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Showing posts from September 19, 2007

Bush wins the political war on Iraq

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Yep. Sorry to say that. But as a member of the Reality-based community I need -- and you need -- to face reality. Here are some of the points I raised in a recent column:
In the aftermath of a very hectic week in Washington which focused on US policy in Iraq, there is a growing recognition among lawmakers and pundits that US President George W Bush is going to win the political and legislative war at home over the military war in Iraq.
The United States is going to 'stay the course' in Iraq at least until President Bush leaves office in 16 months. The decision on what to do about US military presence in that country will have to be made by the next occupant of the White House - long after Mr Bush concludes his two terms in office.
Hence, despite continuing opposition by a large majority of the American people to President Bush's Iraq policy and their support for setting a timeline for withdrawal from that country, the Democratic leaders who control both the Senate and the Ho…

Fed stuff

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Some of my recent analyses of the Fed and the U.S. economy:
Business Times - 20 Sep 2007


Spectre of 'Bernanke Put' looms

Fed's half-point cut in federal funds rate also expected to produce new problems


By LEON HADAR
WASHINGTON CORRESPONDENT

CRITICS of Alan Greenspan have depicted what was seen as an attempt by former chairman of the US Federal Reserve Board, Alan Greenspan, to ensure liquidity in the capital markets by lowering interest rates as the 'Greenspan put'. According to this argument, during the Greenspan term in the Fed, investors operated under the expectations that disorder in the capital markets would make it more likely than not that the US central bank would lower interest rates.

Hence, this 'Greenspan put' may have created incentives for some investors out to engage in risky and irresponsible behaviour since they expected that lower interest rates would serve to bail them out. Their risky behaviour, in turn, would end up igniting more disrupt…