Kudos to Christine Lagarde
Vivian Darkbloom sent me the following:
The International Monetary Fund underestimated the strength of the U.K. economy when warning against the government’s austerity program, Managing Director Christine Lagarde said.
“We got it wrong,” Lagarde told the “Andrew Marr Show” on BBC Television yesterday. “We acknowledged it. Clearly the confidence building that has resulted from the economic policies adopted by the government has surprised many of us.”
A year after the IMF’s chief economist, Oliver Blanchard, said U.K. budget cutting risked “playing with fire,” the Washington-based lender said in April the U.K. economy will grow 2.9 percent this year, the fastest pace among the Group of Seven nations.
Pressed by Marr on whether she had apologized to Chancellor of the Exchequer George Osborne, Lagarde stopped short of saying so and said “Do I have to go on my knees?”
Paul Krugman often complains that he can’t find anyone to admit they were wrong about austerity. Here’s a nice example—I wish there were more.
Tags:
9. June 2014 at 13:36
Krugman wants people to admit that austerity made things worse, not the other way around.
9. June 2014 at 15:15
@meets:
That’s the joke.
9. June 2014 at 15:33
For the record, I want DeKrugman to go on his knees.
9. June 2014 at 16:11
Regarding Krugman: Is there any more clear example of political ideology posturing masquerading as “empirical evidence”? It’s almost as if he sees what he wants to see.
My favorite part:
Give me an example of a strong economy and Krugman clamouring for fiscal austerity and reckless deficits and spending while a Democratic President is in office.
9. June 2014 at 16:12
But of course ‘austerity’ might not have anything to do with this and ‘less wrong monetary policy by the Bank of England’ instead have *a lot* to do with it.
9. June 2014 at 16:30
I hereby eschew Market Monetarism. I am now a rabid Monetary Expansionist. Enough! Enough dainty pussyfooting.
Gun the presses.
9. June 2014 at 16:34
The UK hasn’t had austerity. They just said they would. Legarde needs UK support for a presidency bid.
Marr is *the* goto BBC guy for a very easy interview. It’s not like he beat this out of her. All Marr interviews are finalised in advance.
Really this shows a lack of local knowledge.
9. June 2014 at 16:37
lol burned! Not that I necessarily agree with the reasons given in Lararde’s apology or that Krugman got it all wrong but still Krugman must be feeling the heat.
It seems it is the UK’s central bank that deserves the credit here.
9. June 2014 at 16:41
Blair pioneered “the apology”. When all you have is naked ambition and no contrition apologies are a free lunch.
9. June 2014 at 18:09
Meets = + 0.5
Pietro = + 1
Ben = + 45, pending verification of local conditions.
9. June 2014 at 19:13
Everyone, Yes, it was the monetary stimulus, not the austerity. But let’s not forget that Krugman argued monetary stimulus would not offset the effects of fiscal austerity. Recall the famous 2013 “test of market monetarist views.”
9. June 2014 at 20:10
The UK has a fake recovery due to misallocation/printing into housing and deficit spending. It won’t last.
Why is UK housing so high? They can’t create productivity growth and don’t want to print, so they print by “forgetting” to regulate the banks.
Go on Scott, change your money into GBP – it’ll be *fine* 🙂
It’s a real recovery everyone! Yay!
9. June 2014 at 21:55
The UK recovery certainly DOES NOT PROVE that Krugman wrong. The UK is recovering because the UK government is subsidising private bank lending via schemes like “Help to Buy”. And then of course there have been further subsidies for private banks in the form of the billions that the UK government dished out to stop a total collapse of the private banking system at the height of the crisis.
That’s certainly one way of bringing stimulus. But subsidies, as it explains in the introductory economics text books, misallocate resources, unless there is some very good social justification for the subsidy.
10. June 2014 at 01:20
Completely off-topic, but when exactly did ZeroHedge go completely insane ?
http://www.zerohedge.com/news/2014-06-05/abenomics-legacy-greatest-misery-33-years
10. June 2014 at 04:22
Larry Summers on Mian and Sufi:
http://www.ft.com/intl/cms/s/2/3ec604c0-ec96-11e3-8963-00144feabdc0.html#axzz33rbkJUsd
Mark / Scott, question…
My preferred solution was using MERS to do a “painless” liquidation.
