Friday 30 January 2009
dld-conference: Daniel Kahnemann and Nassim Taleb discuss biases, the illusion of patterns as well as the perception of risk and denial
About John Brockman
John Brockman is a cultural impresario whose career has encompassed the avant-garde art world, science, books, software, and the Internet. In the 1960s, he coined the word "Intermedia" and pioneered "Intermedia kinetic environments" in art, theatre, and commerce
About Nassim Taleb
Nassim N. Taleb is combination of a literary essayist, scholar of risk and randomness, writer of philosophical tales, and derivatives trader. He is known for a multidisciplinary approach to the role of the high- impact rare event -across psychology, economics, philosophy, finance, engineering, and history.
About Daniel Kahneman
Daniel Kahneman is Eugene Higgins Professor of Psychology and Professor of Public Affairs Emeritus at Princeton University. He was educated at The Hebrew University in Jerusalem and obtained his PhD in Berkeley
------------------------
Check out the rest of this blog here.
Thursday 29 January 2009
Britain is set to endure the worst downturn of any major country and the worst year for the economy since 1948
The economy will shrink by 2.8 per cent this year, with Britain faring significantly worse than the United States, Western Europe or Japan due to its reliance on the financial sector, the International Monetary Fund said.
Its forecast was almost double its previous prediction for the severity of the UK recession and prompted leading experts to warn British families were facing an "extremely painful" period, with people getting poorer in the next 12 months.
The IMF's gloomy assessment of Britain's prospects also came as a severe blow to Gordon Brown, who faced fierce criticism from Conservative leader David Cameron yesterday for his "complacent" handling of the economic downturn.
The Tories warned that the UK was now heading for the "worst recession in the world" and its worst year for 60 years.
"Let us hope these forecasts are wrong. But if they are not, Britain is set to endure the worst downturn of any major country and the worst year for the economy since 1948," George Osborne, the shadow chancellor, said.
"Without a change of direction we will be living with Labour's debt crisis for a generation."
more ...
------------------------
Check out the rest of this blog here.
Its forecast was almost double its previous prediction for the severity of the UK recession and prompted leading experts to warn British families were facing an "extremely painful" period, with people getting poorer in the next 12 months.
The IMF's gloomy assessment of Britain's prospects also came as a severe blow to Gordon Brown, who faced fierce criticism from Conservative leader David Cameron yesterday for his "complacent" handling of the economic downturn.
The Tories warned that the UK was now heading for the "worst recession in the world" and its worst year for 60 years.
"Let us hope these forecasts are wrong. But if they are not, Britain is set to endure the worst downturn of any major country and the worst year for the economy since 1948," George Osborne, the shadow chancellor, said.
"Without a change of direction we will be living with Labour's debt crisis for a generation."
more ...
------------------------
Check out the rest of this blog here.
Monday 26 January 2009
Money supply will soar once banks loosen purse strings
Not that the central bank has been exactly resting on its oars.
On the contrary, according to the Federal Reserve Bank of St. Louis, the monetary base (the raw material for the money supply) has risen at a seasonally adjusted annual rate of 86% over the past year. Bad enough, but over the past three months this has skyrocketed to an annual rate of almost 1,000%!
Adjusted reserves have ballooned from $100 billion to $700 billion since mid-September, while the Fed's balance sheet has more than doubled over this period of time, from about $900 billion to a thumping $2.2 trillion.
These funds are beginning to show up in the Fed's two measures of the money supply. M2 has risen 8% over the past year, while MZM, the St. Louis Fed's measure of liquid money, is up more than 10% during the same period.
This is with the banks still reluctant to lend. Once they loosen their purse strings, the money supply will soar.
When this happens, don't be surprised if the Fed stops reporting these numbers. This is what it did several years ago, when it stopped reporting M3, which apparently was rising too fast for the Fed's comfort.
http://www.marketwatch.com/news/story/watch-printing-press/story.aspx?guid=D8EA856F-FF68-4414-9175-5E17F14B1298
------------------------
Check out the rest of this blog here.
Irish house prices may fall by 80%
IRELAND WILL see more demolition than construction of houses over the next decade, as the economy struggles to recover from the collapse of the housing market and the emergence of “zombie” banks, UCD economist Morgan Kelly told the conference.
In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms.
“Construction, but not demolition, of residential and commercial property will fall to zero for the foreseeable future,” he said.
