Get flash to fully experience Pearltrees
Behavioural Economics / Finance
By William Lazonick, professor of economics and director of the UMass Center for Industrial Competitiveness. His book, “Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States” (Upjohn Institute, 2009) won the 2010 Schumpeter Prize. Cross posted from Alternet Corporations are not working for the 99 percent. But this wasn’t always the case.
points of contention...
We have long shown that "investors" whatever that term means in the New Normal - those gullible enough to put their money in Bennie Madoff, pardon Bennie Bernanke Asset Management? - have been not only reluctant to put their money into stocks, but despite week after week of artificial, low volume highs, driven entirely by Primary Dealers (and now European banks post the $1.3 trillion in LTROs, not to mention even foreign Central Banks recently buying high beta stocks ) spiking the market ever higher courtesy of record reserves, but in fact continue to pull their cash out of the stock market with every thrust higher. Why, just last week another $1.4 billion in cash was pulled from domestic equity funds, nominal Dow 13,000 be damned.
Yves here. This post from MacroBusiness provides a good point of departure, and I’ll provide some comments further down. By Sell on News, a global macro equities analyst. Cross posted from MacroBusiness A little known fact about John Maynard Keynes, detailed in Jane Gleeson-White’s book “Double Entry” is that he was responsible for the development of national economic statistics and that he expected them to be aggregated only on a temporary basis. It was being done for the war effort, and would, he reasoned, not be necessary afterwards.
Hawtrey on the Interwar Gold Standard I just got a copy of Ralph Hawtrey’s Trade Depression and the Way Out (1933 edition, an expanded version of the first, 1931, edition published three days before England left the gold standard). Just flipping through the pages, I found the following tidbit on p. 9. The banking system of the world, as it was functioning in 1929, was regulated by the gold standard.
Polly Toynbee says something very sad in the Guardian today . In talking about the Labour opposition in the UK, she writes They have lost the Keynesian argument (for now): the paradox of thrift is just too paradoxical for the public.
C.P. Chandrasekhar and Jayati Ghosh There is a palpable sense of gloom and impending doom in most discussions of the world economy today. Even before, several economists had argued that the excessive optimism about ”V shaped recovery” that was being used to describe the economic revival in 2010 was premature and misplaced, especially as none of the fundamental contradictions of global capitalism that led to the previous crisis had been adequately addressed. But they were once again written off as Cassandras by the financial media, which desperately sought sources of ”good news” and future engines of growth particularly among the emerging markets. Now even the most stalwart establishment voices are expressing growing concern and pessimism.
Olivier Blanchard, top economic honcho at the IMF (not the impossible mission force), says things are bleak and here are his four lessons from the crisis (brace yourself): "First, post the 2008-09 crisis, the world economy is pregnant with multiple equilibria—self-fulfilling outcomes of pessimism or optimism, with major macroeconomic implications. Second, incomplete or partial policy measures can make things worse. Third, financial investors are schizophrenic about fiscal consolidation and growth.
I've noticed in discussions--in person, on Facebook, and in blogs--how hard it is for most people to see that opposition to having the government subsidize or require activity X does not mean that one opposes activity X. Frederic Bastiat addressed this in his classic article, "What is Seen and What Is Not Seen." He wrote [Paragraph 1.63]: But, by an inference as false as it is unjust, do you know what the economists are now accused of? When we oppose subsidies, we are charged with opposing the very thing that it was proposed to subsidize and of being the enemies of all kinds of activity, because we want these activities to be voluntary and to seek their proper reward in themselves. Thus, if we ask that the state not intervene, by taxation, in religious matters, we are atheists.
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph CAMBRIDGE – I have been presenting my new book The Globalization Paradox to different groups of late. By now I am used to all types of comments from the audience. But at a recent book-launch event, the economist assigned to discuss the book surprised me with an unexpected criticism.
Imagine a vast field on which a terrible battle has recently been fought, the bare ground cratered by fusillade after fusillade of heavy artillery, trees reduced to blackened stumps, wisps of toxic gas hanging in the gray, and corpses everywhere. A terrible scene, made worse by the sound of distant laughter, because somehow, on the heights commanding the dead zone, the officers’ club has made it through intact. From its balconies flutter bunting, and across the blasted landscape there comes a chorus of hearty male voices in counterpoint to the wheedling of cadres of wheel-greasers, the click of betting chips, the orotund declamations of a visiting congressional delegation: in sum, the celebratory hullabaloo of a class of people that has sent entire nations off to perish but whose only concern right now is whether the ’11 is ready to drink and who’ll see to tipping the servants.
James Koutoulas, one of the founders of the Commodity Customer Coalition — which represents the interests of over 8,000 MF Global customers, was just on CNBC to talk about the recent blitz of news on the investigation into MF Global's missing customer money . Koutoulas addressed a bank that's been popping up a lot in the investigation: JP Morgan . Reports this morning addressed emails that were sent between JP Morgan and MF Global in the brokerage firm's last days, and also the legality of a previously reported $200 million transfer from MF Global to JP Morgan. Last week, it was announced that JP Morgan's involvement in the MF Global debacle would be investigated .
During two days of recent congressional hearings into how as much as $1.2 billion disappeared from MF Global customer accounts, the chief operating officer of the imploding investment firm responded again and again that he did not know. Yet as the House and Senate interrogated Bradley I. Abelow and other top executives at MF Global Holdings Ltd. , lawmakers did not mention Mr. Abelow ’s role as a financial adviser for the Environmental Protection Agency , which as of Tuesday listed him as the chairman of its financial advisory board. Even as he finds himself the public face of a bankruptcy and admitted to lawmakers that he had no idea how client funds disappeared, Congress and the administration have voiced no public concern about Mr. Abelow ’s role advising the $8.6 billion government agency on its finances.
Last Thursday, the ECB announced that it would not be raising the policy interest rate, and hinted strongly that it would not be raising the rate in June either. This latter was a surprise, and Mr. Market did not like it much, as reflected in the slide of the euro against the dollar. ( Here is an interview I did about the ECB decision that was taped Thursday morning.)
October 3, 2011 Recession, Restructuring, and the Ring Fence John P. Hussman, Ph.D.
The "New" normal
Trendy economic subjects
<img alt="Photo: Jessica Dimmock" src="/magazine/wp-content/images/20-01/mf_neuwirth_qa_f.jpg" title="Soon, two-thirds of the world's workers will be part of street economies, Neuwirth says." width="660" height="534" /> Soon, two-thirds of the world's workers will be part of street economies, Neuwirth says. Photo: Jessica Dimmock Not many people think of shantytowns , illegal street vendors, and unlicensed roadside hawkers as major economic players. But according to journalist Robert Neuwirth, that’s exactly what they’ve become. In his new book, Stealth of Nations: The Global Rise of the Informal Economy , Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers.
Réflexions sur la création monétaire