1. Because of invalid title claims (MERS), it is / was easy to argue keeping the trade line on the credit reports of the foreclosed was illegal.
2. There is / was an infinite supply of private equity ready to acquire Single Family home stock, as long as the predicted rental rates generates a 5% cap return yearly regardless where future home appreciation is not part of equation (thats gravy). Basically, as long as renting is a break even investment at approx. 62% of monthly rent (that gets you your 5% annual return), PE will buy and hold homes for long term.
3. Taken together, this would have allowed the underwater to simply move out (jingle mail), find an rental, and have a clean credit score.
4. It could have even been legislated to say credit line clean after 2 years etc.
Basically, we’ve only had 500K homes acquired by PE since the crisis began (many others were bought by smaller landlords), they bought at FULL GUSTO when prices on homes fell to get them a 8% CAP, they stopped buying when the home prices went up enough, that a 4% CAP was all thats possible.
In many markets PE bought more than half the available liquidated stock.
At 5%+ CAP, the demand could EASILY be 3 or 4M homes acquired by PE.
In my mind, that’s the great sin here.
The PE guys are serious investors, and they are just as able to acquire banks (equity) that are seeing the foreclosed flee their homes, as they are able to acquire the homes the banks that are selling.
In my mind there’s not really a crisis UNTIL the PE guys stop wanting to buy foreclosed homes at a 5% CAP.
PE buys home after home, until the banks have gutted down all their current equity holders to $.10 a share, then PE acquires the banks, because they are looking at the banks remaining housing stock on the based on rental value.
Yes setting NGDPLT at 4% would keep things from getting bad, but looking at Summer’s specific defense, whats wrong with my solution?
10. June 2014 at 04:24
Ben,
“The UK has a fake recovery due to misallocation/printing into housing and deficit spending. It won’t last.”
According to the latest IMF Fiscal Monitor, after pausing in 2012 UK fiscal policy continued to be contractionary. The cyclically adjusted primary balance (CAPB) increased by 1.0% of potential GDP in calendar year 2013 and is forecast to increase by 0.4% in 2014 and another 1.0% in 2015 (bottom of Table 2):
http://www.imf.org/external/pubs/ft/fm/2014/01/pdf/fm1401.pdf
And according to the ONS’s latest “Low Level Aggregates” estimates (May 22), building construction (SNA sector F41) is up from £8,104 million (2010 pound sterling) in 2013Q1 to £8,539 million in 2014Q1 at a quarterly rate whereas RGDP is up £378,439 million in 2013Q1 to £390,257 in 2014Q1. So bulding construction is up 5.4% year on year, and real GDP is up 3.1% year on year. Increased building construction accounts for only 3.7% of the change in RGDP which is only slightly more than its 2.2% share of RGDP.
In other words, 96.3% of the change in RGDP in the last year is due to things other than building construction.
So, if none of your basic economic facts are true, why should I believe anything else that you say?
10. June 2014 at 04:35
Ralph Musgrave,
“The UK is recovering because the UK government is subsidising private bank lending via schemes like “Help to Buy”.”
According to the ONS “loans secured on dwellings by UK MFIs” is up from £1,225,593 million in 2012Q4 to £1,234,247 in 2013Q4 or by 0.7%. In contrast NGDP is up from £395,415 million
in 2012Q4 at a quarterly rate to £411,259 million in 2013Q4 or by 4.0%.
Please explain to me how mortgage loans are the one thing driving the UK recovery when they are barely growing at all, and building construction has only contributed 3.7% to RGDP growth in the past year (see my previous comment).
10. June 2014 at 04:39
Daniel,
“Completely off-topic, but when exactly did ZeroHedge go completely insane ?”
Prove it has ever been anything else.
10. June 2014 at 04:57
Morgan, What is MERS? I have no problem with “PE guys” buying foreclosed homes.