Low levels of education among those employed in construction – where worker numbers peaked at about 280,000 – meant retraining would not be straightforward.
Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.”
http://www.irishtimes.com/newspaper/finance/2009/0113/1231738220759.html?via=mr
------------------------
Check out the rest of this blog here.
In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms.
“Construction, but not demolition, of residential and commercial property will fall to zero for the foreseeable future,” he said.
Low levels of education among those employed in construction – where worker numbers peaked at about 280,000 – meant retraining would not be straightforward.
Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.”
http://www.irishtimes.com/newspaper/finance/2009/0113/1231738220759.html?via=mr
------------------------
Check out the rest of this blog here.
Deep in Debt in the USA - Even rich divorcees are in trouble !
She lives in a lovely home in a stylish inland enclave. It has an interest-only mortgage of about $2.2 million that requires a payment of $12,000 a month, very roughly. It was last appraised at $2.7 million, but who knows if it’s now worth anything remotely close to that price.
The woman, whom I’ve known since she was a teenager, has no job or other remunerative employment. She has a former husband, an entrepreneur whose business has suffered recently. He pays her $20,000 a month, of which roughly half is alimony and half child support. The alimony is scheduled to stop this summer.
http://www.nytimes.com/2009/01/25/business/25every.html?_r=1&partner=rss&emc=rss
------------------------
Check out the rest of this blog here.
Sunday 25 January 2009
Protectionist dominoes are beginning to tumble across the world?
Russia has begun to shut down trade as it adjusts to the shock of Urals oil below $40 a barrel. It has imposed import tariffs of 30pc on cars, 15pc on farm kit, and 95pc on poultry (above quota levels). "It is possible during the financial crisis to support domestic producers by raising customs duties," said Premier Vladimir Putin.
Russia is not alone. India and Vietnam have imposed steel tariffs. Indonesia is resorting to special "licences" to choke off imports.
The Kremlin is alarmed by a 13pc fall in industrial output over the last five months. There have been street protests in Moscow, St Petersburg, Kaliningrad, Vladivostok and Barnaul. Police crushed "Dissent Marchers" holding copies of Russia's constitution above their heads in Moscow's Triumfalnaya Square.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3870089/Protectionist-dominoes-are-beginning-to-tumble-across-the-world.html
------------------------
Check out the rest of this blog here.
Russia is not alone. India and Vietnam have imposed steel tariffs. Indonesia is resorting to special "licences" to choke off imports.
The Kremlin is alarmed by a 13pc fall in industrial output over the last five months. There have been street protests in Moscow, St Petersburg, Kaliningrad, Vladivostok and Barnaul. Police crushed "Dissent Marchers" holding copies of Russia's constitution above their heads in Moscow's Triumfalnaya Square.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3870089/Protectionist-dominoes-are-beginning-to-tumble-across-the-world.html
------------------------
Check out the rest of this blog here.
China to US, 'Be Nice to the Countries That Lend You Money'
But over the years, I believe I learned to be humble. To treat other people nicely. I learned that, from a social point of view, no matter how lowly statured a person you are talking to, as a person, they are the same human being as you are. You have to respect them. You have to apologize if you inadvertently hurt them. And often you have to go out of your way to be nice to them, because they will not like you simply because of the difference in social structure.
Americans are not sensitive in that regard. I mean, as a whole. The simple truth today is that your economy is built on the global economy. And it’s built on the support, the gratuitous support, of a lot of countries. So why don’t you come over and … I won’t say kowtow [with a laugh], but at least, be nice to the countries that lend you money.
Talk to the Chinese! Talk to the Middle Easterners! And pull your troops back! Take the troops back, demobilize many of the troops, so that you can save some money rather than spending $2 billion every day on them. And then tell your people that you need to save, and come out with a long-term, sustainable financial policy.
http://www.theatlantic.com/doc/200812/fallows-chinese-banker/2
------------------------
Check out the rest of this blog here.
Americans are not sensitive in that regard. I mean, as a whole. The simple truth today is that your economy is built on the global economy. And it’s built on the support, the gratuitous support, of a lot of countries. So why don’t you come over and … I won’t say kowtow [with a laugh], but at least, be nice to the countries that lend you money.
