TPS

And the Music City Miracle was indeed a lateral....

Ahhh...reminds me of the old days... Maybe it was the pot, but I thought the concerts I saw before they went studio-only were the bomb. Dias and the Skunk on Bodhisattva was always my favorite.

wrt the "right price," I was trying to say that speculators had once again pushed the price of oil up, but the underlying fundamentals suggest the rise was not sustainable (and we're seeing that now). It's quite possible that the CFTC's announcement this week also helped bring the price down. While I might agree with your conjecture about future inflation, I disagree with the extent of it. Policy makers will not let inflation go past double digits. However, a "little" inflation will actually be good for the economy. As for the definition of inflation, there is only one. We are disagreeing on its cause.

As I mentioned, I am looking at the (relatively) near term that futures contracts cover, which of course is all about anticipation, hence the term...futures. I am saying their bets about the near term are wrong. Inflation is a rise in the general level of prices. Your definition expresses the monetarists' belief that it's caused from the Fed printing too much money. This is wrong. While the Fed has "created" huge volumes of money, that money is not being circulated (as JA mentioned). The Fed can also destroy money, and will do so when the economy starts to recover. Btw, one doesn't need money to buy something; one needs "credit." While money has been increasing, credit has been decreasing. Which one is more imortant for its impact on inflation? If you look a bit further back you'll find that the dollar-oil relationship is fairly recent. In fact, it starts about the time that speculators took over the futures markets....

IMO, those who are making short/medium term bets in the futures markets are wrong; the fundamentals don't support $70 oil. I dont' see global demand rising sharply over the next two years, so I don't see oil rising by 200%. I'd take your bet, but as 2012 is the end of the Mayan calendar (and world), I won't be here to collect....

The point made was that AIG helped start the game, and with all the money being made no one wanted it to end. So, when AIG "got out of the (subprime) game" (almost) everyone else was willing to fill the gap. Your last point is conjecture, especially since AIG "got out of the game" the same year that Greenberg was forced out. IMHO, the crash would've happened, and AIG would've gone down, whether Greenberg was there or not.

YOu are correct--if not Cassano, it would've been [place name here].

I didn't mean that you hold another currency, I meant that you invest in paper assets of those currencies--an emerging market mutual fund or foreign bond fund for example. As for inflation, until the "money" that has been created gets into the hands of people who buy things, there is little to no risk of inflation. The only reason that commodity prices, especially oil, have gone up (until now) is because of people speculating that there will be inflation. Their bets are wrong. Yes, Law's exploits were described in Kindleberger's book (manias, panics, and crashes).

What is our "dollar policy"? Also, if the $ is falling, one doesn't have to hold hard assets, one can simply hold paper assets in the currencies it is declining against. Put a number on "the next few years," and I might take that bet.

Contracts can be settled in cash without taking delivery or one can simply close a position by buying "the other side of the contract", which is why there can be more oil traded than what physically exists. In fact, the majority of commodity futures contracts are never delivered. The futures (and other derivative) markets were created for hedgers, not speculators. The reason contract limits were put in place was to prevent the (easy) manipulation of prices by speculators. Having limits does not prevent market speculation, it prevents speculators from manipulating the market.

Speculators have controlled the futures (and therefore spot) markets for the past several years. Limiting their positions in futures markets is long overdue... back to the futures markets

I really enjoyed Galway, and would've stayed longer if I could have. Great oysters there! In 2007 I spent a week in Glengariff/Bantry (in the southwest), absolutely beautiful. I actually got an invite to Maureen O'hara's birthday party (it's officially 8/17) in Glengariff, but couldn't extend my stay. If you do manage to make it that far south, have a Murphy's at the Maple Leaf pub in Glengariff. You will enjoy Ireland no matter where you go.

Yes, please tell us you are not more than 11 years old...whoever wrote that title...

I have the 6, almost 4 years now. I went for the larger model because you can get 4 sets of clubs in the trunk. Talked a friend into getting his wife the 3, and she loves it. Nice sporty car and the gas mileage is is good. The only complaint I have about mine is that it's not so great getting out of snow (low frame). Other than that, am very happy with my Mazda.