Mark, These people just KNOW their ideas are correct. Facts get in the way of clear thinking. 🙂
10. June 2014 at 05:13
MERS is the mortgage electronic registration system. It was invented to move chain of title electronically instead of filing docs with the county recorder every time a loan is sold. It is legal but some people have a hard time with it for some reason.
It is also, coincidentally the name of a new virus that came from camels.
Housing construction in the UK is depressed. Housing costs are too high and is starting to sap British disposable income. They, like the US, could use a small construction boom.
10. June 2014 at 05:22
Mark,
Well I don’t know, I don’t end up there very often.
Today I did, and found myself knee-deep in insanity.
Has it always been like that ?
10. June 2014 at 05:27
Daniel,
Yes, Zero Hedge has always been insane to its core (although I must admit from time to time I have used some of their graphics with my own text).
10. June 2014 at 05:48
Thanks Benny, I knew about the camel virus. That British data (high prices, low construction) suggests supply-side problems, due to zoning I presume. I know the British are keen on preserving their countryside.
10. June 2014 at 07:10
Mark – housing doesn’t just effect construction. A “booming” market creates a perception of wealth. People spend down their savings (as is happening) thanks to the magic piggy bank that is housing.
You could have made the same argument leading up to 2008 under Labour’s “no more boom and bust”. It looks like a real economy because housing money leaks into all sectors. But it’s not going to stick around.
We’ve been here before when the last government tried and failed to create real growth and so said “sod it, let’s pump housing”. Public debt is way up also. There has been no real austerity.
Car “sales” are also way up off the back of PPI compensation and mad credit “deals”. Mortgage lending multiples are up as people go into more debt to buy the same pile of bricks.
2007 looked legit, I don’t think you can just look at your GDP figures and see whether the economy is sustainable. Nothing has changed since the crisis.
10. June 2014 at 07:27
Everyone, say hey to Ed;
http://www.edwardconard.com/piketty-overlooks-the-circumstantial-nature-of-economics/
‘What puzzles me is how Piketty, after apparently recognizing Kuznets’ failure to see the circumstantial nature of his not-so-universal “truth,” failed to recognize the circumstantial nature of his own supposed “law.” Businessmen and chess players recognize something frequently lost on economists: “universals” are predominantly probabilistic generalizations that are dependent on the likelihood of the circumstances that make them true. A queen, for example, is more valuable than a pawn because in most circumstances it is so. Nevertheless, there are cases where a pawn is more valuable. Except in the hard sciences, generalizations may help to guide our decisions, but circumstances ultimately determine the truth.
‘Scott Sumner offers a clue to Piketty’s naiveté. Sumner complains that Piketty sees Kuznets’ theory as intentionally crafted propaganda”””a product of the Cold War,” according to Piketty-rather than a well-intended theory that unwittingly overlooked the circumstances that made it true. After rereading Kuznets, Sumner concludes, “Nothing could be further from the truth. If anything, Piketty himself seems more like the scholar who makes excessive claims for his model.”’
10. June 2014 at 07:32
Benny Lava, do you work in the mortgage industry?
MERS was CLEARLY illegal as construed. Chain of title is a states rights issue. And a single mistake, where there were gazillions, can invalidate everything going forward.
Unless you have a dog in the fight (I don’t) you’d agree with this. It’s not that using MERS automatically breaks title, but the way they did it sure the hell did.
10. June 2014 at 08:49
Mark and Daniel:
I notice a conspicuous absence of any substantive or documented criticism of that Zero Hedge post from either of you. Is that just a coincidence? I mean, the author of that post could just as easily have called you insane, but where would that get anyone, other than serving to give just another short lived psychological fix?
I honestly believe the both of you are not only insane, but mentally defective, but that doesn’t lead me to only say that. At least I actually address the specific arguments you clowns are making.
10. June 2014 at 09:28
Morgan,
Glad to hear that. I thought MERS was horrible.
10. June 2014 at 10:04
Morgan, I think you are confused about MERS.
Chain of title to real estate is governed by state law, but that is somewhat beyond the point. MERS does not per se involve registration of *title* to real estate; as the acronym suggests, it is a a system to electronically register the beneficial ownership of *mortgages*. (MERS stands for Mortgage Electronic Registration Systems”).