Talk to the Chinese! Talk to the Middle Easterners! And pull your troops back! Take the troops back, demobilize many of the troops, so that you can save some money rather than spending $2 billion every day on them. And then tell your people that you need to save, and come out with a long-term, sustainable financial policy.
http://www.theatlantic.com/doc/200812/fallows-chinese-banker/2
------------------------
Check out the rest of this blog here.
Who Saw The Housing Bubble Coming?
Federal Reserve Chairman Alan Greenspan first addressed the question of a housing bubble in testimony before the Joint Economic Committee on April 17, 2002. He dismissed the idea--or, for that matter, any comparison to the stock market, which had recently gone through a high-tech bubble--on the grounds that housing was different because of substantial transaction costs and more limited opportunities for speculation.
Greenspan also argued that there really wasn't a single national market for housing, but rather a collection of many local markets. Even if a bubble emerged in one market, he said, there was no reason to think it would spill over into other markets.
In June 2002, I filed a report by economist Ed Leamer of UCLA noting that the ratio of home prices to rent was rising rapidly and that this represented a kind of price to earnings ratio for the housing market.
Like the stock market's P/E ratio, when it rises rapidly above historical norms in a short period of time, it's is a good sign that there is a bubble--and that it could burst quickly.
http://www.forbes.com/opinions/2008/12/31/housing-bubble-crash-oped-cx_bb_0102bartlett.html?feed=rss_popstories
------------------------
Check out the rest of this blog here.
Saturday 24 January 2009
Smell the inflation coming! M0 has gone parabolic! Year-over-year in December 2008, it was up 98.9%!
Until late 2008, I hadn’t looked at M0 for years. Why? Even the Fed isn’t foolish enough to change it too much. For decades it has traveled in a tight range between about 2% and 10% annual growth, with a pre-panic average since 1960 of 6.0%. M0 growth less real economic growth is one of the most basic measures of inflation. If M0 grows at 6% and the underlying economy at 3%, then there is relatively 3% more money available to spend on goods and services. This is inflation.
I was reading a book last month that discussed the monetary base’s direct impact on inflation. So I decided to take a look at M0 again. I could not believe what the data showed, I almost fell out of my chair it was so mind-blowing. Per the Fed’s own data, we have just witnessed the most inflationary event in modern history. This crazy monetary base chart will make even the most rabid deflationist very uneasy.
M0 has gone parabolic! Year-over-year in December 2008, it was up 98.9%! This is so shocking it defies belief. In late September as the stock panic started, it had grown by 9.9% over the past year. By October, this rate ballooned to an all-time high of 36.7%. In November, it rocketed again to 73.0%. And in December, it surged up to the staggering 98.9% you can see above. Ben Bernanke’s Fed has doubled the monetary base in a single year! Holy cow.
Between January 1960 and August 2008, the 48-year pre-panic average M0 growth rate was 6.0% and the range was pretty tight as you can see above. 10% growth rates were rare and often preceded sharp gains in commodities prices (mid-1970s, late 1970s). The Y2k scare led to the highest monetary-base growth rate ever to that point, 15.8% as the Fed prepared for an expected run on currency. Yet that is now dwarfed by the unprecedented parabolic explosion in M0 seen during late 2008’s stock panic.
That Y2k spike’s aftermath is interesting too. By January 2000, the Fed knew the world wasn’t going to end. Yet it took it over a year to try and take out some of that excess liquidity, and it was a feeble effort. M0 growth didn’t go negative until December 2000, and this modest and brief 2-month episode was the only shrinkage seen in the monetary base since 1961. So even if the Fed tries to reverse its doubling of M0 after it stops being scared of deflation, it isn’t going to happen overnight. The money supply will be much larger going forward.
http://www.kitco.com/ind/hamilton/jan232009.html
------------------------
Check out the rest of this blog here.
Thursday 22 January 2009
Federal Reserve sets stage for Weimar-style Hyperinflation
On September 15 Bernanke, New York Federal Reserve President, Tim Geithner, the new Obama Treasury Secretary-designate, along with the Bush Administration, agreed to let the fourth largest investment bank, Lehman Brothers, go bankrupt, defaulting on untold billions worth of derivatives and other obligations held by investors around the world. That event, as is now widely accepted, triggered a global systemic financial panic as it was no longer clear to anyone what standards the US Government was using to decide which institutions were 'too big to fail' and which not. Since then the US Treasury Secretary has reversed his policies on bank bailouts repeatedly leading many to believe Henry Paulson and the Washington Administration along with the Fed have lost control.
