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Well said Patrick. Will see how long this over-leveraged system will work using same old tricks over and over.
Issues remain and grow.
Best regards,
Tomasz Janeczko
amibroker.com
----- Original Message -----
From: "vlanschot" <vlanschot@xxxxxxxxx>
To: <amibroker@xxxxxxxxxxxxxxx>
Sent: Wednesday, January 23, 2008 10:18 AM
Subject: [amibroker] Re: Helicopter Ben :-)
> Tomasz,
>
> Philosophically I agree with you 100%. The moral hazard issue has
> been (i.e. Greenspan-put), and continues to be (i.e. Bernanke's
> helicopter) a long-term threat. I have a lot of sympathy with Ayn
> Rand, and all that.
>
> But there are also the constitutional issues. The Fed has 2
> responsibilities, namely price stability and protecting growth
> (i.e. "full" employment). In other words, if the Board concludes that
> the probability of a recession has increased significantly (like
> yourself probably if you're bearish), they have to act. It is their
> duty, regardless whether they take their cue from (lagging) macro
> economic data, their (failing) models, (overreacting) markets, or tea
> leaves.
>
> Re his image flying in his helicopter, remember that his speech in
> 2002 (when we were all worrying about deflation) was very important
> for confidence, and according to some the first trigger for the
> subsequent recovery. I'm not defending the man, nor his predecessor.
> I'm just stating the roles they need to play.
>
> You could be worse off. We have a Governor (of the BOE) who couldn't
> prevent a bank run (e.g. Northern Rock), and simply ignores recession
> signs. Add to that a former Chancellor (Brown) whose public finance
> policies are falling apart, consumers who are even more overleveraged
> than their US counterparts, housing prices which are stratospheric,
> and you have a recipe for disaster. But then again you could be
> blessed by having Trichet . . .
>
> Finally, the growing influence of capital markets on the real economy
> (i.e. the tail wagging the dog), now increasingly at a global scale,
> is the crucial issue here. Capital markets, and the products that are
> designed (e.g. securitisation or the "shadow banking system" [ever
> wondered why CB-policies seem to have less of an effect?]) and traded
> are all driven by this paradigm called "modern finance". It is this
> theory (which, like most, I've been brought up with) which causes the
> longer-term structural problems that remain. But that's a different
> discussion.
>
> PS
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Tomasz Janeczko" <groups@xxx>
> wrote:
>>
>> Hello,
>>
>> You may have some valid points here but
>> 10% for me at least is not really anything worth panicing
>> plus making people belive that central bank will always step in and
>> bail out the market in case of any 5% down move
>> makes people just more reckless in their decisions and this in turn
>> may create new (old?) problems in long term.
>>
>> Best regards,
>> Tomasz Janeczko
>> amibroker.com
>> ----- Original Message -----
>> From: "Yuki Taga" <yukitaga@xxx>
>> To: "Tomasz Janeczko" <amibroker@xxxxxxxxxxxxxxx>
>> Sent: Wednesday, January 23, 2008 2:00 AM
>> Subject: Re: [amibroker] Helicopter Ben :-)
>>
>>
>> > Hi Tomasz,
>> >
>> > Yes, when world equity markets drop ~10 percent in 2 days in
> concert,
>> > you are talking 10s, maybe 100s of trillions of dollars. Yes, a
> lot
>> > of that is just 1s and 0s stored on computers, but if you don't
> agree
>> > that its presence, or its sudden disappearance, influences human
>> > behavior to a tremendous extent, then I don't know what I could
>> > possibly say to convince you otherwise. The markets certainly
>> > believe that all those 1s and 0s that have recently disappeared
> from
>> > major money center banks have some real consequences.
>> >
>> > You know I'm hardly going to argue against the cyclical nature of
>> > markets. I have long made a nice living off of them. But sudden,
>> > violent contractions in wealth have real consequences. The Fed
> knows
>> > there is little they can ultimately do about the market's course,
> but
>> > they are going to try and turn a waterfall into at least a
> cascade,
>> > or a rapids. That's probably a good idea, too.
>> >
>> > At times like yesterday, anything that gets people thinking, even
> a
>> > little bit, instead of reacting in blind panic, is probably a good
>> > idea. Markets are acting like a deep and long recession is already
>> > baked into the cake. Maybe, but not necessarily. Tossing a
> monkey
>> > wrench into the wheels of the panic bus in order to maybe slow it
>> > down a little is probably not a bad idea.
>> >
>> > Also, as I'm sure you know, but as your words seem to obfuscate,
>> > lowering interest rates is not exactly the same thing as printing
>> > money.
>> >
>> > And I think it is competition, not recessions, that do the real
> heavy
>> > lifting of improving efficiency.
>> >
>> > Yuki
>> >
>> > Wednesday, January 23, 2008, 8:42:07 AM, you wrote:
>> >
>> > TJ> Hello,
>> >
>> > TJ> Trillions of dollars ? Or rather "paper profit" (the numbers
> stored in computers)?
>> > TJ> The entire nature is cyclical. Autumn and winter comes after
> summer, what's wrong with that?