It’s unclear to me what, precisely, your objection to MERS would be as “clearly illegal” from its inception. I guess your comment suggests two possibilities:
1. MERS is (clearly?) illegal as construed because a private corporation cannot dictate how mortgages are registered, but, more precisely and importantly, how the beneficial interest can be transferred among subsequent holders (that is primarily a matter of state law). But, I think this is sidestepping the issue. Clearly, predominately state law governs the creation, transfer, assignment and proper registration of mortgages (which, in turn, may affect “title”). However, you are assuming that the way MERS was construed (clearly) violates existing laws. Briefly put, MERS is an electronic registry system under which MERS (the corporation) acts as nominee for the beneficial owner of the mortgage. This enables more efficient and less expensive financing of home loans.
Based on a rather cursory review of the case law to date (and there have been quite a few challenges to MERS), my rough tally would be that MERS has won about 9 out of 10 challenges it has faced (not a bad track record for something that was “clearly illegal as construed”). Generally, those who have attempted to challenge MERS—generally, delinquent mortgage borrowers– have not done so because they dispute there is an outstanding mortgage on their real property, or the amount of that mortgage, or that the title to real property is encumbered by a mortgage; they challenge because they see the opportunity to assert a technical objection as to who has standing to sue in order to escape the obligation to make mortgage payments or to thwart a foreclosure action. Note here that these disputes have primarily centered around standing to sue and not title, as such, to real property.
2. MERS was “clearly illegal as construed” because a “single mistake… can invalidate everything going forward”. I’m not sure what the legal objection would be here—every recording system is subject to error, and I’m not sure MERS is more susceptible to error than historical scriveners, such as, say, Bartleby or Farrington. If there is a problem with proper registration of the transfer of the beneficial ownership of a mortgage loan, it would seem to me that, as a practical matter, this should be of concern to those in the chain of mortgage holders, rather than the debtor or nominal owner of title to the real estate.
Since you are from Texas (apparently), I thought you might be interested in the following article titled “MERS Handily Beats Texas Lawsuit”:
http://www.housingwire.com/articles/29209-mers-handily-beats-texas-lawsuit
PS. I don’t have a dog, or even a cat, in this fight.
10. June 2014 at 11:12
Mark, this is a hopeless fight, in the UK many people truly believe that house prices determine the level of RGDP. The logical consequence is that we should use monetary policy to target the house price index of course, but I can’t get anybody to agree with me on that.
10. June 2014 at 11:22
Vivian,
Start here:
http://documents.jdsupra.com/9e461996-08a3-4eac-9aad-72f80ee52e66.pdf
I’m not in anyway disagreeing with your defense of MERS, I’m saying THAT was the legal loophole to save the economy while screwing the banks and letting the guys with dry powder run the table. I have always been a liquidation advocate.
1. Let 4M underwater homeowners out with promise that in 2 years of whatever they can have trade-line removed.
2. Inventory of homes floods back to banks without any legal recourse on homeowners.
3. Home prices are supported as PE comes in an buys 4M homes and then buys banks for pennies on dollar.
Whole thing done by 2011.
10. June 2014 at 11:31
“Paul Krugman often complains that he can’t find anyone to admit they were wrong about austerity. ”
I often complain that I can’t find “anyKrugman” to admit they were wrong about monetary offset.
10. June 2014 at 11:48
Morgan,
With all due respect, you are obfuscating. So, MERS is not “illegal” or (much less “clearly illegal”? And the title system isn’t being messed up as you originally claimed?
I’m assuming that you are internet savvy and able to do some quick research on the “title issue”; So, here’s what I would ask: Can you come up with any instances in which the amount due on a mortgage registered under MERS *has actually been paid” and subsequently the title to that real property was called into question because of MERS?
The next thing I expect that will be challenged (in order to save the economy and the housing market, of course) will be that student loan borrowers won’t be required to repay their loans because the system for registering the beneficial holders of those notes is electronic and therefore unreliable and/or illegal. But, wait. Heck, maybe they just shouldn’t need to pay if the payments exceed 10 percent of income, etc., etc. I saw the latter one coming.
