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Bad things: 1) Revisions to previous qtrs (apart from Q1-2010) are all negative 2) Personal savings rate up a lot (6.2%, I think) 3) Personal consumption up a lot less than expected 4) Huge contribution from increase in inventories (1.1%) 5) Net exports highly negative contribution, due to...

Right... So this is Bullard's point, I think. When you say "rates at 0% forever" that, by itself, doesn't actually do anything. It creates an incentive for various economic agents to act in a certain manner. What we have at the moment is the problem that, having seen Japan, economic agents...

And when was the last time this happened, pray tell?

Yeah, but it's rates that serve as price signals... That's Bullard's point, as I understand it. That's what the Japanese experience is all about, really. It's not just trivial deflation, but rather a more nuanced shift in expectations towards lower nominal growth rates.

Since I would never contemplate doin such a thing, I don't know how to answer this. Diversification, you see, is my middle name.

It's a signaling effect... "Rates low for extended period" -> expected nominal growth low for extended period -> deflation.

I sold most of my long CHF (bot USDCHF, that is)...

I am curious about what you think your answer to this question might be, as I suspect mine would be different (in the current context).

The only professional FX shags worth listening to are ones that have been in the business for decades. I wouldn't spend a dime on someone who's been trading FX full-time for piddly 3 years. The guy's a jawk.

I liked this line of his best: *BULLARD SAYS `U.S. IS CLOSER TO A JAPANESE-STYLE OUTCOME TODAY'

Yeah, it's fun times, innit?

Are you from Moody's?

Cash 10s30s 109, through all-time highs... Yeeehaw!

Yeah, man, now we're talking... Belgian beer kicks ass!

I am familiar with Gokhale's work, as he's one of the very few people doing this sort of research. I will most certainly look, do some digging and get back to you, debaser. Will I be getting some nice chocolate for my trouble :)?

This is the most brilliant thread in a long long time... I just had to chime in and say that. Please, FXW, promise you won't be riding off into the sunset with your massive profits. My ET experience won't be the same without you. I sure hope you haven't been intimidated and discouraged by...

Turkey? Asian "tigers"? I know there's all sorts of criticism leveled at them and I am familiar with a lot of it. Still, I think it's fair to say that the EM economies wouldn't be where they are today, if it were not for the IMF's "poison pills".

Sure, and pls note I never disagreed with you about Hungary... My point is that I don't really see much predictive power in the history of deficits. On the one hand, you have countries with reasonably high budget deficits (primary and otherwise) that are perceived as safe (e.g. France with...

But if, say, Poland is not worse than, say, France, what makes you think Poland is the next to go, rather than France? I use France, rather than Italy, because of the primary budget deficits of the two countries.

Nah, they've just introduced the system of graduated haircuts that they've been talking about. So, for example, ABS haircuts are now 16%. I don't really see it as such a big deal.