Submitted by Edward Harrison of Credit Writedowns. It has been my thesis for some time that we are seeing a secular change in consumption patterns in the United States. This will have grave implications for a world economy used to seeing the American consumer as an economic growth engine and consumer of first choice. Retail […]
Read more...Submitted by Marshall Auerback, an investment manager who writes for New Deal 2.0. In “The Holy Grail of Macroeconomics”, Richard C Koo’s account of post-bubble Japan, Koo illustrates that highly indebted corporations with depressed asset holdings and a positive cash flow will embark on sustained debt repayment until their balance sheets are healthy once again. […]
Read more...Submitted by Edward Harrison of Credit Writedowns If you recall, at the end of May, I wrote a post “Both initial claims and continuing claims now pointing to recovery” that said jobless claims data were pointing to an imminent recovery. The general gist of my argument was recovery would come by year’s end or early […]
Read more...Ahem, the story from The Hill on the ever rising tide of Federal budget deficits lists financial firm bailouts first as causes of the red ink, with falling tax receipts second. And the very same bailout recipients are crowing about their profitability. Now admittedly, the biggest contributors to the July increase were Fannie and Freddie, […]
Read more...Submitted by Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. The fault, dear Brutus, is not in our model, but in ourselves–apologies to W Shakespeare The economics profession […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Over the past week, America’s banks have had a bumper earning season, in part courtesy of the Federal Reserve’s accommodative monetary policy. Even before this week, a number of market pundits (including me) began to wonder aloud whether the Fed had any strategy with which to remove all […]
Read more...Submitted by Marshall Auerback, an investment manager who also writes at New Deal 2.0: Republicans and Democrats alike embraced legislation last week that would make California IOUs acceptable payment for all taxes, fees and other payments owed to the state – an action that effectively would mean that California is entering the currency business. Some […]
Read more...The first time I every heard of value added taxes was in the early 1970s, and all the stuff I saw then said the VAT was a bad tax, you raised as much from a sales tax with far lower administrative costs. The economic and policy literature was as one-sided as I have ever seen […]
Read more...Submitted by Edward Harrison of Credit Writedowns. In the clearest signal yet that we are still in a potentially devastating global deflationary spiral, The Riksbank, Sweden’s central bank and the world’s oldest central bank, has effectively cut interest rates to minus 0.25% and has started a program of quantitative easing a.k.a printing money. These are […]
Read more...A paradox arises to the extent that it is true that the market is dependent on normative underpinning (to provide the pre-contractural foundations such as trust, cooperation, and honesty) which all contractural relations require: The more people accept the neoclasical paradigm as a guide for their behavior, the more the ability to sustain a market […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. Last night I wrote an article reminding you that downside risk remains in the global economy. While I have been singing a more bullish tune in regards to the prospect of a technical recovery in 2009, I am concerned about a double dip as a likely […]
Read more...Submitted by DoctoRx, who comments on the economic and financial scenes at EconBlog Review: In thinking about Animal Spirits, I am reminded of Spencer Tracy’s comment about Katharine Hepburn in Pat and Mike: “Not much meat on her, but what’s there is cherce.” There’s not much meat on the bones of Animal Spirits, and what’s […]
Read more...Posts like this one at VoxEU, from Barry Eichengren and Kevin O’Rourke, make me feel less of perma bear and more of an objective observer who happens to have been commenting when there was little reason to be of good cheer, as far as my skepticism of the “green shoots-recovery in 3Q-4Q 2008” theory is […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. Nearly a month ago, back on May 5th, I highlighted some testimony by Federal Reserve Chairman Ben Bernanke before congress in a post labelled, “Bernanke expects recovery later this year". In his testimony, Bernanke used the phrase ‘Scylla and Charybdis’ to describe the Federal Reserve’s policy […]
Read more...Submitted by Rolfe Winkler, publisher of OptionARMageddonBack in February, amidst the neo-Keynesian rage to spend our way out of recession, I argued that stimulus wouldn’t stimulate. Pointing to the graph of the 10-year Treasury vs. 30-year mortgage rates I said that the government wouldn’t be able to flood the market with Treasurys without driving up […]
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