Morgan, you like to give the impression you are a realist—well, here’s the reality. People are using this as a smokescreen not to pay their bills. Politicians are using it as a smokescreen to get votes. It’s a great vote getter. You get votes for enabling folks to get the loans and you reinforce that later by saying they don’t have to pay. This has *nothing whatsoever* to do with reliablity of title or the legality of a registration system (“clearly” or not).
As to your list. it’s bogus. I can come up with a list of 10 “potential problems” for anything Have you noticed how journalists now tend to create “lists” for nearly every topic they write about to meet their quotas? Hopefully, the title will contain an even number like “10 Reasons the Objections to MERS are Bogus”. It sells copy!
10. June 2014 at 11:57
Britmouse,
“The logical consequence is that we should use monetary policy to target the house price index of course, but I can’t get anybody to agree with me on that.”
I dunno; check out some of the minutes of the Shadow Monetary Policy Committee. The only reason they don’t want house price index target seems to be that it would involve too little hawkish discretion.
In fact, you get a tremendous variation on there from economists like Trevor Williams and Tim Congdon (very sensible monetarists/monetarist types) to some dry-as-bones skeletal hawks who will remain unnamed.
10. June 2014 at 12:27
Scott,
Simon Wren-Lewis responds to my recent post in a post that avoids naming me:
http://mainlymacro.blogspot.com/2014/06/the-us-and-eurozone-2012-3.html
And my response is here:
http://thefaintofheart.wordpress.com/2014/06/10/simon-wren-lewis-tries-to-explain-how-it-is-possible-the-u-s-hummingbird-can-fly-despite-not-following-his-policy-advice/
10. June 2014 at 12:37
Vivian, Morgan,
The reason I didn’t like MERS was quite simple. When I decided to sell my home (years earlier), the bank had lost track of the loan, and had to scramble to find it.
And it’s a matter of principle. To me, MERS was a quick runaround from the property system which was partly responsible for the wealth of the present. No one excludes local knowledge to that degree and gets away with it in the long run.
10. June 2014 at 12:56
Becky,
I can’t speak to your specific case because I don’t know the details. But, I do know that banks scramble to find stuff all the time (so do lawyers, economists, hospitals, doctors, nail salons, etc). I’m just guessing that the reason for the “scramble” may have been that under our antiquated system, they were required to come up with the parchment. So, I’m not sure the problem can be blamed on the MERS system.
As far as principle is concerned, the telegraph was also partly responsible for the wealth of the present. That’s not an argument we should keep it (or that using the internet is illegal).
10. June 2014 at 13:07
Is there any version of the liquidity trap that doesn’t rest on the reluctance of CBs to inflate being conflated with an inability of CBs to inflate?
The whole thing is self-evidently absurd as soon as you realize the Fed can purchase every asset in existence or send every American citizen $1M in cash as soon as it decides to, physical limitations notwithstanding.
10. June 2014 at 13:21
Ben,
There is indeed often a significant correlation between NGDP and house prices, but Granger causality tests typically show that NGDP Granger causes house prices and not the other way around.
In the case of the UK, Eurostat has a House Price Index (HPI) that starts in 2005Q1. Using the Toda and Yamamato technique I find that NGDP Granger causes the HPI at the 10% significance level but not the other way around.
The day tails start wagging dogs, let me know.
10. June 2014 at 13:22
Britmouse,
Please see my latest reply to Ben.
10. June 2014 at 13:39
Major Freedom,
How come I’m not surprised to learn you are a Zero Hedge reader?
P.S. Derp.
10. June 2014 at 14:06
TallDave,
As I like to say – if the result of an economics education is the belief that fiat money cannot be debased, an economics education is worse than useless.
Mark,
Need I remind you – do not feed the (retarded) troll.
10. June 2014 at 14:06
Vivian,
I didn’t mean to be anything but tricky.
Yes, I am confident the average MERS case to the letter of law was in violation. If we wanted to find the loophole it was there 80% of the time.
