War of Attrition

Lee Adler expounds on why the Fed doesn’t have market risk, but why it was the causa proxima of not only the 2008 stock market crash, but the economic panic that accompanied it. Given the Fed’s record of careening from blunder to blunder under Greenspanput and The Bernank, he expects the Fed to blunder again in 2011 and cause another market collapse. Russ Winter keeps buying cheap puts, anticipating a jail break and a 10-20 bagger. The question is when. Lee looks at the Fed, Treasury, and cycle analysis and posits a time frame. Subscribers, click the player at the bottom of this post (visible on Radio Free Wall Street main site only) to listen to podcast, or use this link to download.

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Source- Meulendyke- US Monetary Policy and Financial Markets, Federal Reserve Bank of NY, 1998

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1 comment for “War of Attrition

  1. Brad Wessels
    December 23, 2010 at 2:26 pm

    Thankyou again for your inciteful update on the latest and greatest Fed mega-bubble. You have illucidated well the risks of the commodity bubble. Do you really think the Burnabucke will acknowlege failure of his policy as the risks take hold and reverse course in time? Greenspan never did. Do you think this could be the final bubble? The one that plunges us into such global ecomomic turmoil and depression that finally we see real radical, violent, revolutionary actions by middle America to undo the power structure that has led to confuscating whats left of gutted-out Mainstreet America? Our current politicos sure are doing a fine job of bankrupting what little security middle America had left with SSI and Medicare with the latest Tax policy “compomise” (everybody gets everthing and then some (cut SSI revenue since its in such great shape and just add a trillion+ to the deficit)… and securing endless profits for the Medical Insurance Industry under the guise of Health Care Reform. Wow I never saw that one coming from Obama, what a total sell out. Anyway it would be fun to just hear you guys look into your crystal balls for 2011. Can’t take all the pundits on crapvision etc. saying 2011 everything is going up; stocks going up, bonds going up, commodities going up,economy picking up, even housing and employment going up(a little at least!)and its all good.
    I have learned from you sentiment is not very useful for trading especially under Fed fueled bubblenomics but my God I have never seen such happy, happy, joy, joy, while teetering on the edge of an abyss.
    This broadcast you have mentioned the dark side of 2011 and some of its possible ramnifications but go for it and let us hear more conjecture on how this bubble bursting may effect us and if you think it will finally remove the “emporers clothing” of the Fed along with Ron Paul? Will Joe the Plumber finally realize he’s been duped and that trickle down economics only results in him getting pissed on? Anyway please expand into what you may see as the political and social as well as financial realm of the bursting of the “final bubble”
    Thanks again for all your efforts to keep us average folk properly informed so we can stay safe and prepare for the next blow.

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