Thursday, December 18, 2008

Krugman: We're turning Japanese ...

Paul Krugman and Greg Mankiw are talking about the "liquidity trap," an era of zero interest rates that makes monetary policy ineffective.

Japan has struggled with this problem. The solution is unclear, but reinstating inflationary expectations may be in order. I.e, no more talk about price stability.

Says Krugman: "Seriously, we are in very deep trouble. Getting out of this will require a lot of creativity, and maybe some luck too."

Schapiro is tough regulator?

The press coverage today of Obama's pick of Mary Schapiro to be SEC chairman is downright fawning. Hasn't anyone noticed all the scandals coming out of Wall Street during Schapiro's watch at Finra/NASD?

See my thoughts at InvestmentNews.