Credit Writedowns » psychology

The euro zone has become a political economy black hole

Edward Harrison — Wed, 16 May 2012 21:00:21 +0000

Without going into the detail of my member posts, here's what I can say: it is clear Greece will eventually exit the euro zone. The question is the timing. But, the political about-face necessary to prevent contagion is a lot larger than politicians are now prepared to take

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[Premium] On my disbelief over the Greek exit chatter

Edward Harrison — Wed, 16 May 2012 12:00:00 +0000

I just re-opened the thread on "How and why Greece will leave the euro zone" because there has been so much chatter about a Greek exit. I am still a bit in disbelief that Europe would allow the Greek economy to crumble so much thy would be forced to exit. You have to think contagion risk from a Greek exit is still pretty high. That tells me Europe is bluffing about cutting Greece off. But politicians sometimes get backed into a rhetorical position that takes on a life of its own. So bad things can definitely happen

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[Premuim] What to expect from Apple’s earnings

Edward Harrison — Tue, 24 Apr 2012 12:00:24 +0000

Apple reports earnings after the close of business today. This will be a closely watched report. Here are the things to look for

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Grantham: Missing a bull market is a dismissible offense

Edward Harrison — Thu, 19 Apr 2012 20:00:10 +0000

Jeremy Grantham: "The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is ﬁrst and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. "

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On debt’s centrality to modelling complex economic systems

Edward Harrison — Wed, 28 Mar 2012 21:36:49 +0000

My view as developed in that post is that debt is central to understanding economic systems, and not just because it has a redistributive element in apportioning losses between creditors and debtors when recession forces credit writedowns. More importantly, debt accumulation adds to an economy's ability to sutain economic growth (and malinvestment) by adding to aggregate demand. The video in this post gets to why this. matters

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Secular Bear Market?

Comstock Partners — Fri, 23 Mar 2012 14:23:18 +0000

We received a phone call over the weekend from a close friend and someone who reads our comments religiously. He had a question for us. He wanted to know if we were still in the secular bear market camp or have we thrown in the towel since the economic news has gotten much better and virtually every index is either at or close to new 52 week highs or are fairly close to all time highs. He explained that it looked to him that the European risk has moderated, the China "collapse" has evaporated, the jobs and housing problems of the U.S. have now clearly turned. We responded that we are still in the secular bear market camp and, in fact, are surer than ever that we are close to a significant peak in the market. He responded, "Please, explain yourselves." This is the logic we used

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Right-wing political extremism in the Great Depression

Guest Author — Mon, 05 Mar 2012 03:50:52 +0000

The enduring global crisis is giving rise to fears that economic hard times will feed political extremism, as it did in the 1930s. This column suggests that the danger of political polarisation and extremism is greatest in countries with relatively recent histories of democracy, with existing right-wing extremist parties, and with electoral systems that create low hurdles to parliamentary representation of new parties. But above all, it is greatest where depressed economic conditions are allowed to persist

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Greece: On Pace for the Worst Recession in Modern History

Edward Harrison — Thu, 16 Feb 2012 15:43:51 +0000

The financial situation in Greece is deteriorating at a remarkable clip

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Richard Nixon gets it

Edward Harrison — Fri, 10 Feb 2012 18:09:34 +0000

Full employment should be the standard

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The Sovereign Debt Crisis and Confirmation Bias

Edward Harrison — Fri, 13 Jan 2012 16:00:06 +0000

The myth that Greeks are lazy and Germans are industrious and that this has some significance in the sovereign debt crisis is everywhere one turns. It is false. The issues for Greece are not about working longer hours but are ones of productivity, industrial organisation, and demographics. That won't stop people from spinning the tales of lazy Greeks and workaholic Germans

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