« Previous Entry |
Main
| Next Entry »
In Case You Missed It: Economists Place Their Bets With Predictions for 2009
Last night on the NewsHour, we did a story on economic predictions for the future, featuring two economists who'd correctly called the current crisis: Martin Feldstein and Ken Rogoff. You can watch the piece here.
We ended the story with the man who bills himself the world's first and only standup economist. In the Business Desk exclusive below, you can watch a little more of him, and me playing the straight man.
-- Posted January 15, 2009 | Comments (4) | Permalink
|
Subject: The Fed Caused The Financial Crisis, Not Knowing The Relationship Between The Price and The Interest Rate
the following communicating with Obama at his Citizen's Briefing Book by searching post-science:
http://change.gov/citizensbriefingbook
:
Real changes must come from outside the boxed-in thinkers.
Thus far, the only change I have seen in the new administration is
Obama himself, and this Citizen's Briefing Book is one of his best
ideas, which might work. The following is a completely outside of the
box idea presented at several Q&A sessions at the recent (1/3-5/2009)
American Economics Association annual meeting. It met almost no
objections. It can be titled: The Fed Caused The Financial Crisis,
Not Knowing The Relationship Between The Price and The Interest Rate.
"Every point the interest is raised, the price of a mortgaged real
estate decreases by about 9%. Changing the fed rate from 1% to 5.25%
should have translated into about 40% decrease in price. The Federal
Reserve raised the interest rate because it did not know
quantitatively the exact relationship between the interest rate and
the price, which is easily determined by the solution of value
(namely, the Infinite Spreadsheet). Neither did most investors. The
rapid price drop triggered the Subprime Woe, which was quickly joined
by a credit crisis created by the unexpected mortgage defaults
aggravated and amplified by the huge outstanding uncovered and
unregulated derivatives."
Thank you for reading my comment, President-Elected Obama and my
fellow citizens. With warmest regards, Hugh Ching, a modern Spinoza, a completely independent thinker 1-14-2009 post-science.com
Great click! Finally, someone who isn't so grim, but also has a clear-headed perspective on this stuff. Let's see him on a regular basis!
Seems like there's an inelastic demand for Economics majors too!
Paul, I think you asked the wrong question. You could have asked the economists "Have you done well out of the melt-down?"
If they say "No" you say "Why?"
If they say "Yes" you say "How did you do it?"
That's all we need to know.