tag:blogger.com,1999:blog-2546602206734889307.post465222010721926858..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: The power of financial marketsMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger60125tag:blogger.com,1999:blog-2546602206734889307.post-57658360491318089442015-03-18T23:38:22.558+00:002015-03-18T23:38:22.558+00:00"I suggest too many people view markets like ..."I suggest too many people view markets like a vengeful god"<br /><br />I have, half jokingly, described the market that way so many times. "She" is a vengeful God who demands to be respected or she will rain fire and brimstone down upon you. <br />Interesting the perspective of those who have actively participated versus those who take no risk but merely pontificate. Derivsnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-61372206734046726752015-03-17T12:52:38.286+00:002015-03-17T12:52:38.286+00:00Is your blog complaining about the "high prie...Is your blog complaining about the "high priests" of the market you engaged with on the night or the market itself?<br /><br />Railing against a couple of random mouthpieces is all good fun, we all do that. Railing against the market is like President Maduro of Venezuela complaining about speculators causing shortages. The financial markets no more caused the "largest recession since WW2" than speculators caused the shortages in Venezuela.<br /><br />Markets merely reflect an underlying situation, not cause it.James in Londonhttps://www.blogger.com/profile/08392235894752150063noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-45374733226214549802015-03-17T12:05:47.913+00:002015-03-17T12:05:47.913+00:00Well whenever I have to know something related to ...Well whenever I have to know something related to finance market, I ask straight forward from Dr. <a href="http://www.bloomberg.com/apps/news%3Fpid%3Dconewsstory%26tkr%3DDTPI:US%26sid%3DaZTU1mgVYTBg" rel="nofollow">Aloke Ghosh</a>. He really have vast knowledge of Finance and accounts. I must say if you have ever doubt related to accounts or finance then ask him.<br />Anonymoushttps://www.blogger.com/profile/14917382663698451692noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10522311150167125582015-03-17T10:53:07.017+00:002015-03-17T10:53:07.017+00:00@Anon 03:33
I think the onus is more on you to gi...@Anon 03:33<br /><br />I think the onus is more on you to give reasons why inflation might not be containable. Historically inflation of 3 or 4% is not that unusual, and episodes of >10% are very unusual. In an era of deflationary tendencies, why should we worry about inflation rising to 4%?gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-38900085878262794992015-03-17T10:33:12.507+00:002015-03-17T10:33:12.507+00:00gastro george17 March 2015 at 02:41
No problem ab...gastro george17 March 2015 at 02:41<br /><br />No problem about that. But what about inflation and containing it? That was my original point, which you have been avoiding. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-68024542399432777052015-03-17T09:41:28.205+00:002015-03-17T09:41:28.205+00:00@Anon 02:24
You take the manichean view that gove...@Anon 02:24<br /><br />You take the manichean view that governments could either not net spend or could/would spend as much as they like. I was taking the more nuanced view that it is entirely normal for governments to net spend. Of course this should not be excessive, but it is part of a normal healthy economy.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-64179111883825108842015-03-17T09:24:09.353+00:002015-03-17T09:24:09.353+00:00gastro george16 March 2015 at 08:39
If so, why do...gastro george16 March 2015 at 08:39<br /><br />If so, why do we ever have to pay taxes? Let governments borrow all they want for their expenditure (and spend even more on me).<br /><br />At least SWL is aware that governments do sometimes have to pay a part of their debt.<br /><br />His weakness is to think that, at the zero lower bound, fiscal stimulus (without monetary policy) is able to raise inflation to 4 % or more, and if inflation goes too far, ther will be no great problem in containing it.<br /><br />To believe that, you have to follow St. Augustine, bishop of Hippo: Credo quia absurdum (I have to believe it since it is absurd and so cannot be proved). Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-57356035027147294172015-03-17T09:14:15.426+00:002015-03-17T09:14:15.426+00:00Anon 7:57 -
Whereas the 'Austerity' argum...Anon 7:57 -<br /><br />Whereas the 'Austerity' argument is that my kids should simply be unemployed, or very poorly paid. This is emotive talking-point argument.<br /><br />The UK has serious infrastructure problems, from a lack of housing to a lack of transport links to a lack of power stations - and there is plenty more. And at the same time we have considerable unemployment and underemployment. The case for a large scale set of public works is rock solid from both these angles, and certainly a lot stronger than the case for austerity-driven stagnation.<br /><br />Andrewhttps://www.blogger.com/profile/02729454651003425550noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-92008955820357537462015-03-16T15:39:59.968+00:002015-03-16T15:39:59.968+00:00If you've not noticed, "public debt"...If you've not noticed, "public debt" is never "repaid" and, if it was, we'd have the mother of all recessions.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-7033126048273367582015-03-16T14:57:10.028+00:002015-03-16T14:57:10.028+00:00Andrew:
