Disconnecting the Heart Monitor In my post last week titled, “Approaching the Zero Bound,” I characterized the Fed’s plan to buy hundreds of billions ($600 billion, it turns out) in U.S. debt as a “hypodermic needle to the economy’s heart.” Actually, that analogy is not quite complete. The Fed’s money-injection plan, also known as quantitative...Read More
“An Attempted Hypodermic Straight to the Economy’s Heart” A fascinating, even feverish dialogue is taking place right now — joined by some of the financial world’s most influential thinkers — concerning what will happen next week, and what economic consequences will flow from that outcome. The elections next Tuesday? Try, the Fed’s much-signalled intention to...Read More
Tapping Corporate America’s Cash Hoard to Reward Investors & Stimulate the Economy Money is like manure; it’s not worth a thing unless it’s spread around. –Thornton Wilder Let’s see if I’ve got this right . . . The economy is decelerating now because the federal stimulus to date has run its course, and additional federal...Read More
“Don’t Just Stand There — Buy Something!” Some people wait for a new episode of a favorite TV series (Seinfeld, The Sopranos). Others for a new album from a favorite artist. I look forward to Jeremy Grantham’s latest quarterly newsletter. Seriously. The man’s honest, brilliantly insightful — and a great writer, to boot: Greenspan was...Read More
Setting the Record Straight on ARM’s It’s easy to think that every adjustable rate mortgage (“ARM”) burned the borrowers who took them out. After all, aren’t so-called “Option ARM’s” supposed to be financial time bombs? They are, but most ARM’s don’t function that way (at least, the ones most common outside of Southern California, Arizona,...Read More
“Buying Too Many Votes — er, Mortgages?” Dear Jack: Don’t buy a single vote more than necessary. I’ll be damned if I am going to pay for a landslide.” –JFK quoting a made-up telegram from his father, Joseph Kennedy What recalls the above anecdote is Ben Bernanke’s so-far successful efforts to keep mortgage rates low...Read More
