Relevant and even prescient commentary on news, politics and the economy.

The Market Doesn’t Think the Fed Will Ever Sell Those Bonds Back

You know the trillion dollars a year of Treasury and GSE bonds that the Fed’s buying up? (And the $3-trillion+ it’s already holding?) It’s driving up bond prices and suppressing yields, right? And if it starts selling them back, it will drive down prices and increase yields, right? The market should be front-running that, right? […]

Do Collateral Chains Create Real Value?

Some of the keenest monetary thinkers out there, over at FT Alphaville — Izabella Kaminska, Cardiff Garcia, etc. (I’ll even throw in Tyler Durden at Zero Hedge, with qualifications) — have been pointing us for years towards the work of IMF Senior Economist Manmohan Singh on collateral chains in financial markets. He provides wonderfully cogent explanation of […]

If Interest Rates Rise, We Can Plummet the National Debt!

Dean Baker makes what seems to be a stunningly obvious point, one that I haven’t seen discussed anywhere. Condensed and with emphasis added for your consideration: …the value of our [government] debt will plummet if interest rates rise… we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of […]

I find it Imp – ossible to disagree with Krugman

Recently, I was pleased to note a disagreement between Paul Krugman and Dean Baker.  Finally, I hoped, a chance to prove I am not a knee jerk acolyte of Krugman.  Sadly I found I agreed with Krugman and not Baker (ouch).  But I didn’t give up hope, until yesterday. Surely, I can disagree with Krugman […]

JzB Smackdown with Some Thoughts on Trends and Context

João Marcus Marinho Nunes is personally offended by my previous Angry Bear post.   Personally I was ‘offended’ by being ‘accused’ of “using short-time series data”, ignoring “what is a valid context” and “cherry picking”. Which was odd, since I didn’t accuse him of anything.  In fact, he wasn’t even on my radar screen.  He […]

What’s in your neighborhood?

Via Naked Capitalism comes this question about comparing economic data for a successful area in the aggregate with contrasting signs of things being not so good for some. Puzzling Economic Sightings Now and again I ask readers for input on what they are seeing locally, a sort of regional check on the statistics and media […]

The ‘ignorance is bliss’/’ride’em cowboy’ mentality of today’s GOP

by Linda beale The ‘ignorance is bliss’/’ride’em cowboy’ mentality of today’s GOP Today’s GOP is dominated by the Tea Party types that are a cross between an ostrich with its head stuck in the sand– the “ignorance is bliss” philosophy– and a 1860s cowboy as depicted in the 1960s western-mania TV shows– the “hell bent […]

Wealth defined with real people in mind

Via the Washington Post comes this idea of economic incentive: But research by noted economists Karl Case, John Quigley and Robert Shiller found the households were more powerful affected by declines in wealth than increases. An unexpected 1 percent drop in housing prices caused a permanent 0.1 percent decrease in spending, that study found. But […]

More on Ineffective Fiscal Policy

This is a companion piece to Steve’s AB post from earlier today, where he points out the specious reasoning of  “the likes of Scott Sumner, David Beckworth, Lars Christensen, et al., claiming that fiscal austerity has obviously had no effect on GDP growth.” I wrote Sumner off a few years ago due to a highly […]