You don't read SWL very much, do you....Andrew:<br /><br />You don't read SWL very much, do you. He wants to bring about 4% inflation through fiscal stimulus, i.e. deficit spending, in other words raising public debt to be repaid by your children. And he also discusses the problem that that might lead to overshooting inflation and that it would then be necessary to rstrain it. He thinks that would be easy. Do you?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-76820385771799444652015-03-16T14:17:12.464+00:002015-03-16T14:17:12.464+00:00Anon 15:19 - 4% inflation would not be a problem. ...Anon 15:19 - 4% inflation would not be a problem. Indeed, for the many people out there with epic mortgages, inflation is about the only way out.. <br /><br />I would like to see these 'rules of political experience', other than the one where austerity leads to political extremes and instability. We got that one in the 1920s and 1930s, thanks, would like to avoid a repeat.Andrewhttps://www.blogger.com/profile/02729454651003425550noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-80094126753839493012015-03-16T14:11:29.767+00:002015-03-16T14:11:29.767+00:00" Blind faith is what it takes to think his s..." Blind faith is what it takes to think his system might work"<br /><br />Blind faith is what we being governed with now. Some say it is all we have ever been governed with.Johnmhttps://www.blogger.com/profile/14763363660123520529noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37859663478697162382015-03-16T13:22:29.607+00:002015-03-16T13:22:29.607+00:00Clayton Christensen of Harvard Business School use...Clayton Christensen of Harvard Business School uses similar religious terminology:<br /><br />"Why is financial capital flowing disproportionately to innovations that do not produce jobs? I think the roots lie in a powerful new belief system. About 40 years ago some people established what I describe as a new church. I call it the New Church of Finance.<br /><br />The members of this church are finance professors at business schools, a lot of economists and the partners in hedge funds and private equity funds. I call it a church because it has many of the characteristics of a well-catechized belief system. For those committed true believers within this “church” it is inconceivable that the catechism isn’t true."<br />http://treasureislands.org/financial-ratios-and-the-new-church-of-finance/<br />(I tried to post this comment earlier but it didn't seem to work; apologies if it's appeared twice.)Nicholas Shaxsonhttps://www.blogger.com/profile/16975154273054074389noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-53956378876141808712015-03-16T11:04:51.589+00:002015-03-16T11:04:51.589+00:00"Or alternatively, you could consider that th..."Or alternatively, you could consider that the Coalition government's policy of Austerity was trying to deliver what the people of the country had asked them to do by voting them in."<br /><br />This is highly misleading I think. First of all they did not have a majority, so saying they were doing the will of the people as a whole is wrong. Secondly, if you look at their 2010 manifesto, nowhere will you find a commitment to making drastic cuts in public spending.<br /><br />http://news.bbc.co.uk/1/hi/uk_politics/election_2010/8617433.stm<br /><br />"Economic measures include the big early issue in the election campaign - the plan to reverse the government's proposed National Insurance rise - and promises to raise the inheritance tax threshold to £1m, freeze council tax for two years and to increase NHS spending in real terms every year."<br /><br />Feel the austerity!Samhttps://www.blogger.com/profile/06743143177414830201noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-84714522686497837332015-03-16T10:59:59.234+00:002015-03-16T10:59:59.234+00:00" But one thing that may colour the result is..." But one thing that may colour the result is that, unlike previous recessions, the smallest losses in terms of income, wages and take home pay has been amongst the people who started off in the worst position. "<br /><br />People with nothing have the least to lose. Also, where you write "real wages rose across the piece" -- I'm not sure what you mean by "the piece" but real wages have fallen substantially since the recession:<br /><br />http://www.ons.gov.uk/ons/rel/elmr/an-examination-of-falling-real-wages/2010-to-2013/art-an-examination-of-falling-real-wages.html#tab-Recent-trends-in-real-wage-growth<br /><br />Samhttps://www.blogger.com/profile/06743143177414830201noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-75522618453651494532015-03-15T22:19:52.099+00:002015-03-15T22:19:52.099+00:00There is high comedy in SWL's accusing others ...There is high comedy in SWL's accusing others of being high priests when he is himself the high priest of his own macroeconomic religion: He believes that fiscal stimulus can flood the economy until we have 4% or more inflation, and then it will be a mere technicality in containing or reducing it. So SWL not only giveth but the taketh away the punchbowl. I do not want to hear the screams of the unemployed when he does a Volcker on them or think of the suicidally minded government that might follow his recommendations. To ignore the rules of political experience as he does requires a sacrifice of intellect worthy of his faith. Blind faith is what it takes to think his system might work.