In this second of two posts on John Bougearel’s guest post at Naked Capitalism, Sherry Jarrell provides an economist’s response.

Response to “2010: Foreseeable and Unforeseeable Risks …”

In this wide-ranging and comprehensive piece, John Bougearel warns of the repercussions on the world economy of the steps taken to remedy the financial crisis.  He warns of the impact of the Federal Reserve absorbing the toxic assets and shaky collateral on its balance sheet, and of the unsustainability of Social Security and Medicare in an aging demographic.   On these basic facts, I agree.

One of the most difficult things for any writer to do when talking about economics and finance is to establish cause and effect.  In trying to analyze past policy decisions and recommend future actions, however, it is absolutely imperative to distinguish cause and effect.  In my view, Mr. Bougearel’s overview is either silent on this issue or implicitly assigns blame to the markets, when it belongs squarely on the doorstep of misguided government regulations. Continue reading “Establishing “cause and effect”” →

In this first of two posts on John Bougearel’s guest post at Naked Capitalism, Paul Handover suggests that we read it and think about the implications.

A rather sobering reminder of the potential challenges for 2010

I am a subscriber to Naked Capitalism, thoroughly recommended by the way, and recently Yves published a guest post

by John Bougearel, author of Riding the Storm Out and Director of Financial and Equity Research for Structural Logic.

I wrote to both Yves and John asking for permission to reproduce the article in full but, so far, no replies have been received.  Therefore the following are some important quotes from the article which I recommend you read in full by going to Naked Capitalism.

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