The Financial Accelerator, Revisited This was on the WSJ blog by Greg Ip and I though it was worth passing on. Fed Chairman Ben Bernanke’s newfound urgency in addressing the risk of recession can be traced in part to the insights he gleaned from his pioneering research on the financial system and the Great Depression. […]
In this mornings New York Times Bruce Bartlett published a nice list of anti recession measures by Congress and makes the point that they are always too late. However, if you read the list of 14 different measures he list you find that 12 of them are for public works programs and he is completely […]
I love the articles we are now seeing that the 2001 tax cut did not work. But look at what happened to real retail sales right after the 2001 tax rebates were implemented. The US experienced a very large surge in real retail sales that werenot adequately explained by the usual factors. ( see the […]
I spent the weekend babysitting a grandchild. But I was reminded that at the end Goldilockswas run out of the forest by the three bears.
Earlier today Cactus posted on the real Dow over the past seven years. Another comparison is to look at the alternative strategy, investing in cash or 3 month T bill. If in January, 2001 you had placed your investments in 3 month T bills and reinvested the income in 3 month T bills, at the […]
We are already starting to hear discussion about the point that this is an election year will influence Fed policy –either to ease or tighten more then it should because of the election. The historic record is clearly that in election year the Fed does what economic fundamentals call for it to do and that […]
In the previous OldVet comments I talked about the relationship between interest rates and the stock market. I just though I would but up one example of what I was talking about. Note how the fitted value has started rising in recent months but the market Pe has not moved up yet.
We’re starting to see a new campaign by the Republicans about a cut in the corporate tax rates. There is a good case to be made for corporate tax cuts. This is especially true if the objective is to increase business fixed investment. After all corporations account for over 80% of business fixed investment as […]
Some quick comments on the employment report. Does not look good. I’m starting to have doubts about my forecast that we are just sliding into a stagnation, not a recession scenario. The household survey look especially worrisome. But the hours worked data is not as weak. December hours worked were unchanged. The 4th quarter hours […]
WOW — in seven year team Bush managed to raise the unemployment rate from under 4% when they took office to 5%. Way to go team Bush!! P.S. Note that in modern times only one Republican President managed to leave office with a lower unemployment rate then they inherited. Every Democratic President achieved this feat.