I occasionally use the expression, "I'm shittin' in tall cotton". Leaves the canucks scratching their heads, lol.
This QE really drove these oil prices
- Thread starter wildchild
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If everyone that states a similar point that I do is my echo chamber, then you're the biggest fucking parrot on the forum. You offer no unique thought whatsoever, and all you do is squawk agreement with your liberal girlfriends. Oh, and click the like button each time you see them write.
Lol, now that you bring it up... enjoy.
"Let me jump right in here. How many people, I wonder — even among economists who have eagerly taken sides in the austerity debate — have a sense of what the overall picture looks like since the great turn to austerity in 2010? I don’t mean what happened in country X in year Y, which you imagine supports your position; I mean the overall shape of events across many countries and multiple years.
"Well, here’s a quick and easy picture. I’ve taken annual data on the growth of real GDP and of government purchases from Eurostat, using every country for which data are available 2010-2013. I was tempted to edit out minor countries like Malta, but decided to do this as cleanly as possible. What we get are 33 countries for 4 years, 132 observations. And they look like this (bear in mind that these are percentage changes, so you can’t read the slope of a trend line as a multiplier):
Photo
Credit
"Does this picture make you think that Keynesian economics is nonsense? You can, if you like, argue that it’s a spurious correlation for some reason. But surely the raw observations are consistent with the view that in depressed economies, cutting government spending hurts growth.
"Of course, the fit isn’t perfect. In fact, the R-squared is only 0.31. That’s because in economics as in life, and as the bumper stickers don’t quite say, stuff happens. And that is why we have statistics. Government spending only explains part of the variation in growth, but the t-statistic is 7.7; for the uninitiated, anything over around 2 is statistically significant at the 95 percent level.
"As I said, you can, if you like, try to argue that this relationship is spurious, maybe not causal. But one form of argument that is really illegitimate is to comb through the data, pick out outliers, and claiming that the existence of these outliers — because stuff does, in fact, happen — disproves Keynesian logic. Unfortunately, you see a lot of that, including from economists who really should know better."
http://krugman.blogs.nytimes.com/2015/01/06/the-record-of-austerity/?module=BlogPost-Title&version=Blog Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body
Ah, someone wrote a rather excellent rebuttal to Krugman's Record of Austerity post, which again is an excellent take down of the charlatan.
http://blogs.cfr.org/geographics/2015/01/13/krugmanchart/
Correcting Paul Krugman’s Austerity Chart for Monetary Effects Yields Very Different Results
by Benn Steil and Dinah Walker
January 13, 2015
In two recent blog posts (1/6 and 1/7), Paul Krugman highlighted a chart he made that, he says, illustrates clearly the failure of “austerity” around the world. We reproduce it above on the left.
Krugman’s chart plots changes in real GDP against changes in real government purchases for 33 advanced countries between 2010 and 2013. The slope of the trend line (which Krugman does not draw) is clearly positive (with R-squared of 0.31), suggesting strongly that cutting government spending (during that period) reduced growth, and that raising it increased growth.
The problem with this figure is that it mixes countries that were able to use monetary policy with those that weren’t – such as those in the Eurozone or those with hard currency pegs. Referring to this problem, Scott Sumner recently asked on his blog: “Why do Keynesians show cross-sectional graphs of fiscal austerity and growth, mixing in countries that have their own independent monetary policy with those that do not?” Sumner’s point is that countries that have independent monetary policy can, in principle, offset fiscal drag with more accommodative monetary policy. Is he right?
On the right-hand figure above, we re-did Krugman’s chart for advanced countries with independent monetary policies. Lo and behold, Krugman’s spending-growth relationship collapses, as Sumner would have expected.
This is not to say that austerity is good. But it does undermine the empirical basis for Krugman’s claim that reducing government spending lowers growth, and that increasing government spending raises growth, at least in countries that can use monetary policy as well as fiscal policy.
Oops.
from some guy's blog:
"
Bank of France Governor Christian Noyer told Handelsblatt that, if the ECB were to buy government bonds, he would favour “a cap” in terms of percentage of the market which the ECB can buy.
Handelsblatt
Le Figaro reports that the European Commission will today unveil a communication detailing the “exceptional circumstances” under which Eurozone countries can be granted more flexibility on the achievement of their deficit and debt reduction targets.
Le Figaro
Both of these actions--European Central Bank purchases of sovereign debt and allowing some countries to exceed their national deficit limits--are violations of the Maastricht Treaty, supposedly the founding legal basis of the European Union and the European Monetary Union (eurozone). This should be a warning to all nations who foolishly believe that they can give up their sovereignty to supranational organizations that will abide by their founding law. These supranational governments will behave no differently than national governments; i.e., they will take whatever power they can regardless of the law. But unlike the potential remedies to restrain those who violate national constitutions, supranational governments that violate their constitutions are restrained only by threats that members will leave. The EU and EMU governing boards act with impunity because they believe that lingering war guilt will keep Germany as a member even though it is against German national interest."
"
Bank of France Governor Christian Noyer told Handelsblatt that, if the ECB were to buy government bonds, he would favour “a cap” in terms of percentage of the market which the ECB can buy.
