Professor Mark J. Perry's Blog for Economics and Finance
Posted 4:11 PM Post Link
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How is such a low rate going to help the two GSEs fix up their debt?From CNBC: Fannie-Freddie Bailout Could Cost Taxpayers $1 Trillion
Great. Just another argument to short USTs.
"Great. Just another argument to short USTs"...Now that's a seriously good nugget there vangeIV...Really!BTW Professor Mark, you've shown up over at Doug Ross Journal: Circle of DeathIts in relation to your California and GM posting the other day...."If you're not familiar with the state of California, it's a public employee pension management organization that runs a state on the side with a large $19 billion deficit"...
Thanks Juandos, I hadn't seen that.
Rates are going even lower. Japanitis--unless Bernanke brings on the QE2 hard and heavy.
"Japanitis--unless Bernanke brings on the QE2 hard and heavy."Solve the problem by throwing money at it. Your boyfriend would be proud, Benji.
Rates are going even lower. Japanitis--unless Bernanke brings on the QE2 hard and heavy.First, the Fed can't really go below zero per cent, which is very close to where we are now. Second, QE2 could destroy the bond market and the currency and will not create any more wealth. It is a step towards a Wiemar style hyperinflation, something that may make some of us very rich but will certainly not help the average American who just wants to be left alone.
Looks like the banks and others that cooked up the housing mess are now going to have to eat left overs for quite a while.
Looks like the banks and others that cooked up the housing mess are now going to have to eat left overs for quite a while. Actually, they are in position to do so. Their equity cannot handle the true losses so they would be insolvent. That means that FDIC will have to step into the void to protect depositors but the FDIC is itself insolvent so the task will be on the Treasury or the Fed to 'fix' the problem. That would require money printing operations that would allow the problem to go away. But that would mean massive inflation, the death of the bond market, and the end of the retirement dreams of most Americans. Buy gold.
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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