Sunday, September 20, 2009

It's Not Easy Being Steve Keen

A must read for a non-MSM view of the economy is Steve Keen's latest in a series. This one is titled It's Hard Being a Bear (Part Five): Rescued?

Here's the conclusion, but please consider reading the entire piece, as it is written for intelligent non-economists:

. . . the bad news is that this model only considers an economy undergoing a “credit crunch”, and not also one suffering from a serious debt overhang that only a direct reduction in debt can tackle. That is our actual problem, and while a stimulus will work for a while, the drag from debt-deleveraging is still present. The economy will therefore lapse back into recession soon after the stimulus is removed.

The Keen analysis is not inconsistent either with ECRI's bullishness or with the longer-term bearishness of many who believe the U. S. stock market is in a "secular" bear market no matter what their guess for stock prices is for the next year.

Copyright (C) Long Lake LLC 2009

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