Tuesday, June 15, 2010
Interestingly, the Greek ratings downgrade seems not to have rattled markets. A friend emailed me Merkel's gloomy comments, which makes me think, who will exit first?
Martin Wolf outlines how to solve Japan's debt problem. I agree with all he says, but a Turkish Central Banker from the late 80s, early 90s would have worked much better for creating inflation.
It is amazing what you can miss by being away from the blogosphere and markets.
Now that we have bashed capitalism, it is time to defend it. Mark Tahoma is right in noting that there is a difference between trying to improve the current system and leaving it altogether for an alternative. For the latter, the famous Churchill phrase comes to mind: Democracy is the worst form of government except all those other forms that have been tried from time to time.
As anyone who has spent some time in the US would know, Americans just love their trucks, so the economy must be right on track...
BIS on bank exposures (via Calculated Risk)
It is natural that women love state bonds, or rather men who hold state bonds; 007 worked for the state, right?
Mark Tahoma summarizes the competing views (and links to an article) on Fed's exit strategy. Calculated Risk takes on the same Fed paper.
Now that I am thinking about the fiscal austerity debate, I think I know where the confusion lies: The optimal fiscal response is quite different for EM and developed countries. That's why students of Econmics get confused when they see the Keynesian model does not work for developing countries. But what has bee going on is that, because of the emerging fiscal worries in developed countries, they have been forced to behave like EM, while the EM have got close to the standard undergraduate Keynesian framework. Am I making sense or just blubbering because of sleep-deprivation?
The perfect article for an economist and journalist wannabe like me.
Gold: Inflation or safe-haven?