Comments | the_recession: Good reads of Sat, Sun, Mon & Tue

cieldumort in the_recession

Good reads of Sat, Sun, Mon & Tue

May 26, 2009 22:49

Catching up with some great articles that you
may have missed with the holiday weekend and start of the work week...

The Baseline Scenario
(Former IMF Chief Economist - Simon Johnson, Peter Boone - chair of Effective Intervention & James Kwak - co-founder of Guidewire Software)

“I Have 13 Bankers in My Office”
The Washington Post (hat tip Mark Thoma) ( Read more... )

nber, mortgage backed securities, zombies, fed funds rate, the |_____ club, zirp, derivatives, clinton administration, recoveries, alan greenspan, global financial trainwreck of 2007-?, deregulation, fraud, bush administration, talf

Comments 4

ytterbius May 27 2009, 04:58:11 UTC

"The selloff in bonds is unstoppable. Bernanke is furiously scratching his head at this point, as he envisions the future: S&P at 2,000, and a 30 year mortgage at 20%. Brilliant"

I'm not sure exactly what this is...

Question: So, basically this is saying that Bonds are getting sold, and stocks are being bought. So, is this trend across the spectrum of bonds, not just 10 year? How "big" is this movement of money? How long will it last?

cieldumort May 27 2009, 05:12:37 UTC

Well, there is certainly a seemingly plausible concern that the floodgates of potential liquidity are itching to ignite unstoppable inflation, at some point in the future.. and that, I presume, bonds are a little bit edgy, already, in part because of this.

ytterbius May 27 2009, 05:24:22 UTC

I've been expecting the inflation, but I don't think I really have understood the implications of crashing bonds. I still don't understand. Increased interest rates on loans, right? Less borrowing, and so worse corporate profits, lower house prices, etc. Then a crashing stock market, and money back into bonds. A cycle, but where does it lead? More Bankruptcy and defaults (and Bailouts?) Or can we "grow out of it" on inflated dollars, as the Republicans with Bush originally intended?

cieldumort May 27 2009, 05:41:10 UTC

I dunnooo.. Imho, this whole recovery bit is nothing more than one giant confidence game. If somewhere along the line (let's say the next 0-10 years) a kink forms that can't be quickly unwound, I'm pretty sure we will see another leg of global financial crisis.