April 27, 2009

Buiter on Those Green Shoots

Nearly (truly?) alone at CNBC, David Faber appears willing to entertain the possibility that the recent/ongoing rally in equities is something other than the bright light at the end of the tunnel. A few minutes ago, he interviewed Willem Buiter, whose maverecon blog at FT.com is a must-read.

Here's a Buiter line from the Faber interview that rang true to our probability-minded shop: "While everything is possible, not everything is likely." Indeed.

And here's the item Faber referenced, whose title ("The green shoots are weeds growing through the rubble in the ruins of the global economy") wins the award for Best of 2009 So Far.

Apr 27, 2009 8:02:51 AM | Economics, Media

NEXT POST
Hussman on Blinkered Short-Termism John Hussman (emphasis added in bold): Understand that the money that the government is throwing around represents a transfer of wealth from an unwitting public to the bondholders of mismanaged financial corporations, even while foreclosures continue. Even if the Fed buys up the Treasuries being issued, and thereby "monetizes" the debt, that increase in government liabilities will mean a long-term erosion in the purchasing power of people on relatively fixed incomes. To a large extent, the funds to defend these bondholders will come by allowing U.S. businesses and our future production to be controlled by foreigners. You'll watch the analysts...
PREVIOUS POST
Still More on Target-Date Funds Because we're in the business of providing asset management services to defined-contribution retirement plans, and because we care about the retirement security of our fellow citizens, we take a special interest in discussions of "target-date" mutual funds (see this, for example). So we were delighted to see Tom Lauricella's semi-recent (and delightfully-titled) riff on target-date funds in The Wall Street Journal. Here's the bulk of Lauricella's short piece, with each excerpt (in blue) followed by our observations (in black): With many target-date mutual funds inflicting big losses on investors nearing retirement, they've gone from hero to goat. If history is...