BUT, yes, every single plaintiff was in arrears, so MERS was always a technicality, a judge looking at it, would say there’s no harm to plaintiff, they didn’t pay their mortgage.
My point was that using MERS was far better than cramdowns, bc the real issue wasn’t to help the underwater stay in their house, the goal was to get them out AND FAST, so that the thing could become a rental in a REIT.
Think of it as instead of getting rid of mark to market, or giving GM to the UAW, or some other questionable legal thing, we did a loophole compromise that screwed the banks.
My point is that Summers is wrong, there was a way to screw the banks and find a stable housing market, and get the economy moving faster sooner.
Think of it as a jubilee where nobody gets to keep the thing they borrowed to buy.
10. June 2014 at 14:21
Zerohedge has successfully predicted 6000 of the past 0 crises.
10. June 2014 at 17:26
Mark:
“How come I’m not surprised to learn you are a Zero Hedge reader?”
I don’t know for sure, but I am guessing it is related to the same reason you’re not surprised in assuming to know, falsely, the causes of recessions.
I am not actually a Zero Hedge reader, as in regular reader. But I did read the article posted by Daniel, and I read it because he posted it. I read it, then realized that neither he nor you gave any substantiation for calling it “insane.” It is almost as if you will not even engage an argument that goes against your fallacious monetarist gobbledygook.
“PS Derp”
Yes, your posts are derp. I don’t see why you have to keep announcing it like I don’t already know.
10. June 2014 at 17:35
Daniel:
You have not shown I am a troll. Disagreement with your core, fundamental principles does not equate to trolling.
10. June 2014 at 17:38
TallDave,
“The whole thing is self-evidently absurd as soon as you realize the Fed can purchase every asset in existence or send every American citizen $1M in cash as soon as it decides to, physical limitations notwithstanding.”
It’s not legally allowed to do that though.
10. June 2014 at 17:48
Mark:
In your reply to Wren-Lewis, there is zero analysis or consideration of the causes for why both the Fed and ECB were confronted with falling “aggregate demand”.
You are quibbling over when subjectively determined events such as “recessions” took place, and you are trying to connect falling outputs with increases in key interest rates, and yet you never bothered to even ask why demand was falling in the absence of “sufficient” money printing.
Both you and Wren-Lewis are arguing from a false start, that is, the belief that aggregate demand is the source, rather than an outcome, of healthy real economic growth, coupled with an ignorance of the fact that capital project growth founded on inflation and not real savings, require accelerating inflation to keep propped up, which of course cannot be done lest the currency collapse, which if why central banks have always chosen the route you falsely claim is wrong. You don’t even realize the logical conclusions of your chronically myopic advocacy.
10. June 2014 at 17:52
Chargercarl:
“Zerohedge has successfully predicted 6000 of the past 0 crises.”
There has been zero crises in history?
10. June 2014 at 17:59
Philippe:
“It’s not legally allowed to do that though.”
The Fed is legally allowed to buy anything it wants, via section 13(3).
10. June 2014 at 18:07
“capital project growth founded on inflation and not real savings”
you don’t even know what this means. Like all internet austrians you just repeat phrases that you think sound meaningful without ever having any understanding of what you are saying.
10. June 2014 at 18:13
“The Fed is legally allowed to buy anything it wants, via section 13(3).”
No it isn’t. Read the text. 13(3) just says the Fed can “discount for any participant in any program or facility with broad-based eligibility, notes, drafts, and bills of exchange” then lists conditions.
10. June 2014 at 22:06
Major_Moron,
My bad, you not a troll – you’re just an autistic moron.
10. June 2014 at 22:07
Come on, Morgan. Rather than persiflage, give me a good old-fashioned palinode.
11. June 2014 at 03:10
Philippe:
“you don’t even know what this means. Like all internet austrians you just repeat phrases that you think sound meaningful without ever having any understanding of what you are saying.”
I do know what it means, and no, it doesn’t merely sound meaningful but is meaningful, and you have not provided any substantive rebuttal.
“The Fed is legally allowed to buy anything it wants, via section 13(3).”
“No it isn’t.”
Yes, it is.