In response to the deepening crisis, the Bernanke Fed has decided to expand what is technically called the Monetary Base, defined as total bank reserves plus cash in circulation, the basis for potential further high-powered bank lending into the economy. Since the Lehman Bros. default, this money expansion rose dramatically by end October at a year-year rate of growth of 38%, has been without precedent in the 95 year history of the Federal Reserve since its creation in 1913. The previous high growth rate, according to US Federal Reserve data, was 28% in September 1939, as the US was building up industry for the evolving war in Europe.
http://www.globalresearch.ca/index.php?context=va&aid=11401
------------------------
Check out the rest of this blog here.
Wednesday 21 January 2009
PETER SCHIFF in the WSJ: There's No Pain-Free Cure for Recession
As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.
With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.
Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.
more ...
------------------------
Check out the rest of this blog here.
With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.
Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.
more ...
------------------------
Check out the rest of this blog here.
The bond bubble is an accident waiting to happen
They are betting too that debt deflation will overwhelm the effects of near-zero interest rates across the G10 and nullify a £2,000bn fiscal blast in the US, China, Japan, Britain, and Europe.
Above all, they are betting that the Federal Reserve chief Ben Bernanke will fail to print enough banknotes to inflate the US money supply, despite his avowed intent to do so.
Yields on 10-year US Treasuries have fallen to 2.4pc – a level that was unseen even in the Great Depression. This is "return-free risk", said bond guru Jim Grant.
It is much the same story across the world. Yields are 1.3pc in Japan, 3.02pc in Germany, 3.13pc in Britain, 3.26pc in Chile, 3.47pc in France, and 5.56pc in Brazil.
"Get out of Treasuries. They are very, very expensive," said Mohamed El-Erian, the investment chief at the Pimco, the world's top bond fund, in a Barron's article last week.
more ...
------------------------
Check out the rest of this blog here.
Above all, they are betting that the Federal Reserve chief Ben Bernanke will fail to print enough banknotes to inflate the US money supply, despite his avowed intent to do so.
Yields on 10-year US Treasuries have fallen to 2.4pc – a level that was unseen even in the Great Depression. This is "return-free risk", said bond guru Jim Grant.
It is much the same story across the world. Yields are 1.3pc in Japan, 3.02pc in Germany, 3.13pc in Britain, 3.26pc in Chile, 3.47pc in France, and 5.56pc in Brazil.
"Get out of Treasuries. They are very, very expensive," said Mohamed El-Erian, the investment chief at the Pimco, the world's top bond fund, in a Barron's article last week.
more ...
------------------------
Check out the rest of this blog here.
Monday 19 January 2009
Sunday 18 January 2009
James Turk: Another Great Depression ?
Unemployment is the key measure that signals whether or not a depression has begun, and by the SGS measures we are rapidly approaching the 25% unemployment rate usually mentioned as the most important signpost marking the depths of the Great Depression. That high rate of unemployment cut a wide-swath of misery through the American population.
Given the current 17.5% rate of unemployment, it would appear that I am not far off the mark to suggest that we have entered another Great Depression, and I am not alone in my thinking. Others who are more attuned to the economic situation see it the same way as I do.
http://www.kitco.com/ind/Turk/turk_jan152009.html
------------------------
Check out the rest of this blog here.
Friday 16 January 2009
Paul Krugman (Keynesian Saltwater MIT socialist economics) Versus Peter Schiff (Austrian School libertarian economics)
Classic Peter Schiff from 2006: what happened to inflation in the 90s ? It became asset bubbles that were left to grow and burst unchecked
Although we had retail price deflation (due to manufacturing being shifted to low cost developing economies like China and India), asset bubbles were created that were exacerbated by lax monetary policy. Central banks should have recognised these assets bubbles as the inflationary phenomena that they were and increased rates to balance western economies. Rather central banks saw these bubbles, not as rational responses to money flow from east to west, but as irrational and strange one off occurrences that would fix themselves with no long term consequences.
Economists and central banks ignored the fact that inflation should have been showing up very strongly in the Chinese economy as so much money was flowing in so quickly from the US and other western countries. The Chinese government, rather than spend the money from state bank deposits and taxation in China was buy up all the US bonds that it could. Thus the dollar was protected and America could live well beyond its means and buy even more Chinese goods.
