Friday, January 2, 2009

Happy New Year!

2008 explained in 3 minutes and 30 seconds!

(HT -- The Anchoress)


Rodak said...

With regard to the economy, what does your crystal ball mean by "the economy will self-correct?"
Does this mean that the millions of unemployed workers will have found jobs, or does it just mean that the investor class will have cut some of its losses and started to make real money again?

Anthony said...

I think that credit will eventually loosen up and that things will get working again. Unemployment will still be higher than its recent lows, but will drop. It will still be a difficult year for everyone.

I think that the "bailouts" have been ill advised. With respect to subprime, I think that if the government stayed in the background, the holders of the debt (probably secondary holders) would have worked out the issue. I think you would have seen a split into "bad" bad debt and "good" bad debt. The bad bad debt would have simply been foreclosed up, but the good bad debt (where the debtor was in difficulty, but should be able to pay eventually) would have been reworked. With respect to the auto companies, they should have declared bankruptcy so they could restructure and come out of it in a few years (bankruptcy does not mean the end).

Instead, we have given this bailout money -- where is it going? Are the CEOs of these companies taking pay cuts?

Rodak said...

My comment actually belonged on the predictions thread, as it refers directly to one of them. Sorry. I copied it up there. You can delete it here. Sorry.
Btw, I don't see how your response answers my central question...?