[Seadragon]

And Greenspan suddenly decides that an inverted yield curve doesn't predict a recession because the "economy's too complex" now. I guess that's right in line with suddenly eliminating publishing M3. Oh, and wasn't Greenspan the one recommending adjustable rate mortgages a couple of years ago? Not sure I would buy a used car from this man.

[JustinFrankl]

And Greenspan suddenly decides that an inverted yield curve doesn't predict a recession because the "economy's too complex" now.

The "economy's too complex" is just another way of saying, "there's a veritable cornucopia of possible solutions out there to this problem."

[capslock]

Hey. No problem. If we hit recession, we'll simply lower the prime rate, increase federal spending, and throw in some big tax cuts for stimulus.

[FoxV]

this article Bernankeism: Fraud or Menace? was mentioned in the Mogambo article that Smiley posted. It goes into details what the Big Heads in the fed are thinking these days.

to some extent I understand what they're trying to do. But what I can't fathom is how they think the foreign governements will let them get away with it.

If the US fed just starts printing out cash, or buy stocks (with freshly printed money) to prop up their values. Foriegners will pull out of the stock market in a heart beat and the dollar would be come worthless.

Not actually a big deal if your a self-sufficient country. But the US imports everything and everything they import would hyper-inflate. The fed can ditch the M3 data on lose track of how much their dollar is worth, but the rest of the world won't (and if they do they'll just start refusing payment in American Dollars)

This all seems pretty obvious to me but how can the Fed possibley think they can get away with it (or does it all come down to that collective insanity thing)

[smiley]

This all seems pretty obvious to me but how can the Fed possibley think they can get away with it (or does it all come down to that collective insanity thing)

I think they could get away with it under a different administration.

It is pretty obvious what they are trying to do. They are engineering a slow controlled decline of the dollar to solve the imbalances via inflation. I think that is a legitimate approach and perhaps the only practical solution.

The countries which hold US debt, would suffer some losses, but they would be willing to take these losses if they would believe that in a few years the US would have their finances solved and gotten back to healthy economic growth. In that case they would consider these losses as an investment in their export market.

But these efforts are frustrated by the current administration which is sending out a message of sheer fiscal irresponsibility. Just think, somewhere halfway January Bush has to go to the Senate to ask for a raise of the debt ceiling for the third time in this administration. The last time being barely one year ago. He's now burning debt at a pace of 0.7 trillion a year. No wonder Greenspan had reserved some very unfriendly words for this administration during his previous speeches, they are messing up his plan.

This whole issue revolves around credibility and trust. If they can make the world believe that this a temporary measure, that is needed to get the US back on track they will get away with it. The rest of the world has as much to loose from a US collapse as the US. If the rest of the world thinks that the collapse has become inevitable then we will see some very nasty things as all nations scramble for the exit.

I think fiscal responsibility (or the lack of it) is the key in creating (or losing) that credibility.

[Pfish]

Where do you find 2 vs. 10 year bond rates? I looked at http://tfc-charts.w2d.com/menu.html Am I in the right place?

[Leanan]

Try here.

[Seadragon]

Bump up for another yield curve inverts story...

http://www.marketwatch.com/news/story.a ... mktw&dist=

[venky]

Well, thought I'd start off this forum


http://observer.guardian.co.uk/world/st ... 75,00.html

For anyone aware of the road and congestion situation on Indian roads, this car might seem like a miracle of engineering. At half the price of the maruti 800 and smaller in size its easy to say that this is the ideal vehicle for Indian roads, struggling to keep pace with the growing congestion and traffic caused by the increased mobility of the rising middle class. At a cost of just 1 lakh (100, 000 rupees or a little over $2000) it brings the possibility of car ownership to probably millions of people in the lower middle class brackett who could not afford one earlier. Sales might only be constrained by availability.

The other side of the coin. Knowing what we know about Peak Oil and global warming; this is probably happening at the worst possible time. Its quite likely that this will only accelerate the growing demand for oil that is already rising at a reckless pace setting it on a collision course as oil production declines, presumably in the next decade. Not to mention the increased emission of green house gases from the additional millions of automobiles on the road.

For an average Indian's point of view (like the average Westerner) this is of little concern and he is probably unaware generally speaking. Most Indians now are convinced that it is now our time in the sun, and that India is on the path to becoming an industrialized major power. And they would probably resent suggestions from any westerner who cites the need to cut green house emissions, pointing at the far far higher per capita consumption in the West.

[TheTurtle]

I have nothing to add to this thread other than to note that I am happy that the very first post to the new Asia Discussion forum could be made by venky, who has been asking for this forum to be instituted for some time now.

[Zardoz]

...it's easy to say that this is the ideal vehicle for Indian roads, struggling to keep pace with the growing congestion and traffic caused by the increased mobility of the rising middle class...

Certainly you see the terrible irony in that statement. Tata is hoping to sell a million cars a year. How long will it be before every street in every sizeable city in India is hopelessly gridlocked?

[venky]

...it's easy to say that this is the ideal vehicle for Indian roads, struggling to keep pace with the growing congestion and traffic caused by the increased mobility of the rising middle class...

Certainly you see the terrible irony in that statement. Tata is hoping to sell a million cars a year. How long will it be before every street in every sizeable city in India is hopelessly gridlocked?

Hmmm, almost seems to be a case of Jevon's paradox

Infrastructure is picking up; though its anyone's guess if it can accomodate the additional demand. Though having a car like this out there would certainly be better than many Indians going for sedans or SUV like vehicles; the craze for which is picking up too.

[venky]

I have nothing to add to this thread other than to note that I am happy that the very first post to the new Asia Discussion forum could be made by venky, who has been asking for this forum to be instituted for some time now.

Hey thanks turtle, I appreciate this forum being set up. A much needed outlet for discussion from the region with half the world's population and now a large concentration of industrialization and economic activity.

I resolved to makes posts here as often as I can

[Pixie]

Do we yet have a picture of one?

[venky]

http://news.bbc.co.uk/2/hi/business/7180396.stm

Here we go

[MadMarcus]

I'm rather suprised that it is estimated to get 50mpg. It seems like it should be more. How does the Nano compare in size, weight, and engine size to older Honda Civics (such as the pre-90's CRx's mentioned in another thread of the really old first ones to be imported)?

[venky]

$2500 car = $200 oil?

A rather interesting take.

http://www.chron.com/disp/story.mpl/bus ... 39103.html

[Pixie]

I'm rather suprised that it is estimated to get 50mpg. It seems like it should be more. How does the Nano compare in size, weight, and engine size to older Honda Civics (such as the pre-90's CRx's mentioned in another thread of the really old first ones to be imported)?

Just judging from what I see in that photo and what I have heard, it sounds comparable in weight and technology to a geo metro, so it's not surprising it gets the same mileage.

[highlander]

So when the world's copycats, the Chinese, produce their own variety of this gem, what will be the price of oil?

[Graeme]

edmunds