ikonic

Don't forget that Big Ben EXPECTS BANK FAILURES

Oh, in other news: A near major bank failure.

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Switchcraft

I don't understand why a 12-month prediction is something to hold up 3 months later. Give the man his year!

xTYBALTx

I will, I will! But aren't I entitled to a bit of ribbing at the 25% mark??

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Current good song: Justice - Stress

Switchcraft

I suppose, but I thought the whole point of his comment was that he knew things were on their way down at the moment but expected them to rebound later. Plus, the man is stuck in Jersey! Kicking him while he's down...

xTYBALTx

Russ Roberts and Tyler Cowen, both professors of economics at GMU, discuss inflation, the Fed, money, the gold standard, private currencies, and the current economic crises. Anyone who's interested enough to post in this thread will be interested to hear what comes from their conversation, and even those holding a PhD in economics will learn something.

http://www.econtalk.org/archives/200...on_moneta.html

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Current good song: Justice - Stress

ScratchMonkey

I wonder what mainstream economists think of GMU (and the Austrian school in general)? Do they consider Austrians to be "tin foil hat wearers"? Mainstreamers seem to love inflation and the Fed, and hate hard money (of which gold is only one example). Maybe they use "gold foil hat wearer".

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Sig

xTYBALTx

Tyler Cowen is not an Austrian. Most economists at GMU aren't Austrians... And yes, I would expect most economists to think that Austrians are kind of like "tin foil hat wearers."

Bryan Caplans' "Why I am Not an Austrian Economist may provide some insight into how "mainstream" economists view the Austrians. Bryan is an AProf at GMU.

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Current good song: Justice - Stress

Steeler

Any thoughts on the Bear Stearns bailout? Why is the fed letting JP Morgan grab a godless killing machine for 10% of it's value?

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xTYBALTx

JPM's market cap is up something like $10B today.

But all may not be so easy for JPM.

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Current good song: Justice - Stress

ScratchMonkey

Thanks for the link. I read through the whole thing. Lengthy and the flicker in my monitor gave me a headache, but it was pretty informative. For the less patient, skip down to the Conclusion at the end.

The Austrians are in a sense Newtonian to the neoclassicals' Einstein: They established some important foundations that the neoclassicals built upon, but then largely stood still while the neoclassicals passed them by. In doing so, the neos found some ugly holes in some of those foundations.

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Sig

El_Gringo_Grande

Now that the Fed has to step in and risk taxpayers dollars I would like to see some investigations and maybe even some charges levied at certain individuals. Maybe even a CEO or two.

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Sen. John McCain (AZ) For President '08
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I’m not racists, I have republican friends. Radio show host.
- "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
- "A foolish consistency is the hobgoblin of little minds" - Emerson
- "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
- If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette

xTYBALTx

Why? What crimes do you believe have been committed?

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Current good song: Justice - Stress

leejo

I'm still holding that line. We're hardly done with the year. We're very close to capitulation now. Stay tuned.

I believe the rest of that quote invited you to put your money where your mouth is. Care to wager a bill on it?

Steeler

Isn't gambling on monetary policy what got us into this mess?

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bkelly

Since nobody asked, here is my $.02.

I don't believe for a second that Ben Bernanke is a moron. I think his objectives are not what you think they are.

I believe keeping inflation low is a secondary goal, one that the fed will sacrifice if needed to achieve it's primary objectives.

The housing market is collapsing because the real estate bubble is popping. This needs to happen and can't be stopped.

The fed isn't concerned with individuals and their adjustable rate mortgages. It is part of the central banking system of the United States and is concerned with the long term health of United States banks.

I agree. The banks have lost money from the subprime defaults and aren't sure about the value of the assets they hold. Lowering the overnight interest rate and the auction/lending/credit facilities are attempts to get the banks more cash.

I donno. That sounds like a plan of losing the game so you can win.

I think a strong dollar is another secondary fed goal, not a main one.

It looks to me as if they went up .3% and that is only because fuel prices dropped for the month which we know isn't the trend.

I do agree somewhat with leejo's first prediction. We'll continue to see inflation until the fed runs out of bullets and the markets correct/crash after which we'll start to see deflation and the US dollar will strengthen. I'm not sure about the cheap imports prediction- those days may be over.

...And the fed is not just "letting" but supporting the acquisition. And it's 10% of the value before the weekend, it's less that 2% of the value a year ago.

I believe the reason for this is that our economy is a house of cards. If Bear Stearns is allowed to go bankrupt and default on it's liabilities, there's no telling how much of the structure will come crashing down.

I don't believe the fed's actions are risking "taxpayer" dollars. They're using money they made from buying and selling treasury securities in an attempt to keep a handle on the economy. My concern is that the fed will soon inherit the job of landlord.

I think if you looked hard you could find some. The bigger crime is that many, many people put together systems/schemes to make themselves a lot of money today knowing that it would pollute the system down the line. Even though they didn't break a specific law, I would totally be in favor of tracking these people down and demand the forfeit their exorbitant salaries to clean up the mess they made - like that's gonna happen.

We're here for a lot of reasons - lack of accountability, greed, low interest rates in the mid 2000s, the banking system, fiat money system, etc. It's going to be very painful to clean all this up.

bkelly