Novak confirms that Greenspan pushing Bush election w/ steady low interest

[papau]

Bob Novak http://www.suntimes.com/output/novak/cst-edt-novak06.html seems to say that the Fed’s Greenspan has signaled his intent to help Bush’s election with the “Federal Open Market Committee's decision Oct. 27 to not only retain low short-term rates but keep them for a ''considerable period'' -- despite the desire of the Fed's influential staff to eliminate those two words. That also represented movement toward an ''inflation standard'' in determining monetary policy, diminishing power of future Fed chairmen and bureaucrats.” (All the while the Brits raise their interest rates today to begin the control on inflation)” Greenspan, blamed by Republicans for contributing to the first George Bush's 1992 defeat by tightening money, does not want to doom re-election chances of the second President Bush by snuffing out the recovery -- particularly after the president extended his tenure to 2006.”. “Greenspan is reported to have no objection to targeting inflation, but only after he leaves the Fed.”

[Stupdworld]

1. hm

wont break my heart if he keeps interest rates lower through the election. im not done with law school yet, and would love to refinance at the low rates (without losing my 6 month grace period)

[rapier]

2. The no choice choice

The low rate continuation was not news. Or rather it is very old news. Everyone knows that the Fed will keep the short term rates it controls low. It has to. If Bush is benefits then so be it. No matter who was in charge the perscription would be the same. The decision in other words was not partisan. It was a not even a decision. The Fed has no choice.

Well they do have a choice of course but after 16 years of Greenspan's Fed overwhelming reliance upon low rates there is no turning back. Every decison to lower rates makes turning back that much harder. As the system has become addicted to every more massive borrowing at ever lower rates.

Simply put a rise in short rates would cause a financial panic and meltdown, so Easy Al has no choice.

[rapier]

3. notes

Today 11/7 there is a story in the NYT about a Greenspan speech saying eventually rates will have to go up, and that they must be vigilant for inflation.

This is just gilding the lilly. This is traditional prudent central banker speak. He mouths the words in order to appear prudent. All an effort to dress up his legacy. Greenspan is the least prudent central banker since the first one, John Law.

The open market meeting announcement about the continued risk of deflation and the commitment to continued low rates is all that counts, not some muddy talk about some distant future. The Open Market committee should be called the open mouth committee. It is committed to influenceing the financial markets and nothing can influence them more than saying we will keep short rates low. That is a go ahead, as if they needed one, for the highly leveraged speculative hot money to continue to pour money into ever larger leveraged bets.

While they talked about ease the funny thing is that the Fed has not been easy with its open market operations of late. IN fact it has been stingy, expanding its balance sheet, ie. printing money, at the lowest rate in years. Why is that? Who knows except I suspect it has to do with the stock market. THe stock mania is back and the Feds liqudity pump always flows directly to the financial markets and they don't seem to need it, now. The point being that the Fed is lying. Trying to manage expectations and the market with words.

[SoCalDem]

4. Greenspan would know about that.. He raised rates SIX times

while Gore was running:eyes:

[rapier]

6. notes

In June of 99 the Discount rate was raised from 4.75% to 5%. Subsequently in 5 more moves the rate was raised to 6.50% by May of 2000.

That was the period of the blow off stock bubble. Well, not the final .5% boost in May. That was after the stock market top of March. That one can be looked at with suspicion I suppose but the broad point is that the economy and more importantly the markets were going gangbusters, at least according to the bizzare measures used today. The raising of rates was hardly suspcious and well in line with convention.

Anyway by May 00 Al's moves were over. It is that period of the summer and fall pre election which is verboten for Fed moves as THEN the election is seen as too close. At any rate by Nov. 00 few voters were very worried about the economy. It was on the cusp of a real downturn but it was essentially a non issue in the election.

Now Kudlow and the "supply side" crazies blame Al's rate policy for the recession. Join him if you want but your missing the point. While the Fed was ostensibly tight, the fact is that the credit markets were on fire over that period. Credit growth and money supply growth were full steam ahead, Al's tightenting or not.

Al's Disount Window dressing was simply that, window dressing. In front and behind the scenes Al was cheerleading the exponential growth of the non bank derivative fueled credit markets and most important of all the mortgage mania. Al's supposed tightness was nothing of the sort.

[KalicoKitty]

5. Greenspan Hoodwinks Stock And Commodity Markets

The stock market is manipulated. There are lies about the economy recovering! Bush’s corrupt friends can do anything! Read on...

Like his buddy Kennyboy Lay. Poppy has buddies like the world's No. 3 gold producer, Barrick Gold Corp.

Greenspan Hoodwinks Stock And Commodity Markets

http://www.rense.com/general9/comod.htm

http://www.rense.com/Datapages/skolnickdatapage.html

http://www.skolnicksreport.com/

Greenspan has lowered the interest rates, what??? About 13 times, I believe!

[rapier]

7. notes

Sherman! Sheesh!

The markets have always been manipulated to some degree, mostly for the benefit of insiders, ie. corporate insiders and the Street itself. Todays manipulation is broader. First is the indirect and possibly direct intervention of the Fed in the equity markets. Direct intervention, thru the futures markets, is strictly unproven. More likely is the easing of the way for the big money to move in concert in ways which 'manipulate' the markets ever higher, as we have seen since March. The indirect intervention has been made public with comments saying that the Fed is "targeting" equity markets.

The broadest form of manipulation is in the 7/24/365 bullhorning (touting if you will) of stocks in the media. That relentless propoganda which is lead by two full networks working non stop to spread the good word on stocks. That goes of course on the back of government induced 'stock investment' in IRA's and 401K's. The stock market has become a form of religion which is supposed to provide us with confortable retirements. All hogwash of course. Stocks aren't an investment, they are a speculation. Always have been, always will be.

The main question now is with the full cooperation of the govenment and its new partners, The Street and corporations, can stocks stay way above historic trends. That is the most important economic, political and social question now. If stocks ever fall to the median norm of valuation then the whole jig is up.


PS. Traditional measures of value like the Price Earnings ratio, the dividend payout, the price to book value, etc. etc. are now, again, insanely high by historic measures. They never even got close to medain levels at the market bottom in 10/02. By these simple measure stocks are at least 50% too high. Maybe it is a new era. As I say, the partnership of government, especially thru the fed, with the market believers may have changed the old relationships. We will see.