How the Fed has gotten itself caught in its own underwear by ignoring Hyman Minsky and in persisting in the clearly failed strategy of super lax monetary policy rather than calling for more government spending.
Read more...How the Vietnam War helped usher in neoliberalism, financialization of the economy, and the use of military spending as stealth stimulus.
Read more...Yves here. I managed to miss this VoxEU post from last month, and it is still timely. It argues that economists have generally been using the wrong measure of relative dollar strength to assess how the level of the currency played into the loss of manufacturing jobs and insufficient internal demand, now better known as “secular stagnation”.
Read more...40 central banks have invested in yuan. Should the US be worried?
Read more...The notion of Eurozone fragility is no longer an active worry among investors and pundits. Is this increased optimism warranted?
Read more...Yves here. While I have every reason to assume the Russians mean to act on the currency front, on the surface, the remarks Wolf discusses in his post appear to be based on a misapprehension. But there may more method here than meets the eye.
Read more...One of the noteworthy elements of Davos, at least according to media accounts, was the cheery, self-congratulatory tone among the Davos Men, at least until the final day, when the emerging markets rout began. But one of the front they thought they’d gotten under control, Europe, may be about to enter a new phase of political stress.
Read more...It’s been so long that America has had a regulator that is serious about regulating that it’s hard to remember how they operate.
Read more...Yves here. With Argentina one of the emerging markets economies whose currency has taken a huge tumble, its aggressive pro-labor, redistribution-oriented policies have come under attack (as an aside, one has to note that Turkey, which was touted as a model emerging economy a few years back, is also fighting a currency downspiral). And a predictable by-product is that some of Argentina’s policies have been misrepresented. For instance, it’s widely accused of “living beyond its means”. Yet as this post shows, the government ran surpluses in eight of the past ten years.
Read more...New financial innovations and instruments contributed to halting the declining trend of the dollar as a debt-financing currency and reversed the falling role of the dollar in the 2000s.
Read more...For those of us who grew up under totalitarian regimes, it is noteworthy that Europeans are resorting to a time-honoured tradition: telling jokes as a form of defiance.
Read more...In case you missed it, it’s ugly out there. US markets swooned as an unexpectedly weak manufacturing report, the ISM, was so bad it couldn’t be attributed solely to bad weather and deepened investor funk.
Read more...Emerging markets-related disruption continued overnight, as the Nikkei fell nearly 2%, pounded by the rise in the yen due to its status as a flight currency. Other Asian markets took a hit as well, with only Australia emerging relatively unscathed.
Read more...Yves here. Please welcome Igancio Portes to NC. He’s a sophisticated young writer who has a sharp eye for power dynamics and is keenly interested in why the left (the genuine left as opposed to the fake version we have in the US) so often fails to achieve its intended results when it gets control of a government. He’ll be providing posts from time to time on Latin America, which is too often covered in a cursory and propagandized manner in the mainstream English language press.
Read more...As Bernanke is about to take leave of office, attacks on his policies are becoming louder, thanks to financial markets turmoil resulting from the Bernanke/Geithner approach to the crisis: do whatever it takes to restore as much of status quo ante as possible. The problem, of course, is that status quo ante is what got us in this mess in the first place.
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