Sorry I missed the sarcasm button. Certainly he "got what he deserved," but he's also the scapegoat to assuage the public. What about all the fraud from Wall STreet in this crisis? The ratings agencies lied about the quality of asset-backed securities. One group at Goldman was selling those securities to investors, while another was making cds bets on their default. A hell of a lot more people should join mr. madoff....

Yes, how nice that someone is going to jail for the worst financial crisis in history. I'm glad they got the guy that forced the government to payout 12 trillion dollars to save the financial system. We got our man!

Must be a relatively new requirement for the job. I wa impressed that Bush was able to dodge that shoe!

My point is that you need an increase in the revenues collected significantly higher than the "average" annual collected. The issue raised was how to bring down the deficit? Raising the cap gains rate won't raise significantly more revenue if you don't also have significant gains. Btw, won't the gains since March be offset by the losses over the previous 3 months?

You need an "asset bubble" for that to have any significant impact on revenues, and I think we're out of those for awhile... My guess is we'll see one or both of these: increased taxes on the upper bracket (or let the Bush cut for the top expire); some type of national sales or value-added tax.

Of the 9 games that Edwards and Reed started and completed in 2008, the Bills were 7-2. It could just be a coincidence, but I don't think so. Reed is Edwards' go-to guy.

The dollar's descent began 7-8 years ago. The recent "flight to safety" was just that. The crisis will only hasten its end as reserve currency, but it will still take quite some time as there is no alternative.

My few cents: I agree with one of your initial statements that it has been expansion of the Fed's balance sheet as LoLR that has mainly stabilized the financial sector; TARP was enacted after weathering the worst of the crisis. The biggest chunk of it has been given to AIG and used as a pass-through to help (mainly) the two remaining finance titans who provide most of the "expertise" at the Treasury... I'd say Paulson abandoned the original idea for TARP because every sane economist was publicly criticizing it as a giveaway of taxpayer money and calling for direct public investment/nationalization. Lehman went under because P&B denied them access to funds to weather the liquidity squeeze. I'm sure there was no conflict of interest there....

If you mean internationally, that could be one source of inflation as it will make imports more expensive (all else equal, if you assume we spend 15% of our income on imports, then for every 10% depreciation of the dollar that can lead to 1.5% additional inflation). With respect to your second point, the Fed has created reserves in the banking system (swapping bad assets for reserves); it has not printed ludicrous amounts of money. The banking system has almost $1 trillion in excess reserves right now, and until they start lending, that's all it is--electronic chits, not paper. And if you believe the economy will continue to sputter, as Japan did, then there won't be signifiant loan demand, which is how those reserves become "money." As long as there is excess capacity (relatively high unemployed labor and real capital) in the US and around the globe, inflation of goods and services will remain weak no matter how many reserves are injected into the banking system. On the other hand (and I believe this is what you all think is happening), if the Fed starts monetizing the deficits, and from its balance sheet it doesn't look like it's done so yet, and government spending is used to buy goods and services, not toxic assets, then that could put upward pressure on prices if it helps push unemployment down and capacity utilization up. The Fed can get away with "monetizing the debt" (printing money) until the latter happens.

Where is all the money the fed is printing? Who has it? Who's spending it? How will it make prices of goods and services go up if no one's incomes are changing and more people are losing jobs?

Most people haven't gone through a deflationary period, aka the Great Depresson. A little inflation is better than deflation any day. Ask the Japanese. Countries spend their way out of recessions all the time, mainly through what's known as automatic stabilizers: taxes go down and spending goes up automatically in downturns causing deficits to widen. In severe recessions the govt will pursue expansionary fiscal policy, like Obama has done. In other cases they'll use the excuse of supply side economics to pursue expansionary fiscal policy, which causes deficits. A lot of posters keep saying there's going to be a great inflation. I'd wish someone would explain exactly how that will occur. Given what the Fed has done, how exactly will it create inflation? Anyone? Anyone? Bueller?