Category Archive

The rebalancing of relative economic power is not only alive but gaining momentum. Average investors need to make sure that they are not hostage to an outdated conventional wisdom that underexposes them to this phenomenon.
—Mohamed El-Erian, chief executive officer of Pacific Investment Management Co

The BRICs are putting the U.S. on notice that there has to be a cutback on spending and get their house in order. This isn’t an effort to topple the dollar. Any attack on the dollar will hurt them. But they want to make sure this kind of mess doesn’t happen again.
—Mark Mobius, executive chairman of Templeton Asset Management, $20b AUM, emerging markets

Traditional ad campaigns are good at building brand awareness, but not among younger people. To reach them, you want to seem edgy. How do you make the Corolla seem irreverent? You can’t fake that; you actually have to be that way.
—Wharton marketing professor Jonah Berger

After the last home price boom, which ended about the time of the 1990-91 recession, home prices did not start moving upward, even incrementally, until 1997.
—Shiller, from the NYT

we should come away from Mr Bernanke’s testimony with at least two conclusions: the chairman seems more cautious about the growth outlook when compared with other recent public statements; and he wants to push fiscal sustainability issues clearly away from the Fed’s domain and back where they belong, with Congress and the administration.
—Mohamed El-Erian

Prior to 2009, it was enough to count on the recycling of the U.S. trade/current account deficit to fund Treasury borrowing requirements. Now, however, with that amount approximating only $500 billion, it is obvious that the Chinese and other surplus nations cannot fund the deficit even if they were fully on board – which they are not. Someone else has got to write checks for up to $1.5 trillion additional Treasury notes and bonds.

…the buyer of last resort in recent months has become the Federal Reserve, with its publically announced and near daily purchases of Treasuries and Agencies at a $400 billion annual rate.
—Bill Gross

Productivity – 1Q09, Quarter over Quarter
—+1.8% in the business sector, on an annual basis, which was “greater than preliminary estimates reported on May 7, due solely to revisions to output growth.”
—Manufacturing showed declines of 2.7% and 10.4% in manufacturing and durable goods manufacturing, respectively. Productivity in nondurable goods manufacturing grew by 1.9%.
—Output Decreased 7.2%, but manufacturing output decreased 21.5% and hours decreased 19.5%. “These were the largest-ever declines in the output and hours series” since 2Q87.
—Productivity at non-financial companies decreased 2.1% in the first quarter

We’ve gone now for a period of three months in the absence of any of that news. And I actually don’t think there is another shoe to drop or another scare headline out there. And the history has said that is a time to buy.
—Jeremy Siegel

I worry about details. We will be watching you very carefully.
—Yu Yongding, in the China Daily interview with Geithner

I wish to tell the U.S. government: ‘Don’t be complacent and think there isn’t any alternative for China to buy your bills and bonds’. The euro is an alternative. And there are lots of raw materials we can still buy. Yes, some people say the euro is very weak. Okay, weak is good, we’ll buy very cheap….The borrower should keep their promises. The U.S. should be a responsible country.
—Yu Yongding, continued

If the U.S. can find a way to protect China’s assets, America’s standing here will increase. We are not going to return to the good old days of 2006. We are going to promote the creation of a new world order.
—Yu Yongding in an interview Monday

You have established good working relationships with your Chinese colleagues and you are committed to increasing China-U.S. cooperation in tackling the international financial crisis. I appreciate that.
—President Hu Jintao at the Great Hall of the People

In the short term I don’t think we can find another currency to replace the US dollar. The US dollar is the main currency because their economy is number one in terms of competitiveness, in terms of innovation…We’ve had SDRs for many years but everybody knows they don’t work so well. People worry about US dollars very much because of the imbalances in the current account but that has been the case for many years – they have had a deficit in the current account since the very beginning of the 1970s.
—Guo Shuqing, chairman of China Construction Bank and former head of the country’s foreign exchange administrator, on 1 June 2009

It’s very difficult at the moment because there are still so many uncertainties. We are not very interested on expanding our business in developed countries because the market is limited and growth potential is not there because of over-banking.
—Guo Shuqing continues in an FT interview on the first

This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. … All in all, I think we hit the jackpot.
—Ronald Reagan, 1982, on signing into law the Garn-St. Germain Depository Institutions Act

The immediate effect of Garn-St. Germain, as I said, was to turn the thrifts from a problem into a catastrophe…the fact is that deregulation in effect gave the industry — whose deposits were federally insured — a license to gamble with taxpayers’ money, at best, or simply to loot it, at worst.
—Krugman

I hope Geithner’s visit can soothe our nerves. The Chinese public is worried about the safety of its foreign- exchange reserves.
—Yu Yongding

Treasuries are still a buy and you can’t explain that from the macro economic perspective alone.
— Mickael Benhaim, head of global bonds at Pictet & Cie Banquiers in Geneva, $32b AUM

The Chinese public is worried about the safety of its foreign-exchange reserves. If America fails to adjust its economy by increasing its saving rate and reducing its current account deficit another financial crisis triggered by a dollar crisis could be inevitable…Geithner can show us some arithmetic. We need to know how the U.S. government can achieve this objective…The balance sheet of the Federal Reserve not only has expanded like mad but is also ridden with ‘rubbish’ assets.
—Yu Yongding

I do not know whether there will be enough demand for new issuances and hence I am worried about the direction of the prices of US government securities.
—Yu Yongding

Prospects for the US dollar and US Treasuries do not look good at the moment, and even worse in the long run.
—Wang Jian, Secretary General of the China Society of Macroeconomics

Expertise Modeling for Matching Papers with Reviewers, David Mimno, Andrew McCallum. Presented at the New Directions in Text Analysis conference, sponsored by the Eric M. Mindich Conference on Experimental Social Science