tag:blogger.com,1999:blog-6616959642391988608.post9097454068963956129..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Fed policy restarts the reflation tradeScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-6616959642391988608.post-48338355376314031302010-09-23T01:40:02.395-07:002010-09-23T01:40:02.395-07:00John,
As for US quality banks I am in your camp. ...John,<br /><br />As for US quality banks I am in your camp. They are good antideflation play, as their current valuations (at least some of them) discounts deflationary environment which in market opinion translates into weakening profitability. Another words, deflation is in the price, so there could be a real and even worse deflation to get the banks drifting lower.Family Manhttps://www.blogger.com/profile/10304538166086313103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32975648902486038222010-09-22T14:00:45.231-07:002010-09-22T14:00:45.231-07:00The value of the dollar is a very important concer...The value of the dollar is a very important concern for me, since I think that is a good indicator of the effective stance of monetary policy, and a good leading indicator of the future direction of inflation. I don't like it when the dollar depreciates, especially when it is (as now) at the lower end of its historical valuation range.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-75225322514379098262010-09-22T13:14:12.001-07:002010-09-22T13:14:12.001-07:00Scott,
Is the "currency war" (BOJ, FED,...Scott,<br /><br />Is the "currency war" (BOJ, FED, BoE)any worry for you. <br /><br />ThanksFamily Manhttps://www.blogger.com/profile/10304538166086313103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81829514111810170032010-09-22T09:40:59.992-07:002010-09-22T09:40:59.992-07:00I agree completely. We need to cut our corporate t...I agree completely. We need to cut our corporate tax rate by at least as much as is needed to remain competitive with other countries. I would even argue that the corporate tax rate should be zero, since corporate taxes are ultimately passed on to the consumer anyway. It's a very inefficient way of taxing.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-27999527498433447012010-09-22T09:19:27.608-07:002010-09-22T09:19:27.608-07:00Scott, thanks for your response. My premise conce...Scott, thanks for your response. My premise concerning repatriation of oversears cash by corporations is to increase velocity of money and to grow the economy. I think this is a better approach then QE.<br /><br />Here is link to short paper by Allen Sanai on how repatriated cash was used by corps after the most recent tax holiday. <a href="http://www.accf.org/media/dynamic/3/media_316.pdf" Buddy R Pacificohttps://www.blogger.com/profile/12737107556268024013noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-78627720458686524722010-09-22T08:48:15.606-07:002010-09-22T08:48:15.606-07:00More the like household penalty and mal-investment...More the like household penalty and mal-investment trade...<br /><br />-Bank of Japan Masaaki Shirakawa argued among other things that “protracted low interest rates play an important role in preventing an economic downturn, but, at the same time, they tend to delay adjustment in excesses accumulated during the period of bubble expansion. In addition, they also tend to delay the rejuvenation of Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-34294795412993152612010-09-22T08:38:41.163-07:002010-09-22T08:38:41.163-07:00Buddy: excellent points. Even if MSFT sells debt t...Buddy: excellent points. Even if MSFT sells debt to fund the increased dividend, the net result is that MSFT's desire to hold cash has dropped. This helps boost money velocity. This is most likely to continue and to build, and if the Fed is not watching carefully, it could become a source of inflation very quickly.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-64103306486972422032010-09-22T07:55:26.654-07:002010-09-22T07:55:26.654-07:00From Scott's comments:
" Consumers and b...From Scott's comments:<br /><br /><i>" Consumers and businesses that have been hoarding massive amounts of money (as reflected in 12% decline in the velocity of M2 since the end of 2007) are now feeling increased pressures to unhoard some of that money, releasing it to be spent in a fashion that boosts nominal and real GDP."</i><br /><br />Microsoft has announced a 23% increase in Buddy R Pacificohttps://www.blogger.com/profile/12737107556268024013noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88158549286226768082010-09-21T21:24:29.268-07:002010-09-21T21:24:29.268-07:00I am no fan of Paul Krugman, but I read his column...I am no fan of Paul Krugman, but I read his column. The guy is impressed with himself, but then he has some credentials. <br /><br />Today, he had a point. <br /><br />"The Fed Speaks<br /><br />We’re failing in our mandate to deliver full employment; meanwhile, inflation is below target; therefore, we’ve decided to do nothing.<br /><br />Oh, and why does the Fed keep saying that inflationBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32551251878861186372010-09-21T18:36:52.164-07:002010-09-21T18:36:52.164-07:00Marmico,
Thank you. I agree my last paragraph sho...Marmico,<br /><br />Thank you. I agree my last paragraph should not have been added. I will refrain from such in the future.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55294597759846918902010-09-21T16:17:08.969-07:002010-09-21T16:17:08.969-07:00Excellent commentary by Scott Grannis. Even if I d...Excellent commentary by Scott Grannis. Even if I disagree, the intelligence and fairness in Grannis' demeanor and writing makes him a very enjoyable read. I always learn something. It helps to have an open mind, if you want to learn.<br /><br />Inflation is dead, dead, dead, and we may already be in deflation, if you believe the findings of the Boskin Commission. I do, and so did Milton Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54719276618462669882010-09-21T15:34:18.197-07:002010-09-21T15:34:18.197-07:00Those who think the world as we know it is about t...<i>Those who think the world as we know it is about to end, please disregard this.</i><br /><br />The world is not ending (well the Mayan calender says 2012) but I'll disregard you none the less. How many newsletters do you subscribe to in order to cut and paste gibberish?<br /><br />The reflation trade, huh. <a href="http://www.clevelandfed.org/research/data/inflation_expectations/2010/marmicohttps://www.blogger.com/profile/08277071086056574486noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-46724510597793583812010-09-21T14:33:22.487-07:002010-09-21T14:33:22.487-07:00The 'reflation trade' is bullish for the b...The 'reflation trade' is bullish for the banks. Bank stocks have underperformed. The Fed is allowing them to reflate their balance sheets. <br /><br />Something very similar occured during the 1990s. After the S&L debacle the banks had to raise capital (sound familiar?) and their stocks were lethargic for several quarters (hmmmmm). The Fed held rates low while banks were loath to lendJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.com