Crying Over Expensive Milk (No More Free Lunch)

Let's be clear about something: The Fed has abandoned the idea that it's possible to retain an ultra accommodative policy stance in perpetuity in order to secure a free lunch for the economy. The apparent demise of the Phillips curve and other frameworks for assessing the relationship between key economic variables, tempted us to rethink what's possible. The pandemic forced the issue. But, in a cruelly ironic twist, the exogenous shock that finally tipped the scales in favor of a policy conjun

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2 thoughts on “Crying Over Expensive Milk (No More Free Lunch)

  1. Thanks H, for the common sense explanations, and in this article an effective use of effectuate, which I seldom choose to use. Since effect (v) is nearly synonymous and more generally used, especially in the context of “effecting change”, my first reaction here was that you’d gone overboard with effectuation and used extra letters where unwarranted. But… when I remembered the old rule of thumb and tried substituting “bring about” for “effect” and “bring into effect” for “effectuate”, and darned if effectuate doesn’t seem a little bit more perfect the verb in this sentence. I suspect the coupling between tightening and appropriate economic change is a bit too loosey goosey to warrant “effect” here. I use too many words… thank you for all you write.

  2. Goldman, like Hallmark, as an indicator for every occasion. Just looking at their Bear Market Probability Indicator a few minutes ago and the bear is pissed. That indicator is in a place where bad things tend to happen the longer the indicator stays elevated. Of course, when it comes to investor timing, the indicator is usually vaguely right, in that official recessions do follow, but, it is precisely wrong 99.9999% precent of the tradable moments before it isn’t.

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