links for 2008-01-26

• Where Continents Go to Die: New Look into Center of the Earth - Spiegel
• Who gets stimulated ? - Paul Krugman Blog
• Let's hear the voice of Kenyans, through a recount - Jeffrey Sachs
• Markets Force Fed to Make a Big, Risky Rate Cut -  John M. Berry
• Fewer people trashing U.S. roads, beaches - McClatchy
• Gertler: Fed Criticism "Way Overboard" - WSJ Economics Blog
• Blogs - The New York Review of Books
• Trends and trendiness at Davos - Project Syndicate

Comments

[esb]

Regarding the WJS blog item, note that Gertler is "a friend of ... Ben Bernanke."

So amusing, wheeling out your "friends" in an attempt to parry the impending fatal telephonic event. "Mr. Chairman, the President would like to have lunch with you tomorrow."

Bernanke is now not long for his padded black leather chair.

He can "spend more time with his family" and go back to co-authoring "some academic papers" with Gertler.

[robertdfeinman]

THE ROAD TO HYPERINFLATION
Fed helpless in its own crisis
By Henry C K Liu (Asia Times)

While the equity markets are hanging on for dear life with the Fed’s help through stealth inflation, the bond markets have collapsed worldwide, with dollar bond issuance falling to a stand still, euro bonds by 66% and emerging market bonds by 75% in Q3 2007. Lenders are simply afraid to lend and borrowers are afraid to take on more liabilities in an imminent economic slowdown. The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity. Insolvency cannot be solved by injecting liquidity without the penalty of hyperinflation.

[anne]

Remember that I have been wondering whether the problem for investors in evaluating mortgage band packages was really the rating agencies. I am still wondering, but I am several times told that problem was more about the mortgage bankers masking credit quality on individual laons and parent banks masking credit quality of packages.