I try to avoid reading the SMH and the Age as much as possible.
However, I was looking for a quote from Peter Hartcher about Joolia’s ‘population policy’, which of course has nothing to do with immigration policy, according to the government, at least some parts of the government.
(Note to Gillard: here are the four boxes to consider in terms of the determinants of the rate of population growth: the birth rate; the death rate; the immigration rate; and the emigration rate.)
When this article caught my eye. Gosh, the certainty of youth – and the condescension to boot. I particularly love her explanation of the (misnamed) automatic stabilisers.
I am wondering whether she has actually undertaken any study in economics? Was this at an Australian university?
I’m thinking she is wasted in her curent job: she really should be a top-level adviser to the EU, telling those European countries to keep up their government spending because it doesn’t affect bond yields (sure). Or maybe Reserve Bank Governor?
This is one of my favourite quotes:
The only way to blame the government for higher interest rates is to also maintain (obviously didn’t learn about split infinitives at school) that it should have let the economy collapse to ensure the Reserve kept interest rates low.
Silly. (What literary style, I’m thinking.)
Everyone still following? Does silly refer to her point? She goes on to dismiss any crowding out, but of course endorses the famed mulitplier effect.
She ends with a very strong point:
Still, given the economic qualifications they’ve (Abbott and Hockey) displayed to date, their prospects for (does she mean of?) landing the jobs they want here might be pretty slim, too.
What compared with her economic qualifications? Mmmm. Read it and weep.
Is Homer advising her on grammatical syntax, because if he is she’s a damn quick learner.
JC
23 Jul 10 at 4:46 pm
No one learns about split infinitives any more, because almost no cares about them.
Steve Edney
23 Jul 10 at 4:47 pm
err, no one cares.
Steve Edney
23 Jul 10 at 4:47 pm
I’m guessing Ms Irvine doesn’t have a mortgage… or if she does, not a very large one. I would be surprised if she was so dismissive of high interest rates if she was exposed to losing ever more of her take-home pay in interest payments.
Secondly – was this meant to be economic insights or an opinion piece? I’d assumed the “economics reporter” would be reporting the economic facts, by this reads more like a piece of advocacy more at home on LP than in a national news site.
HeathG
23 Jul 10 at 4:49 pm
The either or solution is definitely political rhetoric rather than economics: either spend and accept higher interest rates; or if lower interest rates are important, then you must kill the economy.
Why can’t there be other options?
Entropy
23 Jul 10 at 4:53 pm
She seems to have a degree in Economics (social science) from Sydney uni, which is not the straight out economics degree .
It’s just the usual run of the mill political economy bullshit.
The central focus of this degree is on the study of political, economic and social issues. The program combines in-depth analysis with a broad multi-disciplinary approach to important contemporary political, economic and social problems and policies.
Understanding the interactions between economic, social and political processes is crucial for graduates’ success in a range of professional fields. Recognising the range of career paths that students may wish to follow, this degree provides flexibility to specialise in one aspect of the social sciences – economic, social or political – while ensuring a broad-based education across the whole field.
In first year you study three core subject areas: government and international relations, political economy and sociology or anthropology. A fourth subject area is of your own choosing: for example, it could be a subject such as economics, industrial relations, geography, or you could do both sociology and anthropology. In second year you continue to deepen your studies in three core social science areas (government and international relations, political economy, and sociology or anthropology) and take other electives according to your own interests. In third year you complete your major (selected from one of those core social science areas) and the other requirements for the degree.
The course description sounds like a Claytons economics degree and therefore shouldn’t surprise she has no idea how bond market respond.
JC
23 Jul 10 at 4:57 pm
Her summary of the first ‘silly’ argument ignores the disincenitve created by high interest rate to growth. It’s unforunate but recession tend to bring interests rates and prices down. What happens when they’re high and actual economic activity is sluggish? I don’t think it’s more jobs.
Adrien
23 Jul 10 at 5:14 pm
It appears they are grooming her to take over from Ross Gittins with his style of left-wing pseudo-economics.
Phillip
23 Jul 10 at 5:16 pm
What happens when they’re high and actual economic activity is sluggish? I don’t think it’s more jobs.
