Category Archives: Macroeconomic policy

The recession is over but the depression has just begun

Submitted by Edward Harrison of Credit Writedowns This is a post I wrote earlier to day at Credit Writedowns. I just noticed that Albert Edwards and David Rosenberg are saying similar things. See the FT Alphaville post on their comments here. As for me, for the last few months, I have been casting around looking […]

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Guest Post: Credit Default Swaps – Love ‘Em, Ban ‘Em, or Tax ‘Em?

(Yves should be back  – and so the site should return to normal – tomorrow. If all goes according to plan, you’ll be hearing a lot less from me for a week or so. Yves’ book – Econned – will be quite valuable, and so well worth the wait. ) By George Washington of Washington’s […]

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Guest Post: How Well Has The Federal Reserve Performed for America?

By George Washington of Washington’s Blog. How well has the Federal Reserve performed for America? Mainstream pundits, of course, say that Bernanke has saved the world . . . . but they said the same thing about Greenspan.  So let’s look at the actual historical record to determine how well the Fed has done. Initially, […]

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Guest Post: Why Concentration in the Banking Industry Threatens Our Economy

By George Washington of Washington’s Blog. As everyone knows, the big banks have gotten bigger and bigger. Noted economist Mark Zandi says we have an oligopoly of banks, and that “the oligopoly has tightened”. The TARP Inspector – Neil Barofsky – told Huffington Post yesterday that, because of the consolidation in the banking industry: I […]

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Guest Post: Deflation?

By George Washington of Washington’s Blog. As Absolute Return Partners wrote in its July newsletter: The most important investment decision you will have to make this year and possibly for years to come is whether to structure your portfolio for deflation or inflation. So which is it, inflation or deflation? This is obviously a hot […]

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Guest Post: Top Economists Say We Must Break Up the Insolvent Banks (Government Says Let’s Make Them Bigger)

By George Washington of Washington’s Blog. The following top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion: Nobel prize-winning economist, Joseph Stiglitz Nobel prize-winning economist, Ed Prescott Dean and professor of finance and economics at Columbia Business School, and chairman of […]

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Guest Post: How Bad Will Unemployment Get, And What Can We Do About It?

By George Washington of Washington’s Blog. Unemployment is disastrous on both the individual and societal level. Individuals who look for work but can’t find it are miserable.  Indeed, most people who lose their job are unprepared for their circumstances.[1] On the national level, high unemployment is both cause and effect concerning other problems with the […]

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Deflation Worries Looking More Credible

Ambrose Evans-Pritchard has not given up on his deflationary views, which until recently were quite an outlier. But some recent data releases give support to his downbeat take. From the Telegraph: CPI inflation has dropped to –2.2pc in Japan (a modern record), -2.1pc in the US, -1.8pc in China, -1.4pc in Spain, -0.7pc in France, […]

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Macro Hedge Funds Betting Against Recovery Story

Note that while this Bloomberg story discusses that some major hedge funds are skeptical of the theory that the recovery is on, for the most part, it is silent on how they are implementing that view. Recall that even if a trader does make a correct fundamental call, investing successfully on it is another matter. […]

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Twenty-Five Years to Work Off the Debt Overhang?

T. S. Eliot was right. Human beings cannot stand very much reality. As much as I have an appetite for bearish views (I figure the optimist case gets disproportionate air time), the headline of Ambrose Evans-Pritchard’s latest piece, “Our quarter-century penance is just starting,” is grim even by the standards of the bearish faithful. Evans-Pritchard, […]

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Stephen Roach: The case against Bernanke

Submitted by Edward Harrison of Credit Writedowns. While most economists have come out in favor of Barack Obama’s decision to re-appoint Ben Bernanke as Chairman of the Federal Reserve Board, Stephen Roach has penned an Op-Ed in today’s Financial Times which highlights the case against Bernanke. It is must reading. Roach has three main points. […]

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Roubini On U Shaped Recovery: More Statesmanlike or Less Certain?

Nouriel Roubini verged on apocalyptic during the course of the crisis, and was proven largely right. Now that he has softened his stance, some have accused him of moderating his tone as a result of his much higher profile. While that’s possible, a couple of factors seem more likely. First and foremost, much of Roubini […]

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Weak consumer spending will last for years

Submitted by Edward Harrison of Credit Writedowns. It has been my thesis for some time that we are seeing a secular change in consumption patterns in the United States.  This will have grave implications for a world economy used to seeing the American consumer as an economic growth engine and consumer of first choice. Retail […]

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Guest Post: Debtor’s Revolt?

Submitted by Marshall Auerback, an investment manager who writes for New Deal 2.0. In “The Holy Grail of Macroeconomics”, Richard C Koo’s account of post-bubble Japan, Koo illustrates that highly indebted corporations with depressed asset holdings and a positive cash flow will embark on sustained debt repayment until their balance sheets are healthy once again. […]

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Revisiting employment indicators for signs of recovery

Submitted by Edward Harrison of Credit Writedowns If you recall, at the end of May, I wrote a post “Both initial claims and continuing claims now pointing to recovery” that said jobless claims data were pointing to an imminent recovery.  The general gist of my argument was recovery would come by year’s end or early […]

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