Comments on: Martin Wolf Reads Too Much Roubini and Freaks Out http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html Sun, 22 Nov 2009 17:45:03 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5046 Anonymous Wed, 12 Mar 2008 15:08:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5046 Over at Mark Thoma's someone posted a comment citing <br/>"Measured wealth, real wealth and the illusion of saving<br/>Keynote speech by Mr William R White, Economic Adviser and Head of Monetary and Economic Department of the BIS"<br/><br/>http://www.bis.org/speeches/sp060830.htm<br/><br/>which seemed very revealing to me.(but what do I know) Have you read this before? It kinds of fits very well into the theory that most of the "wealth" created in the last decades are illusory Over at Mark Thoma’s someone posted a comment citing
“Measured wealth, real wealth and the illusion of saving
Keynote speech by Mr William R White, Economic Adviser and Head of Monetary and Economic Department of the BIS”

http://www.bis.org/speeches/sp060830.htm

which seemed very revealing to me.(but what do I know) Have you read this before? It kinds of fits very well into the theory that most of the “wealth” created in the last decades are illusory

]]> By: Anonymous http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5045 Anonymous Wed, 12 Mar 2008 14:22:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5045 Ladies and Gentlemen:<br/><br/>All of this should translate vary nicely into the U S treasury market, (the last bastion of credit worthiness?). Sure.....<br/><br/>I anticipate a substantial decline in treasury prices, and you can imagine what that will do to the spreads. There is no reason to panic if you hedge properly. Ben has taken the bait, hook, line and sinker..... <br/><br/>The secret hand giveth and the secret hand taketh away.<br/><br/>Best regards,<br/><br/>Econolicioous Ladies and Gentlemen:

All of this should translate vary nicely into the U S treasury market, (the last bastion of credit worthiness?). Sure…..

I anticipate a substantial decline in treasury prices, and you can imagine what that will do to the spreads. There is no reason to panic if you hedge properly. Ben has taken the bait, hook, line and sinker…..

The secret hand giveth and the secret hand taketh away.

Best regards,

Econolicioous

]]> By: Anonymous http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5033 Anonymous Wed, 12 Mar 2008 12:07:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5033 It is important to bear in mind that the losses we are talking about are accounting losses. Now obviously this affects whether or not one sees a current investment as worth keeping or disposing. It affects ones view of the future. But the real economic losses have already been committed. In fact, the money used to finance these losing propositions is not lost. It is merely redistributed. That is why we are looking at stagflation, perhaps an inflationary recession. It is important to bear in mind that the losses we are talking about are accounting losses. Now obviously this affects whether or not one sees a current investment as worth keeping or disposing. It affects ones view of the future. But the real economic losses have already been committed. In fact, the money used to finance these losing propositions is not lost. It is merely redistributed. That is why we are looking at stagflation, perhaps an inflationary recession.

]]> By: a http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5029 a Wed, 12 Mar 2008 08:34:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5029 "Worse, the bigger the damage to the financial sector, the more credit-fuelled personal spending is going to dry up."<br/><br/>Why is that worse? If anything beneficial comes out of the mess we are in, I hope it's the disappearance of the idea that "credit-fuelled personal spending" is a good thing. Credit-fuelled personal spending *needs* to dry up, and those holding means of production servicing that spending need to take their losses. “Worse, the bigger the damage to the financial sector, the more credit-fuelled personal spending is going to dry up.”

Why is that worse? If anything beneficial comes out of the mess we are in, I hope it’s the disappearance of the idea that “credit-fuelled personal spending” is a good thing. Credit-fuelled personal spending *needs* to dry up, and those holding means of production servicing that spending need to take their losses.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5027 Anonymous Wed, 12 Mar 2008 07:36:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5027 <i>reading too many bearish forecasts</i><br/><br/>I have been reading Nouriel Roubini for over year and half now. On a daily basis.<br/><br/>Sure it is addictive. The truth is that Nouriel has been awfully right.<br/><br/>Anyone with a judgment on financial matters (and not bonus or career as banker) will admit it.<br/><br/>Martin belongs to that league. He is not alone. I'll credit FT time for their reasonable judgement overalll.<br/><br/>Ben Bernanke has obviously no more control on the situation. He is just making his way in such a way that will require the IMF to drop in at some stage and say:"Stop it Sir".<br/><br/>Of course that will not happen. What else can expect that have the gloomy predictions that Nouriel has painted transformed into reality.<br/><br/>The current US campaigners are not even addressing the issue. reading too many bearish forecasts

I have been reading Nouriel Roubini for over year and half now. On a daily basis.

Sure it is addictive. The truth is that Nouriel has been awfully right.

Anyone with a judgment on financial matters (and not bonus or career as banker) will admit it.

Martin belongs to that league. He is not alone. I’ll credit FT time for their reasonable judgement overalll.

Ben Bernanke has obviously no more control on the situation. He is just making his way in such a way that will require the IMF to drop in at some stage and say:”Stop it Sir”.

Of course that will not happen. What else can expect that have the gloomy predictions that Nouriel has painted transformed into reality.

The current US campaigners are not even addressing the issue.

]]> By: Rootless Cosmopolitan http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and.html#comment-5026 Rootless Cosmopolitan Wed, 12 Mar 2008 07:19:00 +0000 http://www.nakedcapitalism.com/2008/03/martin-wolf-reads-too-much-roubini-and-freaks-out/#comment-5026 I would like to object that falling asset prices are not the same as losses. If I buy some good, commodity, house, whatever and the price of the good increases later my nominal wealth will increase. If the asset price falls again afterward it won't mean I have made a loss equal the difference between peak price and current asset price. However, the article treats this difference as if it were a loss.<br/><br/>Also, if lenders make $1000bn loss in mortgages it will be a loss for them. Other participants will have made a gain of $1000bn, though, since the money was spent in the economy. It hasn't just vanished in thin are. There is no loss here integrated over the whole economy. However, the article treats these losses as if they were losses integrated over the whole economy. I would like to object that falling asset prices are not the same as losses. If I buy some good, commodity, house, whatever and the price of the good increases later my nominal wealth will increase. If the asset price falls again afterward it won’t mean I have made a loss equal the difference between peak price and current asset price. However, the article treats this difference as if it were a loss.

Also, if lenders make $1000bn loss in mortgages it will be a loss for them. Other participants will have made a gain of $1000bn, though, since the money was spent in the economy. It hasn’t just vanished in thin are. There is no loss here integrated over the whole economy. However, the article treats these losses as if they were losses integrated over the whole economy.

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