TPS

Who is "we" and who was it that told this to "we"? My perspective is that government deficits and stimulus helped stabilize and prevent this recession from becoming a depression. As I stated here in September 2008, we would find out if monetary and fiscal policies could prevent the US and global economies from melting down, and they did. Without those interventions, this would have been worse than the 1930s. Prior to the collapse in 1930, only the business sector was signficantly over-leveraged. In this crisis, households, businesses, and financial firms were all significantly over-leveraged. The FED bailed out the banking sector, and large federal deficits have helped create surpluses in the business sector. It's the household sector that continues to be a drag on the economy as it is still deleveraging. Also, much of the federal stimulus has been offset by state and local government contractions. My expectation about the level of unemployment (and I made a presentation about this) was that it would not reach the peak of the 1981-2 Reagan/volcker recession, which was 10.8%. My argument was that the 1981-2 recession was engineered by the FED through high interest rates in order to wring inflation out of the economy--monetary policy was tight and fiscal policy was loose. In this case, they (monetary and fiscal policies) used everything including the kitchen sink to prevent the global meltdown. Unemployment peaked at 10.1% in this one.

Gee, no one here questions that it's an editorial from the TWS? If the writer wasn't biased, he would've given a range for the cost of jobs, since the report said it created/saved from 2.4 tp 3.6 million jobs--he chose to report the minimum. The most biased part of the piece is his comparison of the unemployment rate, saying it was 7.3% when the stimulus was being debated (Dec 2008), as oppposed to using the rate when it kicked in, 8.6%. The report also stated that since the stimulus was one-time spending, as the spending recedes, so is the employment impact. This guy makes some idiotic conclusion that job growth would be faster than without the stimulus. From my perspective the fiscal stimulus did what it was supposed to do--it prevented a much deeper recession, and helped in turning GDP growth from negative to positive. Of course, I would've suggested a different mix of spending and tax cuts...

I don't have a barron's subscription, so couldn't access full article.

Thanks, I'll take a look after the holiday weekend. I think the key (from the quote) is that demand has been rising at a steady and predictable rate. Without knowing the details of the article, that doesn't lend support to the rapid run-up in prices in 2008; the dramatic drop; and run-up from last summer to April. I'm hoping to get that book I ordered too...

Now?

The release of the reserves served their purpose, as a signal to speculators (my original point). Of course it won't have a long term impact on fundamentals, but it does serve notice that one might want to be careful about taking too big of a long position in the future(s).... Personally I think it should trade around $90 +/- $7.25 over the next several months.

Seems to me the point you are making is that a one-day move based on this weeks EIA report is a trend that supports your view. I'd say you are a little premature on that conclusion.

I would hope that you're smart enough to know that one day does not make a trend. I like this guy's take: Seeking Alpha On a related note, I just ordered this guy's book Oil's Endless Bid

That basically sums up a lot of the problems right there...

Ok mr spin dr.... My focus has been on institutional changes that have allowed investment flows to overwhelm futures markets, not speculators in the classic sense. Interesting how you NOW say that ETFs and hedgies make a difference. I don't know how many times I tried to convince you and DC of this, as you both argued this wasn't the case. Speculators ran into elasticity of demand in May, and now are being chased by the IEA. Prices have come down 25% in two months, after the Libya impact. I've said on several occasions that $85 is probably close to fundamental value. Given that we probably can't turn back the clock and reverse the influence from non-commercial interests (which used to be < 30% of trades, and is now > 70%), then the IEA SPR might be a useful tool to keep the speculative froth at bay. When Keynes was working on the design of the post-war (II) international financial system, one of his proposals was to create a global commodity reserve fund as a way to stabilize commodity prices over time. Since commodity prices are much more volatile than industrial prices because of supply shocks, the fund would buy in periods of excess surplus and sell in periods of excess shortage. The idea was to eliminate the extreme variability in prices which creates too much uncertainty for producers. More stable prices make planting and expansion decisions easier. You and Magox may disagree, but I think this could be a useful tool to help combat price volatility caused by financial flows.

As the article pointed out, it's a message to speculators; it's not about US supply. In a market dominated by investment flows that are biased long, the IEA, acting like a central bank, is saying don't bet against us. So call me ignorant.

Haven't read it. Saw there's a new edition coming out, so i'll wait. I doubt that there will be much I haven't seen though. Might be a good resource for my classes.

