Comments on: The New Biggest Risk of All – DEFLATION http://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/ Prieur du Plessis’s international investment blog Sun, 29 Jan 2012 22:06:48 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Jaiden Randolphhttp://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/comment-page-1/#comment-5974 Jaiden Randolph Fri, 03 Oct 2008 16:21:46 +0000 http://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/#comment-5974 Deflation pretty easy to get there. Systemic risk averted. Deflation pretty easy to get there. Systemic risk averted.

]]> By: MortgageNewsClips: Where Are We Headed, Swallow Wachovia, Haste Makes Waste, New Servicer, Pumping Cash, Big Score on AIG, $620 bln Lubrication, Deflation, 60%, Charlotte, $122 Billion Burden, Markos Kaminishttp://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/comment-page-1/#comment-5935 MortgageNewsClips: Where Are We Headed, Swallow Wachovia, Haste Makes Waste, New Servicer, Pumping Cash, Big Score on AIG, $620 bln Lubrication, Deflation, 60%, Charlotte, $122 Billion Burden, Markos Kaminis Wed, 01 Oct 2008 01:42:17 +0000 http://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/#comment-5935 [...] The New Biggest Risk of All – DEFLATION - “It seems like a foregone conclusion that deflationary pressures are now squarely upon us. Prices are falling in asset classes across the board,” said guest contributor Bennet Sedaca.  - Investment Postcards from Cape Town  [...] [...] The New Biggest Risk of All – DEFLATION – “It seems like a foregone conclusion that deflationary pressures are now squarely upon us. Prices are falling in asset classes across the board,” said guest contributor Bennet Sedaca.  – Investment Postcards from Cape Town  [...]

]]> By: John Kaighnhttp://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/comment-page-1/#comment-5925 John Kaighn Tue, 30 Sep 2008 13:10:12 +0000 http://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/#comment-5925 Frustration and anger are two feelings that come bubbling forth from my gut as I watch the drama unfold in regard to the rescue plan for our financial system being deliberated before my eyes. At the heart of the matter sit the two Government Sponsored Enterprises (GSE's) Fannie Mae and Freddie Mac. The utter disregard for the facts by the mainstream television and print media, Barney Frank and Christopher Dodd completely amazes me.The implicit guarantee of government backing for mortgage securities peddled by the two GSE's, as they operated under the guise of "providing affordable housing", gave them the ability to enjoy lower interest rates on their bonds, which in turn allowed them to prevail over private companies providing mortgage backed securities. The increased leverage, lack of competition and tacit approval of their operations by politicians receiving campaign contributions through their lobbying efforts allowed their CEO, Franklin Raines, to earn over 100 million dollars, before being ousted for accounting irregularities. Now Frank and Dodd are trying to position themselves as champions of Main Street, while the financial system grinds to a halt. For a more in depth analysis of the Fannie & Freddie debacle, see the articles in the <a href="http://online.wsj.com/article/SB122212558463765111.html" rel="nofollow">Wall Street Journal</a> and <a href="http://www.ibdeditorials.com/IBDArticles.aspx?id=306978378974502" rel="nofollow">Investors Business Daily</a> from Tuesday, September 23, 2008.Ben Bernancke was elevated to Federal Reserve Chairman because he was respected for his knowledge and credentials. Hank Paulson was called upon to be Treasury Secretary because of his knowledge of the financial markets. If they are this concerned about the current crisis in our financial system, I think we better stop with the politics and soberly address the situation. This is NOT a bailout of Wall Street, but rather a rescue of our financial system. If the stock market is halved again in this decade, the pain on Main Street will be devastating. We all enjoyed the rising equity in real estate from 2002 through 2006, but the sad reality is much of it was based on smoke and mirrors. Perhaps this will usher in an era of building wealth methodically through investing, rather than the get rich quick schemes of day trading, real estate flipping and other fads which have led to bubbles and busts. One could only hope!John H. Kaighn<a href="http://jerseybenefits.com" rel="nofollow">Jersey Benefits Advisors</a><a href="http://johnkaighn.com" rel="nofollow">The Kaighn Report</a> Frustration and anger are two feelings that come bubbling forth from my gut as I watch the drama unfold in regard to the rescue plan for our financial system being deliberated before my eyes. At the heart of the matter sit the two Government Sponsored Enterprises (GSE’s) Fannie Mae and Freddie Mac. The utter disregard for the facts by the mainstream television and print media, Barney Frank and Christopher Dodd completely amazes me.

The implicit guarantee of government backing for mortgage securities peddled by the two GSE’s, as they operated under the guise of “providing affordable housing”, gave them the ability to enjoy lower interest rates on their bonds, which in turn allowed them to prevail over private companies providing mortgage backed securities. The increased leverage, lack of competition and tacit approval of their operations by politicians receiving campaign contributions through their lobbying efforts allowed their CEO, Franklin Raines, to earn over 100 million dollars, before being ousted for accounting irregularities. Now Frank and Dodd are trying to position themselves as champions of Main Street, while the financial system grinds to a halt. For a more in depth analysis of the Fannie & Freddie debacle, see the articles in the Wall Street Journal and Investors Business Daily from Tuesday, September 23, 2008.

Ben Bernancke was elevated to Federal Reserve Chairman because he was respected for his knowledge and credentials. Hank Paulson was called upon to be Treasury Secretary because of his knowledge of the financial markets. If they are this concerned about the current crisis in our financial system, I think we better stop with the politics and soberly address the situation. This is NOT a bailout of Wall Street, but rather a rescue of our financial system. If the stock market is halved again in this decade, the pain on Main Street will be devastating. We all enjoyed the rising equity in real estate from 2002 through 2006, but the sad reality is much of it was based on smoke and mirrors. Perhaps this will usher in an era of building wealth methodically through investing, rather than the get rich quick schemes of day trading, real estate flipping and other fads which have led to bubbles and busts. One could only hope!

John H. Kaighn

Jersey Benefits Advisors

The Kaighn Report

]]> By: OilyGasMinerhttp://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/comment-page-1/#comment-5913 OilyGasMiner Mon, 29 Sep 2008 20:35:04 +0000 http://www.investmentpostcards.com/2008/09/29/the-new-biggest-risk-of-all-%e2%80%93-deflation/#comment-5913 Interesting perspective on deflation. I would think that this would be very possible, given the ULTIMATE decision regarding the bailout. As I've always been on the side of hyperinflation if this does occur. The question is how much money is required to simply add stability to the market so that it can rebound on its own, without overpowering government intervention. Has everyone also forgotten that our trade deficit is nearing <a href="http://www.stockresearchportalblog.com/2008/09/update-desperate-people-do-desperate-things/ /" rel="nofollow"> $7 Trillion </a>. Interesting perspective on deflation. I would think that this would be very possible, given the ULTIMATE decision regarding the bailout. As I’ve always been on the side of hyperinflation if this does occur. The question is how much money is required to simply add stability to the market so that it can rebound on its own, without overpowering government intervention. Has everyone also forgotten that our trade deficit is nearing $7 Trillion .

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