The answer is pretty simple, really– demand keeps going up but supply doesn’t.
Author Archives: James_Hamilton
San Diego fires
Thanks to our many friends around the world who’ve asked if we’re ok. We are indeed, and, if you’re curious, here’s our story.
Rules versus discretion in monetary policy
I had the privilege of attending a conference in St. Louis this week on Monetary Policy under Uncertainty at which I presented a paper on the response of interest rates to changes in the fed funds target. One of the interesting themes that came up in some of the other papers concerned whether the public’s interests are best served when monetary policy follows mechanical rules as opposed to responding to events in a discretionary way. Here I report on some of the discussion of this issue from the conference.
Deteriorating lending standards
What is the significance of the fact that the most recently issued subprime mortgages are the ones that are running into the biggest problems?
Superconduit
The Wall Street Journal describes it as a “superconduit”,
the New York Times refers to it as a “super-SIV”,
and the Washington Post is calling it a
“Master-Liquidity Enhancement Conduit”. Whatever you call it, does it make any sense?
Inferring market expectations from changes in fed funds futures prices
I recently completed a new research paper studying how interest rates of different maturities change with market expectations of what the Fed is going to do next.
Speculation and fundamentals in oil prices
Knzn asks about the significance of the shift from contango to backwardation in the term structure of crude oil futures. I think one thing it signifies it that some OPEC spokesmen are simply blowing smoke.
Does a recession matter?
That’s the question posed yesterday by Calculated Risk. Here’s how I’d answer it.
Employment plunge was a big oops
As many of us were anticipating, today’s employment data released by the BLS showed substantially stronger job growth for September.
Not all the news is bad
We’ve been dwelling here quite a bit on the bleak incoming housing data. But I have to admit that I’m not seeing that spilling over so far into some of the other key economic indicators.