cheer up guys

i think it was an ogilvy ad, based on the love song of j alfred prufrock.

talked about this with my lecturer today as we drifted off topic. i disagree with her on some points and none of us are big experts in this area. but a few key points i took out.

1. watch russia. the signs are the same, country risk, fall in oil prices, capital flight. what will russia's impact be on wall street? it was masive in 1998.

2. helicopter drops are a good thing if credit is contracting, you want to keep M2/M3 up so you can print what you like without it being inflationary. anyway, i don't think they've resorted to the printing presses, the treasury is basically depositing more money in the fed through sale of securities allowing it to lend more. this has pushed t-bills down to 0.01% occassionally on wednesday.

3. this could get really messy, e.g. japan asset price bubble mark 2. i disagree because it seems there isn't anything so far much wrong with the rest of the economy, bank runs, etc. My worry though is that if they try to engineer a solution where they take bad balance sheets and add them to adequate ones through takeovers, and these adequate ones belong to commercial banks, then you lose the firewall between the financial maelstrom and the consumer's deposits. then you could have a problem.

4. economics is a countercyclical profession.