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-38689343852047476322015-03-15T18:52:04.482+00:002015-03-15T18:52:04.482+00:00And you can get margaritas, yeah.And you can get margaritas, yeah.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-78639878707914859672015-03-14T15:05:15.664+00:002015-03-14T15:05:15.664+00:00JD, whatever market participants were saying on te...JD, whatever market participants were saying on television/radio, they were drving British sovereign bond prices down. As you point out, look to their actions and not pay too much attnetion to their posturing. Anonymoushttps://www.blogger.com/profile/00040408582097904554noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-259218194330088472015-03-14T14:19:38.867+00:002015-03-14T14:19:38.867+00:00I agree with you that the market can behave irrati...I agree with you that the market can behave irrationaly. (and often do)<br /><br />The answer should be austerity, just depend less on the "high priests" chaos.Portal Emprestimohttp://www.portalemprestimo.com.br/financiamentonoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-40324568645425187742015-03-14T11:53:35.875+00:002015-03-14T11:53:35.875+00:00Only read the first para:
"After all, the ex...Only read the first para:<br /><br />"After all, the excesses shown by participants in those markets had caused the largest recession since WWII. (Not to mention a constant stream of cases of illegality and mis-selling.) However I wondered yesterday if the opposite might be true."<br /><br />In case you haven't realized by now: Dear SWL, with your debt socialism approach you are a lobbyist of the financial markets.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37544459190375151862015-03-14T10:21:22.928+00:002015-03-14T10:21:22.928+00:00Maintaining the value of the Pound was to prevent ...Maintaining the value of the Pound was to prevent importing inflation when a country has a negative current account with the rest of the world.<br /><br />The process means you are forming a currency union with a foreign currency; like the Eurozone countries have done. Sovereign fiat currency economies are not designed to be pegged to other currencies, it negates the whole point of having a fiat currency. You might as well go back to the Gold Standard.<br /><br />Africa 19 fixed currency countries; 14 of them using the CFA franc that is pegged to the Euro currently, acting as a currency union for these small economies. Large exporters of oil, tend to peg to the currency oil trades in, with 7 Middle East countries all pegged to the US Dollar.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-63263243624286346922015-03-14T08:10:25.490+00:002015-03-14T08:10:25.490+00:00At the last count, Zimbabwe was using five differe...At the last count, Zimbabwe was using five different currencies, mainly the US Dollar and the SA Rand. Its own currency was suspended in 2009. Have a read of 7DIF, for a detailed explanation of how it is not possible for a fiat currency issuing government to go broke in its own currency.<br />moslereconomics.com/wp-content/powerpoints/7DIF.pdf Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-84767002191236364492015-03-14T00:17:07.653+00:002015-03-14T00:17:07.653+00:00It's victory day for macro-economists and thei...It's victory day for macro-economists and their models. Just consult your ISLM gadget or your rational expectations model with sticky prices and everything will be fine. We can ignore history, we can ignore all knowledge we have about what actually goes on and just have faith in these...what?<br /><br />Clearly there has been a failure in the education system somewhere for things to get to this level of farce. And didn't we learn anything about the consequences of hubris from recent events?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-62573205983939206572015-03-13T23:43:47.254+00:002015-03-13T23:43:47.254+00:00(disclaimer - academic/Prof. in computational deci...(disclaimer - academic/Prof. in computational decision theory): I wish people would stop using the word “irrational” when they really mean “behavior other than what I would want”. “Rational” as defined by decision theorists is dependent: (1) on your preferences, which do NOT have to be EMV, even if we could all agree on an appropriate discount rate; and (2) infinite computational resources (infinite time horizons and an infinitude of potential factors in the real world, most of which we can’t estimate, make the computational challenge…interesting). NorthwestWinterhttps://www.blogger.com/profile/01156317908928360107noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-1457886956060018222015-03-13T20:52:49.412+00:002015-03-13T20:52:49.412+00:00that's may be fine if you are the UK or anothe...that's may be fine if you are the UK or another developed nation, but I don't think they would be interested to buy mansions in Zimbabwe.<br />Your claim that countries who issue currency ''Can never be insolvent or forced to default in its own currency'' is questionable and much depends what country we are talking about and differs per case.Anonymousnoreply@blogger.com