“Read the text. 13(3) just says the Fed can “discount for any participant in any program or facility with broad-based eligibility, notes, drafts, and bills of exchange” then lists conditions.”
That proves I am right. Any participant in any program with briad based eligobility is just another way of saying yes, it is legal.
—————-
Daniel: You’re still immature and still without any substantive rebuttal as well.
Don’t think I don’t notice the conspicuous absense of arguments caused by a lack of education and understanding.
11. June 2014 at 03:37
Vivian read my first post. I’ve pushed this before elsewhere… I understand the legal issue is a unconventional loophole frowned on by propriety, I was even willing to advocate for a legislative change to upend the MERS system. But most assuredly once we are going to do anything unconventional, the question becomes what unconventional thing is the best thing to do.
AND ULTIMATELY, that old piece of parchment? (last known paper) It’s got to be the determining factor.
If you want to go digital, I’m fine with using the block chain, but I’m not fine with digital title, where a 3rd party is the decider who’s dependent on loan side business to be the judge.
Because it is literally impossible to “own” the digital.
11. June 2014 at 03:55
Major_Moron – since you’re autistic enough to think that a bunch of nonsensical quotes from your prophets somehow prove anything, taking you seriously would be totally missing the point.
I mean, would you try to train a squirrel to fetch the newspaper ?
Also – do you go around rationalist forums and pepper them with bible quotes urging them to repent their sinful ways ?
11. June 2014 at 04:35
Britmouse, I’d add that house prices in the UK moved mostly sideways after 2006, while they plunged 35% in the US. But we both had similar recessions.
Mark, Thanks, I’ll take a look.
11. June 2014 at 04:44
TallDave,
“The whole thing is self-evidently absurd as soon as you realize the Fed can purchase every asset in existence or send every American citizen $1M in cash as soon as it decides to, physical limitations notwithstanding.”
It’s not legally allowed to do that though.
Well, technically they’re not legally allowed to pursue a single mandate, but they seem to do it anyway. In any case, the actual monetary sovereign isn’t the Fed, it’s the US government, which can pass whatever laws it likes.
11. June 2014 at 05:03
Yes, Zero Hedge has always been insane to its core
The comments are fun, though.
11. June 2014 at 05:36
http://new.dowjones.com/newsletter/grand-central-unemployment-falls-fed-doves-pivot-low-inflation-concern/
Interesting insight into the Fed.
11. June 2014 at 05:43
Daniel:
You’re still immature and still without any substantive argument.
I will agree with you though if you say you are confused and unable to understand the argument Austrians are making. The fact that it is “nonsensical” to you proves you don’t understand it.
No, I don’t go around promoting the bible, because one, I am an atheist, and two, the bible is full of evil and violence advocacy. In that sense, the bible is more in line with your worldview: Mystical and proviolence.
(Don’t worry Daniel, I help those who were abused growing up. If you need to identify me as a conduit for self-empowerment, I’ll be there for you buddy. I have the thickest skin out of anyone I know. So no worries about guilt. It is not your fault.)
11. June 2014 at 06:19
I have the thickest skin out of anyone I know.
Smallest brain, too
11. June 2014 at 06:20
“notes, drafts, and bills of exchange” does not mean ‘anything’.
An eligible participant in “any program or facility with broad-based eligibility” does not mean ‘anyone’.
11. June 2014 at 06:22
“I help those who were abused growing up”
I find this extremely worrying.
11. June 2014 at 07:42
Scott,
Off Topic.
Simon Wren-Lewis has written a response
http://mainlymacro.blogspot.co.uk/2014/06/monetarist-vs-fiscalist.html
to a post by Giles Wilkes
http://freethinkecon.wordpress.com/2014/06/09/the-fiscalists-vs-the-monetarists-lacking-a-common-language/
in which he mentions me and I respond here
http://thefaintofheart.wordpress.com/2014/06/11/simon-wren-lewis-needs-help-figuring-out-what-nothing-and-zero-mean-and-the-real-asymmetry-between-monetarists-and-fiscalists/
11. June 2014 at 08:34
Daniel,
You don’t need to disparage people for having opinions that are different than yours. Cool off the language please.
