Comments on: Some Very Blunt Warnings from Soros, El-Erian, Setser, and Other Sensible People

By: Conor Ryan

Conor Ryan — Wed, 23 Jan 2008 22:26:00 +0000

Oh, yeah, sure… The rentier class is always sanguine about inflation. They never have to fight for their stinking cost of living increases the way we little people do.

By: Anonymous

Anonymous — Wed, 23 Jan 2008 22:12:00 +0000

Re: The CEO of TOLL BROTHERS is the gentleman who went on bubblevision saying he was going to bury the shorts…just a few weeks before he sold millions of shares of stock.

This is the mentality of The Bush “insiders” that want to use wallstreet as a mechanism for fiscal policy, i.e, they want to burn the shorts, while they sell out the country!

By: Warner

Warner — Wed, 23 Jan 2008 20:10:00 +0000

Very well written article. If you want to continue on learing more try reading articles by Prem Watsa (Fairfax Financial) or about him. They seen this coming and put their money where their mouth was.
He factors in a good chance that American stocks and the economy may mirror Japan. Imagine the hurt on main street with the Dow at 4000. Cheers

By: Anonymous

Anonymous — Wed, 23 Jan 2008 19:48:00 +0000

Biflation is the state of an economy where the processes of inflation and deflation occur simultaneously. During this period there is a rise in the purchasing prices of commodity items and a fall in the purchasing prices of non-commodity items.
The purchasing price of an item is based on the demand for it and the amount of money in circulation to pay for it.
Biflation is preceded by an overabundance of money placed in circulation within the population by a central bank. Since commodities (such as food, energy,clothing) are essential and are in high demand, the purchase price for them rises due to the increased money available to buy them. This increasing purchase amount is Price Inflation.
Likewise, Biflation is preceded by a decrease in employment within the population. Although there is an increase of money in circulation, fewer people have access to the money to make purchases. As a result, a greater percentage of individual wages is directed toward purchasing commodities and less is utilized for purchasing non-commodity items. Since non-commodities (such as automobiles, televisions, stocks) are less essential and are in lower demand, the purchase price for them falls due to the decreased money available to buy them. This decreased purchase amount is Price Deflation.

By: doc holiday

doc holiday — Wed, 23 Jan 2008 19:05:00 +0000

I often think our gov is run by The Mafia, but if it is not, perhaps they (The Mafia) could be more efficient!

Sallie Mae, the embattled student lender, said Wednesday it lost $1.6 billion in the fourth quarter as borrowing costs rose and it set aside $575 million to cover bad loans.

This is criminal to have every GSE going belly up as The Fed looked the other way on accountability for 8 years! This is criminal and disgusting! Any future president will not have a clue as to what to do and the inept bungled Senate & Congress represent the very worst aspects of a corrupt society in decay; this is criminal, this is fraud, corruption, collusion and you have to wonder if this is a matter of decades instead of years -- as to how this insane group of people destroyed America! Im pissed!

Ill also toss in:

Earnings yield for S&P 500 = 8.23% (including divs) Skyrocketing higher with lower earnings; remember the inversion folks, i.e, lower earnings in a stock increase P/E

10 year Treasury = 3.31% (falling like rock)

Thus S&P 500 about 5% overvalued for "fair value", i.e, the yield on S&P500 is somewhat equivalent to a 10 year treasury

By: Anonymous

Anonymous — Wed, 23 Jan 2008 17:13:00 +0000

This is a nice addition: Senate Budget Committee Chairman Kent Conrad, D-N.D., said the 2008 deficit would reach more than $350 billion once the costs of an upcoming economic stimulus measure under negotiation between the Bush administration and Congress are factored in.

By: Lune

Lune — Wed, 23 Jan 2008 17:01:00 +0000

Does Soros really believe China, India, and OPEC are de-coupled from U.S. markets? One of the chief criticisms of China at least is that most of their growth has been from exporting to the U.S., and not developing their own domestic consumption market. While India has seen increasing domestic demand, it too is still quite dependent on U.S. markets.

If the U.S. and China (and perhaps India) experience a slowdown together, then who exactly is OPEC going to sell their oil to?

I think Soros is a sharp guy, but the world economy is still far too dependent on the U.S. consumer to expect that as the "super-boom" comes to an end, the whole world won't be dragged down with us.

By: Anonymous

Anonymous — Wed, 23 Jan 2008 15:52:00 +0000

Read what El-Erian was saying LAST Jan 25 from this very blog…

http://www.nakedcapitalism.com/2007/01/observations-from-ceo-of-harvard.html

Prescient, indeed!