This may seem sorta silly, but I come from a long line of Maine sea cooks and captains (each of whom got an extra share of the catch of the fishing ships they worked on, so one can romanticize it as being entrepreneurial, but if you have ever spent any time on the Maine coast, […]
Read more...The headline gives one of the results of a Rasmussen survey of small businesses commissioned by Discover (hat tip DoctoRx). Note only 22% expect improvement, with the rest either foreseeing no change or not volunteering a view. Small businesses are the engine of hiring, and as we noted earlier, they have cut back severely on […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Monetary policy is center stage as the Fed pursues highly accommodative policies in order to generate a recovery and […]
Read more...Ambrose Evans-Pritchard is nothing if not decisive in his views, and has a undisguised fondness for the bearish perspective. But he was correct on the 2008 inflation/commodities headfake, saying repeatedly that deflationary forces would prevail when that was decidedly a minority view. He is also a Euro-skeptic, and I’m less comfortable with that position. The […]
Read more...By Robert Johnson, former chief economist of the Senate Banking Committee and Senior Economist of the Senate Budget Committee who writes at New Deal 2.0. Since the early 1980s, rises in the living standard of middle class United States citizens have not kept up with the gains in labor productivity. Wages in the middle class […]
Read more...By John Bougearel, author of Riding the Storm Out and Director of Financial and Equity Research for Structural Logic Policymakers managed to extinguish a financial panic in 2008-09 by March 2009. This rescue operation allowed the broad U.S. stock market as measured by the SP500 to rally nearly 70%. Extinguishing the panic was to be […]
Read more...By Bruce Krasting, a former foreign exchange and derivatives trader and hedge fund manager. Mohammad said, “One cannot foretell the future”. I think he was on to something. What looks predictable rarely happens. There are always surprises. I have been tripped up so many times. The following are not predictions of things that will happen. […]
Read more...By Washington’s Blog. As I have previously noted, credit default swaps are destabilizing for the economy. See this. And the models used to evaluate financial instruments – such as the Gaussian copula formula for CDOs – are inherently flawed. Now, Princeton University economists and computer scientists have demonstrated that financial derivatives are also inherently vulnerable […]
Read more...By George Washington of Washington’s Blog. As I have repeatedly noted, mainstream economists and financial advisors have been using faulty and unrealistic models for years. See this, this, this, this, this and this. And I have pointed out numerous times that economists and advisors have a financial incentive to use faulty models. For example, I […]
Read more...If the sky-high prices relative to income aren’t enough to convince you, consider this discussion from Patrick Chovanec (hat tip reader Michael) who contends that China’s latest effort to contain housing prices, the reinstitution of a property sales tax, is likely to be counterproductive: In China, however, “flipping” is not the problem. Some people may […]
Read more...By Bruce Krasting, a former foreign exchange and derivatives trader and hedge fund manager. On December 10th I raised the possibility of Greece breaking the connection with the Euro. On the likelihood of this black swan type of event happening I said, “This is not a high probability outcome.” A week later the possibility of […]
Read more...Two leading White House economic advisors – Larry Summers and Christina Romer – are giving very different views on the economy. As Fox news summarizes: “Everybody agrees that the recession is over,” said Larry Summers, director of the National Economic Council. “Of course not,” countered Council of Economic Advisers Chairwoman Christina Romer in a separate […]
Read more...Dear readers, I posted this story about 18 hours ago, but my server went down briefly, and this offering was a casualty. The reason I included it was that, according to Google News, it had been picked up only by a few overseas news outlets, like the Turkish Press and the Straits Times, and here […]
Read more...By Edward Harrison of Credit Writedowns I am not sure I buy Meredith Whitney’s assertion that the government is “out of bullets” in its quest to prop up the economy. It’s a matter of political will more than anything else. Nevertheless, I do agree with her basic premise in the CNBC video below that the […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. In 1729, Jonathan Swift wrote an essay — “A Modest Proposal” — satirically suggesting that the impoverished Irish ease their economic troubles by selling children as food for rich gentlemen and ladies. In that spirit, we would like to assist […]
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