TPS

Hola Olivier, Am on sabbatical myself. Never know about meeting people, I´ve had two "small world moments" on this trip already. Just finished a 4-day wine drenching in Mendoza, and after perusing a few posts here, am ready to do it again... Chao, tps Oh, replies to others: there are beautiful women in every country--I don´t discriminate; Kirchners? I'm trying to hang with my leftist hermanos: Hugo, Raphael, y Evo...

A quick update from my last cryptically drunk post--"dopes." Been travelling, since that post, in South America: Galapagos, Machu Picchu, Lake Titicaca; currently in Chile, and now heading to Mendoza, Argentina to drink as much red wine as I can in the next 5 days. Hope you are all well and surviving the recession. I am... Chao amigos. tps

Well, I can see that the cognescenti here believe that all is well. And all is the best of all possible worlds. Keep hoping for the best. I'm out of here. Heading back south. Hasta amigos. Good luck...

Idiots. We'd all be better off if the same folks who ran Bear-Stearns, Merril Lynch, AIG, Lehman Bros, GM, Chrysler, Wash Mutual, Wachovia, et al ran the government.

Because it's essentially at capacity already.

Was there over the weekend...Yummm! Had the pastrami, but I forgot to ask for an egg on it. I'm glad I wasn't drunk, else I would've had a second one... Had a couple of Yuenglings of course.

The thing that people don't seem to realize though is the FED, under Bush or Obama, can reverse what it's done when things improve. Just as it can flood the system with "cash" or liquidity, so can it take it away. Money gets created when the banking system starts lending, and right now it's not. As I keep saying, inflation will occur only if the money gets into the hands of those who spend it--in fact, it's more correct to focus on his fiscal stimulus plan as what might bring about inflation, not the banking system awash with liquidity. The other force that could bring inflation about is the investing class gets confident in speculating in commodities again. The interesting thing about the past 15 years (or so) is that with all of the money sloshing around the globe what we experienced was several asset inflations (tech, real estate bubbles) while goods inflation was tamed by globalization (at least until this past year when the brief commodity speculative bubble caused prices to rise).

Some of it is going, and probably more needs to be done. I mentioned a program in Philly (I believe) that gets lenders and borrowers together in bankrucptcy court to re-work the financing--both sides give a little. A fiscal stimulus will be targeted at the middle class, so that's no different than a "bailout" is it?

The monetary base, which essentially represents the amount of (paper) currency available in the economy, has increased by $600 billion since August, which is exactly the amount of excess reserves held by the banking system. So "team Bush" has already flooded "the banking system with paper." Why is "team obama" getting the blame for that?

It's now only "partially the root of the problem." The other side of the policy coin needs to kick-in in a big way now. Job creation and tax cuts for those making < $100K are necessary. Need to limit credit card defaults, student loan defaults, and business bankruptcies. In other words, there are a lot of other assets that could go bad in a bad economy. While I think Paulson has !@#$ things up more often than not, the FED continues to do whatever is necessary. Fiscal policy kicks in early next year. I expect continued negative news and surprises (who will we bailout next?) until June.

Gee thanks for the ppp news posting. No comment yerself?

You mean to say, "anyone who disagrees with me."

What do you mean around the picture, Hell it's uncle karl!

The key is that money has to be put into the hands of people who will spend it. You don't get inflation because the FED has injected $1.5 trillion into the banking system. In addition, once things "settle down" (if they ever do), the FED can always take the liquidity back. It is true that inflation occurs because there is too much demand relative to supply, and with businesses and consumers cutting back spending, there is no danger of that at the moment. As to your second point, if a dollar sell off caused interest rates to increase, that would push the US further into recession, with a slight counter-effect that whatever we still produce will be cheaper to foreigners. Also, I don't know too many workers who can demand higher wages when unemployment is rising. The cause of hyperinflation has been governments spending on goods financed by printing money when resources (capital, raw materials, and labor) are scarce. We're currently in a situation where resources are becoming "more plentiful."

Thank you sir. My apology to criticizing you on this...

Curious to know your thoughts on how the current deflationary recession could become a "hyperinflationary depression"? Since demand for everything is falling, which is bringing prices down, how exactly can we "jump the shark"?

Not quite. I criticize the belief that 'tax cuts don't lead to deficits." Also, Bush proposed his tax cuts when the economy was slowing down; at that time, I argued for a cut in the payroll tax (again) vs. his cuts (mainly) targeted toward the top. That was a minor slowdown, this is the most severe economic crisis in 80 years. Any sane economist understands the need for expansionary fiscal policy in these times, deficits be damned! Btw, could you expand on this:

I like Gill When was the last time an OC for the Bills had faith in the O-line to run the ball in short yardage situations, let alone 4th and 1?

No soup for you! The most fiscally irresponsible "CEO" in history is threatening to veto an extension of unemployment benefits because it would be "fiscally irresponsible?" Ahhh...irony, Bush be thy name...

It's almost as if some one some where is trying to make us hate our own team... "Please take them away, to a richer city."

I try to be optimistic, but this was the worst coaching I've ever seen. First, I don't know what happened to Schonert. His play calling went from inventive to predictable. He found something that worked, then stayed with it 3 times in a row until it didn't. How many times does he call that play with no one in the backfield on 3rd and short? What happened to him? I am looking forward to hearing Jauron's excuse for that last set of downs. Sure Edwards is having a slump, but he's not the problem. Having a coach without the guts to stick with the run is the problem. Please bring in someone who is tough. I'm tired of so-called smart and fast defenses. It's all about the trenches. The good news is I don't have to watch this sh-- anymore...

I agree. The team wins the next three, then wins 2 of 3 in a rematch with the division to make the playoffs.

Hmmm...the mechanics of the bailout as dicussed here...vs. the actual use of it....as if paulson is reading ppp....

I thought his list of economic advisors was pretty impressive. Who else should he have included to reassure Wall/Main Streets?

Shows where my mind is...