Friday, April 17, 2009

Bernanke Agrees with Pimco's El-Erian, the $50 Trillion in Global Capital Loss will Have "New Normal" Consequences on Corporations and Consumers

*DJ Fed's Bernanke: Damage from Credit Bust Likely To Be Long-Lasting . Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 30 PM EDT 04-17-09 POTC highlights the wisdom of two financial giants as markets search for "new normal" equilibriums. The recent stock market blip was/is a lot more technical and political than fundamental. Bear market rallies have a history of attracting late and greedy capital that eventually sells and loses as short covering ceases. This bear bounce is better compared to a mountain lion pounce, yet it is nothing more than a temporary technical event. --Earnings came in better than expected in many cases, but we know beating lowered expectations create longer-term fundamental valuation problems.-- Until we know where unemployment will peak and how the "new normal" consumer spending patterns will be affected, the quick stock market blip will not help real estate sales as it rolls-over and ends up destroying more wealth than it created. Bernanke and El-Erian are on the same page, the $5o Trillion in global capital loss will have long-lasting psychological and fundamental effects on corporations and consumers. Long-lasting effects that will not be understood for many years. Yet the most abnormal government regulation and spending policies are just taking hold, causing the "new normal" equilibriums to be mispriced for years to come. The greatest discounting mechanism on earth has a major problem. The short positions are terrified of Big Brother's printed presses in the short-run, yet Bernanke and El-Erian warn of long-lasting consequences... A conundrum is on the shoulders of the entire world, yet Capitalist Pig Bob (CPB) thinks Americans cannot lose sight of core principles. Americans must not allow the current partisanship to over regulate, over blame, and especially over spend. All are extremely anti-free market/anti-capitalistic. IF some of the ambitious and more dangerous bills are pushed through, like Cap & Trade and EFCA, then we will be on a one way path to a "new normal" hell. CPB will continue to speak out against this fiscally luberal regime. A regime that has the ability to shift the balance of this country by spending us out of any future liberty, caution as this confusion evolves~


Anonymous said...

Bernanke is a good man working for a fool. Obama should have never spent more than TARP in my opinion.

Anonymous said...

Great call on BAC and GS. I like the blog a lot.
Orange County,CA

Anonymous said...

$3.6T budget, Obama says he will cut $100M. I trust Americans are not stupid do the math.
Linda in London