Monthly Archive:: February 2011

US Budget Gap Is Top Worry for NABE Economists

So much for their legacies: US Budget Gap Is Top Worry for NABE Economists February 28 (Reuters) — The massive U.S. budget deficit is the gravest threat facing the economy, topping high unemployment and the risk of inflation or deflation, according to a survey of forecasters released Monday. The National Association for ...Read More

central bankers comment on QE

Recent statements regarding QE show at least some key Central Bankers have it right: Don Kohn (Former FRB Vice Chair):”I know of no model that shows a transmission from bank reserves to inflation”. Vitor Constancio (ECB Vice President): “The level of bank reserves hardly figures in banks lending decisions; the supply of ...Read More

the Mideast, the Saudis, and our markets

First, I’ve been pretty quiet on the mideast goings ons. I’ve been watching intently from the time Egypt made headlines, and have yet to see anything of particular consequence to us, beyond oil prices. I’ve yet to come up with any channel to world aggregate demand, inflation, etc. apart from oil prices. ...Read More

Saudi Arabia in talks to boost oil output

Right, as swing producer/monopolist that’s what they necessarily do- set price and let quantity adjust. But if quantity demanded exceeds their ability to pump they lose control of price on the upside. >    >   (email exchange) >    >   On Thu, Feb 24, 2011 at 9:43 AM, Greg wrote: >    >   Just like you say about ...Read More

US Gasoline consumption, Saudi crude output

US demand continues to go nowhere, and may even be softening And with Saudis posting prices to their refiners and letting quantity adjust, it doesn’t look like net world demand is doing much either ...Read More

Testimony from Chairman Bernanke

“If government debt and deficits were actually to grow at the pace envisioned, the economic and financial effects would be severe,” Federal Reserve Chairman Ben S. Bernanke told the House Budget Committee Feb. 9. “Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt ...Read More

Krugman & 7DIF

>    >   (email exchange) >    >   On Tue, Feb 22, 2011 at 9:15 PM, wrote: >    >   Paul Krugman gave a speech at Florida Atlantic University and agreed >   to a brief meeting with our econonomics club. >    >   I thought you might enjoy the attached picture. >    ...Read More

China’s “dynamic differentiated required reserve ratios”

This only works to raise the cost of funds for the targeted banks. It’s still about price, not quantity So far the actual quantitative measures remain the govt telling its banks to lend less, or else. That does work. The problem is it works via a hard landing/widening output gap. From Yang ...Read More

China raises bank reserve to curb lending

While this doesn’t actually work to curb lending, it does indicate that China continues to see inflation as a severe enough of a political problem to risk a serious slowdown. And while it’s not impossible, I’ve yet to see any nation succeed in cutting what they call inflation short of increasing their ...Read More

March 30 2009 post

Here’s what I said back a couple of years ago. Unfortunately, not much has changed (including my suggestion at the time in an earlier post that it was all a pretty good environment for stocks which could easily double). Review of the recession and how to end it March 30th, 2009 The ...Read More