This post appeared as an op-ed in Mint, India’s second largest business newspaper. The financial market upheaval that started in May is a stark reminder that the conditions that produced the global financial crisis of 2007-08 have not been resolved. The sucking sound of deflation emanating from Europe and the creaking of bank balance sheets […]
Read more...Tonight brings an odd pairing: Lord Skidelksy, the highly respected biographer of Keynes, and Ambrose Evans-Pritchard, who is generally of the Austrian persuasion, both continuing, as each has, to object to the extreme measures in the process of being implemented in the eurozone. Now before you say that they are both Brits, and therefore suspect […]
Read more...Enjoy! You can view the segment here.
Read more...Martin Wolf, in today’s Financial Times, uses modern monetary theory (!), also known as the fiscal balances approach, to explain why calls for fiscal belt tightening are premature. Let’s provide a little background, courtesy Rob Parenteau of the Levy Institute: …if we divide the economy into three sectors – the domestic private (households and firms), […]
Read more...I’ve been quite mystified at all of this “double dip” recession talk, even though I suppose it beats the “V shaped recovery” talk. Both presuppose that we had a recovery underway, the real sort, not the type that is mainly the artifact of inventory restocking, halting and sometimes covert stimulus, (like hiring unprecedented numbers of […]
Read more...Before European readers get upset about the discussion of continued concerns about the eurozone, some of its eager defenders appear to subscribe to an extreme form of indeterminacy. If you recall the famed Schrodinger’s cat, the indeterminacy of the position of an electron is made (somewhat) more comprehensible by a thought experiment in which a […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). It Always Ends in the Same Way … No one, including the IMF, seriously believes that the austerity program announced by Greece will work. Argentina had debt […]
Read more...A fresh Gallup poll reports that Americans are most worried about….federal debts (hat tip Marshall Auerback via the Atlantic): Gallup also provided a tally of how members of each party view the issue: It would appear the ground has been laid rather effectively for (among other things) an assault on Social Security and Medicare. As […]
Read more...It is not a sign of intelligence to repeat a course of action and expect different results. Yet our officialdom is doing pretty much just that on the economic front. Treasury and the Fed in particular seem quite pleased with their success in patching up the financial system with duct tape and baling wire and […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0 (and happens to be Canadian). For once, Canada is making the news for the wrong reasons: The government of the United Kingdom has braced the country for cuts in government spending of up to 20 per cent as the new […]
Read more...Martin Wolf, the Financial Times’ influential economics editor, takes issue with the austerity fad that is sweeping governments in advanced economies. From his comment: Against this background, what would a big tightening of fiscal policy deliver? In the absence of effective monetary policy offsets, one would expect aggregate demand to weaken, possibly sharply. Some economists […]
Read more...The reaction in the Western media to the doubling of entry-level salaries at the Foxconn factories in Shenzhen was as if it was a change in the world order. Chinese workers treated as if they have bargaining power! Honda increasing wages 24%! Beijing increasing municipal pay 20%! Increases like this do not come out of […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). Carmen M. Reinhart & Kenneth Rogoff (2009) This Time is Different: Eight Centuries of Financial Folly; Princeton University Press, London Raghuram G. Rajan (2010) Fault Lines: How […]
Read more...By Edward Harrison of Credit Writedowns Everybody in the west knows the fabled effectiveness of weight-loss dietary programs designed around intense cardiovascular regimes which burn huge amounts of calories. The people who work hard, doing as much cardio as possible lose weight. Those that pump iron may get muscular, but they aren’t working as hard […]
Read more...As much as I have been a consistent critic of Geithner in his role as one of the chief enablers of the banking industry, he deserves credit for this succinct remarks at the G-20 via Bloomberg (hat tip reader Scott): In a sign of tension among the world’s economic policy chiefs, Geithner flagged concern that […]
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