Arnold Kling is incredulous when it comes to Pimco’s Bill Gross, who said yesterday that “without a government guarantee, mortgage rates would be hundreds — hundreds — of basis points higher, resulting in a moribund housing market for years.”
Yesterday afternoon, I started wondering why my steady stream of emails seemed to have come to a halt. It didn’t take long to get the answer: emails to me were being bounced back to their senders as undeliverable, on the grounds that my Gmail account was over quota.
Over recent decades, public companies have steadily paid out fewer and fewer dividends, with little if any complaining from shareholders. They often prefer it when the money is retained in the company or used for share buybacks, because that way they don’t need to pay taxes on their dividend income.
I had the very good fortune to have lunch today with Carlos Steneri, the veteran Uruguayan debt manager and negotiator who is finally leaving public service after many decades to do some work in the private sector. I’ve known Carlos for the best part of a decade now, and have the greatest respect for him. He’s seen a lot over the course of his tenure working for Uruguay, and it’s worth listening to his highly-experienced take on today’s global situation, and how the likes of Greece and Italy can learn from Uruguay’s experiences.
A rather startling pronouncement pops up on Fortune.com today:
“I wouldn’t be surprised if someday JNJ trades at a spread below Treasurys,” says Jack Ablin, Chief Investment Officer, Harris Private Bank. In other words, Johnson and Johnson yields could dip below the so-called risk-free yield on government debt.
Kristopher Gerardi, Christopher Foote, and Paul Willen, of various regional Federal Reserve banks, have a paper which looks at economic research on whether or not there was a housing bubble, and which concludes that “we do not currently have the ability to prevent a bubble from forming or the ability to identify a bubble in real time”. Yes, they admit, some smart and prescient economists did say, with complete accuracy, that there was a bubble. But! Other economists weren’t convinced! So, never mind, there’s nothing we can do.