Now that the world is in the throes of the mother of all financial messes, economists are scrambling to develop expertise. Carmine Reinhart and Kenneth Rogoff recently had this beat largely to themselves. but in the last two weeks, the IMF came out with a stud of 124 modern banking crises. The latest addition to […]
Read more...I must confess a certain fondness for the apocalyptic sort of financial writer, provided they don’t lose anchoring with reality and fall into the tinfoil hat category. Nouriel Roubini is the case example of an economist who favors a baroque, melodramatic style, and despite sounding more than a tad unhinged at points, he has proven […]
Read more...This report from the New York Times is largely anecdotal but not surprising: In response to the falling value of their homes and high gasoline prices, Americans have become more frugal all year. But in recent weeks, as the financial crisis reverberated from Wall Street to Washington, consumers appear to have cut back sharply. Even […]
Read more...We have a certain fondness for Marc Faber: he knows financial history, he is refreshingly direct, not attached to conventional thinking, and has a record of generally good investment calls (and admits to his mistakes). Reader Dean provided us his latest newsletter, plus a story covering recent interviews (no, Dean is not his PR agent, […]
Read more...Conventional wisdom has been that Treasuries have been the yet another bubble as cash exited equities and other risky investments, first feeding a commodities spike, then seeking a better home in Treasuries. But Merrill’s David Rosenberg, who was in a decided minority in seeing deflation as the likely outcome for the US (he has for […]
Read more...Krugman’s post is here, with an acknowledgment that we also possess nukes. We’ve been on that theme a while. A few examples: America: Banana Republic Watch May 6, 2007 End of Dollar Hegemony Coming? May 22, 2007 “We may just have started to feel the pain” March 6, 2008 A secondary theme: Tthe US is […]
Read more...Consumers, whose spending had been THE driver of this economy, shut their wallets in August. From Reuters (hat tip reader Brian): Consumers facing rising unemployment kept their spending unchanged in August even though incomes rose, according to a government report Monday that showed optimism about the economy’s direction was fading. The Commerce Department said consumer […]
Read more...The Baltic Dry Index, which measures international shipping rates, is seen as a rough proxy for global growth. But like a negative yield curve, falls in the Baltic Dry Index have as often as not proven to be false positives. However, the BDI has taken a dramatic turn south, and in combination with weakening economic […]
Read more...The IMF just released a study that analyzed 124 banking crises, and I wish everyone in Congress (well, at least their staffers), the Treasury, and the Fed read the paper. It provides insight into what worked and didn’t work in past banking crises, and gives an idea of what we might expect from various policy […]
Read more...Swiss investor Marc Faber, known for a long track record of good calls (he was a commodities bull until late this spring, for instance, when he reversed his view) and a fine grasp of financial markets history, confirms the estimate earlier in the week by Ken Ohmae that the US needs a salvage operation much […]
Read more...Tim Duy at Economist’s View tells us that the economy is slowing down markedly, and that that will lead to a lot of false causality. Whether the bailout plan gets done in some reasonable form or not, the slowdown will be blamed on its failure, or the fact that the rush to get it done […]
Read more...From Bloomberg (hat tip reader Lewis B. Sckolnick); Responding to questions from lawmakers, Bernanke said that should the rescue succeed and spur an economic recovery, that may lead the Fed to raise interest rates sooner than it otherwise would. For the plan itself, “I don’t expect any effect on inflation,” Bernanke said. The first trading […]
Read more...Notice how the articles focuses on CPI, which is the more favorable measure, rather than core CPI, which was highlighted when prices were rising at worrying rates and provided the less troubling picture. From the Wall Street Journal: U.S. consumer prices fell last month for the first time in nearly two years reflecting a rapid […]
Read more...Reader Vijay pointed us to an op-ed today in the Washington Post by Don Luskin, “Quit Doling Out That Bad-Economy Line.” Some of its priceless wisdom: Things today just aren’t that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about […]
Read more...Note the not-pretty pattern. The flow of funds out of emerging markets has reached the high-water mark of the period leading into the Asian, then Russian financial crises of 1997-1998. However, after recovering from the damage of this period, emerging markets as a whole enjoyed a period of strong growth. In theory, their economies are […]
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