Conversation Between Rhapsody1447 and Kushinator

23 Visitor Messages

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  1. The econ forum has taken a turn for the worst, which is why my activity here has thinned out completely. That and the level of new idiot posters is at an all-time high.
  2. Just staying busy and on my toes. I am glad to see you have come around! ;-) All kidding aside, i think earnings will continue to meet or beat expectations throughout 2013 and into 2014 which would likely increase the demand for labor. I am estimating between 2.5 and 3.1 million new jobs for 2013, which could push unemployment below 7% by year end. Assuming of course political brinkmanship is resolved! I do agree a pull-back is in the works, but wouldn't expect anything dramatic until right before Q1 earnings are reported.
  3. How about yourself? I've noticed the economics forum has declined in quality quite a bit.. the number of posters I actually read on this board get fewer and fewer every time I check it. I'm sure RL is treating you nicely if you're still working in the markets. What's your personal outlook?
  4. Hey man, been doing great just been super busy recently so I haven't been able to post much. The rally is great! I gotta say, business is much better when things are going up.. and being bullish leaves a better taste in everyone's mouth. My economic perspective is pretty radically different than when I was posting last year -- I have much more faith in the strength of the recovery, believe markets have muddled through the worst, and think the unemployment crisis demands more attention than the fictional "debt crisis". Right now, I agree with most economists that we should have a slow start to the year but will pick up steam in the second half of the year. It's still a tricky time to invest - is it 1986 or 1995? Personally, I'll be waiting for a technical correction before dipping my toe back in and I think the yen trade is still one of the best opportunities out there.
  5. How's it going man!? What do you think about the rally?
  6. Fixing the purchase date to the health of the labor market is (IMO) the best decision the Fed has made as of late. Previous rounds were really just gifts for portfolio managers. However, i still believe the federal government needs to run with this opportunity by funding infrastructure and public works projects in the tune of 3% of GDP. Monetary policy alone cannot solve this problem.
  7. That's definitely true. Sustaining expectations were a primary reason for leaving the easing open-ended. Did you get a chance to read the Woodford paper? He proposed that the expectations channel is more effective than the actual market operations. Most people are saying that paper was the primary factor in Bernanke's decision. Do you support NGDP targeting? What do you see as the drawbacks?
  8. Previous QE attempts have not been capable of sustaining an increase of inflation expectations for reasons outlined prior (it is why you see peaks and troughs across the breakeven). An agency asset buying program in which its duration is tied to the unemployment rate is divergent from these previous rounds.
  9. Both quantitative and open-ended easing affects inflation expectations. One of the main purposes of quantitative easing is to reduce the real interest rate once the nominal rate is zero. I don't understand why a poster of your stature would believe otherwise.

    Graph: 10-Year Treasury Constant Maturity Rate (DGS10)-10-Year Treasury Inflation-Indexed Security, Constant Maturity (DFII10) - FRED - St. Louis Fed
    Best Chart: Fed Purchases Boost Inflation - Businessweek
  10. With a perpetual monetary easing program, the Fed can maintain stringent control of interest rates, and therefore have a meaningful impact on inflation expectations
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