Category Archive

In talks with Clinton, China will ask for a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe. That would be one of the prerequisites for more purchases.

—He Zhicheng, an economist at Agricultural Bank of China

The government will be a net buyer of Treasuries in the short term because there’s no sign they have changed their strategy. But personally, I don’t think we should increase holdings because the medium- and long-term risks are quite high.

—Zhang Ming, secretary general of the international finance research center at the Chinese Academy of Social Sciences in Beijing.

[China] should diversify its reserves away from U.S. Treasuries if the value of China’s foreign-exchange reserves is in danger of being inflated away by the U.S. government’s pump- priming.

—Yu Yongding

You guys are in trouble

—Stephen Roach, chairman of Morgan Stanley Asia, to Asian central bankers at a conference in Kuala Lampur last week

The government’s incentive is to get the price up to support the balance sheet. The private sector participants want to pay as low a price as possible.

—Vincent Reinhart, a resident scholar at the American Enterprise Institute and former director of the Fed’s monetary affairs division

Except for U.S. Treasurys what else can you hold? We are deeply affected [by events in the U.S.]. No country is an island by itself, so the idea of decoupling does not apply at all.

—Luo Ping, director general of the China Banking Regulatory Commission.

• Opportunity Cost
• Competition
• Exigency

Funding may be expensive, but the circumstances are great

We haven’t seen the worst economic data yet. Until we see that things stopped getting worse, it’s hard to see how this market is going to get its footing.

—Keith Wirtz, who helps oversee $20 billion as chief investment officer at Fifth Third Bancorp in Cincinnati

Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.

—Holly Peterson

Thanks be to Heaven, we are thus freed from all this terrifying apparatus of economics

—Epigram at the end of Benn Steil’s op-ed in the FT, from Rousseau

In reality, no one spends someone else’s money better than they spend their own.

—Dick Armey’s op-ed in the WSJ 

…and yet…

The clear and present danger is not enough spending. You get more bang for your buck from spending than from tax cuts. There is no coherent economic theory under which more tax cuts would be a good thing.

—Krugman

598k, vs a forecast of 540k lost

7.6%, vs a forecast of 7.5%, a 16 year high

2008 job loss figures adjusted upward by 385k to 3.6m

Last week, the number of Americans filing first-time jobless claims reached a 26-year high, with 626,000 filling out initial applications

—NYT

A broad measure of unemployment — which counts part-time workers who want to be working full time — is now almost 14 percent. At its highest point in 1982, it was just above 16 percent.

–Economix, David Leonhardt

…this isn’t a brainstorming session — it’s a collision of fundamentally incompatible world views…

Democrats believe in something more or less like standard textbook macroeconomics; Republicans believe in a doctrine under which tax cuts are the universal elixir, and government spending is almost always bad.

—Krugman