Quadruple Entendre: DreamWeaver: Someone tell me if this is good or bad

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity. Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions.

You decide.

So it's good in the sense that, as you lay dying on the battlefield, at least that medic with the morphine came by..

jagec: If interest rates increase, you can sell the T-bonds, and pay back the loans that you took out.

If you sell a 0% T-bill in a market where T-bills are selling at 3%, you'll have to sell it at a *loss*.

But I know I should be wary - with your massive market savvy and grasp of the fundamentals of what *really* drives the market, you're doubtlessly a multimillionaire.

Not just someone who parrots whatever he reads on the Internet that meshes with your confirmation bias, instead of trying to figure out WTF is going on in as neutral a way as possible in order to minimize the negative consequences on you and those you care for.

Right?

patrick767: RexTalionis: And the morning's gains disappear into the red.

The market reacts negatively to interest rate hikes. So now your argument is that it reacts negatively to the Fed not hiking interest rates? Lose-lose.

Ahem. No. I am making an observation. Observations are not arguments.

DreamWeaver: Someone tell me if this is good or bad

Good - for US debtors, who can pay in low value dollars.
Bad - for creditors, who receive low value dollars in exchange for higher value dollars they loaned out.

Good - for hard-pressed exporters, who can sell their goods and services more cheaply.
Bad - for hard-pressed importers, who will have a hard time selling foreign goods and services.

Neutral - for big companies that do a lot of business overseas. They'll be able to juggle where they do the various parts of their business and where they are paid. It'll work out fine.

Good for consumers of American goods, which will be cheaper. You'll be able to find more American goods also.
Bad for consumers of imported goods, as these will cost much more.
Oil is a largely imported good, but higher prices make more domestic oil, natural gas and coal competitive, and permit new sources that cost more to be developed.

Good for discouraging reliance on foreign fossil fuels.

Bad for encourging expensive domestic projects.

Good as it will encourage Americans to live within their means, something they haven't done for ages.

Bad as most Americans are having a hard time living within their means any way, what with unemployment high, government spending being cut, public service workers under attack on all fronts (jobs, wages, pensions) and so forth.

Good because this is pretty much the only way out of this predicament.

Bad because it's a hard way out and means a double dip recession that will increasingly ressemble the Great Depression.

Good for the rich, because the Great Depression was a wonderful time to be rich--workers were desperate, prices were actually dropping, and there were great stock and bond bargains to be picked up if you knew how.

There is never a good time to be poor.

Being middle-class has sucked since Reagan, if not earlier, but at least you've got a job. A lot of people are worse off.

A devalued dollar may mean more inflation, which means stagflation--low growth in employment and the economy combined with inflation when you might expect deflation to lower prices.

But inflation is better than deflation because deflation is a business and job killer.

As the old Scottish curse puts it, may you live in interesting times.

Here in Canada we seem to have escaped the very worst (as we did during the Great Depression) but the economy's not gangbusters and we are experiencing some inflation, which is irritating because we are still paying the Canadian premium for no apparent reason (although there are some) and nothing ever goes down as fast or as much as it goes up.

You'd think that with our dollar high, we'd be getting tons of bargains on all the stuff we buy from the US at least, but it never materializes. We still pay way more for most things. Only a few things (i.e, some comics at the comic book store, some books at independant bookstores, etc.) respond at all to currency fluctuations, even after a couple of years.

Doink_Boink: On a related note, my cat has a hangnail.

Is there a worse combination than chocolate and steamed spinach?

horseradish and caramel might beat that.

christ almighty, the frank is worth $1.37. when i lived there ten years ago, it was worth $.56. hell, just a few months ago it was at parity. this is crazy.

that's swiss franc, not frank, obviously.

P.S. Expect more Canadian shoppers. With the Canadian Premium and exchange rates, it is irresistable to shop American if you are within 200 miles of the border, which most Canadians are.

We'll do what we can to even things out. Canadians are a bit less likely to think "buying Canadian" is a patriotic choice, faced with rational, non-sentimental economic choices such as best quality, availability and best price.

Mind you, there's some difference in quality in the case of some merchandise, but that's true of any two countries you pick and works both ways.

Watch out for warranties and returns--the same global companies have different warranties in each country, and it's a tough job returning goods if something is wrong with them--Sony Canada does not know or want to know Sony USA and vice-versa. Even if you bought a Blackberry in the US, you would have trouble if something went wrong with it by the time you got home to Canada.