Thanks,
11. June 2014 at 08:43
Great post Mark!
11. June 2014 at 09:11
Morgan,
So, you don’t like MERS…
MERS acts as a central clearing house for the trading of servicing rights. What do you think of central clearing in other markets? DTC for example?
The necessity for MERS comes from the MBS market. If the servicer goes bankrupt, does the passthrough holder still have his right to receive P+I payments. With MERS the MBS investor is exposed only to the credit risk of the mortgagor and not to the credit risk of the servicer. Or, is the entire MBS market poisoned. In which case the problem is deeper and older than MERS.
11. June 2014 at 09:59
Chuck E
I see you’ve joined the internet police. How do I go about signing up, too ?
11. June 2014 at 13:01
Daniel:
“I have the thickest skin out of anyone I know.”
“Smallest brain, too”
Well I suppose you accepting me having a thick skin is a start. That should reduce your anxiety a little.
————-
Philippe:
“I help those who were abused growing up”
“I find this extremely worrying.”
Why?
11. June 2014 at 13:03
Daniel:
Internet police? Offering to help you mature without threatening you with force if you refuse, makes him the exact opposite of a cop.
11. June 2014 at 13:54
“Why?”
You’re clearly a person with some mental problems. You’re irrational, dishonest and delusional, you use deceitful sophistry as a tool to try and manipulate others; you have a fanatical devotion to an extreme and irrational belief system…. someone like you shouldn’t be in a position where you can manipulate vulnerable people.
11. June 2014 at 13:57
Doug M,
Maybe you haven’t heard but I am a #Distributist.
I favor making large scale operations assume the responsibility / costs of the Big Government pollution they create. Basically, if your “cost savings” to the consumer creates a larger government to adjudicate it, you are not finding cost savings, you are finding rent.
I’d go much further… if we are gong to have FDIC, I’d only allow local mutual (likely virtual) banks to have this government subsidy.
I’d let anybody who put down a deposit of $25K be a bank, and only loan it locally, and all profits would roll back to depositors (no shareholders), and everybody’s book would be exposed like covestor.com
I’d want all mortgage lending to have to hold their loans at least 10 years.
AND I’d drop a giant land tax down, offset by lowering high end income taxes, that was brutal enough to chew thru any and all local land regs.
Mailbu would look like Miami Beach in 10 years. Anyone in a prime location would be BEGGING for 100 story buildings so they could afford their share of the tax.
Again, I love the digital, so if you want to move MERS to a BLOCKCHAIN that relies solely on computer code to determine title, I’m fine with it. Why? No pollution.
But if we’re going to rely on a trusted 3rd party (basically someone with government and courts on their side) I’m going to weight it to the guy holding the dirty piece of paper, signed in ink, precisely because I want the financial sector to be slow and cumbersome, measure 3x and cut once – always – I want the costs of this absorbed like it is POLLUTION, not a new efficiency someone discovered.
11. June 2014 at 15:28
Philippe:
“You’re clearly a person with some mental problems.”
How so?
“You’re irrational”
Can you give an example?
“Dishonest…”
Can you give an example?
“…delusional”
Can you give an example?
“…you use deceitful sophistry as a tool to try and manipulate others”
Can you give an example?
“You have a fanatical devotion to an extreme and irrational belief system….”
How is it extreme? How is it irrational?
“someone like you shouldn’t be in a position where you can manipulate vulnerable people.”
How am I manipulating vulnerable people?
13. June 2014 at 09:58
Well, I guess this is the closest Krugman is going to get to saying “I was wrong”. I think he did say that he was wrong—but his model was not. So, “it’s ok”.
http://krugman.blogs.nytimes.com/2014/06/13/wrongness-ok-and-not/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2&
13. June 2014 at 10:21
The sick man of Europe is now not Britain.
http://www.bbc.com/news/business-25519110
The future is bright and 2030 predicted to be bigger than the German economy which really is saying something. And this was printed before the discovery of the frackables south of London.
But the problem with this forecast is it assumes the EU and the euro will still exist in 2030 which is by no means a given.
14. June 2014 at 05:22
Thanks Vivian.