Posted by: Tom Keene on September 27, 2010
Real Rates Matter
As a rule, we don’t read enough about saving. Saving in economics is different than saving at the kitchen table. Read more on saving. Martin Feldstein addresses Japan saving here. One percent minus a minus one percent deflation is a positive two percent deflation-adjusted real rate.
PIDSDPS INDEX GP Y ROLL: Here is U.S. saving compared to disposable income. The half-century+ average is just above 7%. Economists care about “personal” savings but on a macro basis really care about the all-in savings. Say, Private savings (personal and business) and government savings.
Ready, Set, Cure
Here is a terrific proposal on exiting the housing mess. Truly, a must-read by William C. Wheaton. The distinction, edge-of-October 2010, is we have not begun to address the lender participation in any organized writedown.
FORLTOTL INDEX GP Q ROLL: Wow. I new this was bad, but this bad? Here is foreclosures as a percent of loans.
Research (Disinflation or Deflation?)
Carl Weinberg at High Frequency Economics does not mince words: “The day Japan’s current account turns negative will be the day JGB yields explode.”
GJGB10 INDEX GP Q ROLL: At 1.005% for 10-years, it is the gift that keeps on giving. It will be interesting to see the interdependent responses if we have a month of +2% yields in Japan.
Many notes on dis-inflation and deflation. This is the chart, below, that keeps cropping up. It is one measure of the inflation “guess” five years forward. Note how it is decidedly lower than 2004 to 2008.
USGGBE05 INDEX GP Q ROLL: Thanks BNP/Paribas and Goldman Sachs.
Which book should I read? Many, but you’d do worse starting here. And then, celebrate. Lord Desai’s treatise on capitalism rewards on each-and-every page. There is the obvious and less obvious as he goes in search of our social astronomy.