Financial Markets

Brad Setser at RGE Monitor provide this commentary

An excellent piece by Michael Malone in the WSJ today (thanks S. Berger):

As this contrived example illustrates, an options market might allow for more efficient output decisions whereas a futures market (let alone a simple spot market) might not.

Much ink has been expended in discussions of the US yield curve and also on the reluctance of the country’s lower money aggregates to grow as

After all, these intangible financial instruments can't be eaten or used to build a house, so what good are they? The present article seeks to answer just this question.

Contrary to the accepted way of thinking, recessions are not negative growth in GDP for at least two consecutive quarters.

Despite their horrible reputation, stock speculators perform a crucial service in the market economy. Their attempts to buy low and sell high quickly eliminate mispricings in the stock market.

New House Speaker Nancy Pelosi has put the 2002 Sarbanes-Oxley (SOX) regulatory monster at the top of her list of things to tackle in January 2007.

Perhaps most importantly, the very source of the crises would remain in place: the concept of "price index targeting," which rests on the erroneous "stabilization" idea, a concept that is in full contradiction to the notion of free markets: "Human action originates change. As far as there is human action there is no stability, but ceaseless alteration."

My disagreement with Ms. Baum regarding central banking is at base a disagreement about what exactly is money and credit.