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The choice is between increasing or decreasing aggregate demand
This is a post I wrote in response to an ongoing debate about financial crises, credit revulsion and deficit spending over at Naked Capitallism. See the four links in the first paragraph for the precursor articles. DoctoRx, Rob Parenteau…
Links: 2009-10-28
Finance and Politics All Debt is Not Created Equal: Government Debt is NOT the Same as Private Debt - Marshall Auerback Must-read Why rich college kids can sell dope and you can't - Denver News I have a slightly different take…
Andy Xie: Central bank “arsonists have been asked to put out the fire”
Former Morgan Stanley economist Andy Xie joins other famed prognosticators like Nouriel Roubini in worrying about an incipient asset bubble. The Rosetta Stone Advisors board member sees the huge increase in money supply created by central…
Norway makes three
The Norwegian central bank has hiked rates 25 basis points, making it the third central bank and first European central bank to do so since the global recovery process started. The Financial Times says: Norway’s central bank increased…
On so-called bureaucrats in Washington and the morality of capitalism
Every time I hear the word ‘bureaucrat’ used to make a point for or against government’s role in the economy, I cringe. I see this label as unfair and dehumanizing. I grew up in Washington , D.C. where my parents and their friends rose…
Extend and pretend and the growing divide between delinquencies and foreclosures
Annaly Capital Management’s blog has a good piece up on foreclosures, inspired by yesterday’s Case-Shiller data (hat tip Scott). If you missed it, The S&P/Case-Shiller index showed a pretty steep 1.2% month-on-month increase in U.S.…
Former Citi Chairman in favor of re-imposing Glass-Steagall
This comes via the NYTimes: To the Editor: Re “Volcker’s Voice, Often Heeded, Fails to Sell a Bank Strategy” (front page, Oct. 21): As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I…
Is the U.S. dollar carry trade replacing the one in Japanese yen?
Nouriel Roubini seems to think so. In remarks quoted via Bloomberg, he called the enormous increase in asset prices “the mother of all carry trades.” Investors worldwide are borrowing dollars to buy assets including equities and…
Case-Shiller shows further improvement in U.S. house prices
The latest data from the S&P/Case-Shiller house price indices shows house prices increasing in 17 of 20 major residential markets. The overall composite index are up for the fourth month in a row but year-over-year comparisons still…
Bill Gross: “almost all assets appear to be overvalued on a long-term basis”
Bill Gross has a must-read piece out for his monthly Investment Outlook called “Midnight Candles.” He begins the piece with allusions to his advancing years (Gross is now 65) and the mortality he feels because of it – pretty sobering stuff.…