By preventing assets from reaching their market levels, the administration risks making the recession last longer than it should. The uncertainty in all of the radical bills proposed in the first year has businesses behaving like a deer in the
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We tend to look at the increase in prices as inflation, but in a situation of fluctuations prices go up and down. What if prices should be going down 3% but instead we see prices increasing 3%. We see a
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For the first time in my working career I laid of three people in one day. Over the last year we have laid off about 20% of our whole work force. We have ceased matching the workers 401k plans for
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One of the most intriguing concepts of economics is the concept of “moral hazard.” It is a corollary to a more obvious principle that everything has a cost. An understanding of it is critical for those whose world view is
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There are a few indisputable changes in our economy. Credit is tightening. Generally this is good because lending standards, whether to individuals to buy homes, or to real estate developers or other businesses, were way too lax. Marginal businesses will
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George Copper writes in “The Origin of Financial Crisis” that our economic thinking is regimented for failure in a world that is more influenced by the bubbles in financial assets. The efficient market hypothesis contends that prices find their natural
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The editors of National Review note the destructive aspects of the cash-for-clunkers program in “Uncreative Destruction”. read it here. If there is one absolute rule in economics it is that everything has a cost. What were ‘clunkers’ to the program
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Jim Cramer shows a correlation between Obama’s rising disapproval ratings and the rise in the S&P 500. While correlation is not necessarily causation it is worth noting.
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The stock market has risen over 40% from the March lows. While the administration is sure to take credit for the market, they should do so cautiously. Since only a very small part of the stimulus package has been spent,
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The percentage of taxes paid by the top 1% now exceeds the percentage paid by the bottom 95%. This increase in progressiveness happened under George Bush. The top 1% are made of 1.4 million taxpayers and pay 40.4% of all
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From Wikipedia “In the economic sphere, many fascist leaders have claimed to support a “Third Way” in economic policy, which they believed superior to both the rampant individualism of unrestrained capitalism and the severe control of state communism. This was
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A friend involved in investment market research believes the stock market is bullish for several reasons one of them being the overwhelming bearish market sentiment. Experienced investors understand that bottoms happen when sellers are exhausted and when bears rule the
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Blogger Doug Ott in ‘Yes and Not Yes’ notes in the annual report of Alleghany Insurance, their thought of the cause of the financial mess. an excerpt Over the following decade and a half, this currency policy contributed to stagnant
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I have been a critic of Paul Krugman after reading his book, “The Conscious of a Liberal”. he just seems to belive that there is no government program that can ever get too big and no problem a government program
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We are in an unusual economic situation. We have deflation because of falling commodity prices and rising unemployment. Many companies have instituted across the board pay cuts. The credit contraction is also very deflationary. In an economy built on credit,
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The stock market of the roaring 20’s was built on excess credit, leading many people to own stock that probably should not have and causing the intellects of the day to rationalize that we were in a “permanently high plateau”;
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