you could also make an argument that PPP is more important for judging low income countries exchange rate but much less so when it comes to rich countries.
Well, how effective has QE2 been for the US? What about the effectiveness of years of aggressive easing (of all sorts) by the BoJ?
I believe you read Scott Sumner blog, he addressed all these points in a way I very much agree with. I don't have time to rewrite all his arguments
But in a nutshell even the 'easy' Fed has allowed NGDP to run massively below trend, so they hardly have done a lot of boosting to ADemand. BOJ is even worse
Hussman is asking why so many pundits claim stocks are 'incredibly cheap' going forward while corporate margins are at record highs. Short paragraph starting around the middle of the page, at 'Profit margins, labor income, and the growing cloud over earnings growth': http://www.hussmanfunds.com/wmc/wmc110905.htm
Eh, but the last third of the essay is just a "zero hedge, cut off bernanke's balls rant." He is to be ignored.
Unloaded all of my NLY AH. Too many issues - mass refis, SEC tax thing, and flattening yield curve. I'm going to sit it out for awhile. The shares were in a tax-free account so there aren't any issues there. It's been a nice 14 year run. My income from divvies on this stock alone this year would have been more than my total income in 1997.