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

Deep and Long: Private Debt and Financial Recessions

While he (uncharacteristically) doesn’t explain or deploy it terribly well, Paul Krugman points to some very excellent research on the relationship between private debt levels and the depth and duration of (especially financial-crisis-driven) recessions. The Schularick/Taylor Vox EU article is here. The Jorda/Schularick/Taylor paper is here (PDF). I think the work is excellent in large […]

Amazon and Apple: The Myth of the Rational Market?

Can anybody explain this to me? AAPL AMZN Price/Earnings 15.15 302.68 That’s a 20:1 ratio. Yes, Amazon has a lower price to revenues ratio, by a 2:1 margin. AAPL AMZN Price/Sales 4.06 2.06 And presumably at some point Amazon can turn the prices-versus-market-share dial away from gaining market share/maximizing revenue and toward price and profits. […]

Why Unwinding QE Won’t Matter

Ashwin Parameswaran nails it once again. If you want to understand how the modern financial/monetary system actually works, run don’t walk to read this post. His key insight: Just as the East India Company could access cash on the back of their government bond holdings in the 18th century, any pension fund, insurer or bank […]

Adam Smith on Corporatism

As a many-times business owner, I noted a couple of years back that in the ecosystem of publicly traded companies, there is nobody who thinks, acts, has incentives like, or is really anything like a real business owner. I’m pleased to find that Adam Smith agrees with me (emphasis mine): The trade of a joint […]

"If you tax investment income what will people do? Stuff their money in the mattress?"

Richard Thaler asks exactly the right question. This from the latest IGM Forum poll of big-name economists, on the effects of taxing income from “capital.” I’ve been over this multiple times before, but it’s nice to see the thinking validated by a real economist. If you’ve got money, there is no (practicable) alternative to “investing” […]

Did Global Warming "Stop" Sixteen Years Ago?

An acquaintance of mine who’s very statistically savvy (and quite conservative) posted the following link on Facebook today. I replied as follows (I’ve replaced a link here with a clickable image): As a statistics guy, you know way better than most how important sample size is. There was a 30-year plateau in the HADCRUT data, […]

57% of Leading Economists are Not Worried About an Inflationary Wage/Price Spiral

8% are. 23% are uncertain or have no opinion. I really like this IGM panel (check out the roster — pretty damned impressive, or at least credentialed), but I wish they didn’t post such wishy-washy, softball questions. I post this one because it’s not. The one I’d really like them to ask: A modern, prosperous […]