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Anybody interested in current economics??


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An economist's take on Fed's August 27, 2010 speech on economic conditions and monetary policy...     Leeds on Finance, the August 30 column

exactly.

because this is america and biting off more than one can chew through reliance on other people's willingness to also bite off more than they can chew, in order to facilitate your greed, is the america

and his background is similar to a number of FOMC members, from what i surmise.

unfortunately some of them don't even have his qualifications.

 

You see the whole pissing match over the relationship between rates and inflation? amusing to see profs get so heated when the underlying theories they debate remain of dubious real world value.

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it's up to the private sector to get cracking on job creation, that they should stop looking to the Fed to do it for them.

 

Suzanne, Just a few of the reasons why the private sector can't, as you say, "get cracking on job creation":

 

1) Weak market/sales;

2) Insufficient revenues;

3) Uncertainty about upcoming tax exposure;

4) Great chaos and expense in reforming the company medical package to conform with the new medical legislation (many people are going to be hugely surprised and impacted in the next few weeks by this dynamic);

5) Difficulties associated with the increased government intervention;

6) Tight or unavailable financing (especially for small businesses which have to look to banks); and

7) Etc.

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it's up to the private sector to get cracking on job creation, that they should stop looking to the Fed to do it for them.

 

Suzanne, Just a few of the reasons why the private sector can't, as you say, "get cracking on job creation":

 

1) Weak market/sales;

2) Insufficient revenues;

3) Uncertainty about upcoming tax exposure;

4) Great chaos and expense in reforming the company medical package to conform with the new medical legislation (many people are going to be hugely surprised and impacted in the next few weeks by this dynamic);

5) Difficulties associated with the increased government intervention;

6) Tight or unavailable financing (especially for small businesses which have to look to banks); and

7) Etc.

{Self Edited) Steve said it more nicely then I did.

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Thankfully, politics has little or no affect on the economy (wars do however). This is cyclical. No matter who is president, no matter what party is running things, the economy moves along at its own petty pace, creeping and crawling until the last syllable of recorded time.

 

We'll be fine. It will take longer than most expect, since the heights achieved were ludicrous. By 2020, things will be back to 1995 levels. Until then it's creeping and crawling.

 

We must learn to walk again and crawling comes first.

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Peter, what you list are not "reasons" but opinion. Maybe if you could explain to me why the private sector can't work this out for itself without blaming government intervention and regulation, I might listen. After all, isn't the American Way to pull oneself up by one's own bootstraps, without whining? Just do it, and all that.

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Our neighbors retired last year, and are selling their house here in NJ to spend more time in FL and their new home in MD.

 

Nice house, well kept, good piece of property, reasonably priced (they say). Went into contract twice, both deals fell apart on credit worthiness and loan issues. Buyers didn't have $50,000 in down payment and closing fees. That's tough for many first time buyers.

 

On a macro level, it's great to see banks being picky about their loan making, doing realistic appraisals, and demanding down payments of 10%. On a personal level, it's sad to see these folks getting squeezed among their three houses. My guess is they cut the price again.

 

Good credit policy starts with good risk appraisal. That's something the US hasn't had in many decades

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Our neighbors retired last year, and are selling their house here in NJ to spend more time in FL and their new home in MD.

 

Nice house, well kept, good piece of property, reasonably priced (they say). Went into contract twice, both deals fell apart on credit worthiness and loan issues. Buyers didn't have $50,000 in down payment and closing fees. That's tough for many first time buyers.

 

On a macro level, it's great to see banks being picky about their loan making, doing realistic appraisals, and demanding down payments of 10%. On a personal level, it's sad to see these folks getting squeezed among their three houses. My guess is they cut the price again.

 

Good credit policy starts with good risk appraisal. That's something the US hasn't had in many decades

There was a reason why the system evolved around the idea of a 20% downpayment. People need to figure that out. I mean christ didn't people learn from their parents?

 

 

Don't even get me started on how our taxation system is rigged against people who rent by choice and is massively regressive for people who rent out of need.

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On a macro level, it's great to see banks being picky about their loan making, doing realistic appraisals, and demanding down payments of 10%. On a personal level, it's sad to see these folks getting squeezed among their three houses. My guess is they cut the price again.

Risk appraisal has to be part of the equation for owners also. If these people went ahead and bought a third home without selling one of the other two and now have to drop the price, why should we feel sorry for them?

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