http://www.ritholtz.com/blog/2009/11/two-different-conversations-in-the-marketplace/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 http://www.ritholtz.com/blog/2009/11/two-different-conversations-in-the-marketplace/comment-page-1/#comment-232994 Loans to Congress - The Untold Debt Story | ZachStocks Sat, 07 Nov 2009 19:07:12 +0000 http://www.ritholtz.com/blog/?p=42675#comment-232994 [...] Now when we talk about our Loans to Congress (Treasury Securities) most people feel relatively safe because the notes are backed by the full faith and credit of the United States of America.  Even if the economy tumbled to the point where revenues were cut in half – or by 80%, the US could still print the money necessary to pay for the treasury liabilities.  So we are secure knowing that even with a worst-case scenario, the income stream can come from the printing press. Other Articles of Interest Fed Maintains Emergency Rate… “All is Well” Mortgage Crisis Part Deux Naked Capitalism: Less Optimistic Treasury View Ritholtz: Two Different Conversations in Marketplace [...] [...] Now when we talk about our Loans to Congress (Treasury Securities) most people feel relatively safe because the notes are backed by the full faith and credit of the United States of America.  Even if the economy tumbled to the point where revenues were cut in half – or by 80%, the US could still print the money necessary to pay for the treasury liabilities.  So we are secure knowing that even with a worst-case scenario, the income stream can come from the printing press. Other Articles of Interest Fed Maintains Emergency Rate… “All is Well” Mortgage Crisis Part Deux Naked Capitalism: Less Optimistic Treasury View Ritholtz: Two Different Conversations in Marketplace [...]

]]> http://www.ritholtz.com/blog/2009/11/two-different-conversations-in-the-marketplace/comment-page-1/#comment-231794 Simon Tue, 03 Nov 2009 21:20:09 +0000 http://www.ritholtz.com/blog/?p=42675#comment-231794 To me there is a weird disconnect here. Was not the point of lowering interest rates to support the value of all assets? This is the most basic investing parameter. Interest rates determine capital value. If interest rates are very low higher returns on risky assets become attractive again. What is hard to understand about this? I can't believe that the FED really thinks they had to lower interest rates etc. to encourage lending. It was to protect the banks!!! They breathed a sigh of relief and got right back into the game. After all its loads of fun when you win is it not? It really does make you feel like a master of the universe. To me there is a weird disconnect here. Was not the point of lowering interest rates to support the value of all assets? This is the most basic investing parameter. Interest rates determine capital value. If interest rates are very low higher returns on risky assets become attractive again. What is hard to understand about this? I can’t believe that the FED really thinks they had to lower interest rates etc. to encourage lending. It was to protect the banks!!! They breathed a sigh of relief and got right back into the game. After all its loads of fun when you win is it not? It really does make you feel like a master of the universe.

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