Comments on: The Zero Yield Economy http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 22:04:14 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: DeDude http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132523 DeDude Thu, 11 Dec 2008 17:50:52 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132523 I was told that the only thing kapitalism had going for it was its much better economic growth rate, making its godless hamering of the poor and sick acceptable if you don’t give a s**t about what the bible teaches us. But if we have had socialism since 1933 and the US in the period 1933 - 2000 clearly had the best economy the world has ever seen, then I guess socialism is the way to go. We just have to make sure that it is not these half-brained, half-committed, dumb a$$ GOP’ers that are running our socialism, since they obviously can’t handle it. Welcome to the socialist party comrade flipspiceland. I was told that the only thing kapitalism had going for it was its much better economic growth rate, making its godless hamering of the poor and sick acceptable if you don’t give a s**t about what the bible teaches us. But if we have had socialism since 1933 and the US in the period 1933 – 2000 clearly had the best economy the world has ever seen, then I guess socialism is the way to go. We just have to make sure that it is not these half-brained, half-committed, dumb a$$ GOP’ers that are running our socialism, since they obviously can’t handle it.

Welcome to the socialist party comrade flipspiceland.

]]> By: flipspiceland http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132387 flipspiceland Thu, 11 Dec 2008 11:42:18 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132387 DeDude: What country are you referring to that is Capitalist? You can't mean the United States with its Socialist Political Economy that found its roots with the inept but eloquent FDR, do you? This country hasn't been allowed to function as a Capitalist economy so the proof that it has failed to deliver 'social services' is baloney. It is the 'socialist economy' that the US has been practicing that has proven a failure. I'd be delighted to debate you on the merits of Capitalism but let's first agree that it has not been practiced anywhere since 1933. DeDude: What country are you referring to that is Capitalist? You can’t mean the United States with its Socialist Political Economy that found its roots with the inept but eloquent FDR, do you?

This country hasn’t been allowed to function as a Capitalist economy so the proof that it has failed to deliver ’social services’ is baloney. It is the ’socialist economy’ that the US has been practicing that has proven a failure.

I’d be delighted to debate you on the merits of Capitalism but let’s first agree that it has not been practiced anywhere since 1933.

]]> By: Mark E Hoffer http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132346 Mark E Hoffer Thu, 11 Dec 2008 02:36:58 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132346 Pat G. are you telling us the UST-Bills are Not U$D proxies? Pat G. are you telling us the UST-Bills are Not U$D proxies?

]]> By: Pat G. http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132291 Pat G. Wed, 10 Dec 2008 23:36:49 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132291 If Treasuries are paying 0% why aren't those flocking to them not just staying in cash? Because looming in the distance is the hit the dollar is going to take. If Treasuries are paying 0% why aren’t those flocking to them not just staying in cash? Because looming in the distance is the hit the dollar is going to take.

]]> By: DeDude http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132193 DeDude Wed, 10 Dec 2008 18:47:39 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132193 So if investors are so scared that they have grossly mispriced the risk of US government debt vs private company debt, and banks have gotten so scared that they fail to fulfill their job of providing loans to private businesses, is it time for the government to step in. Market forces have always been an inefficient and wastefull way to provide critical services to society. Now that they have completely stopped working, there seem to be no other choice than to let government step in, temporarely. If need be issue trillions of government bonds at low interest rate to these scared investors, and use the proceeds to purchase company bonds of similar length. Harvest the spread of 2-500 base points and use that profit to cover any losses. I mean you got to keep the economy going even when capitalism shows the worst sides of its dysfunction. Or is capitalism so important that we will sacrifice our economy to prevent admitting that it has its limitations? So if investors are so scared that they have grossly mispriced the risk of US government debt vs private company debt, and banks have gotten so scared that they fail to fulfill their job of providing loans to private businesses, is it time for the government to step in. Market forces have always been an inefficient and wastefull way to provide critical services to society. Now that they have completely stopped working, there seem to be no other choice than to let government step in, temporarely. If need be issue trillions of government bonds at low interest rate to these scared investors, and use the proceeds to purchase company bonds of similar length. Harvest the spread of 2-500 base points and use that profit to cover any losses. I mean you got to keep the economy going even when capitalism shows the worst sides of its dysfunction. Or is capitalism so important that we will sacrifice our economy to prevent admitting that it has its limitations?

]]> By: bcasey http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132190 bcasey Wed, 10 Dec 2008 18:35:04 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132190 I can't believe they still think they should get bonuses. Anyone in the financial industry talking about bonuses should be shown a nice shiny 8x10 cell along with the new pair af bracelets and the key, which will be given to them as a bonus after they figure out how to fix the mess they made. Additionaly their assets should be frozen and their property confiscated. Heck send em to Gitmo for a little R&R in a nice tropical clime. I can’t believe they still think they should get bonuses. Anyone in the financial industry talking about bonuses should be shown a nice shiny 8×10 cell along with the new pair af bracelets and the key, which will be given to them as a bonus after they figure out how to fix the mess they made. Additionaly their assets should be frozen and their property confiscated. Heck send em to Gitmo for a little R&R in a nice tropical clime.

]]> By: Jim Dandy http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132184 Jim Dandy Wed, 10 Dec 2008 18:19:03 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132184 I know capital ratios for firms apply discounts depending on the type of asset held. Government debt carries the lowest discount, so this may explain part of the extraordinary demand. I know capital ratios for firms apply discounts depending on the type of asset held. Government debt carries the lowest discount, so this may explain part of the extraordinary demand.

]]> By: Lugnut http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132171 Lugnut Wed, 10 Dec 2008 17:36:14 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132171 "Quite remarkable." This story begs for more commentary than that. I can understand not wanting to be as incendiary as Denninger, but I think this is a watershed event. Perhaps we have just had so many of them as of recent, that we get information overload. This does not bode well at all for the credit markets I would think. Not only are investors unable to find any safe investments that would generate a positive rate of return, they don't even trust leaving it in a bank. “Quite remarkable.”

This story begs for more commentary than that. I can understand not wanting to be as incendiary as Denninger, but I think this is a watershed event. Perhaps we have just had so many of them as of recent, that we get information overload.

This does not bode well at all for the credit markets I would think. Not only are investors unable to find any safe investments that would generate a positive rate of return, they don’t even trust leaving it in a bank.

]]> By: ronnie32 http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132165 ronnie32 Wed, 10 Dec 2008 17:04:36 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132165 it reflects the reality of credit rationing and asset deflation moving through the world economies. Having a rear view mirror of the economy can be dangerous to your economic well being. it reflects the reality of credit rationing and asset deflation moving through the world economies. Having a rear view mirror of the economy can be dangerous to your economic well being.

]]> By: MorticiaA http://www.ritholtz.com/blog/2008/12/the-zero-yield-economy/comment-page-1/#comment-132161 MorticiaA Wed, 10 Dec 2008 17:02:13 +0000 http://www.ritholtz.com/blog/?p=12444#comment-132161 danm: Interesting about prices in Canada vs. U.S. My husband is working a long-term project in Canada; he told me that the wine we buy at Kroger for $10 a bottle costs $30 there. danm: Interesting about prices in Canada vs. U.S. My husband is working a long-term project in Canada; he told me that the wine we buy at Kroger for $10 a bottle costs $30 there.

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