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Calculated Risk has a post out today called Bubbles and Employment. The gist of the post is that interest rates play a role in creating bubbles as demonstrated by data on employment and common property yard-sticks like price-to-rent and price/earnings ratios. The graphs presented make the case quite well.
CR finishes the article saying:
Since the recovery [...]

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Federal Reserve Chairman Ben Bernanke recently defended the Federal Reserve’s low-interest rate monetary policy which preceded the housing bubble in the United States. Bernanke instead pointed to a lack of regulatory controls as the major cause of the events which led to a breakdown of the system. Paul Krugman weighed in on the issue, agreeing [...]

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This is the latest in a series of forecast posts I have covered.  Notably, there has been Richard Bernstein, Saxo Bank and Byron Wien. The Pragmatic Capitalist has The Ultimate Guide to 2010 Investment Predictions and Outlooks, if you are interested in more. In this post, I especially like his narratives on behavioral psychology, one [...]

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Unadjusted jobless claims after the holiday season are always monstrous because of seasonality. Last week 645,571 people filed initial claims for unemployment insurance in the United States.  That is down from the 731,958 who filed at this time last year. Looking at the seasonally adjusted numbers, claims rose from to 434,000 last week from 433,000 [...]

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This quote from Caroline Baum sums things up pretty well about the Fed’s complicity in blowing a massive bubble in housing and in stocks before it.
I know Bernanke has given this issue a great deal of thought and devoted the Fed’s resources to finding the correct answer. Still, the defense sounds like something out of [...]

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Given the fact that I have just finished writing two articles on Wien’s predictions for 2010, I thought it relevant to look back at the last three years of Wien’s surprises to just before the housing crisis.  I posted the 2009 predictions last year. The post is here.  Wien calls these events that he gives [...]

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Byron Wien was amazingly accurate last year in his economic predictions even though his annual list is an attempt to build a non-consensus list of likely outlier events.  So, I was eager to see his 2010 list, which was unveiled earlier today. Please read his list in the post here as background.
Reviewing 2009 predictions
When Wien [...]

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I will have some commentary on this in a future post or an updated version of this one. Update 1600 ET: you can see my commentary in the next post here.
The Surprises of 2010

The United States economy grows at a stronger than expected 5% real rate during the year and the unemployment level drops below [...]

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About three months ago, Nobel Prize winning economist Paul Krugman took a stab at explaining why economists didn’t anticipate the worst financial crisis in three-quarters of a century. His was a long piece, taking up eight pages and 6,000 words at the New York Times website. His overview was certainly one of the best in [...]

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The dust has settled a bit on the Treasury’s recent decision to give Fannie Mae and Freddie Mac a green light to nationalize our mortgage problem. Calculated Risk says the move was not necessarily done on Christmas Eve to escape notice. And it was not done to socialize future losses via Fannie and Freddie. It [...]