tag:blogger.com,1999:blog-1207581886255094115.post6165109540490156936..comments2024-02-26T05:51:17.859-05:00Comments on Economic Disconnect: Voodoo EconomicsEconomicDisconnecthttp://www.blogger.com/profile/02802078645713106743noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-1207581886255094115.post-6606629896774894282010-09-26T09:52:41.324-04:002010-09-26T09:52:41.324-04:00GYC - final thought on this, because I'm sick ...GYC - final thought on this, because I'm sick of arguing about it - TPC said that my argument was like the Cash on the Sidelines nonsense. 1) Cash on the sidelines IS nonsense - I wrote a whole post about it. 2) there are two things that change Cash on the Sidelines - a) new issuance b) buybacks<br /><br />when the Fed buys, it's like a buyback (even TPC said himself that it was like the bond was being called!) - that changes (increases) "cash" on the sideline! it may not matter for a 2 year bond, which will mature soon anyway, but a 30 year bond is different. <br /><br />I think THEIR point has to do more with the fact that 30 yr treasuries are very much cash-like in the current excess -reserves environment, but TPC never responded to that comment either. <br /><br />fahhhhk it.Kid Dynamitehttps://www.blogger.com/profile/17475987512856310577noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-87831720227272771162010-09-24T19:24:45.298-04:002010-09-24T19:24:45.298-04:00KD,
Well I think when pressed TPC was vague. I tr...KD,<br />Well I think when pressed TPC was vague. I tried to make the best of it but I thnk its funny that we are probably on the same wavelength as far as WHAT QE can do but not the mechanics. I can only hope all those reserves are not available or anyone that has no metals is going broke real fast, like overnight.<br /><br />Scharfy,<br />a bit late, but I will see what I can do!EconomicDisconnecthttps://www.blogger.com/profile/02802078645713106743noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-5337427974955369392010-09-24T19:07:48.841-04:002010-09-24T19:07:48.841-04:00Phil Collins. Easy Lover
The Wiz. Ease on down ...Phil Collins. Easy Lover<br /><br />The Wiz. Ease on down the Road<br /><br />Lionel Richie. Easy Like Sunday Morning<br /><br />Eazy E. Eazy Duz it.<br /><br />Any of the above. Theme should be self evident.scharfyhttps://www.blogger.com/profile/18309882331114382248noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-19140828957553760112010-09-24T17:26:03.265-04:002010-09-24T17:26:03.265-04:00GYC - TPC says he did answer my question, and it a...GYC - TPC says he did answer my question, and it all comes down to excess reserves. Their point is that banks have trillions that they CAN spend if they want to, but they aren't doing it.. ie, they are already NOT spending it on treasuries - it's sitting at the Fed as excess reserves... so, when the Fed buys stuff from them, there is no reason to believe that they will have to reinvest it...<br /><br />that's not quite true, obviously. The banks don't HAVE to reinvest it - actually, they might - if the Fed bought all of the banks assets the banks would obviously reinvest their 0% cash. So there is a sliding scale somewhere - that's my point, that they keep missing.<br /><br />TPC also keeps mentioning Cash On the Sidelines which is not the right analogy here.Kid Dynamitehttps://www.blogger.com/profile/17475987512856310577noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-34089233009410767182010-09-24T14:45:21.368-04:002010-09-24T14:45:21.368-04:00check this: http://pragcap.com/does-quantitative-...check this: http://pragcap.com/does-quantitative-easing-drive-asset-prices-higher<br /><br />i strenuously disagree with TPC here, and I think he's been brainwashed...<br /><br />he writes: <br /><br />"If a bank swaps bonds for cash the net financial assets in the system was not changed. This is the key point that most people seem to miss with regards to QE. Therefore, if that bank were to go out and use that cash to purchase new assets they would have to find a seller of equal size. The price the buyer and seller decide upon has nothing to do with the fact that one has cash and one has another asset. The price they agree upon is based upon which buyer or seller is more eager to allocate funds."<br /><br />as I wrote in my own post comments, this is where commercial banking theory and investment banking reality differ. CS was completely right in their claim of how it works, which TPC was trying to refute.Kid Dynamitehttps://www.blogger.com/profile/17475987512856310577noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-15433861370624287582010-09-23T21:29:55.432-04:002010-09-23T21:29:55.432-04:00I changed a side bar picture, which one?I changed a side bar picture, which one?EconomicDisconnecthttps://www.blogger.com/profile/02802078645713106743noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-41680322723180525792010-09-23T21:04:04.699-04:002010-09-23T21:04:04.699-04:00Glad you liked it, I certainly did! Better to hav...Glad you liked it, I certainly did! Better to have fun and do what I was made for, sarcasm.EconomicDisconnecthttps://www.blogger.com/profile/02802078645713106743noreply@blogger.comtag:blogger.com,1999:blog-1207581886255094115.post-82419162349898732792010-09-23T21:00:52.791-04:002010-09-23T21:00:52.791-04:00Great post!Great post!watchtowernoreply@blogger.com