He made it playing the market..

Post #332,333 by beepster 9/7/10 3:24:22 PM Reply	He made it playing the market.. ..that the central banks make. Specifically, he sold the UK central bank short..betting (yes, gambling), that the UK central bank was not going to surrender to the EU currency system. He was correct, and he made a couple billion. Sure, understanding today's complex world of the future is a little like having bees live in your head. But...there they are.
Post #332,335 by Another Scott 9/7/10 3:34:29 PM Reply	And...? http://en.wikipedia....Wednesday#Prelude The market said that the UK government couldn't support the pound at the previously agreed-upon level. Soros saw that the UK government was not stronger than the market. The market "won", so Soros made a lot of money. (Your short-hand "the central bankers are the market" doesn't seem to match history.) Now translate that into your suggestion that the dollar needs to be weaker. I ask again: How can that happen when people are running to dollars as a safe haven? Do you agree with Box's suggestion that the Treasury sell dollars for a basket of other currencies? If so: What happens when that doesn't lower the dollar significantly? More words, please. ;-) Cheers, Scott.
Post #332,336 by beepster 9/7/10 4:17:16 PM Reply	Would he have made that money without central banks? no. They are the market. (not central bankers, central banks) He played in their market. Had the UK agreed to stay in the EU system, he would have lost everything. He placed a bet and he won. Certainly flooding the market with dollars could weaken the currency. Reducing the effective yield of treasuries to zero would make other investments more palatable and also take pressure off of the dollar. The "what happens if" just means we are in this rut that much longer. Sure, understanding today's complex world of the future is a little like having bees live in your head. But...there they are.
Post #332,350 by Another Scott 9/8/10 1:47:59 AM 9/8/10 3:47:00 AM Reply	You're not getting it. You're telling me about abstract econ things from textbooks while ignoring what has happened over the past 2 years. The Treasury has flooded the system with trillions of dollars to try to fill the vast pit in the economy. In spite of that, contrary to what many on the right have said, the value of the dollar has increased. Interest rates are already effectively at zero and can't go lower. When we're up against the zero bound, things are different and too many (apparently including yourself) don't want to recognize it. We're talking past each other. I'll quit. [edit:] Some thoughts by Karl Smith on something to try - a payroll tax holiday: http://modeledbehavi...ope-calculations/ I think it might be worth a short, but as a commenter points out, it does nothing for the presently unemployed. As part of a package that includes: 1) Extended UI benefits (including those 99ers who have hit that limit), 2) a tax surcharge on, say, those with AGI > $500k-$1M, 3) a phased-in resumption of payroll taxes as unemployment falls in steps, I think it makes sense. And I think it's more likely to get things moving than trying to force the dollar lower by the Fed and Treasury playing the currency markets. FWIW. Cheers, Scott. Edited by Another Scott Sept. 8, 2010, 03:47:00 AM EDT Expand All History
Post #332,358 by boxley 9/8/10 8:38:26 AM Reply	how very conservative of you :-) herman Cain and others on the right have demanded that for a long time. Treasury is not the fed. What money they have printed went straight to American banks and sits there. That has nothing to do with central banking and foreign currency. Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 55 years. meep
Post #332,360 by Another Scott 9/8/10 10:02:29 AM Reply	This has nothing to do with the "Fair Tax". It's hard to know what you're agreeing with there, but I assume it's about the payroll tax holiday. Cain seems to be a fan of the "Fair Tax" (sic). Different animal. There are lots of reasons to be skeptical of a payroll tax holiday, and all proposals aren't equal. I doubt that Cain would be a fan of Reich's proposal from August 2009 - http://robertreich.o...propose-a-peoples [...] Republicans understand the art of tax demagoguery: Put the other side on the defensive by forcing them to explain why a Âtax increaseÂ is warranted and they lose regardless. So instead of playing defense, Democrats should go on the attack. Accuse Republicans of being shills for the rich. And donÂt stop there. Do tax jujitsu. In addition to ending the Bush tax cut for the rich, put forward another proposal for growing the economy that cuts taxes on lower-income Americans. Democrats should propose eliminating payroll taxes on the first $20,000 of income, and making up the revenue loss by applying payroll taxes to incomes above $250,000. This would give the economy an immediate boost by adding to the paychecks of just about every working American. 80 percent of Americans pay more in payroll taxes than they do in income taxes. And because lower-income people would get most of the benefit, itÂs likely to be spent. It would also give employers an extra incentive to hire because theyÂd save on their share of the payroll tax. And most of the incentive would be directed toward hiring lower-income workers Â who have taken the biggest hit on jobs and pay during the recession. It wouldnÂt add to the deficit. Lost revenues would be made up by applying payroll taxes to income exceeding $250,000. This is certainly fair. As it is now, the Social Security payroll tax doesnÂt apply to any income over $106,000. Having the tax kick in again at $250,000 would draw on the top 3 percent of earners, who (as noted) now rake in a larger portion of total income than they have in more than 80 years. Call it the PeopleÂs Tax Cut, and let Republicans explain why theyÂre against it. Yeah, the Treasury and the Fed aren't the same. They work together though. E.g. from October 2008 - http://www.econbrows...ance_sheet_o.html But how did the Fed acquire all that stuff, with "only" a $160 B increase in reserve balances and a $30 B increase in currency outstanding? The answer is to be found in a new entry on the liability side described as "Treasury supplementary financing account." This was announced by the U.S. Treasury through the following somewhat obscure release: The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio. The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury's current borrowing program, which will provide cash for use in the Federal Reserve initiatives. Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes. Here's what I take that to mean. I gather that the Treasury auctioned off some extra T-bills to the public, in addition to their usual weekly auction, and simply kept the receipts as deposits in an account with the Fed. If that were the end of the story and the Fed kept its total liabilities constant, it would result in a huge (completely infeasible technically) drain on reserve balances and currency in circulation, as banks sought to deliver reserves to the Treasury's account to honor their customers' purchases of the T-bills. So the Fed offset the supplemental Treasury auction with a matching purchase of private assets, such as the PDCF and AMLF, thereby temporarily delivering reserves to banks which the banks in turn could hand over to the Treasury supplementary account. The net result of such dual Treasury/Fed operations is that the newly created "reserves" would just sit there in the Treasury supplementary account doing nothing other than standing as an accounting entry. In other words, the device allowed for a huge expansion of the Fed's balance sheet without causing any change in currency in circulation or reserve deposits. Getting closer to the original topic - If the US exchange rate were fixed, and the US decided it wanted to devalue the dollar by, say, 30%, it would be the Treasury's job - http://en.wikipedia....y_of_the_Treasury Since the exchange rate is not fixed, that means nudging the market (and in this case the headwinds are due to a hurricane of buying of dollars, so moving it the other way won't be trivial). Cheers, Scott.
Post #332,361 by boxley 9/8/10 10:38:49 AM Reply	from October 12, 2009 http://www.wnd.com/i...php?pageId=112634 Suspend the payroll tax for one year. This gives an immediate 7.65 percent increase in take-home pay to all workers. It also lowers the payroll costs for all employers by 7.65 percent for one year. A total of about $900 billion would be injected directly into the economy immediately, rather than through the inefficiency of the federal government. Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 55 years. meep
Post #332,364 by Another Scott 9/8/10 10:53:09 AM Reply	Interesting. Thanks. (The rest of it is bogus, of course.;-)
Post #332,359 by beepster 9/8/10 9:33:24 AM Reply	Oh, I am they haven't tanked the long term rates yet..still over 3. Also, "what he said" in the other response. Additionally, they've done nothing on the other side of my equation..which is focus nearly 100% of the stimulus on asset or export producing endeavors. Seems you ignored the post of yesterday where Pres is asking for more money for infrastructure. Simply put, that should have been where the stimulus went. State & Local need to learn that they cannot expand services and expenses beyond the bounds of per capita growth rate or inflation. (yes, it would have been an extremely painful lesson this go around but all we've done is set the expectation that there is no real risk, since the Fed will come in with cash and/or extend the pain because the come to papa moment is next year instead of this one). Sure, understanding today's complex world of the future is a little like having bees live in your head. But...there they are.
Post #332,363 by Another Scott 9/8/10 10:51:07 AM 9/8/10 10:59:53 AM Reply	Hmmm. Maybe it's the time difference... they haven't tanked the long term rates yet..still over 3. The trend has been down since the spring. http://research.stlo...ed2/data/GS30.txt The lowest rate was 2.87% in December 2008. I think it's a very safe bet that 30 year T-bill rates will continue to drop over the next year or longer. It obviously takes longer for long-term rates to fall. Additionally, they've done nothing on the other side of my equation..which is focus nearly 100% of the stimulus on asset or export producing endeavors. Seems you ignored the post of yesterday where Pres is asking for more money for infrastructure. Simply put, that should have been where the stimulus went. "Nothing"? - http://webcache.goog...&client=firefox-a Due to the combined effects of inventory rebuilding, benefits from the ARRA and exports, manufacturing production increased 8.4 percent over the past year. Still, while the current recovery has been stronger than the initial year of growth following the 1990-1991 and 2001 recessions, it has lagged behind the recoveries that followed the 1981- 1982 and 1974-1975 recessions. The ARRA was full of compromises, and had to be spent in 2 years. Obama's latest proposal is different, and has to be paid for. (I haven't ignored it.) http://iwt.mikevital....iwt?postid=35427 I agree it's long overdue, but your fellow travelers who yell about "TEH TAXES!!!!111" would have tried to scuttle it, and may still try[]. It's not going to be effective if the Republicans put up roadblocks so he can't get it passed. State & Local need to learn that they cannot expand services and expenses beyond the bounds of per capita growth rate or inflation. S&Ls are cutting bone, not fat. Police and Fire are being cut in several areas. The "easy" cuts (turning off lights, closing libraries, closing recreation facilities) have been done already. In my area, the county has around a $1000 (yes, one thousand dollar) budget for road repairs on secondary roads - http://scottsurovell...nding-paving.html . FWIW. ;-) [edit:] [] Speaking of which - http://www.washingto...010_09/025571.php Cheers, Scott. Edited by Another Scott Sept. 8, 2010, 10:59:53 AM EDT Expand All History

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