Dull Street
Wall Street types continue to puzzle me. From Marketwatch:
NEW YORK (MarketWatch) -- Treasurys advanced Tuesday, pushing yields down the most since at least mid-December, as Treasury Secretary Timothy Geithner's plans to help troubled U.S. banks disappointed investors..."Geithner is saying that this is going to take time and the markets don't work that way," said Jason Brady, who helps oversee about $6 billion in fixed-income assets at Thornburg Investment Management. "They want answers now."
They want answers now? They want to hear that it won't take time? Are they completely naive? Bush and Paulson told them all last year that everything was going to be fine immediately. How well did that work out? Are they childishly going to hold their breath and turn blue and withhold their investments until they hear what they want?
Again, it reminds me that the proper stimulus for the economy doesn't require spending trillions of dollars to bail out banks and build bridges -- it requires maybe just a few million dollars worth of Prozac.
I just came back from lunch with a penny-and-pound-wise friend who reminded me that these are the best times to increase contributions to retirement funds. But there seems to be no end to the arrogance and short-term greed of large portions of the investor class. They steadfastly refuse to see investment as a long-term prospect. And the economy suffers as a result.
Agree that now is a great time to invest...so long as you have a job. It's also a great time to buy a home, purchase a new car, or buy anything at the mall...so long as you have a job. Unfortunately, the unemployment rate is high and getting higher. Working Americans are worried about their futures - they might be employed now, but they're not so sure what the near-term future might hold. Consequently, people are saving and not investing and spending. Same with banks and other financial institutions. Keynsian economics has been effectively replaced by rational expectations - that is, people aren't inclined any longer to spend a few extra bucks that might fall in their hands, but are now more inclined to save and hedge against a dark future.