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  • bobgiamarco bobgiamarco Aug 27, 2009 5:37 PM Flag

    More Bank Failures - S&L Remember?

    Hi Gina,

    I think the big take away in all this is not whether it will correct at precise levels. It's about magnitude of the correction and the need to be cautious of capital preservation.

    "It's different this time". I heard that same line with the RE Bubble and I was ridiculed.

    But no one here has told me why it's different. Where is the well supporting facts and rational other than it won't happen?

    I hope you are not "banking" on massive coordinated global printing and borrowing of money is the magic pill. Of course it requires massive money supply relative to the total massive debt.

    What happens if the stimulus money doesn't sustain the current "recovery"? Is the answer to print more money to prop the markets up?

    Even the government doesn't know. Increasing the money supply has serious negative implications which comes around to bite back later years - Hyper or Higher Inflation =higher interest rates.

    FYI Printing money didn't work in 1930's

    Why Did The Great Depression Last So Long?

    http://www.forbes.com/2009/04/30/1930s-labor-wages-business-ohanian.html

    "And the Depression lasted far longer than it should have. After 1933, productivity growth was rapid, liquidity was plentiful, the banking system was stabilized, deflation was eliminated and there was plenty of demand stimulus as the Federal Reserve more than doubled the monetary base (currency and bank reserves) between 1933 and 1939."

    Gina why are you at 100% cash so early when you expect a zig zag market? Are you hoping to time a zig zag line?

 
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