Weekend Recap – 8.22.09
The S&P is over the magical 1,000 barrier and things are feeling exuberant in the stock markets again. But, could this just be a false start? It seems some pretty smart bloggers are starting to sound the “come back to earth bell.” Here’s my run down of some of the best and most interesting articles I’ve read this week.
- Edward Harrison of Credit Writedowns warns that consumer spending could be weak for years.
- Naked Capitalism echoes this sentiment and gives some reasons for why we should expect a pullback at some point in the near future.
- James Hamilton of EconBrowser asks us whether the glass is half empty or half full featuring two charts plotting our recent rebound vs. rebounds of various other bear markets. (For those who didn’t realize, in 1930, the Dow rallied 51% about 100 days after the bottom during the Great Depression only to fall further and deeper for the next two years.)*
* Source material for the EconBrowser Post can be found on Doug Short’s original post and Calculated Risk’s rebuttal.
It seems, however, that the popular media and policy experts are seeing signs that the recovery has begun. Is our biggest problem now inflation?
- Reuters reports that the Fed may not be able to hold rates low enough to stimulate the economy and fight inflation at the same time.
- MarketWatch reports that the IMF believes the recovery has begun but that the path to growth will be slow.
- ZachStocks provides his thoughts on Ben Bernanke’s recent comments on the returning health of the economy.
- Chad Brand of Peridot Capitalist looks at how inflation may help us improve our deficit numbers in lieu of increased taxes.*
* I may disagree a bit with Chad’s analysis. He uses Debt-to-GDP as a measure of financial health. This, however, ignores that there’s still some nominal amount of debt thatwill need to be repaid. Granted, one assumes that higher GDP (inflated or not) creates higher tax revenues, but then, why haven’t we managed to reduce debt on a nominal basis?
On a side note, the current health reform debate going on in Washington DC and at town hall meetings around the nation is a very important topic to me and I would like to do my part in helping people get informed. So, this week, I’ve collected some great posts on healthcare in America. Please take some time to read them.
- Income inequality and healthcare – Eliot Spitzer
- An Honest look at American Healthcare vs. the NHS – The Economist
- Healthcare reform in steps – The Economist
- The Health Insurance Program Reality Check
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