Wednesday, October 27, 2010


LOAN DEMAND AND LOANS OUSTANDING have continued to drop each and every reporting period, the policy of the FED to continue to manipulate long term interest rates down in an environment of contracting demand is one of desperation and idiocy.

Banks don't want to lend at 4% or lower, and besides the DEMAND not being there, the stricter standards implemented in the face of the crisis cut out a big clump of the remaining demand.

Business and consumer confidence remain near all time lows and DO NOT resemble anything like a recovery. WITHOUT transportation todays DURABLE goods fell .8%

ANOTHER ROUND of QE will have unintended consequnces, already building a stock bubble....OIL, GOLD, WHEAT, STEEL are waiting to be inflated even more....driving up costs for finished goods. IF $Trillion PLUS did not drive up loan demand, why would another $T?

Affordability and the meager job growth do not support housing and an expanding economy.

LONGER TERM INTEREST RATES have been creeping up, the 30 yr back above 4%...higher long term yields compete with stocks.....the FED is trying to monetize that debt by printing $'s and buying Treasury debt.....somehow....that does not impress me.....will it impress the stock market?

If gains are due almost primarily from FED actions....and not secular trends not sustainable demand.....when the spiggot shuts down wont there be hell to pay?


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