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« Statistical Inference: Using the NFL | Main | Understanding the Political Process: The Bailout »

September 23, 2008



Apparently your Gunning-Fogg index is high.
Just kidding -- I actually think you write very well. I ran some of my sample writings through some online fog index calculators and mine come out quite high too.


RB -- Sorry to be clueless in reading this. I am trying pretty hard to get people to see a complex issue.

It is so easy to criticize and so hard to do anything constructive on the issue.

Any advice you have is most welcome!



Forgive my earlier poor attempt at sarcasm regarding the need to obfuscate. I do not have any expertise on FAS 157, nor do I repudiate the expertise on the subject.


RB -- Let's try to keep the threads separate. We have a sharp disagreement on the measurement of CPI. I will revisit the world of the cynic versus the government.

Meanwhile, we are all trying to figure out how to make some investment returns from what is happening.

My contention, now supported by many astute observers, is that we have a self-inflicted death spiral. I ask you to do the following.

Check out those who have opined on this topic. Try to separate bloggers, pseudo-economists, journalists seeking a headline, and academic economists from those who actually trade the markets. I already know the result of this comparison.

Of course it depends upon a willingness to seek expertise instead of starting with the idea that you already know the answer. You have written enough here that I am confident in your ability to meet this challenge!

Make your bet.

Just a thought....



Yes, yes, we need some trickery because of all those models of probity surrounding us. Just like those Congressmen who lie about CPI because they are so fiscally concerned.



That too. I own my own business.



KP - -Are you in marketing? Clever idea.



Influencing behavior all comes down to figuring out which way to put things. You have made two points:

1. FAS 157 / mark-to-market needs to be suspended

2. When international accounting standards are adopted, the toxic parts of FAS 157 will no longer exist

Since no one is listening to #1, you should simply say "We need to adopt IASB standards immediately, for the sake of desperately needed global coordination, and this crisis will end."



Briefly put, I was objecting to my (perceived) understanding of your statement that those who think taxpayers will lose money are wrong. My concern was whether Bernanke/Paulson know what the correct price should be -- and therefore, I highlighted the critiques of two sources who argued for an equity stake so as to minimize the chance of taxpayer loss. If its based on an optimistic view of housing prices going forward, that is uncomfortable given Bernanke's optimistic public views about housing and the economy prior to the Bear Stearns episode.

Based on Paulson's statements yesterday, the Paulson plan seems to have been a negotiating ploy, particularly with reference to oversight.

Given an industry which goes into crisis mode so often, I wonder why their regulations are loosened ever at all -- count me among those with a similar gut feeling as those described below. Sure, we want to avoid a repeat of the Depression and all that ..
So a taxpayer bailout is inevitable?

I think it’s inevitable. In Japan, in the end, authorities had to do that. There was very strong resistance here as well, both from [parliament] and the general public. The American situation is very similar: There will be resistance from Congress and from the American people, because people, whether in Japan or the United States, simply don’t like the banks. They are the institution that lends you an umbrella when the weather’s fine, and won’t lend it to you when it’s raining. But eventually we had to overcome that.


"Trying to solve all of the problems on a short deadline is a challenge. FDR's speech after Pearl Harbor comes to mind."

FDR's speech closing banks and confiscating gold comes to mind. How did that work out? Seems like we were stuck in depression until we transitioned to war.

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