key quote:
Here’s my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.
The end of the financial world as we know it and How to repair a broken financial world. Michael Lewis and David Einhorn, NYT. (though Paul Kedrosky gives you some reasons to question why Lewis would have any particularly compelling insight into the way forward, at People who got lost suggesting path forward.)
speaking of Kedrosky, he has a very short point that bears thinking about at:
Be it resolved, Americans are spenders. Infectious Greed.
and an even more important point about being flexible in your viewpoint in such uncertain times at:
What have you changed your mind about?
hat tips to naked capitalism for the next 3:
If this is like 1932, there will be hope, as well as pain. John Authers, Financial Times.
'This is economic war!', Jarislowsky warns. Financial Post.
Chicago Fed says take interest rates below zero and monetize debt (to devalue dollar). Jesse's Cafe Americain.
and, finally, two from Mish:
44 States face huge budget shortfalls.
and
Fed's Yellen supports "experimental approaches" to prevent deflation.
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