Yes, we are both "Minskyites." Our economics are heavily influenced by the late Hyman Minsky. He's one of a dozen or so who predicted the crash. Where'd you see him?

Go IEA!

Thanks, that was cool.

No, it explains that they use a different keyboard because they have all of those funny symbols in Spanish. It drives you nuts trying to figure out how to get the @ and \ signs...Tho once you get the hang of it, it's kind of fun to throw that little squiggly sign over an n....As in manana amigos...

Nice job. I always like to do this after I've read up on each of the picks, and was thinking about doing the same, so I'll give brief comments to each of your grades. 1. I'm with Tenn boy, this is an A+. If you saw the video of behind the scenes from the draft on BB.com, right after Denver picked Miller, Nix gave a pump fist--they got the their guy, and possibly best player in draft. 2. I like what I've read about this pick. I like that they didn't reach and took someone projected to go 27-30 in R1. CB was a bigger need than most realized. That said, your grade is probably correct. 3. I like everything I've read about KS. Bills definitely needed ILB help. He reminds me of Talley, and if he can provide that kind of emotion and leadership, then you've again got the right grade. 4.a and b. These were the two hardest picks for me to judge. Searcy seems to be an enigma, some calling him a great SS, others saying he shies away from contact. C+ is probably right. Hairston seems to have a lot of upside, so I'm with you here too. 5. Given all of the accolades on JWhite, I'd say his grade should be bumped a bit. 6. CWhite, I think says it all. I like the enthusiasm, but does he have enough athleticism to make it? I'd bump this one down a notch. 7.a. This is my sleeper pick. The only knock I've seen on this kid is his size. I think someone on the board compared him to Jabari Greer, which I think is a good comparison. Bump him up a notch. 7.b. Usually the type of pick that I root for, but given how over-hyped he's been here, I'll wait and see if he's more than a Leif Larsen... Silly to give an A- for such a unknown quantity. I'd give the pick a B for the draft department's ability to find him. As for waiting 2-3 years, what fun is that?

The Fed can get away with it as long as the economy stumbles along and unemployment is above 8%. Under these conditions, there are few other alternatives. Even if China et al stopped buying, yields would rise a bit, but not because of inflation. As for your question, that's the point we're arguing: yields did rise with QE2 because of expectations, which haven't materialized to the extent believed. When or if growth seriously takes hold, yields will rise; but until then, the FED can push on a string all it wants without much of an impact. As for the CPI Mag, I don't disagree that as an average indicator it doesn't tell us how those below the average are affected in a worse way. That is, for those at the bottom, they are more affected by changes in gas and food prices than the average consumer--there's no doubt. However, since you don't buy the CPI as indicator (but you seem to be ok with all other data), it's pointless to debate. Your answer will always be, "by my definition, I am correct." You're bordering on DCTomophobia, defined in Webster's as "fear of being wrong..."

Disagree. They've gotten away with it because of 9-10% unemployment. My position for the past several years is that monetary policy is not very effective in severe recessions. The Fed has flooded the system with liquidity, but they have been pushing on a string. International reserve currency status has played a bit part.

Since 1950 there's only been one year of deflation. There is always some inflation now (annual). The question: is it above norm? Not quite. However, if the recent couple of months becomes a trend, maybe. Given the drop in oil in early May and continuting, will probably see a drop in measured inflation for May. My beef is with people who were crying we'd see Zimbabwe or Weimar Germany in the US because of FEd policies. I agreed with Magox about the commodity price increases due to QE2, which I argued would be mainly driven by investor speculation (like himself), and that's trickled into the CPI. I'm not sold that it's a sustainable trend yet.

That's certainly the issue in this current investment environment--finding a decent Sharpe return. However, the underlying issue of my post was a dig at those who argued over the past several years that the Fed was printing money which was going to cause high (or even hyper) inflation. Still waiting...

It's not how you get there, just get there on time. SJ “You beat the defender, but you might run the same route five different ways. As long as he’s at the right depth where he’s supposed to be and on time then he’s fine. That’s the best part of the offense. I’ve been in other offenses where I had players like Steve, but the offensive coordinator did not give the players the freedom to be creative and they felt handcuffed.”

Bill Gross and Madox must be sweating....

I think they should try Jasper at QB, as they don't have a 3rd or 4th one yet. He might need to lose a few more pounds though...

Interestingly in every one of those 4-down segments the commentators talk about what high-character guys they are; a trend that's continued from last year.