2 things. It’s an indication you’re about to tip over into recession or you may have stagflation on your hands.
JC
23 Jul 10 at 5:17 pm
An acquaintance of mine’s father was one of Australia’s doyennes of journalism and media. He reckons that journalism’s biggest mistake was reconceptualizing itself as a profession rather a craft and the consequent switch to recruiting uni graduates, rather the old cadet model. Even though as far from a leftist as possible, he once said “Oxbridge ruined The Guardian.
Peter Patton
23 Jul 10 at 5:19 pm
I’m not at all sure the cadet-ship system would work for specialized areas such as economics. You could very well end up with the same tripe being peddled in Fairfax media, which isn’t that far from going bust in my opinion.
JC
23 Jul 10 at 5:24 pm
2 things. It’s an indication you’re about to tip over into recession or you may have stagflation on your hands.
Bing! And she doesn’t address it. Second rate.
Adrien
23 Jul 10 at 5:28 pm
I believe she’s missed the point of “crowding out” too. She describes it as tying up of finance; but (correct me if I’m wrong, economists), crowding out also applies to government services competing with privately run services. For instance, if the government runs a subsidised bus sevice in a town (just for example), then local private bus companies in that town will struggle. Isn’t that also “crowding out?”
daddy dave
23 Jul 10 at 5:56 pm
jc
Yeah, you would think that would correct, but here we have do have a graduate. The problem is that graduates are more likely to think they are qualified to bang on about anything.
I mean, this article is not journalism anyway.
Peter Patton
23 Jul 10 at 6:54 pm
I’m not sure what your problem is with that quote Judith. Are you implying that rates should remain at emergency lows even if the economy is recovering? If not what is your point?
DD
Government spending does crowd-out the private sector when an economy is close to capacity. However with government stimulus rolling off as private demand takes over the effect should be only short term. That is the way the policy was designed.
The bus analogy doesn’t really work as the services do not directly compete. In any case private bus services in this country are also subsidised to the best of my knowledge.
sdfc
23 Jul 10 at 6:57 pm
Great call Judith. I’ve thought Irvine has been writing supercilious dross for a long time and have been waiting for someone to call her on it.
Check out her inability to interpret the baseline scenario properly in the following piece where she discusses Concept Economics’ modelling of the CPRS.
She makes a complete fool of herself and then proceeds to blame the media for being taken in by “fancy economic modelling” to use her childish expression. I’m still laughing … but seriously, some of the blame also lies with those people who are silly enough to employ her.
http://www.smh.com.au/opinion/contributors/brazen-models-conceal-the-truth-20090825-ey39.html?page=-1
“In June the Minerals Council of Australia published a report saying ”23,510 direct jobs will be lost across Australia’s minerals industry by 2020”. Wrong.
The modelling, produced for the council by another consultancy, Concept Economics, found jobs in the mining industry would grow over that time, just not by as much when compared against a certain ”reference case”, which, as it turns out, involved assuming a much higher level of ”no-change” emissions than anyone is predicting.
The media must take some responsibility. Journalists are trained to understand the particular biases of sources, and alarm bells should ring loudly about any research paid for by lobby groups. But as a journalist it is hard to resist the lure of fancy economic modelling, served up as an ”exclusive” that can get you a spot on the front page.
Lobby groups also pressure journalists by releasing findings to all media outlets under an embargo. If you do not run the story the next day it can look like you missed it, rather than you decided not to run it. And tight embargoes reduce the investigation journalists can do into the limitations of the study.”
Blake Van Buren
23 Jul 10 at 8:25 pm
.However with government stimulus rolling off as private demand takes over the effect should be only short term. That is the way the policy was designed.
Of course. The government doesn’t need to borrow as a result of the stimulus because you said last night money is unlimited in a fiat regime.
Good one dude. There’s homer during the late morning and you take over for the evening.
JC
23 Jul 10 at 9:44 pm
You just don’t get it do you JC. The government borrows from the financial markets. Australian government debt is low. It does raise interest rates when debt reaches extreme levels, we do not have a high level of debt. There is no shortage of money in hte world to invest in AAA rates government debt. As DD pointed out the major risk of crowding out comes in the use of resources, not finance.
sdfc
23 Jul 10 at 10:05 pm
My last comment relates to the current situation. Loose fiscal policy is of course inflationary in an economy at or on its way to, full employment.
sdfc
23 Jul 10 at 10:07 pm
Judith -
Your critique is poor.
You identify that Irvine’s tone is condescending, you don’t know what her qualifications are and can’t be bothered to look them up, and she had occasion to wantonly split an infinitive.
I look at our stimulated economy – it’s now growing at a clip (also nicely assisted by the Chinese stimulus). Partly as a result of the stimulus we’re not going to get a pernicious long term unemployment problem. The stimulus is being withdrawn and the debt is nicely manageable.
If the best criticism you can muster is that promoters of stimulus split infinitives I shall seek infinitives to proudly split.
PSC
23 Jul 10 at 10:14 pm
“I look at our stimulated economy – it’s now growing at a clip (also nicely assisted by the Chinese stimulus). Partly as a result of the stimulus we’re not going to get a pernicious long term unemployment problem.”
This is absurd.
Discouraged workers etc shot up close to 200 000 during the “stimulus”. Workers were kept on because job sharing could happen due to flexible workplace laws. The stimulus was implemented after we returned to growth, then after it began, cap ex growth fell and then we returned to negative per capita growth.
.
23 Jul 10 at 11:00 pm
“There is no shortage of money in hte world to invest in AAA rates government debt.”
Sure, but after a point money creation no longer creates AAA debt or high quality money.
.
23 Jul 10 at 11:04 pm
Can I ask you a personal question SFDC?
Are you drunk when you post here each evening because it seems you’re incapable of following conversations, misinterpret what is being said or in fact totally misrepresent someone’s comment.
Take your earlier comment that you made to Judith. It bore no relation to what she quoted. It’s almost like you’re channeling Homer.
Let’s go though this current swill.
You just don’t get it do you JC.”
No, I don’t get what happens to you in the evening, SDFC. You need to stay off the booze or the dope.
The government borrows from the financial markets.”
That’s interesting. It borrows now because last night you were suggesting that they print the money because money is unlimited in a fiat regime. If it’s so unlimited why aren’t they running the printing presses 24/7 you dope? Or perhaps money supply is significant? Is it? Oh I get it. You think that I they ran intop rouble they could just simply print the money. That doesn’t work any longer, you moron. It doesn’t work because capital moves around freely and the moment people got a sniff that a small out of the way country like ours was doing masses of QE it would screw the bejeezes out of us.
Australian government debt is low. It does raise interest rates when debt reaches extreme levels, we do not have a high level of debt. There is no shortage of money in hte world to invest in AAA rates government debt.
I’ve told you this before. Other people have told you this before. The financial press refers to this. Debt becomes a problem when it becomes a problem. You have no time to prepare for it and a problem can show up even for those that are safe.
Look, you knucklehead, the RBA could NOT find buyers for two bond issues in the middle of the GFC. There were no bids, you moron and this was even before the Little Turd you elected went on his spending spree subsequently burning down 200 houses and counting and killing 5 people. We had no bids for our bonds! That’s what happens, even to triple A.
We don’t want to be placed in a situation where the only bidder is China, as that has serious geo-political consequences for us. And since when has the OECD been our star, when a good portion of that membership is deadbeats?
As DD pointed out the major risk of crowding out comes in the use of resources, not finance.”
I’m not going to discuss crowding out because you just don’t get it. It’s like trying to read war and peace to a dog. You will never get it. Everyone here has tried but you don’t get it and never will.
My last comment relates to the current situation. Loose fiscal policy is of course inflationary in an economy at or on its way to, full employment.”
You’re drunk, SDFC. You brain isn’t working. Stay away until you sober up in the morning.
JC
23 Jul 10 at 11:33 pm
Does Jess realise the flipside of her argument is that Keynesian policy can never actually work?
.
23 Jul 10 at 11:34 pm
“There is no shortage of money in hte world to invest in AAA rates government debt.”
Sure, but after a point money creation no longer creates AAA debt or high quality money.
Dot, he’s drunk. He thinks we could just print our way out of a problem.
JC
23 Jul 10 at 11:35 pm
Does Jess realise the flipside of her argument is that Keynesian policy can never actually work?
Jess was taught social science economics. She has no idea what the hell you’re saying.
JC
23 Jul 10 at 11:36 pm
JC
Are you drunk when you post here each evening?
Dude, who died and appointed you the blogging breathalyser bus?
Peter Patton
23 Jul 10 at 11:46 pm
Your critique is poor.
You identify that Irvine’s tone is condescending, you don’t know what her qualifications are and can’t be bothered to look them up, and she had occasion to wantonly split an infinitive.
I look at our stimulated economy – it’s now growing at a clip (also nicely assisted by the Chinese stimulus). Partly as a result of the stimulus we’re not going to get a pernicious long term unemployment problem. The stimulus is being withdrawn and the debt is nicely manageable.
If the best criticism you can muster is that promoters of stimulus split infinitives I shall seek infinitives to proudly split.
Here’s another wood duck.
We know her qualifications, you dolt, PSC. I posted them and I’m sure Judith would have looked them up but was too nice to say. I’m not. I’m not nice, as I prefer to go for the jugular right away, as I like to see blood, which is why I posted her miserable degree. She did political economy, which is like doing a sewing class and pretending it’s engineering.
It’s like the GFC and the debt crisis hasn’t happened with you morons. Look you fucking idiot. We’re running a budget deficit of $42 billion, which for the most part is all predicated on enormous amounts of global liquidity.
The deficit is going to be slightly smaller the next year and then supposed to go into surplus. However if the world takes a fucking dive, we’re fucked because we’ll have not just $40 billion in deficit but it could be $90 to $100 billion if tax receipts are crushed. How the fuck do we finance that, you genius. Do we go to China cap in hand and sell them 30% of the country?
Print money? In a world that is repudiating shitty economics what are the chances that bond buyers would buy our currency when the presses are moving at the rate of knots. What the chances that domestic players wouldn’t simply sell the currency and get out of here?
You morons have no fucking idea what it means to protect one’s downside, do you? You’re like a deer in headlights.
Have you looked closely at the European bonds spreads? Have you?
Why is the market punishing Spain, Greece, Portugal and Ireland while Italy is getting away with it despite having a debt to GDP of 125% which is equal to Greece’s and much larger than Spain’s 78%.
The reason is that Italy appears to be in control of its annual finances. Its primary budget is well under control, maturity schedule is around 7 years and therefore it’s bonds trade almost like the core. That is slightly above France but less than the others.
Now imagine Australia having to go into the market with its annual budget blowing out to $100 billion and the bottom falling out of our export markets in addition to the currency dropping out of bed. We’re fucked. Do you understand what protecting the downside means now?
You turkey’s along with those Bozos you vote for are fucking morons. You really have no idea the risk you’re placing us in.
JC
23 Jul 10 at 11:55 pm
Good point Peter
tal
23 Jul 10 at 11:55 pm
There should be a breath test, Patton. Some of these bozos seem to be permanently on the booze.
I really don’t know what the fuck is happening in higher educations system. Some of these bozos purport to have degrees in economics but they don’t seem to understand economics. It’s like they can all regurgitate eco 101 etc. but they don’t think.
Borrowing large amounts in today’s markets is dangerous and also destabilizing to our banking system (higher cost of funds) and the concern the bottom could fall out of the world economy especially with China so unbalanced now.
You don’t want to be borrowing or putting yourself in a position where you could get run over by the speeding train that you don’t see coming.
They’re freaking morons.
JC
23 Jul 10 at 11:59 pm
look at this attempt at bullshit that’s just out.
European stress tests on 91 banks will take into account bank losses only on government bonds they trade rather than those they hold to maturity, according to a draft European Central Bank document.
“The haircuts are applied to the trading book portfolios only, as no default assumption was considered,” according to a confidential document dated July 22 and titled “EU Stress Test Exercise: Key Messages on Methodological Issues.”
The tests will assume a loss of 23.1 percent on Greek debt, 14 percent of Portuguese bonds, 12.3 percent on Spanish debt, and 4.7 percent on German state debt, according to the document obtained by Bloomberg News. U.K. government bonds will be subject to a 10 percent haircut, and France 5.9 percent.
The decision “allows banks to basically underestimate their exposure to distressed peripheral debt,” Brown Brothers Harriman, the New York private bank founded almost 200 years ago, said in a note to clients today. “By leaving out stress tests on the banking book, then a true picture of bank balance sheets will clearly not be obtained.”
The tests assume the weighted average yield on euro-area five-year government bonds will rise to 4.6 percent in 2011 from 2.7 percent at the end of 2009. The tests also include an increase in the yield on five-year Greek government bonds to as much as 13.9 percent after “interest rate shocks,” the document shows.
The Euro banks are so pregnant with dangerous peripheral debt that they’re now stress testing the banking system without even looking at the bond holdings held on their books.
What a complete fraud this is.
Oh but it’s okay that continue to go on borrowing money and place our entire system at risk.
JC
24 Jul 10 at 12:10 am
“Let’s be clear: if interest rates rise during the campaign, there is no sensible way in which to sheet blame home to either the government’s stimulus packages or its level of debt.
If Abbott and Hockey really want low interest rates, perhaps they should move to somewhere like the US, where interest rates are practically zero – and the jobless rate is 10 per cent, double Australia’s.”
This poor lady needs a doctor. She is dribbling shit.
.
24 Jul 10 at 12:28 am
Best comment on that thread:
“You remind me of those sheep in animal farm, only this time you are bleating – government debt good, private debt baaad. I would suggest that people track FEDERAL government debt themselves via the AOFM – go to securities on issue and you will the updated figures for June – 150 billion. Go back to prior to 2007 and you will see it ended at a touch under 60 billion. That is 90 billion of extra bonds issued over just under 3 years – not bad eh? Add in State debt and we have a real debt party going on here but dont worry, it wont effect the economy at all – nooooo. It’s all good – keep spending Labor – keep jacking it up until it hits around 80% of GDP then your sheep can start bleating a different tune.
Don | Cairns – July 23, 2010, 8:39AM “
.
24 Jul 10 at 12:32 am
Worst comments. Why? Because they assert falsely this lady is qualified to comment, the causes of the crisis and the outcome of the stimulus (riffing that public debt is good and private debt is bad, ala Homer’s ALP/Democrat debt good, republican/Liberal debt bad – we call this the animal farm theory of public finances).
” Jessica, great article. You’ve hit the nail on the head.
The amount of economic illiteracy among the commentators is astounding. So many fallacies, I don’t know where to begin.
My general opinion is- if you have an economics degree, then and only then are you qualified to comment on the economy. Contrary to what most people think, economics is not easy and the economy is never simple. Harsh to say, but if you haven’t studied the subject formally, your opinion is worthless, for exactly the same reason why the CSIRO doesn’t take advice from smh readers on genetic engineering or electromagnetic physics.
Remember too before you post that Jessica has an economics degree. Do you?
Floyd | Sydney – July 23, 2010, 8:58AM
Your eminently sensible economic analysis Jessica has, as expected, brought out a plague of economic Hanrahans with the usual jeremiads of “we’ll all be rooned!”. As is also quite usual these are often the very same invividuals who saw no difficulty with the massive market failure that has caused the greatest economic downturn in eighty years around the world.
Their ideological fixations simply will not allow them to admit that Government has saved the private sector from it’s own excesses by sensible counter cyclical actions. Fortunately such voices, so recently accorded seer status, are now being appropriately marginalised due to the utter failure of their evanescent economic ideology.
Lesm | Balmain – July 23, 2010, 9:01AM “
.
24 Jul 10 at 12:35 am
hahahahahhahahaha
My general opinion is- if you have an economics degree, then and only then are you qualified to comment on the economy. Contrary to what most people think, economics is not easy and the economy is never simple. Harsh to say, but if you haven’t studied the subject formally, your opinion is worthless, for exactly the same reason why the CSIRO doesn’t take advice from smh readers on genetic engineering or electromagnetic physics.
I agree. Jess has a Claytons degree in economics and therefore should not be discussing anything about the subject.
WTF is “political economy” anyway… or Economics (social science)
JC
24 Jul 10 at 12:39 am
JC – Australia is not Greece. Next time you go to the ATM, have a look at what it dispenses.
You’ll see a nice signature of this bloke Glenn Stevens, who happens to live in these parts, and the word “Dollar” somewhere on the piece of plastic. If you go to an ATM in Greece, you get paper, I can’t remember whose signature it is JCT probably, but the paper says “Euro”.
You see JC, about 6 years ago, Greece adopted the Euro, and started borrowing in Euro denominated debt and the banking system moved to Euro. All the countries in your disaster area list did the same. Now people want those Euro back. But the economy can’t support it. The currency can’t revalue and wages are sticky – painful deflation is the only option. So they are, as you rightly point out, fucked.
We borrow in AUD over here JC. Not Euro.
Reuters tells me 15 year bonds are just over 5.3% – around 80bps over the cash rate and under the long term average. Bond traders don’t seem to share your concerns about horrid inflation or default. They want Aussie Bonds! There are two possibilites:
- free markets are a terribly imperfect way of pricing things and a sensible person like yourself should centrally set rational prices by making debt so expensive the government can’t afford it, or
- you’re full of crap JC.
PSC
24 Jul 10 at 3:24 am
JC – Australia is not Greece. Next time you go to the ATM, have a look at what it dispenses.
Ummm it’s nice looking colourful plastic signed Ken Henry, which inspires a great amount of confidence. Not! But so, what’s your point? If I went to Greece I would end up getting Euros that I could take anywhere in the EU.
You’ll see a nice signature of this bloke Glenn Stevens, who happens to live in these parts, and the word “Dollar” somewhere on the piece of plastic. If you go to an ATM in Greece, you get paper, I can’t remember whose signature it is JCT probably, but the paper says “Euro”.
Umm yea It also has Glenn Stevens name there too.
You see JC, about 6 years ago, Greece adopted the Euro, and started borrowing in Euro denominated debt and the banking system moved to Euro. All the countries in your disaster area list did the same. Now people want those Euro back. But the economy can’t support it. The currency can’t revalue and wages are sticky – painful deflation is the only option. So they are, as you rightly point out, fucked.
Yea, thanks for reminding me what most people and I already know, although I would have worded it much fancier than you.
We borrow in AUD over here JC. Not Euro.
No Doofus. We have a current account deficit which be definition means we borrow some of that deficit in foreign currency and covert the proceeds into Aussie dollar for the most part.
Reuters tells me 15 year bonds are just over 5.3% – around 80bps over the cash rate and under the long term average. Bond traders don’t seem to share your concerns about horrid inflation or default. They want Aussie Bonds!
Doofus, the markets wanted Euro all through last year, with major Asian central banks converting a portion of their reserves out of US dollars into Euro denominated sovereign debt. They did loads with estimates of around $US800 billion and now they’re sucking wind after make the conversation at around US/EU1.45 up to 1.60. The point being that large central banks around the world never foresaw the “rat fucking” that was going to happen in Europe only 6 months before it did happen, as these sorts of crises aren’t predictable and resemble someone being blindly hit by a train. In other words don’t think the calm waters we’re seeing now is going to necessarily last if the bottom falls out from under us. As I said we have no downside protection.
There are two possibilites:
- free markets are a terribly imperfect way of pricing things and a sensible person like yourself should centrally set rational prices by making debt so expensive the government can’t afford it, or
- you’re full of crap JC.
Free markets are great and attempt to price in information as it arrives. The most important point I made was that these bozos and nincompoops you’re voting for are leaving absolutely no margin for error. If an unbalanced China goes down the gurgler we’re fucked because we won’t be able to borrow 10% of GDP without serious damage to our banking system and the interest rate being charged on our sovereign debt.
But continue believing what you want to believe and continue thinking that everything is hunky dory in the world and that if another economic crisis hits we’d be able to borrow $100 billion is annual budget shortfalls without a hitch. Lord you leftwingers are freaking morons.
JC
24 Jul 10 at 3:54 am
My general opinion is- if you have an economics degree, then and only then are you qualified to comment on the economy.
These people don’t believe in judging an argument on its merits. They judge the argument by whether the person has a paper on the wall that says they are allowed to comment.
This is known as “argument from authority” and is generally considered to be a bogus line of reasoning.
What I haven’t seen is commentary that explains why “argument from authority” always sounds so pompous and arrogant.
daddy dave
24 Jul 10 at 7:38 am
“We borrow in AUD over here JC. Not Euro.”
sfdc reckons we can borrow an unlimited amount of money. Save for seignorage, we have to rely on loose monetary policy elsewhere – which is not always a good idea. Not always, but until the GFC the Australian mortgage market was reliant on US XCP. The US was oversupplying global markets with money. Their institutional GSEs were reducing the risky rate of debt by subsidising it with guarantees on “risk free” lines of credit. Hence XCP became a financing vehicle.
“They want Aussie Bonds!”
Demand is truncated sometimes. In the GFC they couldn’t get two bond issues out.
It is amazing to tell other people they are full of shit when you ignore reality.
.
24 Jul 10 at 9:51 am
Economics is hard, JC.
You can tell people the facts but they still gibber on with BS…
http://thecitysquare.blogspot.com/2010/02/us-aaa-bond-rating-threatened-by-obama.html
Look how “John” is schooling “anon” and anon won’t shut the fuck up like some flat earther. “anon” is just denying there is ANY link between Fannie/Freddie and the US Govt. A $2 trillion line of credit DIRECT to US Treasury says otherwise.
The idea that Governments do not default is BS. Charles II for example repudiated most of his debt by abuse of (a bad law anyway), the usury acts.
.
24 Jul 10 at 10:01 am
She’s done second year IS-LM-BP and thinks she’s knows everything. Economic journalism won’t improve until 20 years after they stop teaching that nonsense. I hope I live to see it. Hopefully Peter Schiff will get elected to the US Senate in November and start educating policy-makers.
Rajat Sood
24 Jul 10 at 3:28 pm
“Demand is truncated sometimes. In the GFC they couldn’t get two bond issues out.”
How many umpteen billion dollars worth of government guaranteed debt did the banks sell last year? 150-odd? Would anyone buy our bank’s paper without the guarantee?
And anyway the the AOFM had maybe 80-odd bond auctions, not 2. Coverage ratios were pretty consistently over 2x – there were some last May where it got has high as 7x!
So the government sold or guaranteed around a quarter of a trillion dollars of debt – the govt stuff with tight yields and the market wolfed it down and came back for more, tail wagging.
You could short AUD and aussie bonds and try to make yourself very wealthy if you really believe what you’re saying. There’s a lot of people out there happy to be counterparties. You could just be smarter than all of them.
PSC
24 Jul 10 at 3:54 pm
She’s done second year IS-LM-BP and thinks she’s knows everything.
Yep. She’s taken one side of the long-running Keynes-Hayek polarity – the side she was taught to take – and can dismiss the other with a one-word denunciation of “Silly.”
Does she even grasp that there are serious criticisms to be made of the stimulus, both on theoretical grounds and on the specific implementation?
daddy dave
24 Jul 10 at 3:56 pm
actually young Jessica started well by emphasising most deficits and debts come from automatic stabilisers however she omitted the effect of the economy on INCREASING the structural deficit.
She also made a howler that Sinkers always makes about stimulus.
strange Judith missed those tow obvious mistakes although to be fair they are always missed at Catallaxy
Butterfield, Bloomfeld % Bishop
24 Jul 10 at 4:36 pm
You could short AUD and aussie bonds and try to make yourself very wealthy if you really believe what you’re saying. There’s a lot of people out there happy to be counterparties. You could just be smarter than all of them.
Dude, here’s some advice. Short the VXX contract every time it gets down to 2o-24 range as it has the same effect as you’re leveraging off the worst side effects of over leveraged sovereigns.
But go ahead and keep believing we have a nice little cushion if the world inverts.
JC
24 Jul 10 at 5:02 pm