Saturday, October 25, 2008 1:02:38 PM
>> I don't want to be in the market over that announcement period. If I miss the bottom; I miss the bottom.
Of course we all make our decisions based on our own circumstances and estimates of the future.
So to move the discussion away from what we will personally do, I am wondering what the institutions who have received the 2-3 trillion $$ in new liquidity will do ? Will they simply hold accounts in zero interest treasury bills ? Or will they invest in well-covered dividend paying stocks ?
>> At every turn pundits have tried to impose limits on this crisis.
OK, so what exactly is this problem that is destroying markets day after day ? The only thing that I can see that explains a problem of this magnitude is the fact that some (most ?) of the growth in demand for consumer goods since 2001 came from funds derived from refinancing of homes, and federal government deficits (that financed tax reductions).
Refinancing, as an enabler of demand, had dried up couple of years ago. So I don't think the current GDP has any of that inflation in it. Federal deficits will continue, so I don't think there can be much reduction to GDP. Maybe a couple of %. Traders might throw a canniption about that, but I think it will be eventually overcome by the recipients of the 2 trillion bucks that the fed injected into the economy in the last few months. Inflation will follow, but I don't see that as bad for Intel.
Regarding the banking system seizing up, that is just a matter of the fed instructing someone to write bigger numbers in some column. They have figured out which columns in which spread sheet to modify, and it is being done already. That problem will evaporate.
Of course we all make our decisions based on our own circumstances and estimates of the future.
So to move the discussion away from what we will personally do, I am wondering what the institutions who have received the 2-3 trillion $$ in new liquidity will do ? Will they simply hold accounts in zero interest treasury bills ? Or will they invest in well-covered dividend paying stocks ?
>> At every turn pundits have tried to impose limits on this crisis.
OK, so what exactly is this problem that is destroying markets day after day ? The only thing that I can see that explains a problem of this magnitude is the fact that some (most ?) of the growth in demand for consumer goods since 2001 came from funds derived from refinancing of homes, and federal government deficits (that financed tax reductions).
Refinancing, as an enabler of demand, had dried up couple of years ago. So I don't think the current GDP has any of that inflation in it. Federal deficits will continue, so I don't think there can be much reduction to GDP. Maybe a couple of %. Traders might throw a canniption about that, but I think it will be eventually overcome by the recipients of the 2 trillion bucks that the fed injected into the economy in the last few months. Inflation will follow, but I don't see that as bad for Intel.
Regarding the banking system seizing up, that is just a matter of the fed instructing someone to write bigger numbers in some column. They have figured out which columns in which spread sheet to modify, and it is being done already. That problem will evaporate.
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