------------------------
Check out the rest of this blog here.
Economists and central banks ignored the fact that inflation should have been showing up very strongly in the Chinese economy as so much money was flowing in so quickly from the US and other western countries. The Chinese government, rather than spend the money from state bank deposits and taxation in China was buy up all the US bonds that it could. Thus the dollar was protected and America could live well beyond its means and buy even more Chinese goods.
------------------------
Check out the rest of this blog here.
Thursday 15 January 2009
Someone has to pay and the easiest way to make the little guy pay is via inflation !
Inflation is loved by politicians because wealth can be transferred from the poor and disenfranchised to the rich and powerful and the blame can be given to gold speculators, labour unions etc ...
------------------------
Check out the rest of this blog here.
------------------------
Check out the rest of this blog here.
Sunday 11 January 2009
Peter Schiff Vs. Stephen Leeb Cnn 10th Jan 09
Stephen Leeb seems to be saying the keys to a strong economy are big government, weak currency and wars ! Plus the only alternative is to run the country as a dictator like Hitler or Stalin ???
------------------------
Check out the rest of this blog here.
------------------------
Check out the rest of this blog here.
Saturday 10 January 2009
I.O.U.S.A. boldly examines the rapidly growing national debt and its consequences for the United States and its citizens
As the Baby Boomer generation prepares to retire, will there even be any Social Security benefits left to collect? Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions. Throughout history, the American government has found it nearly impossible to spend only what has been raised through taxes. Wielding candid interviews with both average American taxpayers and government officials, Sundance veteran Patrick Creadon (Wordplay) helps demystify the nation's financial practices and policies. The film follows U.S. Comptroller General David Walker as he crisscrosses the country explaining America's unsustainable fiscal policies to its citizens. With surgical precision, Creadon interweaves archival footage and economic data to paint a vivid and alarming profile of America's current economic situation. The ultimate power of I.O.U.S.A. is that the film moves beyond doomsday rhetoric to proffer potential financial scenarios and propose solutions about how we can recreate a fiscally sound nation for future generations.
http://www.imdb.com/title/tt0963807/
http://www.iousathemovie.com/
------------------------
Check out the rest of this blog here.
American Expess is loan sharking in the UK with its 46% card
American Expess has increased the cost of borrowing on one of its credit cards to 46 per cent — more than 30 times the Bank of England base rate.
The company now charges 46 per cent APR on the British Airways Premium Plus card, making it Britain’s most expensive credit card.
Consumer groups said the cost of borrowing on some credit cards had now lost all touch with the base rate.
more ...
http://en.wikipedia.org/wiki/Loan_shark
------------------------
Check out the rest of this blog here.
Niall Ferguson - Chinese Savings Helped Inflate American Bubble
In March 2005, a low-key Princeton economist who had become a Federal Reserve governor coined a novel theory to explain the growing tendency of Americans to borrow from foreigners, particularly the Chinese, to finance their heavy spending.
The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.
This colossal credit cycle could not last forever, he said. But in a global economy, the transfer of Chinese money to America was a market phenomenon that would take years, even a decade, to work itself out. For now, he said, “we probably have little choice except to be patient.”
Today, the dependence of the United States on Chinese money looks less benign. And the economist who proposed the theory, Ben S. Bernanke, is dealing with the consequences, having been promoted to chairman of the Fed in 2006, as these cross-border money flows were reaching stratospheric levels.
more ...
------------------------
Check out the rest of this blog here.
U.S. debt is losing its appeal in China
China has bought more than $1 trillion in American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home - a shift that could pose some challenges to the U.S. government in the near future but eventually may even produce salutary effects on the world economy.
At first glance, the declining Chinese appetite for U.S. debt - apparent in a series of hints from Chinese policy makers over the past two weeks, with official statistics due for release in the next few days - comes at an inopportune time. On Tuesday, the U.S. president-elect, Barack Obama, said Americans should get used to the prospect of "trillion-dollar deficits for years to come" as he seeks to finance an $800 billion economic stimulus package.
Normally, China would be the most avid taker of the debt required to pay for those deficits, mainly short-term Treasury securities. In the past five years, China has spent as much as one-seventh of its entire economic output on the purchase of foreign debt - largely U.S. Treasury bonds and American mortgage-backed securities.