Canada's tourism industry is really going to have to haul ass to attract American tourists.

Good. They should. We need better service. We need Canadians who know how to firmly and politely complain a lot more than we do. The US market is more competitive and the US consumer is reason number one.

TyrantII: Because a strong dollar has the word strong in it, so it must be strong. STRONG!

Sometimes making up for that little penis really does cause people to herp the derp. Why anyone on main street would ever want a strong dollar is beyond me. Our exports are cheaper, our imports are more expensive.

Sure, you get less for that trip to Cancun or Canada, but overall it's more beneficial to anyone not running a large corporate bank.

Worked out wonderfully for Germany circa 1930-33.

jst3p: If you can borrow 100,000,000 you are making 3,710,000 a year

This would almost triple after the three decades which would mean almost enough money to buy the one bedroom shack in China after those decades.

MikeyFuccon: Trolljegeren: Step 1 - Be a big bank and borrow massive amounts of cash from Fed for free.
Step 2 - Buy 30 year treasury bonds at 3.71%Swiss francs, Canadian/Australian/NZ dollars, maybe some Brazilian reais---oh, and a bit of gold and silver, just for fun with the free money from the Fed.
Step 3 - Profit.

FTFY.

Invest in Treasuries? Why anybody is still investing any more money than they can afford to lose in USD or EUR-denominated debt is beyond me.

Jon Stewart was mocking this very situation last night (or this morning for those of us who now watch the show while getting ready for work).

It's simply a case of US Treasuries being the best place to stow a lot of money, even after a downgrade in credit-worthiness. The US may miss a few payments, but it is unlikely to permanently reneg on its debts because that would really kick over the out house.

Because of the downgrade, they have to pay more interest, but the risk of default is not necessarily worse. Maybe if and when the Tea Baggers see and understand how much more interest has to be paid when your credit falls, they'll stop gallumphing around like Barbarian Invaders and "go native" like everybody else in Washington, DC over the last 200 plus years. Maybe the more than 350 non-Tea Baggers in the House and the nearly 100 Senators in the Senate who are not Tea Baggers will stand up to them. A bi-partisan anti-revolt revolt by the 80% majority? It's not impossible. Stranger things have been known to happen than a majority standing up to a ruthless and loony minority.

Switzerland is too small to carry the global investors, gold has its costs--you either have to pay for security or pay somebody else to keep it for you, and the price is volatile, and the market--the real, non speculative market depends on a healthy economy in at least one of China, India, and the US, three gigantic buyers of gold.

If you have nowhere to dump money safely, you tend to dump it where you can.

The USA is still the best place to dump it, even though the US is the destabilizer of the global economy in the first place. Less obviously Standard & Poor''s and Moodies are still able to tell you are doing a lousy job fixing the problems they created. The bank doesn't like the way you have re-acted to being driven into bankruptcy? That's your problem. The rating agencies were corrupt, incompetent, stupid or malicious? Your problem. The Government needs more money? Your problem. It's not Obama's fault, but it is Obama's problem, and it is not necessarily the fault of the American People (although a goodly number of them are problems) but it's your problem. My touchstone in all this is Jean de la Fontaine's fable of the "Animals and the Pest". The weaker party always has to pay, even if they are the wronged party.

Think of the US as the Roman Empire--sure they just trashed your country. But can you think of a safer place to put your gold (besides in the ground) than Rome? You wouldn't trust the neighbors with a dead camel. Rome, you can trust to steal x percent as their due, but they won't try to Bogart the whole heap of treasure unless, of course, you give them an opportunity.

RexTalionis: And the morning's gains disappear into the red.

oh wait, now the gains are even bigger
so the traders continue to be tards like we always new they were

what is your next prediction for what the market will do??

Lamune_Baba: AntiNorm: /opening up another savings account in a couple of weeks. this one gets a whopping 1%!!

There is a banner in front of one of our local banks here advertising a fantastically "high interest savings" at .79%!

I miss my free checking account pulling 3%. Oh, and the $0.99 gas. That was fun, too.

Visit to whore house = $60.00

/those were the days

namatad: RexTalionis: And the morning's gains disappear into the red.

oh wait, now the gains are even bigger
so the traders continue to be tards like we always new they were

what is your next prediction for what the market will do??

I'm sorry, but do you have some sort of inability to understand the difference between an observation and a prediction?

When I made that statement, the market dropped about 300 points and was about 100 points in the red. That statement is perfectly true at the time I made it. It has no bearing on future performance.