Simon Johnson and Goldilocks
Posted by Larry Doyle on May 8, 2009 3:56 PM |
Shortly after writing my “Goldilocks Economy” post, I caught an interview that Simon Johnson gave to Carol Massar (no, she is not Goldilocks!!) of BloombergTV. Johnson is formerly the chief economist of the IMF, and currently a Professor at MIT’s Sloan School of Management and a senior fellow at the Peterson Institute for International Economics.
In this 7 minute clip, Johnson covers virtually all the questions I raised in my “Goldilocks” post, including:
1. ongoing financial support of the banking industry
2. the Wall Street-Washington dynamic
3. government guarantees allowing the banking sector to “print” profits
4. the rigor and results of the Bank Stress Tests
5. expectations for inflation and potentially hyperinflation
6. Johnson calls Goldman Sachs a “branch of the government”
7. compares our economy to an emerging market…not too dissimilar
8. can banks earn their way out of this mess? or will it be Japan in the 1990s all over again?
9. implications of an inverted yield curve on bank profits…HINT: it’s not good!!
10. prospects for massive budget deficits with rising taxes
11. need for regulation
Check out 7 minutes of must watch video from Bloomberg, brought to you by Sense on Cents!! (FYI . . . the interview with Simon Johnson starts about 30 seconds into the video clip).