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Re: Will Boomers Cash In
Old 03-20-2005, 03:04 PM   #61
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Re: Will Boomers Cash In

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Re: Will Boomers Cash In
Old 03-20-2005, 03:06 PM   #62
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Re: Will Boomers Cash In

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Re: Will Boomers Cash In
Old 03-20-2005, 05:01 PM   #63
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Re: Will Boomers Cash In

Charlie--

"Unstable equilibrium". That's a neat way to put it.
Kinda like two tarantulas in a bottle!

You know things are bad when you see this stuff on TV dramas. Recently President Jeb Bartlett on West Wing had a dialogue with a Japanese economist who co-shared the economic Nobel Prize with him. The Japanese guy warned him about the debt situation and Martin Sheen told him to kiss off. You guys need us as bad as we need you was about his pitch. The end has got to be near.

Sounds like you have established a pretty good defensive stance in your portfolio. I have a gut feeling that things are beginning to change for the buck though.
First of all, you are right about the rest of the world. A lot of them aren't in such hot shape either -- particularly the Europeans. Second, Greenspan's actions to cool our own economy and raise interest rates will eventually shore up the currency. The diversify into foreign assets thing may have passed the peak. Everybody's doing it and that is generally not a good thing.

I understand completely now your concern about "real return" spikes vs increases due to CPI inflation premiums. I think real return is a very complicated phenomenon which will be determined partially by the superabundance of capital which will act as a deflationary bias on real rates versus psychological factors (ie., fear) which will refocus on risk and act as enhancer of real return requirement in the markets. How that is going to balance out in the long run who knows. Just keep your eye on Greenspan. He is on a not so stealthy mission to move rates higher (short term and long term) and you can call it "real return requirement" or whatever, but those nominal rates are on the way up.

In a game of chicken, I will bet on Greenspan every time.
I don't think he believes that America can afford to blink on this one. He has to enforce discipline or the countyr faces a perilous future. He knows the Congress won't or can't face up to this. Its his job. With the economy rebounding this may be the last chance to get us back on track without a massive economic adjustment. If we can't absorb the pain now when will we be able to? I remember how cold blooded Paul Volker was about the pain produced by raising short term rates to 20% in his day. Steely eyed guy. Lot of tears shed in those days. Horrible, really. Volker sat in those Congressional hearings and chewed on an unlit cigar. Stared those Congressmen down. I think Greenspan also has that in him. Bush's problem will be to nominate a successor with the cojones to see the job through. It's going to be tough to get that guy through the Dems on Capitol Hill. But the country is going to need one tough old bird to finish the job that Greenspan started last June. Maybe they could trot old Paul Volcker out of retirement for one last service to his country.

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Re: Will Boomers Cash In
Old 03-20-2005, 05:08 PM   #64
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Re: Will Boomers Cash In

My Gawd.........is Volker still alive? He must be older than Clint Eastwood Greenspan looks like he was
dug up too. His wife is kind of cute though

JG
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Re: Will Boomers Cash In
Old 03-20-2005, 05:17 PM   #65
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Re: Will Boomers Cash In

Paul Volcker, along with Eisenhower, FDR and Hank Aaron, the greatest Americans of the last 75 years.

Greenspan couldn't carry water for Big Paul.

Hip, hip, hoorah!!

Mikey
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Re: Will Boomers Cash In
Old 03-20-2005, 05:19 PM   #66
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Re: Will Boomers Cash In

One of the enduring illusions we Americans suffer from is we think it's all in our hands.

We tend to forget Adam Smith's Invisible Hand - aka the markets in the rest of the world. Sometimes we get an offer we can't refuse - sort of like Volker. Of course nobody remembers that.

I like to read a lot of Stephan Roach at Morgan Stanley.

We're still the 800 lb gorilla - but even the gorilla can have a Bad Day at Black Rock. Fund flows to commodities, international, gold, and natural resouces are getting increasingly squirrelly now a days.

If central banks begin to shift reserves in a meaningful way - things could get - interesting.
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Re: Will Boomers Cash In
Old 03-20-2005, 05:20 PM   #67
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Re: Will Boomers Cash In

JG--
Yeah, the old guy is still kicking. He is trying to straighten out the UN right now. They thought they could get him to whitewash the oil for bribes program but he is having none of it. Still chewing on those cigars,too! There's hope for all of us!

