The “Tale of Two Depressions” updates an earlier column (“up to April 2009) that graphically compared many aspects of global economic activity in the Great Depression and the recent past. The key findings of this comparison are: 1) many aspects of real economic activity are closely following the downward path of the Great Depression; 2) [...]
Entries Tagged as 'Economics'
A Tale of Two Depressions
June 8th, 2009 · No Comments · Analysis, Bonds, Debt, Economics, Economy, Federal Reserve, Global Economy, Interest rates, Stimulus, Stock Market, Treasury
Tags:
Robert Shiller Expects Housing Prices to Continue To Fall
June 8th, 2009 · 1 Comment · Economics, Housing
I recently wrote about Robert Shiller’s unusual, for an establishment economist, ability to see the forces that influence market prices. He is also an expert on housing prices, as co-creator of the Case-Shiller index of housing prices. In an article in the June 6, 2008 New York Times, “Why Home Prices May Keep Falling”, he [...]
Tags:
Efficient Markets versus Irrational Exuberance
June 8th, 2009 · 1 Comment · Economics, Federal Reserve, Housing, Regulation, Stock Market, Wall Street
Today’s New York Times has an article entitled “Poking Holes in a Theory of Markets.” Joe Nocera, the author, interviews Jeremy Grantham and several academic economists. The article makes what is now an obvious challenge to the theory of “efficient markets,” the theory that markets accurately reflect at all times the best possible valuation of [...]
Tags:
Tax Consumption Instead of Income?
May 25th, 2009 · No Comments · Debt, Deficit, Economics, Policy, Taxes
I’ve long thought that a tax on consumption rather than income seems obviously better. Consumption is income minus savings; thus a tax on consumption would make all savings tax free. Because ultimately all investment needs to be financed by savings (or external debt), taxing savings decreases investment, to the long term detriment of our prosperity. [...]
Tags:
The Focus Is Shifting to the Deficit – Bad News for Bonds and the Market
May 25th, 2009 · No Comments · Debt, Dollar, Economics, Financial, Global Economy, Policy, Stock Market, Wall Street
I’ve noticed lately many more articles commenting on the projected US deficits (which are enormous). I think that “green shoots” is about played out as a media and market focus. As the focus shifts to the questionable long-term economic prospects of the US and the problems created by the deficits, the mood on Wall Street [...]
Tags:
Nate Silver – Too Optimistic about Americans Turning Away from Cars
May 7th, 2009 · No Comments · Analysis, Economics, Economy, Statistics
Recently, Nate Silver, who was the preeminent predictor of the 2008 Presidential election outcome, recently published an article in Esquire. In it, he analyzes the historical factors that have reasonably successfully predicted gasoline consumption in the past. When he applies these historic prediction equations to January 2009, they predict that gasoline consumption should have increased [...]
Tags:
Whose Running the Ship?
April 23rd, 2009 · No Comments · Banks, Corporate Power, Economics, Taxpayers
This cartoon (thanks to Ritholtz) conveys the sense of powerlessness many feel in the present circumstances, where the political power of the financial institutions and corporations appears to be making the government their hand maiden.
To be more accurate, there should be several lifeboats in the scene, in front of “Free Market”, labeled “Taxpayers” and [...]
Tags:
More Cold Water on Euphoria from Germany
April 23rd, 2009 · No Comments · Banks, Economics, Financial, Global Economy, Nationalization, Restructuring, Stock Market
Der Spiegel reports that German experts aren’t buying the bank turnaround euphoria. In part this may reflect the sharper contraction expected in Germany this year (GDP down 6%) than in the U.S. It also, though, reflects the view from more impartial observers of the financial scene.
NOT OUT OF THE WOODS YET
Experts Warn that Banking [...]
Tags:
Whither Goes the Economy? So Goes the Stock Market
April 22nd, 2009 · No Comments · Economics, Global Economy, Stock Market, Wall Street, deflation, inflation
The stock market has had major rise in the last six weeks. The beginning of the rise was fueled, as I pointed out at the time, by the Obama Administration’s pledge of a trillion dollars of taxpayer money to ensure that no big banks would go bankrupt. This apparently removed lingering doubts in big investor’s [...]
Tags:
Obama’s Major Economic Address and (Failing) Defense of Bank Bailouts
April 15th, 2009 · No Comments · Bailout, Banks, Debt, Default, Economics, Federal Reserve, Financial, Nationalization, Policy, Restructuring, Video
On April 14, 2009, President Obama made a major address on the economy and his policies at George Washington University. It was a wide-ranging address that reiterated major themes that he has been making since taking office. Full Transcript. Video
He offered a goal for his actions that I applaud:
…I want every American to know [...]
Tags: