Are we still all Keynesians now?

And the accompanying story. Says that “Wall Street Baffled by Slowing Economy, Low Yields”. If so, it’s time they started reading Catallaxy.

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7 Responses to Are we still all Keynesians now?

  1. mikey

    It’s exactly like Chief Wiggum stuck in the hole: “No, no, dig up, stupid!”

  2. JC.


    The figures last night… Emplyment and the the PMI was the most depressing set of numbers I’ve seen for three years.

    If these weren’t one offs I reckon it’s an absolute disaster.

    The economy slows while the debt piles up is a recipe for the big D as the markets will begin selling US debt.

    If you’re not a believer I still suggest you make a little trip to the church and pray a little, as this could get very ugly.

    As for Nobama… even a corpse lying in the morgue would win in 12 if this economy keeps going.

  3. Rafe

    As someone said, there is a power of ruin in a nation. But how many more hits can we take – the re-regulation of labour market, hounding independent contractors, the tidal wave of regulation that will accompany the carbon tax, a blank cheque for the NBN, the blowout on refugees…

    We could really use a return on those school halls! Not to mention the payoff from the education revolution. And alternative energy!

  4. TBH

    It is indeed worrying stuff. I get a sense that this is like the 1970’s all over again for the US: economic stagnation, a President who seems to have little idea what he’s doing (especially with the Middle East) and a pervading feeling of gloom. If the GOP can put forward any kind of credible candidate, you’d have to think that Obama is in trouble.

    As far as the calls on a depression, I think they are still a bit hyperbolic. Then again, somewhere out in the financial media and the Internet, you’ll always be able to find someone to get in front of a microphone and make some kind of big statement.

  5. TBH

    I forgot to add another parallel: presidents who bought into Keynesian ideas about economics.

  6. JC.


    The really serious slowdown in the US is extremely serious. The bond market is currently working on the premise that there would be some growth and the the growth would help support tax receipts to pay the debt/interest on the debt.

    What happens if expectation line is bent?

    If the bond market catches wind of a slowdown and begins to questions the budget trajectory in that economic conditions worsen bond yields rise as people begin to leave the US credit markets. So you end up with rising yields in a slowing economy which is truly fucking toxic.

    It isn’t likely to happen however the odds have just increased.

    What happens then? The Fed comes out with Q3? And what if the bond market begins to repudiate Q#, by pushing up yields?

    These very ugly scenarios.

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