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Posts Tagged ‘Greg Mankiw’

Increasing Inflation or Playing With Fire

Posted by Larry Doyle on May 19th, 2009 4:09 PM |

There is a reason parents tell their children not to play with matches. Small campfires can take down an entire forest. In similar fashion, heightened levels of inflation also have the potential to explode in a ball of fire. Are our central bankers playing this inflation-ahead1game as a means of addressing our massive government and non-governmental debt burden? In my opinion, they most definitely are rubbing those sticks together mighty hard. 

I have highlighted three means for central bankers to address excessive debt: default, restructure, devalue. Individuals and corporations are increasingly defaulting and will default at an increasing rate as evidenced by my post earlier this morning highlighting the surge in delinquencies. Individuals and corporations are looking to renegotiate and restructure debt burdens wherever possible. Our government is restructuring debt through the legislative process and not always consistent with generally accepted market and legal principles. Despite words to the contrary, I am convinced that Ben Bernanke and Tim Geithner are on course to devalue our debt, as well, via a promotion and acceptance of higher inflation.

I was somewhat surprised to read that two economists whom I highly respect are encouraging Bernanke specifically to raise the inflation target. Greg Mankiw, an Economics professor at Harvard, shied away from providing an actual inflation target but did offer that Bernanke should work towards a “significant” level of inflation. Kenneth Rogoff, also a Harvard professor and former chief economist at the IMF, believes Bernanke should target an inflation rate of 6%.

Rogoff and Mankiw are both highly regarded. In my opinion, they are calling for higher inflation because they are clearly concerned that the mix of stimulus programs (monetary, fiscal, and budgetary) will not be sufficient to jumpstart our economy. (more…)

Navigating Sense on Cents

Posted by Larry Doyle on April 11th, 2009 7:29 AM |

As many people travel this weekend to be with friends and family, I would like to take an opportunity to navigate the highways and byways of links and material connected to Sense on Cents.

I hope this post will open more eyes and ears to wider avenues of information as we collectively try to make sense of the economy, markets, and world of global finance.

If I could beg your indulgence, if any of these links do not interest you but you feel they may help others, please pass them along. I thank you in advance.

With no further adieu, let’s travel around Sense on Cents . . .

Career Planning: I have always taken pleasure in providing career guidance. I provide a wealth of  Must Read articles from a variety of sources along with a Workshop for developing a game plan.

Market Data:  this page connects to real time market data from the Wall Street Journal. Every sector of the market is a mere point and click away. Stocks, bonds, currencies, commodities, economic data, international markets, historical graphs, and more…

Newsworthy: some stories have made headlines, while others are off the beaten path.  These stories come from your local papers and from posts around the world. I welcome sharing them with you.

No Quarter Radio: “Sense on Cents with Larry Doyle”  is my weekly Sunday evening radio program. I share insights and perspectives on the markets and economy while also hosting outstanding professionals from all corners of finance as my guests. All shows are archived and available as podcasts on iTunes. I also provide an audio player right here on Sense on Cents immediately after the completion of each show so that you can listen to a playback of the show right from this site.

The Reading Room is filled with a variety of books (pleasure, finance, inspirational, educational) that I have enjoyed and found impactful.

For those working their way up the learning curve (aren’t we all?), I have
Primers on the following topics:

Investing: anything you could ever possibly want defined or simplified.
Mortgage Market and Mortgage Finance
Financial Aid
Insurance
Debt Management

I also closely track a number of professional money managers, economists, and analysts. This collection of pro’s pros are my Economic All-Stars and include:

Laszlo Birinyi: outstanding equity manager and Wall Street veteran

Nouriel Roubini: highly acclaimed NYU economist

Jeff Gundlach: the highly acclaimed Chief Investment Officer of Trust Company of the West

Bob Rodriguez: along with his First Pacific Advisors colleague Tom Atteberry, named Morningstar’s 2008 Fixed Income Managers of the Year

Bill Gross: the highly acclaimed bond manager at Pacific Investment  Management Company

Greg Mankiw: widely respected Harvard Professor of Economics

John Mauldin: a true favorite of mine, this market analyst is amazingly well connected

Sheila Bair: the chair of the FDIC and, in my opinion, the preeminent regulator in the U.S. government today.

Carmen Reinhart: Professor of Economics at the University of Maryland

Thought Leaders: 22 of the finest economic minds in the world today  connected to Project Syndicate, an international association of 415 newspapers in 150 countries !!

If you are reading this post, I hope this trip has opened new avenues of interest for you. As the moderator, I actively engage readers, so please do not hesitate to ask questions and leave comments, or – as some may say –  sign the Guest Book!! Please share the site with friends, family, and colleagues.

Ultimately, I hope you enjoy coming to Sense on Cents as much as I do!

Have a blessed holiday ~

LD

Economic/Market Highlights 11/20/08: D-E-L-E-V-E-R-I-N-G !!

Posted by Larry Doyle on November 21st, 2008 7:55 AM |

There were major forced liquidations on the parts of hedge funds, asset managers, and insurance companies that went through the markets Thursday. Laszlo Birinyi, a noted market tactician whom I follow quite closely, indicated today that given the market price action that making investment decisions now is “strictly guesswork”.

Equity markets traded down another 5.5% to 6.5% Thursday with much of that selloff occurring in the last hour which is an indication that orders from asset managers and mutual funds built into the close. The delevering process (the selling of assets purchased with borrowed money) continues!! Volume on the NYSE was 8.8bln shares, 44% above average. Clearly a strong indication of massive liquidations. Oil and copper were down 6% and 4% respectively given continued expectations of economic weakness. When does OPEC come out and announce aggressive cuts in production?

Government bonds rallied by 30basis points in the 10yr (a huge move) in a “flight to safety” trade.

While the safest bonds rallied, bonds with a risk component (high grade corporates, mortgage-backed bonds, high yield) either did not move or in the case of high yield traded down in sync with equities. (more…)






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