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Re: Will Boomers Cash In
Old 03-20-2005, 05:22 PM   #68
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Re: Will Boomers Cash In

Jeez Mikey, none of them would have made my "B"
team. OTOH, I was thinking that it seems all of my real heroes are dead. There is a certain advantage in
having expired as you are no longer in danger of screwing up and having to endure the consequences.

JG
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Re: Will Boomers Cash In
Old 03-20-2005, 05:31 PM   #69
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Re: Will Boomers Cash In

Unclemick--

I remember reading a little article tucked in the back pages of a paper years ago. It was a story about Paul Volcker attending a meeting of International Bankers in some Eastern European capital like Bucharetst or someplace like that. The Saudis drew him aside at that conference and threatened the United States of America. They told Volcker that if he didn't get inflation under control they were going to move their reserves out of the US and require payment in anything but dollars for their oil. Volcker about swallowed his cigar. Got on a plane and when he got off in NY he started jacking short term rates through the roof. The rest as they say is history.

I would give a nickle to have saved that article. I would have it framed and hang it over my desk as a reminder of how things could get.

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Re: Will Boomers Cash In
Old 03-21-2005, 12:03 AM   #70
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Re: Will Boomers Cash In

Quote:
Jeez Mikey, none of them would have made my "B"
team. *OTOH, I was thinking that it seems all of my real heroes are dead. *There is a certain advantage in
having expired as you are no longer in danger of screwing up and having to endure the consequences.

JG
I see wat you mean John. FDR only saved America, Eisenhower only saved Western Civilization, Volcker only set the stage for the 20 year bull market and business expansion, and Aaron only holds the unmedicated HR recordl

Bunch of slackers, if you ask me!

Mikey
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Re: Will Boomers Cash In
Old 03-21-2005, 02:56 AM   #71
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Re: Will Boomers Cash In

You are givin' these people too much credit. Other folks helped too (except for "Hammerin' Hank").
You are generalizing, big time. Personally, FDR MIGHT be my fav.
dem of all time. Beyond that............My heroes have always been cowboys ( Willy Nelson).

Seriously, I admire Caesar (Julius
not the salad), R. E. Lee, Custer, Patton, Hemingway, Ayn Rand,
Lincoln (Abe, not the tunnel), and Einstein (the man not the bagel).

Disclaimer: This has nothing whatsoever to do with ER.

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Re: Will Boomers Cash In
Old 03-21-2005, 05:14 AM   #72
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Re: Will Boomers Cash In

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Unclemick--

I remember reading a little article tucked in the back pages of a paper years ago. It was a story about Paul Volcker attending a meeting of International Bankers in some Eastern European capital like Bucharetst or someplace like that. The Saudis drew him aside at that conference and threatened the United States of America. They told Volcker that if he didn't get inflation under control they were going to move their reserves out of the US and require payment in anything but dollars for their oil. Volcker about swallowed his cigar. Got on a plane and when he got off in NY he started jacking short term rates through the roof. The rest as they say is history.

I would give a nickle to have saved that article. I would have it framed and hang it over my desk as a reminder of how things could get.

Donner

So does that mean the Saudis saved us? Volcker didn't get moving until threatened?? Or was he trying to do something and Congress prevented it?

I must have been asleep. I always thought of Volcker as one of the bad guys during Jimmy C's presidency. I mean, the economy went to hell during his watch and it resulted in about 20 years of Republican presidents. Donner, your posts indicate you're a lot smarter than I concerning these things, but I am mystified by your adoration of Volcker. Further, I thought Greenspan was the hero of the bull, etc. Or is ole Alan just a caretaker?

I do confess I have not read anything about Volcker. I'm not trying to be annoying, I just don't know about him. Any good books? or articles?
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Re: Will Boomers Cash In
Old 03-21-2005, 06:42 AM   #73
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Re: Will Boomers Cash In

JG,

Your list has it's bright spots, but Custer? That arrogant jerk who's last words were along the line of "MAN, look at all those freakin' Indians!"?
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Re: Will Boomers Cash In
Old 03-21-2005, 06:56 AM   #74
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Re: Will Boomers Cash In

George C. was not perfect by a long shot (last in his class at
West Point). But, he was devoted to his wife, was the youngest general in the Civil War, a published writer.
pretty honest (he testified against Grant's brother in a fraud scam). He had honor (19th century style) and courage in spades. As far as the Indians, he admired them even while he was killing them. The same was true for the Confederates. It was a different mindset
from today. From the Native American point of view though, it's hard to argue with the bumper sticker
"Custer had it coming!"

