I saw the new Bond flick, ‘Quantum of Solace’, over the weekend and I was amazed at how progressive it is. No longer does our alpha-male hero wreak destruction upon villains with moon bases, bent on world domination. His latest homicidal rampage is to prevent a new terror: oligopoly pricing. Read more
With the official cash rate set to fall even further later this week, shares become relatively appealing when compared with other financial instruments, such as bonds and term deposits.
The old adage of ‘buy low, sell high’ seems fitting, given the battering shares the world over have taken in the past while. The NZX and Dow Jones industrial averages, for example, are both down around a quarter from their respective values six months ago.
But just when is the market ‘low’?
I don’t know! If I did, I’m sure I’d be a lot wealthier than I am. However, I thought it would be useful to write a blog entry to stimulate discussion and debate on what TVHE readers are picking for the sharemarket:
I look forward to hearing our readers’ views on the current state of the sharemarket.
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Over at Paul Krugman’s blog he discusses the idea that monetary authorities could have prevented the Great Depression and how that relates to now (ht Economist’s View). Specifically he states that recent events imply that “the thesis of the Monetary History (Friedman’s book) has just taken a hit”.
I am not sure I agree with Krugman’s argument here. He states that the Fed controls the money stock. Given that the money stock grew through the late part of the Depression, and given the money stock has increased meteorically now he states that we can’t “blame” the Fed for either slowdown.
It appears someone has created a site that copies our entire posts.
I have tried emailing the guy – but I didn’t get any response. What do you guys think we should do?
Update: So we have agreed it is a spam blog, and we should put a copyright on our site and posts. Interestingly, when I looked up the site on Technorati I noted that the Standard links to “invest on credit” as well as us (both under “other blogs”) – random! They would have linked because of the “quality” New Zealand content methinks 😉
According to a recent book by Christian Broda and David E. Weinstein (Prices, Poverty, and Inequality: Why Americans are Better Off Than You Think) (ht Marginal Revolution) growth in income inequality was less pronounced in the US because of changes to the quality and cost of goods that “poor” people purchased.
This indicates to me that a tiered consumer price index could be a useful thing. Currently the household economic survey (HES) provides an annual tiered income measure (where we see the average income of different income deciles). However, this nominal measure is not particularly useful if the change in prices experienced by different groups are very diverse.
As a result, a similarly tiered CPI measure (so a CPI for each income decile) would actually give us a much better way to figure out change in “real income” and thereby a fairer measure of the distribution of real income – which is something we care about.
Surely the HES has a measure of purchases by different income groups. As the CPI is broken down into different products it should be possible to take these weights and come up with a loose set of indicies that represent the price inflation faced by different income declines shouldn’t it?
In what could become an awesome resource for creating economics post, we have found Debatepedia.
We discovered the site after we found it linking to a post we did on progressive taxes in support of the argument that “progressive taxes adjust for random factors in wealth“. The full progressive tax debate is here. It is awesome how it provides background and short quotes summarising the arguments – while also providing links for people that want to get their hands dirty.
Truly awesome, and a great way for you guys to quickly find good counter-arguments to any dodgey points I try to make – not that you guys need any help 😉