The Emperor is Naked: David Stockman

A “paralyzed” Federal Reserve Bank, in its “final days,” held hostage by Wall Street “robots” trading in markets that are “artificially medicated” are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner . . . → Read More: The Emperor is Naked: David Stockman

When Metaphors Fail

Consider this nonsense:

What if borrowing money made you so much richer over the long-term that it paid for itself? It’s not crazy. Millions of families make such a decision every year when they take on debt to pay for school. Indeed, investing in yourself is a bet that often pays off. But can . . . → Read More: When Metaphors Fail

In Praise of Deflation

First, some neo-Keynesian nonsense:

It’s counterintuitive that falling prices can be bad. After all, nobody ever complained about stuff being cheaper. The problems, though, are twofold. First, if prices fall across the board, so too will wages — but debts won’t. Borrowers will have a harder time making their payments. More of them will . . . → Read More: In Praise of Deflation

Education Inflation

Paul Krugman is aghast at this chart, which shows how the Pell Grant has declined in relative cost coverage:

This is pretty much how inflation works. In the early stages, its effects are not very noticeable because an incentive has not yet taken place. As the incentive shift takes place—marking the beginning of a . . . → Read More: Education Inflation

Loans Aren’t the Solution

Apparently microcredit has not lived up to its hype:

There has been enough time and evidence now to explore the full impact of microcredit in depth, and, set against its vaunted reputation, my verdict is dour: Microcredit rarely transforms lives. Some people do better after getting a small business loan, while some do worse . . . → Read More: Loans Aren’t the Solution

'Mania' in Junior Mining Stocks Predicted: Fayyaz Alimohamed

Fayyaz Alimohamed, CEO of Altair Ventures Inc. and publisher of the Acamar Journal, offers historical perspective and predictions on the global economic crisis. In this exclusive Gold Report interview, he foresees a “mania” in junior mining stocks and recommends holding physical gold outside the banking system as a safety net.

The Gold . . . → Read More: ‘Mania’ in Junior Mining Stocks Predicted: Fayyaz Alimohamed

The Morality of Walking Away

There appears to be a misunderstanding:

Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call “strategic default.”

“Guilt and morality are one side, and objective financial analysis are on the other side,” Martin said. . . . → Read More: The Morality of Walking Away

"Possess nothing and be possessed by nothing"

The saying is attributed to Ahmed Ibn Abu al-Hassan al-Nuri.

No, I’m not a scholar of Sufism. I came across the quote in Kim Stanley Robinson’s Mars trilogy years ago, and it spoke to me in a certain way — not as a moral or religious principle per se so much as a practical . . . → Read More: Possess nothing and be possessed by nothing

I’ll gladly pay you Tuesday for a hamburger today

Was it Popeye’s friend, Wimpy, who kept asking for a hamburger on credit? Today’s credit markets are anything but robust, with reduced demand and supply for borrowed funds. Always eager to find obscure terms for modern dilemmas, economists refer to this condition as a liquidity trap. With a little prodding from Facebook friend and . . . → Read More: I’ll gladly pay you Tuesday for a hamburger today

Compelling Proof of the College Bubble

From the New York Review of Books:

In Academically Adrift, Arum and Roksa paint a chilling portrait of what the university curriculum has become. The central evidence that the authors deploy comes from the performance of 2,322 students on the Collegiate Learning Assessment, a standardized test administered to students in their first semester at . . . → Read More: Compelling Proof of the College Bubble