>> >
>> > TJ> Recession follows the period of growth. And it forces
> companies to seek
>> > TJ> more efficiency and makes them more competitive. That's
> healthy for the economy.
>> > TJ> Fed printing money does not make you wealthier, you will just
> see more zeros in numbers
>> > TJ> on your computer screen but this means nothing. What's the
> difference if someone
>> > TJ> is losing wealth by market fall or by money devaluation? Only
> the one who has the printer
>> > TJ> benefits from that.
>> >
>> > TJ> Best regards,
>> > TJ> Tomasz Janeczko
>> > TJ> amibroker.com
>> > TJ> ----- Original Message -----
>> > TJ> From: "Yuki Taga" <yukitaga@xxx>
>> > TJ> To: "Dennis Brown" <amibroker@xxxxxxxxxxxxxxx>
>> > TJ> Sent: Tuesday, January 22, 2008 11:34 PM
>> > TJ> Subject: Re: [amibroker] Helicopter Ben :-)
>> >
>> >
>> >>> Hi Dennis,
>> >>>
>> >>> Think about what you said compared to the reality of the
> situation.
>> >>> Nearly unregulated free-market capitalism (as in CDOs, SIVs, et
> al)
>> >>> just about brought down the house.
>> >>>
>> >>> It's a funny cognitive dissonance. Ultra-right religious
>> >>> conservatives (not saying you are one), who are often also pure
>> >>> laissez faire market people (ditto), accept the negatives of
> human
>> >>> nature as inevitable when it comes to moral issues. But
> somehow,
>> >>> this same negative human nature is presumed, one would
> apparently
>> >>> suppose, to just vanish once human beings step forth into the
> holy
>> >>> cathedral of completely unregulated capitalism. "Let the
> markets run
>> >>> themselves completely," they say. But every time they get
> their way,
>> >>> they or the markets just about run the truck into a ditch.
>> >>>
>> >>> There. If you start a thread with serious potential for
> *conflict*,
>> >>> Dennis, load the wagons! ^_-
>> >>>
>> >>> Yuki
>> >>>
>> >>> P.S. Given the non-zero sum nature of equity markets, and their
>> >>> size, it's probably not a bad idea to do something in an
> attempt to
>> >>> stop potentially trillions upon trillions of dollars from simply
>> >>> being panicked out of existence. Money is simply uncreated, to
> use a
>> >>> rather ugly phrase, for the most part. That was allowed to
> happen in
>> >>> the early 1930s, with pretty sad consequences.
>> >>>
>> >>> Wednesday, January 23, 2008, 12:38:32 AM, you wrote:
>> >>>
>> >>> DB> Hello Tomasz,
>> >>>
>> >>> DB> There are many of us in this country (USA) that want to see
> the
>> >>> DB> markets take care of themselves. Unfortunately not enough
> are aware
>> >>> DB> of the issues involved and there is only one person running
> for
>> >>> DB> President that has that goal --Ron Paul.
>> >>>
>> >>> DB> It may take a complete financial disaster before everyone
> wakes up
>> >>> DB> and realizes that centralized control does not work well.
> No small
>> >>> DB> committee can understand all the factors involved in an
> economy. If
>> >>> DB> they could, then it follows that a small number of people
> (or an
>> >>> DB> individual) could know enough to make a quick fortune in
> fundamental
>> >>> DB> investing. And we know how hard that is to achieve!
>> >>>
>> >>> DB> Best regards,
>> >>> DB> Dennis
>> >>>
>> >>> DB> On Jan 22, 2008, at 10:23 AM, Tomasz Janeczko wrote:
>> >>>
>> >>>>> Hello,
>> >>>>>
>> >>>>> So helicopter Ben is in full panic mode now :-)
>> >>>>>
>> >>>>> It is pretty amazing and funny to see how this "free economy"
> is
>> >>>>> hand-operated :-)
>> >>>>>
>> >>>>> Best regards,
>> >>>>> Tomasz Janeczko
>> >>>>> amibroker.com
>> >>>>>
>> >>>>>
>> >>>>>
>> >>>>> Please note that this group is for discussion between users
> only.
>> >>>>>
>> >>>>> To get support from AmiBroker please send an e-mail directly
> to
>> >>>>> SUPPORT {at} amibroker.com
>> >>>>>
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>> >>>>>
>> >>>>> For other support material please check also:
>> >>>>> http://www.amibroker.com/support.html
>> >>>>>
>> >>>>> Yahoo! Groups Links
>> >>>
>> >>>
>> >>>
>> >>>
>> >>> Please note that this group is for discussion between users
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>> >>>
>> >>> To get support from AmiBroker please send an e-mail directly to
>> >>> SUPPORT {at} amibroker.com
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>> >>> For NEW RELEASE ANNOUNCEMENTS and other news always check
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>> >
>> >
>> >
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>> >
>>
>
>
>
>
> Please note that this group is for discussion between users only.
>
> To get support from AmiBroker please send an e-mail directly to
> SUPPORT {at} amibroker.com
>
> For NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
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> For other support material please check also:
> http://www.amibroker.com/support.html
>
> Yahoo! Groups Links
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>
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