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his father, an avid hunter, reportedly trained his son to shoot prairie dogs
—NYT
Without an increase in oil prices or an improvement in the capital account of the balance of payments, the central bank will eventually have to devalue. [Urals crude of $60 a barrel] would imply a devaluation of the ruble against the bi-currency basket by 25 to 30 percent.
Evgeny Gavrilenkov, Troika Dialog’s Moscow-based chief economist (11/7/9)
This is the year the consumer has been given a holiday gift beyond belief. You can get anything, anywhere, at any price. What’s happening is the retailer is almost saying, ‘Please just come in…We’ll pay you to shop.’
—Marshal Cohen, chief industry analyst for NPD Group
Retailers Report a Sales Collapse
By STEPHANIE ROSENBLOOM
Published: November 7, 2008
Most of the nation’s retailers reported double-digit declines in October sales, underscoring how the financial turmoil has touched all consumers.
Wen Jiabao discusses economic policy in the Communist Party journal Qiushi, or Seeking Truth.
China’s foreign-exchange reserves stand like mountains in contrast to the capital-hungry conditions in much of the rest of the world. These reserves lend resilience to China’s economy, and, in turn, help to buffer Asian economies.
—Jeffrey Knight, the chief investment officer at Boston-based Putnam Investments, which manages $137 billion
It’s better to die what you are than to live a stranger forever
—Saul Bellow, through Mintouchian, The Adventures of Augie March
If you print enough money, you can create inflation
—Kenneth S. Rogoff, a former chief economist at the International Monetary Fund.
Specter of Deflation Lurks as Global Demand Drops
By PETER S. GOODMANPublished: November 1, 2008Consumer cutbacks could lead to falling prices, suffocating investment and worsening joblessness for months or even years.
the last time it fell even for a single quarter was in 1991, and there hasn’t been a decline this steep since 1980, when the economy was suffering from a severe recession combined with double-digit inflation.
When Consumers Capitulate
By PAUL KRUGMAN
Published: October 31, 2008
Sooner or later, American consumers were going to have to pull in their belts. But the timing of the new sobriety is deeply unfortunate.
- GDP down .3%
- Real Consumer Spending down 3.1%
- Real Spending on Durable Goods down 14%
This meltdown is not just a financial event, but also a cultural one. It’s a big, whopping reminder that the human mind is continually trying to perceive things that aren’t true, and not perceiving them takes enormous effort….
But the second thing you realize is that government officials are probably going to be even worse perceivers of reality than private business types. Their information feedback mechanism is more limited, and, being deeply politicized, they’re even more likely to filter inconvenient facts.
The Behavioral Revolution
By DAVID BROOKS
Published: October 28, 2008
The financial crisis may be a coming-out party for behavioral economists to the realm of public policy.
…………………Response…………………
David Brooks suggests that corporations don’t face an information-volume problem, but a problem with perception. “The human mind is continually trying to perceive things that aren’t true,” he says. Nonetheless, he claims they are better positioned than government to perceive the information. It may be a claim he woudl like to make, but it is not logically obvious.
Brooks lays two advantages with corporates. They have more information and the information is less politicized. We would draw from this that the volume and the framing of the information is somehow superior. By framing, one can understand it as how the information is presented, inasmuch as how presentation affects how it is perceived.
It is clear that the volume and framing of the information is different, but does that make it better or worse? Politicizing the data may change how people attend to it. Government doesn’t have access to all of the detail that corporates do, just as corporates don’t have access to some government data. If we agree with Brooks that corporate view is flawed, a change in the perception could actually be an improvement. Notwithstanding, his argument does not confirm that either view is better or worse.
Considering the track-record, however, it’s clear that the corporate view is not and should not be the final view on the information. Indeed, just changing how the information is framed, as we have learned from Kahneman, Sunstein, Thaler and even those such as Tufte, can powerfully alter our perception. More important, the difference in perspective will yield different insights about the data and perhaps challenge the corporate perspective in ways that can encourage a meaningful response.
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