But now, Beijing is seeking to pay for its own $600 billion economic stimulus - just as tax revenue falls sharply as the Chinese economy slows. Regulators have ordered banks to lend more money to small and midsize enterprises, many of which are struggling with slower exports, and Chinese bankers say they are being instructed to lend more to local governments to allow them to build new roads and other projects as part of the stimulus program.
more ...
------------------------
Check out the rest of this blog here.
At first glance, the declining Chinese appetite for U.S. debt - apparent in a series of hints from Chinese policy makers over the past two weeks, with official statistics due for release in the next few days - comes at an inopportune time. On Tuesday, the U.S. president-elect, Barack Obama, said Americans should get used to the prospect of "trillion-dollar deficits for years to come" as he seeks to finance an $800 billion economic stimulus package.
Normally, China would be the most avid taker of the debt required to pay for those deficits, mainly short-term Treasury securities. In the past five years, China has spent as much as one-seventh of its entire economic output on the purchase of foreign debt - largely U.S. Treasury bonds and American mortgage-backed securities.
But now, Beijing is seeking to pay for its own $600 billion economic stimulus - just as tax revenue falls sharply as the Chinese economy slows. Regulators have ordered banks to lend more money to small and midsize enterprises, many of which are struggling with slower exports, and Chinese bankers say they are being instructed to lend more to local governments to allow them to build new roads and other projects as part of the stimulus program.
more ...
------------------------
Check out the rest of this blog here.
Thursday 8 January 2009
Britain's zimbabwe economy - going to print money until all debts are gone and savers are wiped out !
Bank cuts interest rate to all-time low of 1.5%
The Bank of England today ordered another half-point cut in interest rates to just 1.5 per cent, the lowest in 314 years, as it kept up its aggressive campaign to breathe life into the stalled economy.
The Bank’s further move came hard on the heels of cuts of 2.5 percentage points over the past two months alone.
But the move will disappoint struggling businesses and fearful workers and consumers, who were hoping for a more radical cut by another full percentage point or more.
The latest cut came amid soaring fears over Britain’s rapidly worsening prospects following a deluge of dire economic news and a mounting toll of job losses.
more ...
Chancellor set to print more cash as interest rates hit record low
Alistair Darling is considering printing more money in an attempt to ease the credit crunch.
As interest rates appear certain to fall to an historic low today, the Chancellor and Mervyn King, the Governor of the Bank of England, are looking at expanding the money supply by billions and using the extra cash to buy assets ranging from government or commercial debt to private equities.
The Bank’s Monetary Policy Committee began its two-day meeting to decide interest rates yesterday as the grim toll of job losses and closures continued. Viyella, the fashion business, went into administration, putting at risk 450 jobs at stores around the country. Marks & Spencer confirmed that it was cutting 1,200 jobs and closing 27 stores. Another 1,000 jobs are under threat at Cattles, the finance firm, and Barclays cut 400 jobs from its IT departments.
Today base rates are expected to fall to their lowest level since the Bank of England was founded in 1694. The markets expect a drop of at least 0.5 points to 1.5 per cent or even lower.
more ...
Punish savers and make them spend money
Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively
The battlelines are drawn. On one side we have the Labour Government and the Liberal Democrats, the Bank of England, the US Federal Reserve Board and the vast majority of Keynesian economists in every country - plus Barack Obama. On the other side, the Tory Opposition, the German Socialists, the European Central Bank, the Church of England and the vast majority of Marxist economists in every country - plus the British public. The question, of course, is what to do about the recession. Specifically whether the way out is “to spend, spend, spend or to save, save, save” - as David Cameron has so clearly put it.
I believe, in line with the vast majority of non-socialist economists, that Mr Cameron's campaign for savings is completely wrong; that “borrowing our way out of debt”, paradoxical as it sounds, is exactly the right prescription for our present problems. This paradox is easily explained: if governments or wealthy individuals increase their borrowings they replace weak debtors - bankrupt hedge funds, struggling businesses or repossessed homeowners - with strong ones and this helps to stabilise the financial system and sustain economic activity and employment. The country can borrow its way out of debt.
more ...
------------------------
Check out the rest of this blog here.
The Bank of England today ordered another half-point cut in interest rates to just 1.5 per cent, the lowest in 314 years, as it kept up its aggressive campaign to breathe life into the stalled economy.
