Quote Originally Posted by stumann
bubbles don't occur within a market - bubbles are manifestations of underlying credit conditions over which the Fed has little control. it's globalized credit creation which is the real culprit - its the trading leverage Doug Noland talks about, the 99.9% of "money" crossing borders which has no relation whatsoever to the real economy we live in - this is what created the stock market & housing bubbles in the US, not whether the Fed sets rates at 1% or 10%....
the fed abdicated its role as regulator, forgoing the opportunity to raise margin requirements in the '90's and, along with other bank regulators, turning a blind eye to wild credit market conditions more recently. the issue isn't just the fed funds rate, it's also market oversight.

Quote Originally Posted by stumann
In real terms, the education you got at Harvard or at UCLA in the 1970s was superior to the one you now pay 700% more for today, or the medical care you got in the 1970s superior to what you get today.
i suppose one could argue about the quality of education at elite institutions, but i attended one in the 60's, and i've had occasion to see what's going on at 2 such universities in recent years, and there has been NO drop in quality. to the contrary. and as a physician who started practicing in the 70's, i'd add that there is no comparison between the level of medical knowledge and the power of medical interventions in the 70's and that available today. you must be kidding to make the assertion you made.

Quote Originally Posted by stumann
So under "Ka-Poom" maybe we should put all our money into gold, or maybe we should short stocks, or maybe try and catch that last big run up in tech, but any of these choices will be wrong if & when the expansion of financialization ends. Since Greenspan chose to cut & Bush chose to invade, we've experienced the perfect calm before the perfect storm. But the storm won't be implosion. The storm will be the breakdown of global markets. Even the winners won't win.

Remember those stories of highly trained Soviet doctors working 60 hour weeks for 100 rubles when a gallon of milk was 70? Recall the decades of the destruction of Africa's economy or the Japanese 'deflation'? All these events occured against the backdrop of a strengthening financializing global trading system. What happens when its the global trading system which is the problem?

"Ka-Poom" won't just be a decline - markets are too highly controlled now. Ka-Poom will probably result in the in the dislocation and then the localization of markets. It won't just matter whether you own gold or shorts or shares of IBM. What'll matter more is what local market you end up owning them in, how long you've owned them, who you are & who you are, and how indebted your local goverment is. Welcome back to the brutal world of localism.
i must say it's a pleasure to read your post. i mean that 2 ways: you say interesting things, albeit some with which i disagree; and you make me feel like an optimist, something i thought impossible. thank you.;)