Replies to post #127633 on Zeev's Turnips Patch-No Politics (ZEEV)

[market_watcher]

We've already got 10% unemployment when you count 'discouraged' workers. Deficits don't include Social Security, AFAIK, and those liabilities are going to be huge(ironically, SS is supposed to run out the very year I reach retirement age, so I hope I don't need it and I wouldn't be surprised if it ran out before that). Bankruptcies are still very high, especially on the individual side, but on the corporate as well, even though they're down.

But, in my opinion, the worst thing is that by 'averting' this all, the FED has simply not allowed the market to clear and has let weak management teams, including itself, remain in control of assets that would be better utilized in stronger hands.

I don't think the FED intervenes in the market daily, though.

[Ace Hanlon]

A lenghty period of sub-par growth or a lengthy period of stagflation? I fear the latter.

[qwave]

Zeev, Maybe I missed it but have you officially packed away your bear suit? Have we seen the lows for the next year or two? Are you one of the folks expecting 3-4% growth for 2nd half?

[goodluck]

But we will plausibly have at least $500b of deficits over the next few years anyway, even without a "sudden dislocation." And unemployment so far hasn't shown any signs of lessening, though it is, to be sure, a lagging indicator, so who knows maybe it will get better in the next few months. But the budget deficits won't get much better unless this market rally grows to be even larger than the late 90s bubble, which I can't begin to fathom. We won't have the dot coms or the telecoms. Even so, the decrease in the cap gains rate will lessen tax revenues. Only a matter of time before rates rise again, and cause the cost servicing the debt we are incurring to dramatically increase.

It seems to me we have only postponed things. This is the price AG has paid to get renominated, IMHO.


re: <<I think the fed has successfully averted a melt down and got a soft landing, the penalty is a lengthy period of sub par" economic growth, the alternative would have been a sudden dislocation, 10% plus unemployment, major economic contraction lasting possibly three or more years and associated with that, budget deficits in the $600 B to $800 B annually and waves of bankruptcies.>>