Monday, July 14, 2008

Anatole Kaletsky: more wrong than David Smith?

We have financial, not economic, problems

"Sometimes markets make spectacular blunders, completely losing touch with the real economy. While Wall Street has gone into meltdown since the beginning of June, conditions in the real economy have been unambiguously improving. The latest employment figures confirmed that economic conditions had stabilised after their sharp deterioration in the winter, while purchasing managers' surveys, the most reliable indicator of very recent economic trends, suggested a continuation of the modest but clear improvement that began in April. It is time for regulators and governments to recognise that market prices are sometimes plain wrong."

Posted by drewster @ 01:47 AM (998 views)
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9 thoughts on “Anatole Kaletsky: more wrong than David Smith?

  • beartil2010 says:

    Interesting.

    Essentially he’s saying ‘it doesn’t matter that are banks are insolvent or horrendously undercapitalised, the only thing that’s wrong is that if people call them on it they go bust. Stop asking banks to know their positions, and just keep borrowing more money and we’ll all be okay’

    hmmm

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  • I think this guy should just pack up and go home. He has been so wrong about all this, all the way along.

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  • We have financial, not economic, problems ???

    Isn’t it generally accepted that our ‘economy’ has been largely constructed on debt based consumer spending and financial services? – or am I missing something?

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  • “financial not economic problems”

    Oh dear. I’ve read enough already. This rather myopic view that they are not linked is exactly what got us into this mess in the first place.

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  • whiteknight says:

    This guy needs to get out more.

    Walk down the street. Chat with a few people.

    Get his head out of the official figures.

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  • I can’t believe someone like him, who should know better, is still tarting the old story about the finance world being completely unrelated to the “real economy”. Think of all the job losses in the housing-related sector alone – the housebuilders, the estate agents, the mortgage-providers, the furniture companies, the local builders, etc. Unemployment is not only a lagging indicator, it’s highly subject to manipulation by government.

    I’ve really lost what little faith I had left in the Times. It’s becoming more of a tabloid each day. Soon it will follow the path of the Daily Mail into tabloid ridicule.

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  • “Soon it will follow the path of the Daily Mail into tabloid ridicule.”

    Times “compact” format = tabloid.

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  • shipbuilder says:

    I think this thread is in real danger of looking like the housepricecrash.co.uk cartoon –

    http://www.propertyinvestmentproject.co.uk/blog/2007/10/14/house-price-crash-hpc-website-mentality/

    I distinctly remember a number of ringing endorsements for Anatole’s views in the past.

    I think he makes some good points in this article – that the markets react to the ‘real economy’ and sometimes overreact. The dotcom boom, for example – did the markets reflect the real worth of companies on that occasion? If it can happen on the way up, it can happen on the way down.
    In both scenarios, the irrationality of the markets can hurt the real economy by giving false impressions of the real worth of a company.
    To me, this also ties in with a thread a few days back which discussed whether speculation actually had a negative effect on people’s lives, with regard to the price of commodities etc. If we agree that the markets and the real economy are interconnected, doesn’t this also make sense?

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  • I am liking how we look at one of his worst quotes in this thread and then comment on how bad it is. We already know this one is horrible so lets try another: From July 14, 2008, “consumer confidence showed improvement. Even the figures on home sales have now been near-stable for four consecutive months. Most important of all, the monthly trade figures, published on Friday in the midst of the Wall Street meltdown, proved that the remarkably adaptable US economy was responding to the credit crunch by undertaking an immense structural shift from consumer and housing-led growth to growth powered by exports.” he also makes a joke about how bad wall street is saying, “Wall Street is a great economic forecaster – it has predicted six of the last three recessions.” He points out how wall street exaggerates and blows “blunders” way out of proportion. This is also true for most other people ( hpwatcher, whiteknight, and drewster), drewster thinks that unemployment is highly subject to manipulation by government, while I am not arguing with this statement, it seems the three that have posted and I have mentioned as well as others, are highly subject to manipulation by many “officials” who claim economic recession. While the claim could be made that I am under Kaletsky’s control, I believe the evidence is by far in his favor.

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