Posted by
Doug Wolkon on September 18, 2008 at 12:15 am
As the Fed continues to “print” more money what is the effect on the economy. Can they “print” their way out of this economic slide by lending more and more money to their friendly financial institutions? “Printing” more money against the same asset base is like an alcoholic having “just one more drink”. Such an attitude eventually leads to another and another…it is a bad idea and only works to “inflate” the existing problem. Continued »
Posted by
Doug Wolkon on August 11, 2008 at 3:15 am
So how much paper money is out there anyway. Does it matter that every time The Wizard of Oz (The Fed/government) decides to bailout a financial institution like Bear Stearns, Lehman, Fannie or Freddie, they have to print more and more money. What is behind this printing of money and how do they do it? Continued »
Posted by
Doug Wolkon on July 22, 2008 at 9:36 pm
Starting to get a lot more optimistic about the economic opportunity that lies ahead. The economy’s assets and liabilities are shifting perspective and ownership. It will be forced to act more efficiently. It may feel like it will happen super fast, but it has been a long time in the making. For those who embrace it, it will be fun, but for those who don’t, it won’t. Continued »
Posted by
Doug Wolkon on April 13, 2008 at 9:40 pm
The word “balance” has significant meaning here. When you take something “off-balance,” you are doing just that. In other words, balance is good (think yoga or buddhism), off-balance (think checkbook) is not good. On that note, what do you call Fannie Mae, Freddie Mac and Sallie Mae. Do they qualify as “off-balance sheet financing?” How about the Bear Stearns portfolio. The U.S. government did about 36 hours of due diligence on that one, is that one off-balance sheet too? Continued »
Posted by
Doug Wolkon on March 10, 2008 at 10:48 am
Dramatic unemployment increases in financial services, construction and autos will be the real shoe to drop. Who will pay for all these billions of dollars of writedowns? Oh, I forgot, the Fed has the ability to actually print more food and oil – yeah right, was Bernanke ever taught the first rule of Economics: Land is Scarce.
So how much of our newly printed paper is currently being bought by our social security system – talk about drinking your own blood. The welfare state will inevitably be forced to solve their huge inefficient costs of entitlements and armed forces. Continued »
Posted by
Doug Wolkon on February 21, 2008 at 3:47 pm
Given the energy transportation costs, nasty petroleum-based containers, and cost of waste, it is inevitable that well-filtered municipal water distributed out of locally recycled glass (e.g. wine bottles from local restaurants) is a gold mine waiting to happen. Continued »
Posted by
Doug Wolkon on February 14, 2008 at 3:14 pm
Subprime is a fancy word for too much debt. Adam Smith would actually say that housing over and above shelter has no utility value. If that is true, we are in for some serious additional write downs (think second homes).
On another note, Subprime could have worked if the loans stayed true to their risk and were made at “loan shark” type rates (5% “money-down” should have warranted a 20% rate; instead we were lending it at 7-10%). As a result, we were only realizing less return on a greater expense in the form of lower and lower investment rates (Menger, Say, Smith, Jevons and others), but more risk. Continued »
