Great Recession Archives - the patient investor

May 29, 2013

Market Monetarism – The next big idea? | Quartz

Miles Kimball, Professor of Economics and Survey Research at the University of Michigan, gives a clear summary of Market Monetarism — its strengths and its weaknesses — concluding with these remarks:

Despite the differences I have with the market monetarists, I am impressed with what they have gotten right in clarifying the confusing and disheartening economic situation we have faced ever since the financial crisis triggered by the collapse of Lehman Brothers on September 15, 2008. If market monetarists had been at the helm of central banks around the world at that time, we might have avoided the worst of the worldwide Great Recession. If the Fed and other central banks learn from them, but take what the market monetarists say with a grain of salt, the Fed can not only pull us out of the lingering after-effects of the Great Recession more quickly, but also better avoid or better tame future recessions as well.

February 24, 2013

Scott Minerd: The Keynesian Depression | John Mauldin

Scott Minerd, Chief Investment Officer at Guggenheim Funds, writes:

Though some may be cheered by the relative policy successes this time around, at the current trajectory it will still take almost as long for total employment to fully recover as it did in the 1930s. While job loss was not as severe this time, the recovery in job creation has been much slower. Although nominal and real gross domestic production have returned to new highs on a per capita basis, we are still below 2007 levels. In the same way the Great Depression and the depressions before it lasted eight to 10 years, we will likely continue to see constrained economic growth until 2015-2016 roughly nine years after U.S. home prices began to slide.

October 27, 2011

Back to Where We Began. Finally. – NYTimes.com

It has taken 15 quarters for the economy to merely recover the ground lost to the recession. That is significantly longer than in every other recession/recovery period since World War II. In the previous 10 recessions, the average number of quarters it took to return to the prerecession peak was 5.2, with a high of 8 quarters after the recession in the 1970s.

via Back to Where We Began. Finally. – NYTimes.com.

October 26, 2011

Richard Koo: The effect of de-leveraging after a banking crisis

This video from 2010 is particularly important. Richard Koo explains how the private sector paying off debt leads to a rapid contraction in national income.

INET interview with Richard Koo, Chief Economist at Nomura Research