Paul Krugman economics: Deny, deny, deny!

I thought the Hindeburg disaster was caused by static electricity from the mooring. Anyway, it is an act of God, for insurance purposes. : )

 

Please explain how you know this.

 

You need a chart?

 

I'd like you to support your statement with a sound argument. You know, one that has a bit more than usual one-liners and rhetorical commentary. Charts would help, sure.

 

DJIA, since the recession ended? I'm sure you know how to find this.

 

That's where I thought you were going with this. You're saying the equity market is ok with it. Ah, I see. Well, of course the equity market would be ok with it. The Fed is throwing over $$85 Billion a month, or over a trillion a year, into it on a consistent basis.

The Zimbabwe Stock Market loved it when they did Quantitative Easing as well:



But when we're talking about whether the "market" likes the fact that the Federal Reserve is buying the debt, we're talking about the Debt Market. After all, the Federal Reserve isn't directly buying stocks (as far as we know). I would have thought you would have grasped this.

And when we look at the debt market, we can't look at rates - because the Fed is cornering it. But we CAN look at bids in the auctions on US Debt. Particularly, we look at the difference of Direct and Indirect take down of the debt. That is, who bids. In the Direct case, it is the primary dealers which flip it back to the Fed (because the Fed doesn't buy direct from the treasury). Indirect bidders are those representatives of foreign central banks, hedge funds, etc. The people you WANT to buy your debt because it indicates they trust it. Feel free to go to the US Treasury's website and learn all about direct and indirect bidders.

Instead, this is what we're seeing:

Direct Bidders Take 30% Of 2 Year Auction As Indirect Flight Continues

Another Record Direct Bid Award In Today's 3 Year Auction

Indirect Takedown In Today's 2 Year Auction Lowest On Record

And so on. This indicates less and less indirect bidders, and that is telling us (for those who know how to listen) that the market is definitely not ok. Incidentally, this is what I mean when you present an argument that is not just a one-liner/canned response.

 

Ahh yes, I knew you were going to come back talking about some other market. Nice dodge.

 

Oh brother. That's your answer? Some "other" market? It's a dodge to talk about the debt market when the issue for consideration is debt?

Are you for real?

 

Maybe the Cattle market is more relevant to the "debt is ok" argument? Or lean hogs?

 

I knew you were going to ask that again. Ok, "markets" is plural.