Many investors purchased absurdly overvalued stocks during the late ‘90s and have since suffered devastating losses. The explanation now given for this is that the stock market was in a “bubble” which has burst, but those buying stocks at the time were not able to identify the bubble. What is clear in retrospect was a controversial proposition at
Some years ago, Amazon.com patented the concept of having a “1 click order” button on their web site. Now, JP Morgan is trying to patent a busines deal that they did with MicroSoft. When MicroSoft changed its employee compensation from stock options to restricted stock, they sold the options to JP Morgan, who agreed to buy them as part of a
Economist Marc Faber, author of one of the more interesting books of the last year combining economics and investment ideas ( Tomorrow’s Gold ) provides his outlook for the coming year . I would describe Faber as Austrian-influenced but not Austrian. He mentions the Austrian theory of the business cycle in his book but gets it wrong. He is
Federal Reserve Economist Wayne Passmore has authored a new study on the housing GSEs , which finds that: (1) the federal government’s implicit subsidy of Fannie Mae and Freddie Mac has resulted in a funding advantage for the GSEs over private sector institutions, (2) the actions of GSEs result in slightly lower mortgage rates for some
“Today, Fannie Mae (nyse: FNM - news - people ) will announce plans to expand its support of a ten-year, $2 trillion, first-time home buyer lending program called American Dream Commitment.” It now appears that, thanks to the Fed’s ultra-low interest rate policy and the packaging of dollar assets into bonds for Asian central banks to buy with
Contrary Investor provides some statistics, graphs, and charts showing the unsustainable growth in debt at all levels. Consumer, corporate, and government debt levels are at or near historic highs. While interest rates are low, cash flows are manageable, but if, for example, the Fed were to have its hand forced to raise interest rates to defend
Could the weak dollar have the effect of reducing the incentive to outsource capital and labor? If so, would that create a political incentive to maintain it through monetary policy? Declan McCullagh writes (on ZDNet): “Because U.S. tech firms have been shifting operations outside the country, a weak dollar means that those facilities are more
Japanese Finance Minister Sadakazu Tanigaki suggested last week that Japan could diversify part of its huge foreign exchange reserves from dollars into gold. But doing so rapidly would hurt the country’s export-based economy (that is, it would stop the subsidy exporters currently
Bond guru Bill Gross writes about the shift of the US economy from producing things to consuming things on credit that other people finance, and why this is unsustainable in the long run. The latter he calls a “finance-based economy”. The characteristic of such an economy is that it is dependent on continuous credit expansion to keep the supply of
The Economist : “Some think the dollar has fallen too far. On the contrary, it has not fallen by enough.” (Thanks to R.F.)
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The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.