deLong notes the central banks increased the money supply by 7% in a single day (dollar and euro),
for some reason
this works out to 5.3 trillion percent per year, or 4.3 billion %/year if you assume bankers don't work weekends...
economists can sometimes have more fun than even astronomers
Watching the markets has been "interesting" recently
I have vague memories that a feature of markets is highly correlated variance,
ie that large day-to-day fluctuations correlate with large medium term fluctuations,
could be an interesting autumn
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In an article reviewing the success of the Euro, the WSJ attributes at least some of the finiancial instability of recent months to currency volatility between the US and Europe.
The Euro has had numerous benefits:
Travel was made easier, as was trade and investment. Interest rates fell. Prices…
Over the weekend, The Washington Post actually committed journalism with a report about the growing income and wealth gap in the U.S. To place it in historical context, they compared two CEOs, one from the 1970s and the current CEO. Here's the blast from the past (italics mine):
It was the 1970s…
I finally figured out what the underlying philosophy for the banking bailout is (other than TEH STOOPID): it's supply-side/trickle down economics. First, the latest insult by way of Chris in Paris (italics mine):
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/29/AR20081…
U.S. banks…
Please.
The Federal Reserve, this morning, sent out a press release.
Watching the financial crisis unfold must be like what it would have been like if the LHC had been turned on, and promptly made a small stable black hole that fell out and started eating the Earth.
Predicted in some theories,…
Maybe we should start referring to huge numbers as "economical".
> would that cause inflation?
yes of course. that is the whole point of such operations (to re-inflate the value of certain assets, in this case mortgage backed securities).
yes, the point of course being that it is unsustainable
the worrying thing is the ECB and Feds intervened again today at a similar level
which means they are pushing on overshooting the reflation and triggering genuine short term inflation
but the markets are expecting rate cuts, which is one reason they are "correcting" rather than in free-fall, but if the Fed overshoots then to hold on inflation they have to raise rates, which would make things worse.
I guess we find out if Bernanke is a good juggler, and whether there are too many things up in the air for even a good juggler.
An old New Yorker cartoon showed a financial news commentator on TV saying (as I recall):
"The Dow Jones Industrial Average rose briefly this morning to infinity, before profit-takers moved in."
True, if one knows the response of a system to a Dirac delta, then one can take a convolution integral (Wiener's?) to know response to an arbitrary function of time...