JG
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Re: Will Boomers Cash In
Old 03-21-2005, 07:07 AM   #75
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Well, I don't know much about him, so I shouldn't talk, my comments were based in a Andrew "broken deals" Jackson, trail of tears, wounded knee sentiment. I studied enough of the Civil War to know that I am very glad the North won, but respect R. E. Lee tremendously. He took the job reluctantly to defend his state, and made fools of the Northern generals despite overwhelming odds, until the Northern industrial engine kicked in and these guys Grant and Sherman showed up.
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Re: Will Boomers Cash In
Old 03-21-2005, 07:13 AM   #76
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Re: Will Boomers Cash In

Lee is still viewed as almost Christlike by many in the South. I personally believe he was about as close to a perfect human being as you can get, at least by my
standards.

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Re: Will Boomers Cash In
Old 03-21-2005, 07:13 AM   #77
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Re: Will Boomers Cash In

One of my first bosses in the workforce(Boeing) was Souix - joined the Navy in WW II and never went back.

Souix Independance Day (when Custer got his cookies) - first time I ever heard the term.
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Re: Will Boomers Cash In
Old 03-21-2005, 03:14 PM   #78
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Re: Will Boomers Cash In

Eagle--
Try this link for a pretty good insight into Paul Volker. It's a PBS interview with him apparently done in the late 1990's sometime. Also check out the interview with Alfred E. Kahn on the same link, Click on the word interview under each guy's picture. Read Volker's interview first then read Kahn's. Be sure to plow all the way through Kahn's interview. He talks about a lunch he had with Volker during the bad times. Fascinating.

http://www.pbs.org/fmc/interviews/3seg4.htm

I don't idolize Paul Volker. In a way I feel kinda sorry for him. I think history has given him a bum rap. He was a guy who circumstances forced into a very bad situation. I'm sure he didn't enjoy wrecking careers and families and forcing people into bankruptcy. But he inherited a mess and he did what he had to do. As he told Kahn at lunch: "Only I have a weapon to use in this town and one of these days I am going to have to use it." The only point I am trying to make using Volker as an example is: if you have to cut meat, find yourself a butcher. Get the guy for the job.

I think the Kahn story is even more fascinating. He was Chairman of the Council on Wage and Price Stability. Remember that? His observations on the nature and effect of inflation are well worth the read. He makes some great points. I think he is right on about the psychological effects of inflation. Once you get inflation psychology moving in the country its damned hard to reverse. You need to get yourself a butcher. Greenspan knows all this. He lived through it, too. And, he is determined to not let it happen again in his lifetime. Shoulda acted sooner than he did though, IMO. Psychological cat may be out of the bag now.

Donner
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Re: Will Boomers Cash In
Old 03-21-2005, 03:27 PM   #79
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Re: Will Boomers Cash In

Eagle--

I must be psychic or something. See today's WSJ editorial entitled Greenspan's Real Mistake:


http://online.wsj.com/article/1,,SB1...html?mod=TOPIC

An excerpt:

We aren't the only ones warning about inflation risks. No less an authority than Paul Volcker, the former Fed Chairman, used a February speech at Stanford to underscore what he called "the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. ... This is not a time to take chances on forcing faster economic growth at the risk of rising inflation." Mr. Volcker has rarely spoken up about monetary policy since he left the Fed in 1987, so this is stout ale.


Jimminy Cricket! Sounds like they are getting the old man warmed up in the bullpen! What a message that would send! The French and Germans would croak, not to mention the Asians and the Arabs. The sight of that unsmiling old warrior striding into the room with that cigar chomped between his jaws to take the oath of office one more time would expunge any inflationary thoughts or any other bad thoughts about the dollar, or the trade deficit, or excess worldwide liquidity that anybody, domestic or foreign, may be harboring at that time. No doubt what that guy's policy would be. I do believe even the Chinese would sit up and take notice. Might even be a little more cooperative in adjusting the value of their currency. Gives me the willies just musing it over. We would have one big, tough, mean cat in the cage wearing the red, white and blue trunks. Think about it , George!


Donner
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Re: Will Boomers Cash In
Old 03-21-2005, 03:53 PM   #80
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Re: Will Boomers Cash In



JG

Those that you admire, I understand all except Custer. Why Custer?
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