Ramesh Ponnuru of The National Review does a first-rate job of summarizing the counterintuitive nature of monetary policy and how it applies to recent history. In particular, he explains in clear and (mostly) non-technical terms how and why the Fed’s “passive tightening” in late-2008 helped turn what might have been a relatively modest recession into something much worse. He also outlines why the subsequent QE2 was necessary and how many commentators (primarily conservatives) have misunderstood the necessary monetary policy solution, along with the fact that low interest rates of late aren’t a sign of loose money.
Daily Archives: April 6, 2011
A Brief Look At Estimating Equilibrium Risk Premiums
MarketWatch’s Robert Powell reports that “two legendary investors have conflicting points of views” on stocks and bonds. Rob Arnott is cautious on the outlook for equities and Bill Gross is anxious about expected returns for bonds. Putting the two together suggests it’s time to avoid stocks and bonds.