As the idea of regime uncertainty has gained ground in recent years as a partial explanation of the economy’s failure to recover quickly and fully, economists and others invested in Keynesian thinking have begun to strike back. One such Keynesian debunking of regime uncertainty was offered recently by Gary Burtless and seemingly endorsed by...
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Highly-regarded J.P. Morgan Global FX Strategist Ken Landon included the following in his email advisory on Tuesday: Here’s a tautology: it will no doubt be another volatile day. With confidence having been severely undermined over the past two weeks, risk markets will continue to be susceptible to bouts of extreme fear in both directions....
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I cannot vouch for this chart, which is described as showing the findings of a survey of investors by Citi, but if it is even in the neighborhood of the truth, it would appear to be additional evidence of regime uncertainty–major-policy uncertainty, fear of significant government foul-ups, call it whatever suits you best. I have not...
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In a poll of business executives following Tuesday’s State of the Union speech, the Wall Street Journal finds most remain skeptical of President Obama’s new, business-friendly rhetoric, and confirmed that his policies to date account for the continued economic malaise. As encapsulated by Anthony Guzzi, CEO of Emcor Group Inc., a construction and facilities-services...
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As Congress and the President consider yet another set of “reforms” for the federal income tax code, taxpayers should encourage them to heed the words of one of the first and greatest economists. In Book V, Chapter II, Part II of The Wealth of Nations (Modern Library, Cannan ed., p. 778), Adam Smith wrote...
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Writing for CNBC’s “Behind the Money,” John Melloy describes the findings of a recent survey of investors: Institutional investors fear a government policy mistake far more than inflation, terrorism, a housing double dip, a weak dollar, poor earnings or any other potential risk to the economy, according to a survey of 100 mutual fund,...
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We are now mired in the third year of a recession produced when a housing bubble inflated by easy credit finally burst—as it was bound to do sooner or later. From the very beginning, government officials, among whom I include the people who run the Federal Reserve System, have proceeded as if the way to...
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It’s unfortunately getting easier and easier to find confirmation that “regime uncertainty” is the biggest drag on the U.S. economy’s chances of recovery. This, from a front-page story in today’s Wall Street Journal: The U.S. has ample resources to restimulate the global recovery. U.S. companies are sitting on some $1.8 trillion in cash—the highest...
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Each summer, Wall Street strategist Byron Wien convenes a meeting of high rollers to discuss the outlook for investment. This year’s meeting brought together fifty individuals, including more than ten billionaires. Their expectations, as reported by CNBC, are gloomy: “They saw the United States in a long-term slow growth environment with the near-term risk of recession quite...
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On August 24, I posted some data and analysis on yield curves for high-grade corporate bonds since the beginning of 2008, seeking to determine whether changes in these curves are consistent with the hypothesis that the current economic crisis has given rise to regime uncertainty. If it has done so, the yield curves should...
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