House of Paine

a bubble hustle three peat

heres a fed hack's

timeless 
       three part 
           verbosity

on the no go
  barriers
 to anti-bubblicious 
         policy moves 

==================




"The first hurdle—

Can policymakers identify a bubble?"

-----------lovely pull the  can't be sure shit ------------
-------- after all maybe it ain't a buuble maybe 


" asset price 
appear aligned with fundamentals"


----notice word choice here...----------


" Some have argued
   one of two
  escape portals exist "

------------ portals ?
why portals?

perhaps what one 
really wants 
must be  disavowed --------------

" either
 bubbles don't exist 
        or
even if they do exist
they can't be identified "

-------- well that's
         a  road block alright 
how   do u pull that off ? 


well A -------------- 


" bubbles don't exist 
because asset prices 
reflect 
the collective information 
and wisdom of traders 
in organized markets ..."

---------blah blah blah holy market smoke 

and 
for the more dtermined activist
                                      --------------------


 "bubbles cannot be identified
 because the requisite estimates 
of the underlying fundamentals 
are so imprecise."

-------- and naturally ...-----------

 "If policymakers cannot discern a bubble,
 then a laissez faire 
 no  reaction
  Policy is the only feasible response"
--------------------------------------------

-------- but our bub
is willing to up the challenge --------------

" suppose an asset price bubble 
   is identified
 Then a  second hurdle emerges :

 whether bubble fluctuations 
have significant macroeconomic fallout 
that monetary policy 
         cannot readily offset after the fact"

------- double trouble form here
but this portal of escape
sez

hey there ain't no bubble burst
 we can't clean up real easy
                      after its over 
                                  anyway 
so why jump in before hand ---------------------

------here he runs  
 two  sub routines -------------

" Two situations prevent clearing this hurdle"

----alls well so far ...--------

" First, if the bubble is in an asset market
 that is small in domestic economic terms
—for example, a localized real estate market—
then a central banker should avoid attempts
 at asset price realignment"

--------- ie local problems ?

avoid wasteful global solutions


" kill joe"

"which  joe ?"

 "oh fuck just 
 shoot em all" --------------------- 
 
"Second, even when there are
 significant macroeconomic consequences
 from an asset price bubble boom and bust, 
if they occur with a sufficient lag 
so the policymaker can adopt
 a wait-and-see attitude, 
then a laissez faire  Policy
 is again appropriate."

----------- 
 "some ones rapin some one in there"

 " ooops lets play it safe
          could be consensual 
            lets   wait and see 
i got a day after pill anyway "
                                   --------------
-------- now take a ride -------------

" if fluctuations 
in the bubble component..."

-------- translation 
its boom and subsequent bust -------------

 " have only 
       conventional effects 
on aggregate demand and supply..."

-------------- ie effects on spending -------------

" through changes in wealth,
 the cost of capital, and balance sheets"
 
-------------- get that  okay ? ------------------

"Then,
  to a first approximation, 
the lags involved in these channels
 are about as long as the lags 
in the monetary  system"

---------- once the bubble bursts
we can get credit policy to the scene of the disaster
in time to rescue its victims...
errrr
  more or less .....
      give or  take ...--------------

--- and  so  ----

 " an  apres le deluge 
       laissez faire Policy should suffice".



"For example,
 fluctuations in equity prices 
will affect wealth and consumer demand, 
but a nimble central banker 
can essentially offset 
  these consequences 
by changing interest rates 
in reaction to—that is, after—
the equity price movements"


-------- is that clear enough
for ya 
you fuckin  rubes ? ------------------------

-------------------------------

----------- now for the dark fork ....--------------

"Alternatively, asset price movements 
could have significant adverse
 macroeconomic consequences 
that are hard to alleviate
 after the fact through monetary policy"

---------- now we're talkin ------------------

" The most often mentioned possibility
 is that a bursting asset price bubble 
will lead to a broad financial crisis 
and credit crunch." 

"Such financial instability 
is likely to be transmitted 
to the economy much more quickly 
than can be offset by an interest rate policy"

------- get it?

lot price  pop one
 triggers bigger
lender solvency  pop two -----------

 "This may set the stage for invoking a Bubble Policy"

" Another possibility 
 the asset price misalignment
 results in significant misallocations 
of resources,
 which distort aggregate 
demand 
and supply 
across sectors and over time 
and impede the achievement 
of the highest possible 
long-run economic growth"

--------- check out his example
ripped from the pages of just yesterday ....----------.

" the dot-com bubble 
spurred overinvestment 
in fiber optic cable 
and decimated the provision
 of venture capital 
for new technology start-ups 
for years. "

--------- but here's where the bloke
gives up his secret ----------------

"Of course, after the fact, 
it is difficult to unwind these problems "

--------- ready ?------------

"with the blunt instrument of monetary policy"


-----------  plan smarters
                    swallow and enjoy ---------------


 -------- but still this admission leads on to ... -------------

" a  final hurdle 
before invoking a Bubble Policy..."


"this   involves assessing whether
 monetary policy is the best way
 to deflate the asset price bubble"

" Ideally, for the Bubble Policy,
 a moderate adjustment of interest rates 
could constrain the bubble
 and greatly reduce the risk 
of severe future macroeconomic dislocations"

----------  rate change??

ideal or otherwise
  what about the fine tuning
  
by  sectoral ration cuts  bub ????------------

 "However, bubbles,
 even if identified,
 may not be influenced
 in a predictable fashion
 by monetary policy actions"

------- true if here restricted to a global rate hike 
   
 blow up the whole  zoo
to kill the escaped monkeys  ? --------------------


---------- seee the scam

claim the police 
are armed only with nukes


they lack the small arms 
needed
 to  interfer 
in day to day  armed robberies --------------

 
" Furthermore, 
even if changing interest rates 
could alter the bubble path
 such a strategy may involve
 substantial costs "

--vide above vulgar gestures------------

"including near-term deviations 
from the central bank's
 macroeconomic goals 
as well as potential political
 and moral hazard complications"


----------lovely eh?
thors hammer of the regulation strike
totally ignored
to create this silly all or nothing
massive retaliation only
          picture of fed options --------------- 
 
----------- then he pulls his out his dick at last------------- 

"Finally, even if monetary policy
 can affect the bubble,
 alternative strategies to deflate it"

------are u ready ladies ???------------------

"   
changes in financial regulation 
         or supervision
 may be more targeted and have a lower cost"

------------- see dawn braking ???------------------------