In February, when Ben Bernanke gave his report to Congress, he spoke of his concern about "Excessive risk taking". On May 10 he repeated his warning: very low interest rates, if maintained for a considerable time, could impair financial stability. For example, portfolio managers dissatisfied with low returns may “reach for yield” by taking on more credit risk, duration risk, or leverage. So what is Ben talking about? What does it mean when he says "reach for … [Continue reading]
Sunday, May 19, 2013
CBO – US Economy Set to Soar On Obamacare?
The Congressional Budget Office put conservative economic thinkers on their ass this week. In this Report (pdf), the CBO concluded that the US budget deficit is about to collapse to insignificance. The improvement in the deficit outlook is so … [Continue reading]
Saturday, May 11, 2013
Bernanke Takes a “Leak”
How about Bernanke's communication policy? The most important development for monetary policy in the last four years comes from a planted story in the Wall Street Journal on a Friday night. While I'm not surprised, I'm still disgusted. Press … [Continue reading]
Wednesday, May 8, 2013
This and That
Question for Bernanke Two charts from the CBO, then a question. No surprise in this chart. 11m people are in the US illegally. 8.5m are from Mexico or Central America. This one was a … [Continue reading]
Monday, May 6, 2013
SS Report Due Out This Week
The Social Security Trust Fund annual report to Congress is due out this week. It will be discussed in the Press for a few days. Some of the things that will come up: - The NPV of the unfunded liability will go up by approximately $2 … [Continue reading]