The Bank’s further move came hard on the heels of cuts of 2.5 percentage points over the past two months alone.
But the move will disappoint struggling businesses and fearful workers and consumers, who were hoping for a more radical cut by another full percentage point or more.
The latest cut came amid soaring fears over Britain’s rapidly worsening prospects following a deluge of dire economic news and a mounting toll of job losses.
more ...
Chancellor set to print more cash as interest rates hit record low
Alistair Darling is considering printing more money in an attempt to ease the credit crunch.
As interest rates appear certain to fall to an historic low today, the Chancellor and Mervyn King, the Governor of the Bank of England, are looking at expanding the money supply by billions and using the extra cash to buy assets ranging from government or commercial debt to private equities.
The Bank’s Monetary Policy Committee began its two-day meeting to decide interest rates yesterday as the grim toll of job losses and closures continued. Viyella, the fashion business, went into administration, putting at risk 450 jobs at stores around the country. Marks & Spencer confirmed that it was cutting 1,200 jobs and closing 27 stores. Another 1,000 jobs are under threat at Cattles, the finance firm, and Barclays cut 400 jobs from its IT departments.
Today base rates are expected to fall to their lowest level since the Bank of England was founded in 1694. The markets expect a drop of at least 0.5 points to 1.5 per cent or even lower.
more ...
Punish savers and make them spend money
Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively
The battlelines are drawn. On one side we have the Labour Government and the Liberal Democrats, the Bank of England, the US Federal Reserve Board and the vast majority of Keynesian economists in every country - plus Barack Obama. On the other side, the Tory Opposition, the German Socialists, the European Central Bank, the Church of England and the vast majority of Marxist economists in every country - plus the British public. The question, of course, is what to do about the recession. Specifically whether the way out is “to spend, spend, spend or to save, save, save” - as David Cameron has so clearly put it.
I believe, in line with the vast majority of non-socialist economists, that Mr Cameron's campaign for savings is completely wrong; that “borrowing our way out of debt”, paradoxical as it sounds, is exactly the right prescription for our present problems. This paradox is easily explained: if governments or wealthy individuals increase their borrowings they replace weak debtors - bankrupt hedge funds, struggling businesses or repossessed homeowners - with strong ones and this helps to stabilise the financial system and sustain economic activity and employment. The country can borrow its way out of debt.
more ...
------------------------
Check out the rest of this blog here.
Wednesday 7 January 2009
Satellite and Climate Model Evidence Against Substantial Manmade Climate Change by Roy W. Spencer, Ph.D.
Three IPCC climate models, recent NASA Aqua satellite data, and a simple 3-layer climate model are used together to demonstrate that the IPCC climate models are far too sensitive, resulting in their prediction of too much global warming in response to anthropogenic greenhouse gas emissions. The models’ high sensitivity is probably the result of a confusion between forcing and feedback (cause and effect) when researchers have interpreted cloud and temperature variations in the real climate system.
more ...
------------------------
Check out the rest of this blog here.
more ...
------------------------
Check out the rest of this blog here.
Sunday 4 January 2009
The End of the Financial World as We Know It ?
AMERICANS enter the New Year in a strange new role: financial lunatics. We’ve been viewed by the wider world with mistrust and suspicion on other matters, but on the subject of money even our harshest critics have been inclined to believe that we knew what we were doing. They watched our investment bankers and emulated them: for a long time now half the planet’s college graduates seemed to want nothing more out of life than a job on Wall Street.
This is one reason the collapse of our financial system has inspired not merely a national but a global crisis of confidence. Good God, the world seems to be saying, if they don’t know what they are doing with money, who does?
Incredibly, intelligent people the world over remain willing to lend us money and even listen to our advice; they appear not to have realized the full extent of our madness. We have at least a brief chance to cure ourselves. But first we need to ask: of what?
more ...
------------------------
Check out the rest of this blog here.
Wake up people: deflation will set you free, inflation will make you a slave of the government
Hyper Inflation Book
http://mises.org/multimedia/mp3/audiobooks/DeflationandLiberty.mp3
http://mises.org/story/3231
------------------------
Check out the rest of this blog here.
http://mises.org/multimedia/mp3/audiobooks/DeflationandLiberty.mp3
http://mises.org/story/3231
------------------------
Check out the rest of this blog here.
Thursday 1 January 2009
Subscribe to:
Posts (Atom)
