It is singularly odd (one might even say out of line) for a former Fed chairman to intrude on the turf of the current Fed chief. So why is Greenspan making predictions about the US economy, ones that seem to be at odds (at least in tone) with Bernanke’s? You may recall that the week […]
Read more...Ah, a man after our own heart (we too have written about Pollyanna markets and complacency about risk). In a nicely understated piece at Seeking Alpha, “Short-Lived Economic Pessimism: Pollyanna is Back – With a Vengeance,” Michael Panzer writes about how various regulators have been perternaturally cheerful this week.The piece is very much worth reading […]
Read more...This post from Seeking Alpha makes a persuasive case based on the commodity price outlook that inflation will get worse and the Fed may have to increase rates. When you contrast this with some of our earlier posts, such as ones on the distress in the housing market, the meltdown in the subprime sector, and […]
Read more...Mirable dictu, a Wall Street Journal editorial, “How Expansions Die,” that, for the most part, has a solid foundation in reality. Although the WSJ’s news pages have been reporting on the meltdown in the subprime mortgage market (admittedly somewhat less intently than the Financial Times), both the news and editorial pages have treated it as […]
Read more...Normally, I shield readers from posts from The Housing Bubble Blog. It features news stories from newspapers all over the country, and the tone of the articles ranges from “somewhat bad” to “pretty desperate”. Generally speaking, one has to wade through quite a few listings to have a sense of the whole. This post, “Will […]
Read more...The stockmarket today posted another new high, yet the drip, drip, drip of less than cheery economic and political news continues (or have market participants forgotten that governments are bigger than they are?). But the markets focus on whatever good news there is, and the spectacle of Bernanke reassuring Congress also soothed, perhaps anesthetized, investors. […]
Read more...Readers may have noticed that we have a soft spot in our heart for negative news about the economy. That’s because the business and popular press dwell on the postive and give short shrift to the other side (with the exception of the Financial Times). So we have a tense geopolitical climate, global warming looking […]
Read more...This excellent post in Barry Ritzholtz’s The Big Picture was prompted in part by Alan Abelson’s article, “Spendthrift Nation,” in today’s Barron’s. The key point is that consumers spent more than they made for two years running, 2005 and 2006. The last time this happened was in the depths of the Depression. Yesterday, DF asked […]
Read more...We have pointed out various signs of complacency in financial markets regarding risk: declining credit spreads (January 16), a lack of concern about systemically high use of leverage (previous post plus January 18), and technical indications that suggest we are near a stock market peak (January 22). Yet there is an almost irrationally high level […]
Read more...The Financial Times reports that in 2006 the US economy showed its lowest level of productivity growth in more than ten years, according to a study by the Conference Board. This isn’t surprising. Falling productivity growth is an end-of-cycle phenomenon. And what has been unusual about this cycle has been business’ reluctance to invest and […]
Read more...An interesting set of posts, all more or less pointing in the same direction, namely, that investor optimism is out in front of reality, and some of the behaviors are consistent with a frothy market. On Seeking Alpha, Michael Panzner discusses how the view that “cash is trash” is getting traction, both leading private equity […]
Read more...OK, so it was only a speech by the president of the New York Fed, Tim Geithner, to the Council on Foreign Relations. But the disparity in reporting between the Financial Times, both in placement and content, and the Wall Street Journal (and to some degree Bloomberg) is striking. Not surprisingly, the WSJ downplayed the […]
Read more...Martin Wolf is the Financial Times’ chief economic writer and is always thoughtful and balanced. This column in today’s paper presents a more jaundiced view than the sunny forecasts from most US economists. In particular, he focuses on the role of liquidity in the current expansion: What is going to happen to the world economy […]
Read more...Good post this morning on the debate over what the inverted yield curve means for economic prospects by Barry Ritholtz at The Big Picture | Yield Curve: Its different this time. The trigger was that Arthur Laffer has been arguing that the negative yield curve does not point to an impending recession, while a story […]
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