In a continuing effort to provide words of wisdom from beyond the walls of Zacks, here are a few things that I think people should find interesting. The views expressed in the articles are not always shared by either myself or Zacks, but I do find them thought-provoking.
James Hamilton, an Economics Professor at University or California, San Diego makes the case here for using Natural Gas as a transportation fuel. I fully agree as it would lower both our trade deficit and our carbon emissions.
Yves Smith of Naked Capitalism Blog discusses here the extent to which the Fed bailed out European Banks during the crisis, and its inability to set capital standards for foreign banks operating here. I think that big banks, both here and abroad, need to be holding onto more equity capital.
Erica Groshen, a researcher at the N.Y. Federal Reserve points out here that the percentage of unemployment during the Great Recession due to temporary layoffs, rather than permanent dismissals, was very low, particularly relative to pre-1990 downturns. This is a partial explanation for why each of the last three recessions (1990, 2001, and 2008) have been followed by “jobless recoveries.”
Martin Feldstein, Economics Professor at Harvard, and Reagan’s chief economist argues here that QE2 was largely the cause of the strength in the stock market since the market started to anticipate it, and that the bull market is what caused consumer spending to be strong in the fourth quarter, thus strengthening GDP growth. I think he is right, but would add that the stock market is not the only transmission mechanism between QE2 and stronger economic growth. It also helped to weaken the dollar and thus cut imports and raise exports. He is a bit more bearish about the prospects for 2011 than I am.
Daniel Gros, of the Centre for European Policy Studies argues here that the European Bank Stress tests were even less stressful than the U.S. Stress tests and that the debt problems of the PIIGS still posses a very significant risk to the big banks at the core of Europe.
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