Commentaries

from Rolfe Winkler:

Mosler’s 11 steps to fix the economy

January 8, 2010

by Warren Mosler

1.  A full 'payroll tax holiday' where the US Treasury makes all FICA payments for us (15.3%).  This will restore 'spending power' and, by allowing households to make their mortgage payments, will fix banks from the bottom up.  It may also keep prices down as competitive pressures may lead businesses to cut prices, passing on their tax savings to consumers even as sales increase.

from Rolfe Winkler:

Keynesianism, Monetarism and Complexity

January 7, 2010

by James G. Rickards

The debate between Keynesianism and Monetarism is over; they both won. Obama's approach to the crisis is breathtakingly simple - print money and spend it fast. For Keynesians, stimulus substitutes for private demand until the latter is jump started and stimulus can be reversed.  For Monetarists, the logic is equally simple - increase the monetary base to expand GDP.  Don't worry about inflation until you see the whites of its eyes. Then withdraw the money after the job is done.  Easy.

from Rolfe Winkler:

Morning Links 1-7

January 7, 2010

Tim Geithner covered up AIG's payments to counterparties (DealBook) Timmy G. knew it looked bad for AIG to pay out 100¢ on the dollar to counterparties like Goldman. So he told AIG to shut up.

from Rolfe Winkler:

Mosler vs. Rickards on fixing the economy

January 6, 2010

I have a treat to share with readers. Warren Mosler and Jim Rickards have agreed to an op-ed debate here on my blog. Over the course of a couple weeks, they'll engage in intellectual fisticuffs about how to fix the economy.

from Rolfe Winkler:

Is the output gap smaller than we think?

January 6, 2010

Economist Kevin Kliesen at the St. Louis Fed asks that question in an article he published today.

from Rolfe Winkler:

Lunchtime Links 1-6

January 6, 2010

Let them eat lobster! (Yves, Naked Capitalism)

The weather according to economists: sunny! (Kedrosky) Group think...

How to combat the natural tendency to procrastinate (Economist)

Let's get fisical (Bill Gross, PIMCO) In his latest investor letter, Bill Gross paradoxically laments the influence of special interests. Of course he was one of the chief special interests -- representing the investor class -- lobbying for government to support asset prices. He also questions how the market will perform when our government "sugar daddy" disappears, especially in light of the disappearance of foreign buyers of Treasuries.

from Rolfe Winkler:

Dodd to quit

January 6, 2010

The big news today comes out of Washington where Senator Chris Dodd, Chairman of the Senate Banking Committee, is expected to announce he won't seek re-election in November. (Ferraro, Reuters)

from Rolfe Winkler:

Ugly CRE charts

January 6, 2010

From the Mortgage Bankers Association's Quarterly Data Book:

Screen shot 2010-01-05 at 11.12.41 PM

Screen shot 2010-01-05 at 11.12.57 PM

Screen shot 2010-01-05 at 11.13.11 PM

Screen shot 2010-01-05 at 11.13.19 PM

from Rolfe Winkler:

Afternoon Links 1-5

January 5, 2010

Must Read--Global bear rally will deflate as Japan leads sovereign bond crisis (Evans-Pritchard, Telegraph) Points to Ambrose for making lots of predictions in a single column! (ht Yves)

from Rolfe Winkler:

Gerry Levin’s mea culpa

January 5, 2010

Finally got around to watching this video. Kudos to Gerry Levin for taking responsibility for the worst merger in history. His comments about banks being malls instead of supermarkets is very true, but it's not his, it's Chris Whalen's, who provided a helpful counterpoint in NYT's non-mea-culpa from Sandy Weill. Their point is that the synergy Sandy Weill claimed for Citigroup -- combining insurance with commercial banking with investing banking with retail brokerage, etc. -- was bogus from the start.