Handelsblatt
Le Figaro reports that the European Commission will today unveil a communication detailing the “exceptional circumstances” under which Eurozone countries can be granted more flexibility on the achievement of their deficit and debt reduction targets.
Le Figaro
Both of these actions--European Central Bank purchases of sovereign debt and allowing some countries to exceed their national deficit limits--are violations of the Maastricht Treaty, supposedly the founding legal basis of the European Union and the European Monetary Union (eurozone). This should be a warning to all nations who foolishly believe that they can give up their sovereignty to supranational organizations that will abide by their founding law. These supranational governments will behave no differently than national governments; i.e., they will take whatever power they can regardless of the law. But unlike the potential remedies to restrain those who violate national constitutions, supranational governments that violate their constitutions are restrained only by threats that members will leave. The EU and EMU governing boards act with impunity because they believe that lingering war guilt will keep Germany as a member even though it is against German national interest."
Oops is right!!! did anyone besides me happen to pick up on the difference between the y-axes in these two plots??!!!Ah, someone wrote a rather excellent rebuttal to Krugman's Record of Austerity post, which again is an excellent take down of the charlatan.
http://blogs.cfr.org/geographics/2015/01/13/krugmanchart/
Correcting Paul Krugman’s Austerity Chart for Monetary Effects Yields Very Different Results
by Benn Steil and Dinah Walker
January 13, 2015
In two recent blog posts (1/6 and 1/7), Paul Krugman highlighted a chart he made that, he says, illustrates clearly the failure of “austerity” around the world. We reproduce it above on the left.
Krugman’s chart plots changes in real GDP against changes in real government purchases for 33 advanced countries between 2010 and 2013. The slope of the trend line (which Krugman does not draw) is clearly positive (with R-squared of 0.31), suggesting strongly that cutting government spending (during that period) reduced growth, and that raising it increased growth.
The problem with this figure is that it mixes countries that were able to use monetary policy with those that weren’t – such as those in the Eurozone or those with hard currency pegs. Referring to this problem, Scott Sumner recently asked on his blog: “Why do Keynesians show cross-sectional graphs of fiscal austerity and growth, mixing in countries that have their own independent monetary policy with those that do not?” Sumner’s point is that countries that have independent monetary policy can, in principle, offset fiscal drag with more accommodative monetary policy. Is he right?
On the right-hand figure above, we re-did Krugman’s chart for advanced countries with independent monetary policies. Lo and behold, Krugman’s spending-growth relationship collapses, as Sumner would have expected.
This is not to say that austerity is good. But it does undermine the empirical basis for Krugman’s claim that reducing government spending lowers growth, and that increasing government spending raises growth, at least in countries that can use monetary policy as well as fiscal policy.
Oops.
Good catch. Obviously for those countries limited to only fiscal policy, the government spending/GDP growth correlation had to be huge, to get Krugman's plot. For those countries able to employ monetary policy (and assuming they did), looks like it worked about as well as "pushing a rope"? Which is what you would expect from a balance sheet type recession.
Bloomberg Says There Is No More “Greenspan Put”: Please Stop Laughing And Move On!
"Bloomberg informsus that the new broom at the Fed, Janet Yellen, won’t immediately rush to the stock market’s aid when the next downturn comes. Could it be that an article from the Onion has been smuggled in while they were not looking? Lately, Fed doves have been wheeled out at every market dip exceeding 3%."
I only got a bigger laugh when I watched a Bloomberg business vid the other day after the SNB eliminated their peg. The Bloomberg journalist breathlessly, and acting very surprised, reported that the SNB had decided to stop protecting the swiss franc. So I ask you. In what sphere of economic ignorance is a rising currency perceived as lacking protection? I think it's explained best by a quote from a Stockman article:
"This leaves us to ponder what the purpose of such articles is, and we already hinted at it above: their aim is to bolster the impression that central planning of the economy is not only possible, but a perfectly normal and desirable state of affairs. Monetary interventionism by bureaucrats is to be taken for granted and to be accepted as delivering the best of all worlds. It is basically propaganda dressed up as reportage."
http://davidstockmanscontracorner.c...eenspan-put-please-stop-laughing-and-move-on/
"Bloomberg informsus that the new broom at the Fed, Janet Yellen, won’t immediately rush to the stock market’s aid when the next downturn comes. Could it be that an article from the Onion has been smuggled in while they were not looking? Lately, Fed doves have been wheeled out at every market dip exceeding 3%."
I only got a bigger laugh when I watched a Bloomberg business vid the other day after the SNB eliminated their peg. The Bloomberg journalist breathlessly, and acting very surprised, reported that the SNB had decided to stop protecting the swiss franc. So I ask you. In what sphere of economic ignorance is a rising currency perceived as lacking protection? I think it's explained best by a quote from a Stockman article:
"This leaves us to ponder what the purpose of such articles is, and we already hinted at it above: their aim is to bolster the impression that central planning of the economy is not only possible, but a perfectly normal and desirable state of affairs. Monetary interventionism by bureaucrats is to be taken for granted and to be accepted as delivering the best of all worlds. It is basically propaganda dressed up as reportage."
http://davidstockmanscontracorner.c...eenspan-put-please-stop-laughing-and-move-on/