Kudlow & Cramer Deliver Signs of a Market Downturn Seeking Alpha
Greenspan Favors Government Bailout for Homeowners Bloomberg. The former Fed chairman argues for direct subsidies to financially strapped homeowners, rather than indirect measures that distort the housing or interest rate markets.
US recession Sky News. An interview in Australia with Steven Roach, Morgan Stanley’s house bear, now head of Morgan Stanley Asia.
Big Table Fantasies Paul Krugman. On Obama vs. Edwards on health care. Although Edwards doesn’t look like he has a hope of winning the Democratic nomination, the reform-minded experts on the health care beat (and Krugman is one) all give top marks to Edwards. This piece discusses the naivete of expecting Big Pharma and the health insurers to embrace change.
When a rose is not a rose: TAF is not “just” the discount window Interfluidity. Steve Waldman is a genleman when he disagrees, as he does here with us on the term auction facility, the new mechanism created by the Fed to (hopefully) create more liquidity in the interbank market. We think it is unlikely to have much impact; Waldman argues it may well (although that is based on the assumption that the TAF continued beyond the four auctions planned by the Fed). However, we are on the same page on the matter of “moral hazard” in its correct sense, that those who made mistakes need to suffer the consequences, not out of a sense of Puritanism, but because otherwise, those sort of mistakes, by being de facto rewarded, will be encouraged and repeated on a greater and more costly scale (he says it better, BTW).