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Fed Kicks Wall Street in the Sh'narkies!

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February 06, 2008 – Comments (11)

Wow.

Although the weakening economy is a big concern, "we must not lose sight of the other part of the Fed's dual mandate -- which is price stability," Federal Reserve Bank of Philadelphia President Charles Plosser said, according to Dow Jones Newswires

11 Comments – Post Your Own

#1) On February 06, 2008 at 3:17 PM, floridabuilder2 (99.32) wrote:

maybe they get it after all...... now if they can just convince Ben

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#2) On February 06, 2008 at 3:31 PM, TMFBent (99.80) wrote:

Well, I think the Philly fed is traditionally the inflation hawk these days, so it may just be posturing from the "bad cop." But, since productivity is down and worker wages are getting pressure up, there's probably no need to add "flation" to the "stag" we're seeing, especially when the stag is more or less centerd in RE and the crappy loans surrounding it...

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#3) On February 06, 2008 at 3:47 PM, FleaBagger (28.10) wrote:

If you just said the economy's doing not-too-bad to okay aside from housing and dumb lenders, amen. Nothing shooting out the lights, but most of us are not in for much devastation, unless our government "bails us out."

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#4) On February 06, 2008 at 4:21 PM, mickeyc21 (29.76) wrote:

Any suggestion that the rest of the economy is OK is simply delusional. I'm getting tired of posting this response to the "contained" crowd and I'll probably give it up soon.

However - once more for the record: I own a business and know a lot of other business owners in a very wide cross section of industries in the Western US. THINGS ARE NOT OK!!

If you own a business elsewhere and have a different viewpoint have at it. However one of my advertising partners works US wide and his take is that everywhere is bleak.

These posts remind me of the conversations I had with people from April 2007 that housing was imploding. Everyone looked at me like I was an idiot and most people still thought that up to recent weeks. 

If you want to invest your hard earned money now good for you. 

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#5) On February 06, 2008 at 5:09 PM, CycleFreak7 (< 20) wrote:

I'll go out on a limb and make a prediction:

The government powers that be and the Fed lackeys they control don't care about the long term.  They care about the current administration NOT going in to Novemeber elections with a stifled economy full of woe, high unemployment and a powerful recession in full swing.

The Fed (probably against their own judgement) will lower rates again. Further, the good ol' government will bail out troubled lenders and come up with some miraculous cure for homeowners in trouble.

The Reps will then stump this as a great triumph and use it gain votes.  Nevermind that it will devalue the USD and fuel another bubble.

It's exasperating.  Like FloridaBuilder says over and over, don't buy into homebuilders, lenders and banks.  But don't short them either.  The day after you short, the gov't will announce a bail-out and ... well, you know what will happen then. 

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#6) On February 06, 2008 at 5:23 PM, AnomaLee (28.72) wrote:

mickey, 

That may well be economically true for whatever industry you operate in and where you live. However, we are just in another cycle and experiencing a shift in the economic strengths of our economy. 

I think it's nice to see the emergence of an industry that used to carry our economy over 50 years ago. I live in an area on the "Rust Belt." Life is being breathed into these industries that have been "left for dead" for decades. These goods producers, & manufacturers(steel, coal, minerals, others) will see continued growth. The demand to export due to the devaluation of our hard-earned dollar bills does have its positives, and it could eventually help to offset trade deficits.

I've stated in my blogs here & elsewhere that small business on a whole are hurting... and are hurting bad right. Small businesses have limited access to credit, and banks are usually their only line of credit. I've been personally seeing how this is hampering the growth, start-up and sustenance of small businesses in a lot of areas. Hell, it's stalled my personal plans of entrepreneurship, but....

This country's economy has been overwhelming driven by the growth of its non-good producing "service" sector. We don't competitively produce many things to trade and we'll probably see the service sector slow and it will hurt because it is the wheels of our modern economy and it's the platform for the American consumer. On the grand scale, it can be okay. Economic cycles occur and when you can find ways to discount short-term pain it leads to long-term prosperity. We need to bring back the policies & understanding of Paul Volcker

cotton & agriculture, tobacco, railroads, steel, airlines, technology.... From the industrial revolution to the information revolution. Throghout the past 200 years of the U.S. economy we have seen many cycles. 

I just wanted to say that there are things that are okay.

 

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#7) On February 06, 2008 at 7:49 PM, SpaceMonkey01 (30.79) wrote:

Ruh-row, Shaggy..... they're already trying to tack it on

 One provision possibly stranded with the Democratic plan by Wednesday's vote would allow financially troubled companies to qualify for a tax refund this year. Homebuilders are among those who would benefit and company officials from Centex Corp. (CTX), KB Home (KBH) and Lennar Corp. (LEN) have been on Capitol Hill this week lobbying lawmakers.

 And under the provision sought by homebuilders, companies hurt by the downturn could make more use of tax losses from 2006 through 2008, by offsetting profits as far back as five years instead of the current two-year "carryback" limit.

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#8) On February 06, 2008 at 8:37 PM, FleaBagger (28.10) wrote:

Lee: don't talk down to mickey like that. Since he's right all the time about everything, he's probably a billionaire investor, and he's getting tired of saving us from ourselves. If we're not more respectful, he might shave his prophetic beard, ditch his camel hair robes for bermuda shorts, and leave us in the dark for good. He is, no doubt, able to afford his own Caribbean island, so the slightest provocation might drive off our guiding light.

Cyclefreak7: I totally agree with what you're saying, except that you seem to be giving dems a pass. They're at least as bad, as we will no doubt learn the hard way in 2009.

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#9) On February 06, 2008 at 8:40 PM, abitare (47.45) wrote:

Good post from dwot on:

U.S. bank woes are "poetic justice": Buffett

"I wouldn't quite call it a credit crunch. Funds are available," Buffett said during a question and answer session at a business event. "Money is available, and it's really quite cheap because of the lowering of rates that has taken place."

He added: "What has happened is a repricing of risk and an unavailability of what I might call 'dumb money,' of which there was plenty around a year ago."

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#10) On February 06, 2008 at 9:58 PM, CycleFreak7 (< 20) wrote:

FleaBagger: Yep, agreed.  Let's not forget that Congress is Dem-controlled. Savvy voters can (and will) pick and choose who to blame. Neither party wants to play the patsy or take the fall.

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#11) On February 07, 2008 at 3:43 PM, Tastylunch (29.40) wrote:

just wanted to say as fellow rust belter, I have to say ANomalee's post is spot on.

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