Like many economists, I do not expect the U.S. economy to rebound briskly from its current troubles. The economy may well return to positive growth in the third or fourth quarter, as many forecasters anticipate, but that doesn’t mean that the suffering is over. In short, I don’t expect the recovery to be a V, with recent declines offset by a rapid recovery. Nor, for that matter, do I expect a Japan-like L, in which the economy flattens at its new low level. Instead, I expect a Long U, in which the economy heals slowly before eventually returning to solid growth.
Archive for May, 2009
The Long U
Posted in Macroeconomics, tagged Great Depression, Macroeconomics on May 30, 2009 | 4 Comments »
The Berkshire Anomaly
Posted in Finance, tagged Arbitrage, Berkshire Hathaway, Finance, Stock Market on May 30, 2009 | 3 Comments »
Readers seemed to enjoy my post about anomalies in the pricing of Citigroup securities, so I thought it would be fun to look at another anomaly, this time in the shares of Berkshire Hathaway, Warren Buffett’s famous company. This pricing anomaly is small compared to the Citigroup one. But it does raises some interesting questions [...]
Drawing the Line on Health Insurance
Posted in Budget, Health, tagged Budget, Health on May 29, 2009 | 11 Comments »
Some of CBO’s most important decisions involve principles, not numbers. For example, CBO has to decide when proposed policies should be treated as part of the government — and thus be recorded on the budget for Congressional purposes — and when not. Many calls are easy. But then there’s health insurance reform.
What a Strange Round Trip It Has Been
Posted in Finance, Macroeconomics, tagged Finance, Interest Rates, Macroeconomics on May 28, 2009 | 3 Comments »
In the months after Lehman’s fall, yields on regular Treasuries plummeted in a massive flight to liquidity, while yields on less-liquid inflation-indexed bonds rose sharply. Those moves have reversed in recent months bringing both 10-year Treasury yields back to where they started.
A Plane Crash Averted?
Posted in Macroeconomics, tagged GDP, Great Depression, Macroeconomics on May 28, 2009 | 9 Comments »
The parallels between the lead-up to the Great Depression and the lead-up to today’s severe recession are eerie. Why do the economic costs today appear to be so much lower (knock on wood)?
Not the Great Depression 2.0
Posted in Macroeconomics, tagged GDP, Great Depression, Macroeconomics on May 27, 2009 | 43 Comments »
NEW UPDATE: For updated data and an even better discussion of the issues raised here, please start with this post from August 2, 2009. UPDATE: Please see two related posts: “The Long U” and “A Plane Crash Averted?” The Great Depression was an unspeakably bad time for the U.S. economy. I know that sounds obvious, [...]
Google: Master of the Auction
Posted in Auctions, Internet, tagged Auction, Google, Search, Wired on May 27, 2009 | 4 Comments »
People usually think of eBay as the master auctioneer of the internet age. As this month’s Wired points out, however, Google is the real master.
Auction the TARP Warrants
Posted in Auctions, Finance, tagged Auction, Banks, Finance, TARP, Warrants on May 26, 2009 | 10 Comments »
Treasury should give up on negotiated sales and simply auction the bank warrants it received through its TARP investments. Auctioning the warrants will enhance the transparency of the process, ensure that taxpayers get a fair return on their investment, free banks from the nuisance of government involvement, and allow banks, if they choose, to preserve needed capital.
The Citigroup Anomaly
Posted in Finance, tagged Arbitrage, Banks, Citigroup, Finance, Stock Market, TARP on May 26, 2009 | 11 Comments »
Something is amiss in the market for Citigroup securities: prices are out-of-whack with standard arbitrage relationships. This suggests that (a) recent financial turmoil — or, perhaps, the policy responses to it — have undermined market efficiency and (b) some investors are over-paying.
Welcome
Posted in Blog Admin on May 25, 2009 | Leave a Comment »
Welcome to my new blog. This is an experiment. I intend to use the blog to share thoughts on economics, finance, and, occasionally, life. But we will see how it evolves. Feedback is appreciated. Please click on over to the contact form if you’d like to share any thoughts on the blog, on the economy, [...]
Most Requested
Twitter
Get Updates by Email
Get Updates by RSS
Share or Bookmark
-
Recent Posts
- How Much Does the United States Really Owe?
- Can One Professor Teach 500,000 Students At Once?
- Capital Gains Taxes Are Going Up
- The Natural Gas Glut is Reshaping Electricity Markets
- Oil and Natural Gas Prices Move Even Further Apart
- Getting Better But a Long Way to Go
- How Do Consumers Spend Engine Efficiency Advances? On Bigger, Faster Cars
- Lose an Election, Gain a Think Tank
- You Can’t Manage What You Don’t Measure Correctly, NYC Crime Edition
- Top Posts of 2011
- The Best Photograph of the Year
- Santa, Could You Please Give Me the Impossible?
- The Twelve Days of Christmas for Our Weak Economy
- The Most Important Economic Chart of the Year
- North Korea’s Economic Failure in a Second Picture
30-Second Economics
Tags
Categories
Archives
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
Translate this blog into
