Monday, December 29, 2008
Friday, December 19, 2008
|Currency in Crisis|
The ECB just doesn’t get it. The Federal Reserve has driven the Fed funds target to 0-25 bp. Short-term US T-bill yields have on occasion dipped below zero. As this is written, the 3-month T-bill yield is quoted at -5 bp. And still there is demand.
Thursday, December 11, 2008
Rare is a consensus among economists, the practioners of the dismal science. Yet there seems to be nearly universal agreement about the nature of the current crisis and the parallels with the Great Depression. The paralysis of the capital markets and the inability and/or unwillingness of banks to lend derailed the real economy. By word and by deed, officials and investors seem to concur, but what if they are wrong? What if the credit crunch itself is not so much a cause as a symptom of a larger, structural problem?