Saturday, September 27, 2008

Is it time do more Crunches? FT on the Credit Crunch

Samuel Britton of the Financial Times had stated in May this year:
One striking feature of recent events is how slow they have been to hit the real economy. Although the credit crunch was first discerned last August no major area has yet recorded a downturn in activity, as distinct from a growth slowdown. This suggests not that the crisis is coming to an end but that it is slow-burning. The ominous feature is the one I have already hinted at in my reference to the continued trend rise in commodity prices, which could well be part of a long-term shift in the terms of trade against the industrial west, as well perhaps as part of a shift in political and economic power. Here is an area where it will be necessary to adapt to market movements rather than to attempt to reverse them by ill-considered intervention.
and recently on discussing Chris Coyne's book After War:
he(being Coyne) accepts the case for occasional intervention for humanitarian reasons or to protect US citizens. His main suggestions are to avoid nation-building types of intervention and adopt free trade, if necessary unilaterally by the US. It is perhaps d̩formation professionelle for economists to overrate the spillover benefits of the latter. But peace and welfare may depend on how far the next US president accepts the main lines of his analysis Рa subject even more important than the current credit crunch.
HT to Chris Coyne.

1 comment:

USpace said...

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It’s a shame politicians forced banks starting back in the 80s to give home mortgages to poor people who weren’t credit worthy enough. Then, they just started lending mortgages way beyond many people's credit abilities. That’s where all this mess started. And also that they didn’t regulate Fannie Mae and Freddie Mac like they do other banks.

Alan Greenspan should be exposed for the problems he helped cause by allowing credit quality to be ignored.
Scary, will sanity ever prevail?
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if money were free
it would have no value
- extreme inflation

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ignore credit scores
give everyone homes
- like musical chairs

to deny a mortgage
must be due to racism

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absurd thought -
God of the Universe says
forgive all debts

settle all accounts
no one owes anything

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absurd thought -
God of the Universe says
make housing costs look cheap

go paint a rosy picture
just get people to sign up

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Philosophy of Liberty Cartoon
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Help Halt Terrorism Today!
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USpace

:)
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