that have held our economy hostage b/c of their "too big to fail" status and they know it.

This is how our economy is presently structured: Rip people off, steal what you can and if you screw up go to the gov't for a handout. It is based on excessive borrowing at low rates and inflation-pushing policies that keep asset prices up to help banks' cover their loans/security exposure.

This is NOT a healthy economy and not how standard economics work. It is an economy based on entities that have a dangerous amount of influence and are holding the US public hostage with the false threat of failure.

Unfortunately most of the US public doesn't care and our politicians have nearly all have been bought off.

so --- your choice is deflation because that will punish the banks and the politicians?

what will it do to the rest of us? once, deflation takes hold, how will we stop it? once home prices fall to an acceptable level, then they will magically stop falling?

how much unemployment will result?

Yes the poor homeowner..... Please help the BMW m6 driving tool. It's not his fault he took out a $2mm mortgage on a $2.01mm home.

While we are at it, let's sue henkle for making the knife that serial killer used.

If the sheep uses cash and lived humbly we'd be alright.

Do not disagree on how we've dismantled our capital formation infrastructure, to basically one of consumer credit (financing of present day prada shoes consumption). When did we turn the 99% of allocating of capital to productive uses in society and 1% prada shoe consumption upside down to 99% vaca/car/tiffany/victoria secret/cigarette consumption financing?

For several years there would be high unemployment; but if you think the present rate and structure of employment in the US (a bunch of people working at McDonalds and WalMart) is healthy or is going to make us competitive in the future, think again.

**The sad thing is the concept of a healthy recession and economic restructuring went out of the window during the mid-1990's with Greenspan and was replaced with perpetual FED and gov't pumping of the economy to maintain unnatural growth and an imbalanced economy.**

That is a natural consequence of the economy restructuring and its assets reestablishing equilibrium.
You can't have it just one way: Economic growth driven by exploding asset prices but then maintaining the out-of-wack asset prices with inflationary economic policies in order to prevent them from falling back to a normal state.

Economic policy shouldn't be about promoting excessive asset prices, but that is what we presently have. We are promoting more and more investment into the financial sector which is feeding off of our need to borrow and finance our way to "prosperity" (and also to be able to afford such assets at present price levels). Meanwhile, real incomes haven't gone up for over a decade - while RE prices more than doubled in many places - then came off trapping many with negative equity.

Can't you see this is EXACTLY what the financial sector wants? (And just guess who is advising our gov't on what to do...) You can't really afford anything so you have to borrow and do business with them. That lets them charge you all sorts of excessive fees and rates and nickel and dime the general public to death. What used to be considered usury is now commonplace. This is what you get with easy money and inflated asset prices coupled with no real growth in real income - and a complicit gov't that refuses to regulate or enforce any financial laws.

The bottom line is that our economy shouldn't be held hostage to inflated asset prices. It isn't a normal and healthy sign but a signal that things are terribly out of place. There will be consequences of maintaining this status quo - though many of the beneficiaries will have made more than enough money to flee the country if any political issues may arise - which is what I fear in the medium- to long-term.

Again, we have corrupted our economy, our politicians and OUR COURTS with this national RE boom. Yet people want to keep the music playing and act as if we can inflate our way out...

It is time to face the consequences head on and deal with the pain... not just keep on putting it off believing we can have our cake and eat it too.

Focus on the micro picture not the macro.
the macro is screwed. screwed for years to come unless some super smarty figures out a way to package debt and feed it to starving Africans. Focus on the micro. My block, My business, My town, My family. How do we, as individuals, thrive in a shit storm. One way, sell paper towels and safty glasses. Be blessed that your a New Yorker. QEII does suck unless you live here and realize that a nice portion ended up in the hands of those that caused the problems who live, work and, spend right here. They also buy re. Is it bad yes. As bad as other places? No.
I hear that Japenese re shoppers will spend anything for a Park Ave. address.
One Avenue down...14 to go.

Just as I am sure it was wonderful to be an industrialist in Germany or Japan during the mid-1930's to early 1940's...

NYC RE has been an oasis b/c it has become a destination for all of the ponzi millions - just as Miami RE benefits(ed) from the drug trade.

QE2 has priced many out of the NYC RE market - like the conservative investors that weren't willing to gamble and place over-sized bets that RE would keep on appreciating at a 25%/yr rate.

How is this a healthy thing?

W67: Nothing makes me crazier than that Prada mentality. I was in Miami waiting for a car at an upscale hotel and a car full of 20 somethings pulled up. So many got out of the modest car it reminded me of a clown car in the circus and they were all wearing Christian Louboutin shoes. Some were wearing the Daffodile line which are $2000 and up!!!! I guess we taught an entire generation that you don't have to save, that you can spend recklessly because you don't have to put money down on something like a house -- the govt will just give you one. Btw, they were not hookers.
http://www.bonanza.com/listings/PERSONAL-SHOPPER-Christian-Louboutin-Daffodil-LEOPARD-35-5/30457064

The car full of 20 something clowns know how to make a smart investment: for $2000 you get TWO shoes, versus only one South Florida condo for $8000. Two is more than one. Duh.

'Btw, they were not hookers.'

Needless to say they weren't hookers....hookers work for a living. If they were hookers wearing those shoes at least it's a business expense and deductible.

A clown car of 20 something hookers wearing expensive sexy shoes sounds like something I might like for................let's say....My Birthday.

So now all my friends on SE know what I want for my B-day. I've got a big one coming and these girls don't sound cheap.

As long as they look cheap...I'll be satisfied.

I could think of one regular poster here on SE that was concieved in a clown car.

Maybe that's why the town/county 'username' keeps changing.

explains a lot.

Falco: HA! Next time I'm in Miami, I'll see what I can find for your birthday. AH: that $8000 price tag is coming perilously close to the truth.

"So many got out of the modest car it reminded me of a clown car in the circus and they were all wearing Christian Louboutin shoes. Some were wearing the Daffodile line which are $2000 and up!!!! "

?? what offended you the most? the modesty of their car, the quantity of their persons, or the price point of their footwear?

"Next time I'm in Miami, I'll see what I can find for your birthday"

did you just offer him your pimping services?

Miami.....
Nothing but clown cars full of hotties, at least in south beach.
Little bit north of south beach we got clown cars full of old New Yorkers out searching for the cheapest earliest dinner $4.95 will buy.

Pimp my vacation!

apt23, it's been $8000 for awhile in the death's waiting room compounds a bit north.

For example, http://www.realtor.com/realestateandhomes-search/Delray-Beach_FL/price-3000-8000 currently goes as low as $6000! With the fancy pimped-up laminate floors replacing the royal blue wall-to-wall.

Furniture stays.

So apt23 bought an overpriced apartment in Miami.
She believes that NYC real estate buyers are the moral equivalent to cigarette pushers.
A wasteful apartment purchase is better to her than buying nice shoes.

Truth
about 2 hours ago
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My boyfriend is in Joplin, volunteering.

He's a "thug"?!

Stick it up your smelly hole, slob.

Seeing yet another of these threads from Steve, it reminds me how Steve spends an awful lot of time explaining why he keeps losing money.

Perhaps his time would be better spend trying not to lose it in the first place.

Yup.