Monthly Archive:: December 2009

Monetary Policy and the Housing Bubble

[Skip to the end] >    >   (email exchange) >    >   On Tue, Dec 29, 2009 at 8:55 AM, wrote: >    >   Do you agree with their conclusion that monetary policy (low rates) didn’t affect housing >   prices? Yes, seems that way to me, too. >    >   I guess they did raise rates from 2003-06. >    >   Seems the ...Read More

Why health care will keep us ill

[Skip to the end] The flaw in the annointment is that our out of paradigm legislators and administration have apparently agreed that whatever healthcare they pass will be a ‘tax now, spend later’ arrangement. This will only serve to reduce aggregate for the time leading up to the additional spending, which looks ...Read More

Iron ore in China

[Skip to the end] Yes, China is very large and in many ways ‘untouched’ and will most likely continue to find its own resources, rather than cause world wide shortages. China says it may have 10bln tonnes of iron ore reserves in Hebei Dec 26 (Reuters) — The eastern region of China’s ...Read More

Fixing the small banks

[Skip to the end] Fixing the Small Banks The Obama administration has been preaching the importance of fixing the small banks and getting them lending again. This will review what I see as the critical issue and how to fix it. First, the answer: 1. The Fed should loan fed funds (unsecured) ...Read More

more on the man of the year

[Skip to the end] More on the Bernanke testimony: Shortly after the failure of Lehman Brothers, I was in Brazil at an international meeting, and I had a meeting there with bankers, and I asked them how the Brazilian economy was doing. And they said well, it had been doing fine, but ...Read More

Schwarzenegger Seeks Obama’s Help

[Skip to the end] Still haven’t seen any discussion of a per capita revenue distribution to all the States? $500 per capita would give California maybe $19 billion and be ‘fair’ to all the States. It would also support aggregate demand (spending power) output and employment, which presumably is a national priority? ...Read More

fixing the economy

[Skip to the end] I was asked by a reporter to state how I’d fix the economy in 500 words and replied: Fixing the Economy 1. A full ‘payroll tax holiday’ where the US Treasury makes all FICA payments for us (15.3%). This will restore ‘spending power’ allowing households to make their ...Read More

Fed reverse repo tests

[Skip to the end] Repo testing??? This is downright embarrassing: Fed’s Reverse Repo Tests Going Well, Industry Group Head Says By Liz Capo McCormick Dec. 23 (Bloomberg) — Federal Reservetests of tri-party reverse repurchase agreements have “gone extremely well,” according to the head of the industry group working with the central bank ...Read More

more from Geithner and Obama

[Skip to the end] Geithner: Tight Lending Threatens US Recovery Dec. 22 (Reuters) —U.S. Treasury Secretary Timothy Geithner expressed confidence on Tuesday that the U.S. economy was on a solid recovery path, but said tight lending practices by banks still pose a risk. He said the Treasury “will do what is necessary” ...Read More

Hedge funds bet on rising yields

[Skip to the end] Yet another legend (or two) slips into the ‘better lucky than good’ category. They may be right, but it will be for a different reason: Top hedge funds bet on big yields rise By Henry Sender Dec. 22 (FT) —The recent rise in long-term US interest rates comes ...Read More