Category Archive

There’s really no solution now — except abstinence.

—Lt. Col. Greg Conti, a professor of computer science at West Point on “What search Engines have found out about all of us”

Bear markets always end for exactly the same reason, and that is the market begins to price in deflation. Equities will be incredibly cheap.

—Russell Napier on the expected direction of James Tobin’s Q Ratio

a recession with adjectives — A deep recession, a long recession, a damaging recession

—Martin Feldstein

The big problem is that there’s no bottom in sight for consumers and for businesses. The negative sentiment makes it difficult to stabilize the situation. It’s very worrisome.

—John Lonski, chief economist at Moody’s Capital Markets

teasing is a mode of play, no doubt with a sharp edge, in which we provoke to negotiate life’s ambiguities and conflicts. And it is essential to making us fully human.

—NYT

With the U.S. economy suffering the worst financial crisis since the Great Depression, AARP has to decide if charging higher insurance rates in order to bolster its revenue by $497.6 million a year is the kind of help that seniors need.

—Bloomberg article on private interests at the AARP

In a veiled jab at Peter Wallison, Federal Reserve Governor Randall Kroszner observes:

Contrary to the assertion of critics, the evidence does not support the view that the CRA contributed in any substantial way to the crisis in the subprime mortgage market…lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending.

Overall economic activity weakened across all Federal Reserve districts since the last report

—Beige Book

We are looking at an economy that is not only in a recession, but a recession that is deepening rapidly

—Former Fed Governor Lyle Gramley

We are in the middle of the worst quarter. Right now, we are looking for a pretty sharp decline in the fourth quarter, a little less sharp decline in the first quarter and then hopefully things will improve after that.

—St. Louis Fed President James Bullard

It is clearly not going to end in a few months. We would be lucky to get done with it in the middle of next year.

—Jeffrey Frankel, a member of the NBER committee and a professor at Harvard University

Recent economic evidence suggests that the pace of this downturn is accelerating

—Lawrence Summers

This sets the stage for the Federal Reserve to be more formal in its adoption of quantitative easing

—Vincent Reinhart, the Fed’s director of monetary affairs until last year

But right now we have a fundamental shortfall in private spending: consumers are rediscovering the virtues of saving at the same moment that businesses, burned by past excesses and hamstrung by the troubles of the financial system, are cutting back on investment. That gap will eventually close, but until it does, government spending must take up the slack. Otherwise, private investment, and the economy as a whole, will plunge even more.

—Krugman arguing for deficit spending in exigent circumstances and against the likes of Amity Schlaes

Although the near-term outlook for the economy is weak, a number of factors are likely over time to promote the return of solid gains in economic activity and employment in the context of low and stable inflation. Among those factors are the stimulus provided by monetary policy and possible fiscal actions, the eventual stabilization in housing markets as the correction runs its course, and the underlying strengths and recuperative powers of our economy. The time needed for economic recovery, however, will depend greatly on the pace at which financial and credit markets return to more-normal functioning.

—Bernanke, today

Purchases of up to $100 billion in GSE direct obligations under the program will be conducted with the Federal Reserve’s primary dealers through a series of competitive auctions and will begin next week.  Purchases of up to $500 billion in MBS will be conducted by asset managers selected via a competitive process with a goal of beginning these purchases before year-end.  Purchases of both direct obligations and MBS are expected to take place over several quarters.  Further information regarding the operational details of this program will be provided after consultation with market participants.

—Federal Reserve

We’ve got a big downdraft coming on. The recession is certainly looking longer and deeper. It’s just getting very tough for consumers.

—John Silvia, chief economist at Wachovia

We’re in for a pretty serious recession

—Jeffrey Frankel, a member of the business-cycle dating committee of NBER (11/12)