I don’t even want to comment on this one: “EU reaches deal on naked CDS ban law”
Shoot the messenger and the problem will go away? I think not…
Share your views of the quality of policy makers in Europe please.
Killing the messenger won’t solve the debt crisis
Posted by Lars Christensen on October 19, 2011
https://marketmonetarist.com/2011/10/19/killing-the-messenger-wont-solve-the-debt-crisis/
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The Hottest Idea In Monetary Policy
The Hottest Idea In Monetary Policy
The Market Monetarist- From excessively easy to excessive tight US monetary policy
- Re-visited: Firefighter Arsonists – the myth of the central bankers as ‘good’ crisis managers
- US monetary policy has become too TIGHT – the Fed risks significantly UNDERSHOOTING it’s 2% inflation target
- ChatGPT, Python, FRED and some NGDP gaps
- Re-visiting R*: Close to the end of the hiking cycle for the Fed
- US inflation set to fall sharply in the coming quarters
- Recession or not? Answering a question the Fed should not care about
- Milton Friedman commented on Powell’s Fed in 1978
- Carl Bildt is puzzled – he should read an economics textbook
- US domestic spending – a closer look at the 2021-22 data
The Market Monetarist 
Alex Salter
/ October 19, 2011Arbitrageurs are harbingers of efficiency. Their job is to bring asset prices in line with their fundamentals, which means in-line with their opportunity cost in the current constellation of prices. If they’re right, markets are more efficient. If they’re wrong, they and only they take a bath. This is a perfect example of Mises’s ideas on the dynamics of interventionism: One regulation, ostensibly to improve the economy, will make things significantly worse. The politicians will respond by instating another regulation, which again will make things worse instead of better. Lather, rinse repeat.
Politicians in Europe seem a bit more insulated from the electorate than politicians in the U.S. We know that governments worldwide gain permanent additional powers during a crisis, even after it passes. I can see definite public choice considerations which incentivize the politicians to keep the economy teetering, but not in total freefall, as it is now.
Lars Christensen
/ October 19, 2011Alex, so true, so true. Mises’ theory of intervention dynamics is an example that Austrian economics is worth studying.
The only positive to say of this crisis is that European policy makers is providing lots of evidence that public theory is correct even though I hope feel we need a new discipline of research called “public psychiatry” to understand European policy makers.
jakob Trap
/ October 19, 2011Lars, I’ll support your suggestion for a research discipline in “public psychiatry” 🙂
Reading this I remembered a post from Felix Salmon mentioning a report ordered by some EU institution to account for the CDS market and the likely effects of a ban.
Felix: http://blogs.reuters.com/felix-salmon/2010/12/09/the-eu-debunks-the-debt-speculation-meme/
The report is here :http://www.scribd.com/doc/44989344/20852775
It just makes the EU officials look even more ridiculous.