Friday, October 10, 2008

An Economy You Can Bank On

Normally, my job is to conjure new hypotheses to explain puzzles in old data. But these days, the marketplace for ideas has a void in the application of the old ideas of supply and demand to the most recent data. So far, here's what I've found:

  • New York Times article on today's marginal product of capital and substitute private (sic) providers of banking services. Further elaboration in a September blog entry.
  • Recent stock market declines may be partly due to news about corporate earnings, but much (probably most) is a change in the market's willingness to own a given earnings stream. If your willingness has changed less (more), you should buy (sell).
  • (Measured) Housing prices will fall further in many places.
  • Calculation of the effect of Treasury investments in volatile bank stocks on the deadweight cost of taxes.

1 comment:

Sheng said...

Casey,
Good to know that you also think "the fundamentals are strong". I used to applause it for McCain speaking out, but was disappointed after he bite the words back a couple of hours later. He should subscribe to your blog...