Is the Medicine Worse than the Illness?
The Fed’s announcement last week that it intends to print lots of greenbacks to get the economy moving again has Jim Grant up in arms: Barely nudging Mr. Madoff out of the top of the news was the Federal Reserve’s announcement last Tuesday that it intends to debase its own paper money. The year just .. read more
Greg Mankiw Explains Fiscal Stimulus
Greg Mankiw posts an interesting exercise about the effects of various “stimulus plans”: In thinking through the fiscal policy options and their implications, it might be useful to compare a few hypothetical, fanciful scenarios. Suppose that the federal government borrows some money and then…
John Hussman: The Dollar Crisis Begins
John Hussman is worried about the dollar: In the next several months, we’re likely to observe one of two things. If the dollar holds steady, Treasury bond prices are likely to plunge; if Treasury prices hold steady, the value of the dollar is likely to plunge. Either way, foreign holders of Treasury securities are facing .. read more
John Tamny: How Capitalism Really Works
John Tamny explains how capitalism really works: More broadly, all this hand-wringing over the presumed negative impact of automobile-related job losses speaks to a massive misunderstanding of what makes economies grow. Economies falter when work effort is duplicative, and they grow when finite capital is redeployed in order to create new goods that fulfill a .. read more
Where Bailouts Come From
Caroline Baum on where bailouts come from: “Let’s move on. Did Mrs. Adams tell you how we got into this mess? Banks loaned money to people who really couldn’t afford a home of their own. When house prices started to fall, these homeowners had no way of paying the interest on the loan. So they .. read more
Weekly US Economic Calendar – Dec. 22-26
Weekly calendar of latest economic events and indicators, complete with full reports, charts, graphs, and in-depth analysis. Monday None Tuesday Corporate Profits – Full Report Existing Home Sales - Full Report, Charts and Analysis New Homes Sales - Full Report, Charts and Analysis Wednesday Durable Goods Orders – Full Report Initial Jobless Claims - Full Report Personal .. read more
Market Week in Review
The major stock market averages produced another boring week of flat performance, but other markets provided plenty of excitement as the Federal Reserve finally reached the lower bound of ZIRP (zero interest rate policy). The Fed’s two day meeting was widely expected to produce another interest rate cut, but Bernanke surprised the market by going .. read more
Bailing Out Detroit
The Bush administration announced today that they will use TARP funds to provide loans to GM and Chrysler (via WSJ): The deal would extend $13.4 billion in loans to General Motors Corp. and Chrysler LLC in December and January, with another $4 billion likely available in February. It also would provide the government with non-voting .. read more
