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« The Fed and Bear Stearns Collateral: Back Door Buying of Mortgage Securities | Main | Pundits on "Pandering" »

March 24, 2008



... or keep them on and and know the Fed'll do the opposite.

Bill aka NO DooDahs!

Both normative (analyses they should do) and positive analyses (they probably will do) are useful and enjoyable, PROVIDED THAT they are used properly, and that the reader knows the difference between the two types, and bifurcates their decision-making processes.

For example, the Fed SHOULD disband, and leave their stated functions to the free market. However, I'm not going to base my trading decisions on the probability of them actually doing so ...

There is also the problem of assessing quality levels in positive analysis. For example, if you've been following a popular blogger whose predictions about what the Fed would do have been consistently off the mark, perhaps you should take them off of your RSS reader ...

Josh Stern

Speaking of breathalyzers, I found this transcript incredible even by the standards of the U.S. chief executive:

Whether or not he's sauced, he's definitely got some sort cognitive impairment.

Mike C

Isn't there room for both? I don't see it as an either/or decision.

As an investor, I want to know what government/agencies/Fed will do so that I can implement the correct investment position.

At the same time, as a citizen with concerns that stretch beyond just seeking investment profits, I do want to read opinionated analysis about what government should do or sometimes more importantly should NOT do, and I don't think there is anything wrong with that.

I absolutely agree that investors need to understand the difference between the two.

As an example, IMO we should be moving aggressively towards nuclear power for electricity generation, but from a practical view I don't see that happening based on current government policy. I see natural gas being a growing power source for electricity generation in the years to come, and am allocated to natural gas E&P names.

When it comes to government and the Fed, their policy decisions have serious consequences, and I think it is a legitimate question (although not actionable to make money) to ask if they are making moves that overstep their authority, and if those moves are being sold as helping "Main Street" when the truth might be the prime beneficiaries are someone else.

David Merkel

Well said. It's imperative to distinguish what is likely to happen from what you think should happen if you had the power to make things right.

I've tripped over that, which is why I created systems to limit my decision-making. I make fewer decisions, but I make better ones.

PS -- I have some things to say on last night's piece, but am backed up right now. My quick summary is that I agree with much of what you said, but you may have misinterpreted some of my actions and reasoning. (Which may be my fault...)

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