It was like riding a tiger, not knowing how to get off without being eaten.
—Ramalinga Raju, former Chairman of Satyam, on his perpetration of a +$1b accounting fraud
Rates are going to be low for a long time. They see the economy as extremely weak. It is a dark document.
—Vincent Reinhart, former director of the Fed’s Division of Monetary Affairs, who is now a visiting scholar at the American Enterprise Institute in Washington
The current downturn is likely to be far longer and deeper than the ‘garden-variety’ recession. It’s worth pulling out all the stops.
—Janet Yellen, Federal Reserve Bank of San Francisco President in a Jan. 4 speech
Has Financial Development Made the World Riskier? – 2005 Paper by Raghuram Rajan
Comments on “The Revival of Fiscal Policy”
—Janet Yellen, President, SF FED
Byron Wien Announces Ten Surprises for 2009
New Oaktree Letter – Howard Marks, 17 – Dec – 2008
A recession happens when, for whatever reason, a large part of the private sector tries to increase its cash reserves at the same time…if the problem is that collectively people want to hold more money than there is in circulation, why not simply increase the supply of money?
The Great Depression happened largely because policy-makers imagined that austerity was the way to fight a recession; the not-so-great depression that has enveloped much of Asia has been worsened by the same instinct. Keynes had it right: Often, if not always, “it is ideas, not vested interests, that are dangerous for good or evil.”
—Krugman, from Slate in 1998, responding to talk about Hayek, Schumpeter and the Austrian school’s “overinvestment” or “hangover” theory of recessions.
It’s a mountain of cash. Somebody’s just got to find the match and light it.
—Bob Doll on reports that the $8.85 trillion held in cash, bank deposits and money- market funds is equal to 74% of the market value of U.S. companies, the highest ratio since 1990, according to Federal Reserve data compiled by Leuthold Group and Bloomberg.
Our government doesn’t have enough spare cash to bail out a lemonade stand. Our standard of living must decline to reflect years of reckless consumption and the disintegration of our industrial base. Only by swallowing this tough medicine now will our sick economy ever recover.
—Peter Schiff, president of Euro Pacific Capital
We got into this mess to a considerable extent by overborrowing. Now, we’re saying, ‘Well, O.K., let’s just borrow a bunch more, and that will help us get out of this mess.’ It’s like a drunk who says, ‘Give me a bottle of Scotch, and then I’ll be O.K. and I won’t have to drink anymore.’ Eventually, we have to get off this binge of borrowing. This is a dangerous situation. The risks of things actually getting worse and us going into a really severe recession are high. We need to get more money out there now.
—Martin Baily
Those who claim that sharp increases in federal borrowing and the national debt would be ill advised at the present time, when the economy is weakening while deflation threatens, have failed to study Japan’s history
—John H. Makin
Printing Money – and Its Price
By PETER S. GOODMAN
Published: December 28, 2008
The future seems a distant concern now. But Washington is spending as we once did.
Bloomberg Survey ================================================================ Release Period Prior Median Indicator Date Value Forecast ================================================================ Case Shiller Monthly YO 12/30 Oct. -17.4% -17.8% Case Shiller Monthly In 12/30 Oct. 161.6 159.0 Chicago PM Index 12/30 Dec. 33.8 33.0 Consumer Conf Index 12/30 Dec. 44.9 45.5 Initial Claims ,000’s 12/31 Dec. 27 586 575 Cont. Claims ,000’s 12/31 Dec. 20 4370 4400 ISM Manu Index 1/2 Dec. 36.2 35.4 ISM Prices Index 1/2 Dec. 25.5 21.0 ================================================================
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