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  • jaquecroissant jaquecroissant Nov 30, 2011 8:10 PM Flag

    Thank you Ben Bernanke!

    I think Ben is probably the smartest guy in the room. People knock him when they should be congratulating him. I would like to personally thank him for orchestrating the plan of action we witnessed today.

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    • Good discussion today guys. I was beginning to lose faith in this board.

    • I do understand where you are coming from Doc. I'm not meaning to praise money printing, but as you and I agree, the government was dealt a bad hand. Believe me, I'm not a fan of bailouts, especially bankers. I guess our government did the best they could. I can't knock them for trying. These are not easy times by any means. I certainly don't have the answers. I just do the best I can with what I know.

      Thanks for your posts, I do read them and appreciate your knowledge regarding the macro. It's just beyond my knowledge so I'll follow your posts.

    • Yes Wins, I would agree with you that the EM's are where the growth will be. I think we are on the same page in many ways. Thanks.

    • <I think Bernanke and the worlds feds,etc have no other choice in this situation.>

      That is nonsense, Jacque. By doing these multiple QEs, it allows the banks to be profitable while other businesses suffer. American Airlines has 35% of its costs related to fuel. Would it have gone under if oil were at $40 to $60 a barrel? Of course not. That is what you get when you devalue the dollar. You help Goldman Sachs and stick it to AA.

      Politically speaking, I totally get it. Bernanke does not want the TBTF banks to fail on his watch, but companies are suffering from higher input costs due to Bernanke.

      That said, I would probably be doing the same thing he is. He can't do it alone and has gotten absolutely no help from Congress or the President for that matter. They need to be figuring out ways to make the system more efficient, and they aren't even trying as far as I can tell.

      There is no question that Bernanke was dealt a really bad hand and IMO he is doing the best he can with it.

    • I did not say saving banks, I said saving the banking system. The banking system is not a private enterprise.

      If you were a Lehman, Bear, or MF Global shareholder, you would probably not feel like you were a winner.

      But here is my main point: There is a great deal of revisionist history coming from republicans and wall street suggesting that we should just let banks do what they do with minimal interference and everything will work out better; Dodd-Frank is bad, blah blah blah...

      This is where you see the venal, the corrupt and the incompetent lining up to stick it to us again by evading the checks and balances that help equilibrate the system.

    • Jaque, it's kinda funny but I do agree with a lot of your thinking but a huge caveat.

      In short, I like the idea of buy and hold but I just can't think that way given the macro backdrop for the OECD.

      I know you like to stress stock picking(as do I) but to me, the odds are against you if the broad OECD indexes can't beat (real) inflation as they haven't over the last decade or so.


      and there's nothing to change my mind about the decade to come in terms of the broader indexes for the OECD.(FWIW, I think the LT outlook has gotten worse recently)

      I'm also not interested in merely keeping up with inflation though most would have been happy to do that over the last decade.... it's inflation adjusted positive returns that I would like to achieve.

      And for my money, the places to look for such returns are in the EM's for the simple reason that it's those economies and related indices that are showing real growth and provide a better fishing pond.

      That's not to say that there aren't firms that are located in the OECD that I won't look at and consider but for my money, they should have the majority of their exposure to non-OECD economies.

    • "AS LONG AS THERE ARE CHECKS AND BALANCES ON THE STRONG."

      60 Invertebrates in the US Senate voted on Monday to pass legislation that allows the executive branch to order the arrest and detention - without trial - of anyone, anywhere, at any time including US citizens. This should convey to us a feeling for how much they care about "checks and balances." They just don't. They are doing the exact opposite - destroying any such checks and balances.

      http://www.aclu.org/blog/national-security/senators-demand-military-lock-american-citizens-battlefield-they-define-being

      If Homeland Security were really protecting our Homeland, those 60 would be on their way to Gitmo for being traitors to our country and the Constitution. Just imagine how we managed to survive the Cold War, with amazingly powerful, intelligent and well-armed foes, WITHOUT the need to trash the constitution. What kind of self-importance or engineered-crisis motivates the sponsors of such legislation today? If the USSR could not scare us out of our Constitution, what is it the excuse today ?

      "What if ?" by Judge Napolitano
      http://www.lewrockwell.com/blog/lewrw/archives/99410.html

      "What if ?" by Ron Paul
      http://www.youtube.com/watch?v=NIaqmF5IXV4

      Revealing interview on the philosophical foundations of the Neoconservatives
      http://www.opendemocracy.net/faith-iraqwarphiloshophy/article_1542.jsp

    • BS !!!!

      Saving the banks is not my concern. Banking is supposed to be a private enterprise. Yes, they have become public institutions.... like all corporations. But in a capitalistic system, since when does it become the concern of the people to save the institutions ?
      Let me get this right. When they profit they win. When they F up... we loose. I that fair ?

    • I continue to think the Fed is doing the right thing.

      Maintaining the purchasing power of the dollar is an insignificant objective next to maintaining the viability of the banking system, and the availability (and acceptance) of credit. The dollar has no purchasing power if the banking system ceases to function.

      Bankruptcy of weak banks and weak countries is simply part of the process, and the weak being taken over by the strong is desirable AS LONG AS THERE ARE CHECKS AND BALANCES ON THE STRONG.

      Having middle class Americans (or Germans)sacrifice to preserve an advantageous system makes sense, in principle. What makes no sens is for the rich, who benefit disproportionately, to evade sacrifice. That is stupid morally, politically and economically.

    • Kudos to Musk for stating that the fed would not have done this had the world economy been good. Also, a surprising kudos to Wins for this quote, "A decline in USD purchasing power will have negative consequences for the economy even if it raises stock prices nominally."

      When people say, "don't fight the fed" what they typically mean is that the fed is lowering interest rates, and that in turn lowers T bill and bond rates. People then have to migrate from safer to riskier assets to get a decent return, and riskier assets like stocks, high yield bonds, and commodities go up. On top of that, the consumer can refinance his house at a lower rate and at the end of the day, he has MORE money in his pocket. So the consumer gets lower mortgage rates and higher stock valuations. That is why you don't fight the fed when they are cutting rates.

      But we are not talking about lowering interest rates. We are talking about the fed printing up dollars and handing them to Europe for Euros. What that does as Wins correctly stated was that it lowers the value of the dollar. That is not stimulative to anybody who holds, works for, or spends dollars. Unlike with lower interest rates, the fed is not helping the consumer but sticking it to him. So I will happily fight the fed when they are shafting the consumer.

      Bottom line Jacques is the move today was a classic bear market rally. That is why I hate being classically short because TPTB always pulls a stunt like this when the market falls. Thank God for the ETFs.

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