Comments on: The Markets Are Making Almost No Sense

By: John

John — Mon, 22 Sep 2008 18:43:32 +0000

DP,

The 1929-1932 was created by a huge expansion in money supply 10 years prior to that by guess who - the Fed! It's very similar to today. They increase the money supply and keep increasing to keep the bubbles going ("roaring" 20s?) and then it all comes crashing down as a huge correction, for which no amount of printing money is going to solve it. The Fed actually increased the M1 during the 1929-1932 period by 30% but M3 still shrunk because of all the unwinding in the financials. The Fed was powerless then as it will be now.

By: DP

DP — Sat, 20 Sep 2008 22:48:45 +0000

You shouldn't complain about the Fed's rescue efforts. Would you like to see a rerun of 1929-32 when the Federal Reserve sat on it's hands while the financial system and the economy collapsed? That must haunt present day policy makers.

By: Bobbaloo

Bobbaloo — Sat, 20 Sep 2008 07:53:04 +0000

Really, very good article for the fact that it doesn't focus on one specific area, but rather views the whole debacle as a number of interconnected odd business manglings. Isn't this business ride we've been introduced to seem oh so exciting?! Regulations put in place during Roosevelt's Presidency to avoid the pitfalls of the Great Depression got nixed by McCain's economic advisor, Phil Gramm. He slipped it into a bill at Xmas time, that all those rich congressmen didn't bother to read, and we started the whole Depression style of losing the ol' home to the bank bit again. Aren't we having fun now? Phil Gramm says we're all a bunch of whiners in a mental recession. Gee, I guess if I was a multi-millionaire that had sucker punched a whole country, I might be arrogant enough to have that attitude too. But in the final analysis, I'm just a regular joe blow in no position to act that cocky about an economy around me that looks like its shrinking into a black hole. Oh, why does my gut turn as I keep wondering where the bottom is. Is this it, are we there yet?

By: watcher7

watcher7 — Fri, 19 Sep 2008 21:55:42 +0000

New Dow high in boom then bust

"Indeed the temporary breaks in the market which preceded the crash [of October 1929] were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed the end had come" (John Kenneth Galbraith, "The Great Crash", p.98).

History suggests, as I have argued before, that the Dow will peak in the McCain presidency and then the bust will come. The events of this week encourage me that the final rally of the ‘bull’ market that started in early October 2002 is near or underway.

By: Robert

Robert — Fri, 19 Sep 2008 01:00:19 +0000

Students of Physics know a sun expands rapidly before it collapses.

By: Coffee Addict

Coffee Addict — Thu, 18 Sep 2008 23:03:37 +0000

The market makes no sense because most players haven't got a clue.

Gold up - gold juniors down (margin calls and perceived dinance risk I guess)

More liquidity - market rally (in the face of a cliff fall I guess. Idiots still assuming a return to bull conditions abound.)

I'm still learning more about synthetic CDOs each day and each day brings new surprises. My gut feel at the moment is that about 50% of what was sold on the Aussie market will be wiped out - but who knows? maybe less, maybe all of it. Clearly the products were misrepresented by the promoters. In any case I still feel sad for the Lehman staff in Australia - and as usual it is the little people who cop abuse over the phone after the key bosses have walked.

A trip to the Rocky Mountains would certainly clear the breathing!