The Fed will use these power tools during the next big recession

Summary: Six years after the recession ended, we are due for another recession. Many experts say that the government is “out of bullets” to fight the next severe downturn. That’s quite false because 2008 marked the start of a new era in which our leaders manage the business cycles using strange and awesome tools. We’ll … Continue reading The Fed will use these power tools during the next big recession

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Updating the recession watch; & what might the government do to fight a slowdown?

Summary: The economic data continues to darken. Let's review the situation -- updating the recession watch -- and guessing what might be the government's response to a recession. It's an era of new normals, so we should expect steps that would have been considered incredible or even mad a decade or two ago.  {1st of … Continue reading Updating the recession watch; & what might the government do to fight a slowdown?

Let’s ignore another warning from the BIS. Do we enjoy paying for burst bubbles?

Summary: As one market after another drifts off into bubble valuations, a few institutions warn of the consequences. As usual (we've done this so many times), we ignore them -- our passivity and ignorance earning our role as the deep pockets paying for the resulting damage. This post looks at a few of the warnings … Continue reading Let’s ignore another warning from the BIS. Do we enjoy paying for burst bubbles?

Today began the next phase of the great monetary experiment, as reality plays a trump card.

Summary: Today began the next phase of the great monetary experiment, the collision of Central Bankers' bold promises with reality.  History suggests skepticism about the odds of CB's success (e.g., see the many unbreakable currency pegs and unions which broke). Today the Swiss National Bank folded its cards. Here we discuss the significance of this … Continue reading Today began the next phase of the great monetary experiment, as reality plays a trump card.

2015 might bring an end to the great age of experts’ experiments on us

Summary: Beam us down to Earth on 31 December 2015. What will we find? My guess is that the massive experiments now underway by experts will have borne fruit, and we'll know if they were sweet or poisoned. Interesting times lie ahead, and none can say how they will end. Contents The age of experts' … Continue reading 2015 might bring an end to the great age of experts’ experiments on us

For Japan there is no road but to an economic recovery

Summary: the most contrarian thing you'll read today. Japan was a big story in 2014. The hopes for its rise -- quickly crushed -- created ripples around the world. Today's post features an article by an expert asking if a new phase in its recovery story will unfold in 2015. A recovery in Japan would … Continue reading For Japan there is no road but to an economic recovery

Richard Koo gives a “Post-QE forecast: sunny, cloudy, or stormy?”

Summary: Prosperity, perhaps even survival, in the 21st century might require learning which experts we should listen to. In economics its a short list, if we limit it to people who have understood large aspects of the great recession and the aftermath.  Richard Koo certainly deserves to make that short list. Here he tells us … Continue reading Richard Koo gives a “Post-QE forecast: sunny, cloudy, or stormy?”