A front page economic analysis column in today’s The New York Times reflects on whether recent economic “good times” were simply a “mirage” and, referring to the so-called “great moderation” – growth without inflation, high yields without risk – blithely remarks that it “now seems to have depended – in part – on a huge speculative bubble . . . that hid the economy’s rough edges.”


A brief sample from the list of gross market distortions over the past few years:

– Global LBO volume increased from $95 billion in 2003 to over $1.2 trillion (annualized) in the first half of 2007.

– Subprime mortgage originations increased from $120 billion in 2001 to over $1.2 trillion in 2005-06 combined.

– The notional amount of debt underlying credit default swaps has increased from less than $2 trillion in 2002 to over $45 trillion today.

“Seems, madam? Nay, it is. I know not ‘seems.'” (Hamlet, I, ii).


About Amir

I hate doctors!
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