Posts filed under “UnGuru”
We asked him once to visit us in our offices and the meeting took place the day after then Fed Chairman Alan Greenspan’s famous Irrational Exuberance speech in December 1996:
“But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”
The professor said he was in town to meet with Greenspan who was concerned about the run-up in stock prices. During the meeting Greenspan solicited his thoughts on why stocks were rising. The professor answered maybe it was just “irrational exuberance” among investors. Hmmmm…
-The Ambiguity of Stock Value, December 27, 2010
In other words, Greenspan cribbed Shiller’s phrase for his speech!
Perhaps this explains why Shiller named his book “Irrational Exuberance” — he was taking back the phrase from Greenspan as his own.
Fascinating stuff . . .
This is the third or so in a continuing series of WTH/WTF posts where we look at famous wealthy folks’ investing errors, and wonder just WTF is going in their personal finances. Our goal: Learn from other people’s mistakes. Today’s WTF?! celeb is 42 year old golfer Phil Mickelson. Phil is “mad as hell about…Read More
Distinguished Lecture by Nobel Laureate Prof. Joseph E. Stiglitz
Occasion: Investiture ceremony of Prof. Joseph E. Stiglitz
Date: 04, January 2013
Venue: University of Hyderabad, India
Speaker: Prof. Joseph E. Stiglitz, Columbia University
Topic: Macro Economics in crisis: An agenda for Rejuvenating the discipline
About the speaker:
Joseph E. Stiglitz, a Nobel Laureate in Economics (2001) and University Professor at Columbia University, is one of the most eminent economists who has explored and pioneered many pivotal concepts and theories in Economics.
His Works have helped explain several critical market circumstances, globalization and economic crises in several parts of the world.
He has also authored several books in Economics. Some popular ones being, “The Price of Inequality”, “Globalization and its Discontents”.
As Ben Walsh of Reuters mentions, the Tim Geithner Legacy Project is underway. There was a large post by Neil Irwin in the Washington Post, arguing that he’ll be one of the most important Treasury secretaries in history. Joe Weisenthal argues he’s done a great job guiding us out of the recession compared to other countries. As there will be several pieces like this in the weeks ahead, I want to make some general criticisms. This will probably go across several posts.
Joe Weisthnal notes that our recovery has been better than other financial crisis recessions.
Four things about the chart. First, I’d note as a matter of the empirical research that “financial crisis” isn’t a coherent unit of measurement for these purposes. If Finland was going to have a recession three-times worse than the United States, it would also have a “financial crisis” at some point. But that doesn’t mean the recessions are identical. This idea that financial crises creates long recessions when long recessions really create financial crises is the weak part of the whole Rogoff-Reinhart argument. So I’m not sure these are equal starting points for a comparison.
Each year, David Weidner of MarketWatch puts out a list of folks in finance that you should pay no attention to.
This year’s list is out, and its a doozy:
1. Jamie Dimon
2. Sam Stovall
3. Jim Cramer
4. Bill Miller
5. Michael Grimes
6. Sheila Bair *
7. Vikram Pandit
8. Greg Smith
9. Meredith Whitney
10. Occupy Anything
11. Glenn Hubbard
12. Robert Diamond
13. Mitt Romney
* Bair was on his Do Not ignore list.
(2012′s list is after the jump.)
Who did he miss this year?
Q&A: The Price of Paying Attention (November 3rd, 2012)
13 Wall Street voices to ignore (or not) in 2013
MarketWatch, January 2 2013
I don’t know about you, but I am bored to death with the Fiscal Cliff obsession. This may be the signle greatest example of excess media hype since Y2K. We find out how devastating this will be very soon. I do not believe history will look back kindly at how many people and institutions handled themselves over this period. (Pathetically irresponsible are the first words that come to mind).
What is causing all the sturm und drang? Is this really a Mayan apocalypse of expiring tax breaks and sequestered spending cuts.
Hardly — here is what we are discussing, in terms so simple even a congressman could understand it:
• Bush tax cuts expire; tax rates revert to Clinton-era levels. Recall this was originally designed to get rid of that pesky surplus (mission accomplished), and to expire in 10 years. It is now year 13;
• Top marginal rate go from 35% to 39.6%; Middle-class tax payers see increases of ~$2,200 per year;
• Payroll tax cut stimulus expires; Americans will go back to paying 6.2% up from the current 4.2%, this rate applies to the first $113k of income.
• Unemployment insurance expires for 2.1 million long-term unemployed, with another 1 million Americans scheduled to see those benefits terminate Q1 2013.
• Sequestration kick in. $1.2 trillion in cuts spread out over the next decade. (That’s hardly a cliff after all).
• Specific Savings: $492 billion come from Defense; half from discretionary programs (non defense, non entitlements). That adds up to $984 billion — the balance of $1.2 trillion are interest rate savings on the smaller debt.
• Annual Spending Cuts: The specific savings amounts to $55 billion in Pentagon cuts plus $55 billion from non-defense discretionary programs.
• Alternative Minimum Tax patch expires. A messy set of repairs to that operates to fix the simple error of the AMT not being inflation adjusted since 1969.
• Medicare doctor payment adjustments: Another annual fix-the-original-error expires tomorrow. Without this, Medicare doctors get a 26.5% Medicare payment reduction.
All Most of these will be phased in over the next year and decade. For example, the tax rate increase won’t have to be paid until you file your taxes in April 2014.
None of these are simple or painless, but they hardly amount to the world ending depression many are claiming. It will be a minor drag on the economy at a time when it is still soft, not yet fully recovered from the financial crisis.
All of the above is the opposite of classic Keynesian stimulus — raising taxes and cutting spending during economic weakness (then reversing it during strength). Those of you who are anti-Keynes should therefore be rooting for this.
Falling Off the Fiscal Cliff
Dallas Fed, December 2012
The Fiscal Cliff: Absolutely everything you could possibly need to know, in one FAQ
Suzy Khimm, Ezra Klein, Dylan Matthews and Brad Plumer
Washington Post, December 3, 2012
The Guide to Going Off the Cliff
Nation, December 29, 2012
Lately, I have been hearing a lot of market top/crash calls. These have been going on pretty much the entire rally off of the lows (recall the disastrous Hindenburg Omen). The most recent comes from respected fund manager John Hussman, who while having a bearish bend, has an actual methodology. I am no stranger to…Read More
Interesting Exchange with a friend who lives Near Tim Geithner in Westchester: M: Saw him twice today here in Larchmont. His family must have moved back already. Probably a while ago. Barry: Never sold the house, did he? M: Doesn’t look like it. I’d bet the family has been living here for a year. They’ll…Read More