News: 2013-11-18
Economics
Actually, Economists Can Predict Financial Crises – Bloomberg
Monetary Policy
The implications of secular stagnation | Gavyn Davies
Maybe monetary policy ISN’T the right way to counteract this phenomenon? Is it just me or does that point stand out?
“If the secular stagnationists are right, there will still be a shortage of demand when the future comes around, so there will be a need for ever-greater injections of monetary stimulus (presumably through quantitative easing) in order to avoid an ever-worsening recession.”
Summers on bubbles and secular stagnation forever | FT Alphaville
Secular Stagnation, Coalmines, Bubbles, and Larry Summers – NYTimes.com
“Summers’s answer is that we may be an economy that needs bubbles just to achieve something near full employment – that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn’t just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s.”
Yellen signals new emphasis on Fed policing role | Reuters
2010 Reminder: QE = Currency Debasement and Inflation | The Big Picture
What Yellen didn’t tell Congress and why it matters | Reuters
Why did the market get the Fed and ECB so wrong? | Global Investing
“If one of the aims of forward guidance is to avoid volatility and variance of opinion about the trajectory of policy, then this kind of spectacular misread is an indictment of forward guidance.”
If Fed Lowers Unemployment Threshold, Key Question Will Be Why? – Real Time Economics – WSJ
“There are two lines of thought.
One line of thought is that the jobless rate is currently understating weakness in the job market because so many people are leaving the labor force. Under this view, there is much more slack in the job market than is indicated by 7.3% unemployment because millions of Americans are sitting on the sidelines, waiting to rejoin the job search process once opportunities become available. As this thinking goes, lowering the threshold to a number like 6% would bring the threshold better in line with the realities of the job market. It would be more a technical adjustment than a change in policy meant to add new stimulus to the economy.
The other line of thought is that lowering the threshold would be meant to add more stimulus to a slow-growing economy by demonstrating to the public that the Fed is committed to keeping short-term interest rates low for even longer than previously planned.”
North America
Midwest Farmland Values: Past Peak Season? – WSJ.com
Interest-Rate Swaps Narrow Versus Treasuries in Search for Yield – Bloomberg
Corporate default risk models are broken – FT.com
“Concerns are now mounting that the analytical frameworks, which underpin many investment decisions, are becoming increasingly useless when it comes to measuring risks lurking in the corporate bond world and wider financial system.”
Sentenced to a Slow Death – NYTimes.com
“Judges, bound by mandatory sentencing laws that they openly denounce, are sending people away for the rest of their lives for committing nonviolent drug and property crimes. In nearly 20 percent of cases, it was the person’s first offense. “
America’s Longest War…Likely to Get Longer | TIME.com
In Obama’s Wall Street-friendly cabinet, a clean sweep for finance : Columbia Journalism Review
Former U.S. Treasury Secretary Geithner to join private equity firm | Reuters
Tales from Obamacare’s trenches : Columbia Journalism Review
NY factories slow down in November in bad sign for U.S. economy | Reuters
U.S. Industrial Production Falls 0.1% – WSJ.com
Are There Cockroaches Under Tesla’s Hood? – Bloomberg
Europe
Spain’s bad loans ratio rises to 12.7 percent in Sept | Reuters
ekathimerini.com | Schaeuble rules out new haircut, but not new bailout, for Greece
ekathimerini.com | Bundesbank says ECB expansive policy is ‘currently justified’
ekathimerini.com | Cyprus economy shrinks 5.7 pct in Q3 2013
“Recent French growth has been sluggish, but much better than that of, say, the Netherlands, which is still rated AAA. According to standard estimates, French workers were actually a bit more productive than their German counterparts a dozen years ago — and guess what, they still are.
Meanwhile, French fiscal prospects look distinctly non-alarming. The budget deficit has fallen sharply since 2010, and the International Monetary Fund expects the ratio of debt to GDP. to be roughly stable over the next five years.”
EU Inflation Rate Falls to Four-Year Low – WSJ.com
“The EU’s official statistics agency said Friday consumer prices rose 0.9% in the 12 months to October, a lower annual rate of inflation than the 1.3% recorded in September, and the lowest since October 2009.
Eurostat also confirmed that the annual rate of inflation in the 17 countries that share the euro was 0.7% in October, the lowest level since November 2009.”
Asia
New Era of Higher Costs Spurs Record 50-Year Yield: China Credit – Bloomberg
Technology
NSA Asked Linus Torvalds To Install Backdoors Into GNU/Linux – Falkvinge on Infopolicy
Review: Apple’s Retina iPad mini is the small tablet we wanted a year ago | Ars Technica
NSA Fallout: Tech Firms Feel a Chill – WSJ.com
Elsewhere
Lack of Sleep Reduces Impulse Control Necessary to Turn Down Junk Food
These Beautiful “Place-Hacking” Photos Will Give You an Adrenaline Rush | Mother Jones
Charlie Sheen Calls for Rob Ford’s Resignation – The Daily Currant
WARNING – This is satire
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