Freitag, September 03, 2010

Quote of the Day...

In this case, I'm not sure where I read it.

The best description of the state of the economy is that we are now in a supermodel economy. The curves just keep on getting flatter and flatter.

While obviously true for interest rates, it's also indicative of the general malaise: no one is investing, no one is buying big-ticket items, no one is building worth a damn. Even government spending is flat, given how the US government shot its wad buying off the unions and democratic interest groups (with the pretense, but really at the expense, of creating jobs).

Why are the curves so flat? Because we are going to be very, very lucky if we can continue to tread water and not go under.

Banking is all about getting rewards for taking risks. No one can risk, right now, the collapse of government finances if interest rates were to increase. This is an inverse risk, where nothing happens because no one wants to go there, rather than everyone wanting to get a piece of the pie that got us in the trouble we are now in.

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