mattobrien

14 ms·

61.
by mattobrien 17y ago
If we pretend the emperor has clothes does that mean he's not naked? This author seems to think so. This is very foolish. Unfortunately, Roubini is likely correct: there probably won't be a turnaround until 2010, and even that will be weak.
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by mattobrien 18y ago
This is most likely not fantastic news. This is most likely terribly misleading news. As noted, suspending aspects of mark-to-market undoubtedly helped their bottom line. And who knows how much of these "profits" were the result of one-time
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by mattobrien 18y ago
Two things. Developing economies generally have higher rates of growth than more advanced ones, so the fact that Russia had higher rates of growth than the seven most advanced economies in the world is fairly meaningless. In fact, there was
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by mattobrien 18y ago
Much of this growth came from spiking commodity prices, particularly oil and natural gas. That's not long-term sustainable. High energy prices masked the structural problems Russia faces. Now that's over.
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by mattobrien 18y ago
There is a lot of parroting of talking points to unpack here. First, you assume that drawing down our nuclear program is a priori bad. This is clearly not so. Consider that the greatest threat of terrorists gaining access to nuclear weapons
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by mattobrien 18y ago
Just because the bubble lasted longer than "perpetual bears" thought it would, does that mean their analysis was wrong? For instance, Andy Beal, the banker Forbes profiled (that was at the top of HN), saw the crazy deals being made in 2004
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Is Harvard A Hedge Fund?(hedgedbet.blogspot.com)
2 points by mattobrien 18y ago|0 comments
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Is There Even Demand For New Debt?(hedgedbet.blogspot.com)
4 points by mattobrien 18y ago|0 comments
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by mattobrien 18y ago
Fair enough on TF. But plenty of smart people also thought housing prices would never go down...
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by mattobrien 18y ago
You are wrong. Everyone's standard of living is not increasing. Quite the opposite. Adjusted for inflation, median incomes have stagnated or declined in the last 30 years. Household debt has skyrocketed oftentimes as people have simply trie
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by mattobrien 18y ago
The banks are insolvent. Mortgages and auto loans and credit cards are all going bust. There is nothing panic driven about the depressed value of those assets. Studies they've done on CDOs show that they are worth even less than what the pe
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by mattobrien 18y ago
Supply side economics does not really increase supply. That's just the moniker. Supply side economics means tax cuts for the well to do, who will supposedly then create the jobs that will grow the economy. But this rests on the middle class
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by mattobrien 18y ago
Here's the thing: everyone else is doing the exact same things. And we're starting from a better place than most everyone else (lower government debt-to-GDP ratio). All currencies will likely lose value against real assets. But as far as cu
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by mattobrien 18y ago
The euro??? The euro has a much, much better chance of ceasing to exist than it does of replacing the dollar as the reserve currency. Countries like Spain and Italy that are near depression will have huge incentives to leave the euro so the
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by mattobrien 18y ago
Supply side economics has a fundamental flaw: it lowers aggregate demand. The middle class has been able to make up for this over the last 30 years in two ways - by having women join the workforce, and by taking on more and more debt. Debt
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by mattobrien 18y ago
Small point: Dubai is finished. It is bankrupt. It was a classic boomtown. All of the building was done on debt. Foreigners are leaving their cars at the airport, flying out, so that they do not end up in debtor's prison (yes, Dubai has deb
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by mattobrien 18y ago
The current situation is much worse than Japan's "lost decade." Unfortunately, the crisis today is global in scope. When Japan went through its "lost decade," it was eventually able to export its way back to growth. That option does not exi
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by mattobrien 18y ago
Obama talking about the economy did not make Lehman brothers fail. It did not make Bear Stearns fail. It did not make our entire financial sector load up on risky loans. It did not make mortgage originators and bankers give out mortgages an
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by mattobrien 18y ago
A few things. First, this is a global recession. I would not expect unemployment in the US to be as bad now as it was during the Great Depression simply because the US occupies a different place in the global economy today. In 1929, the US
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by mattobrien 18y ago
This is wrong. This current recession is the worst economic crisis since the Great Depression. Unlike 1973-75 and 1981-82, we now have a recession in the real economy and a banking crisis. This is a disastrous combination. The last time we
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by mattobrien 18y ago
are you from albania?
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by mattobrien 18y ago
This was a bank run, except it involved money market accounts. Money market accounts hold a lot of short term corporate debt. After Lehman went bankrupt, a few prominent money market accounts that held Lehman debt "broke the buck", ie paid
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by mattobrien 18y ago
Taleb has not claimed that the current crisis is a Black Swan; in fact, quite the opposite. While this crisis has thrust his ideas into the spotlight, he has maintained in interviews that our financial crisis was entirely predictable (and h
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by mattobrien 18y ago
Because they were the result of bubbles bursting, not the Fed raising interest rates. The 1981-82 recession was very steep, but the recovery was very quick, precisely because the Fed induced the recession by raising rates, and then ended it
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by mattobrien 18y ago
It's a populist backlash. As far as Harvard is a proxy for our financial elites, the commenters are upset at what they see as the government bailing out Wall Street while ignoring Main Street.
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by mattobrien 18y ago
In the long term we are all dead. Or, to quote Keynes again, markets can remain irrational longer than you can remain solvent. It's not just a question of whether these real assets will rebound in value within the next few months/years - it
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by mattobrien 18y ago
How is it actually very different from Japan-style deflation? The problem is that as the credit bubble has popped, prices across the board are falling, and consumers are so scared that even relatively well-off people are cutting back on con
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by mattobrien 18y ago
Because the "cure" threatens to kill the patient. The current recession is deflationary - something we have not seen in the US since the Great Depression. Whereas monetary policy can rather easily counteract a typical recession - and be use
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by mattobrien 18y ago
It's not just a matter of a lag. The Big 3 owe auto suppliers around $10 billion for parts already delivered. These suppliers need payment soon to avoid their own bankruptcies - payment they won't receive with a Big 3 collapse. If many supp
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by mattobrien 18y ago
The Big 3 are disappearing right now because they can't receive credit, and consequently can't roll over their debts. Exacerbating this, demand for cars - even for Japanese cars - has plummeted as consumers are scared and are pulling back o

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