08 Jul 2009


All Posts, Potpourri No Comments

* I am going to be in Las Vegas for FreedomFest for a few days, so drop me an email if you will be too.

* Doug French favorably reviews my new book.

* Vasko Kohlmayer favorably reviews my new book.

* Mercedes Rules asks me, in regard to the reports about Goldman Sachs’ trading code getting stolen, “So, is Goldman publicly admitting they developed a computer program that can manipulate markets?” I had thought the same thing when the news broke. Yet another, “Is everyone else taking crazy pills?!” moment. (Here’s the money quote: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” [Assistant U.S. Attorney] Facciponti said, according to a recording of the hearing made public today.)

* In yet another post from Bizarro Land, Scott Sumner agrees with me that what the Fed is doing now under Bernanke, is exactly what they did in the early 1930s. So Scott and I are agreed that what they’re doing right now, is the way to replicate the Great Depression. The reason I put Scott in Bizarro Land is that his conclusion from all this is that Bernanke should pump in even more dollars created by the stroke of the pen (or click of the mouse). I, on the other hand, think that the way to break the symmetry with the 1930s is for the Fed to stop “helping” the markets at all. Interest rates are prices and they really convey information about the state of the economy; you don’t help investors by blindfolding them.

* Krugman is back, this time saying it is speculation driving up oil prices. I was amazed to agree with him back in 2008, when he said it was (fundamental) supply and demand, which is what I said too. The lack of a smoking gun that time was no build-up in oil inventories, whereas Krugman says crude inventories are building up now. Unfortunately he links to a site that requires you to buy a subscription. I’m not kidding, how much of a kickback does Krugman get for something like that? I bet that site got 10,000 hits the day the post first ran. In any event, now I have to go check the EIA website to see what we can see about oil inventories in 2009.

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