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Nobel Prize Winner And Stimulus Bull Extraordinaire Krugman Shifts Into Asset (De)Allocation
Reading anything by Krugman these days is all about getting an understanding of why drowning in infinite debt within a decade to finance stimulus after stimulus is really a pretty swell thing. Well, today the Nobel-prize winner has decided to go on pro-stimulus hiatus and instead is focusing on providing asset allocation advice. According to Bloomberg, "Nobel Prize-winning economist Paul
Krugman said he plans to sell some of his investments in Brazil,
Latin America’s biggest economy, on concerns that asset prices
are over-valued."
“I am seeking to get out because of what’s happening. Not
that I see a crisis, but people seem to be loving it too much,”
Krugman told reporters in Sao Paulo.
Then again, Krugman does not see a crisis with the US headed straight into bankruptcy either: after all there is stimulus #X to be funded tomorrow, cost of capital be damned - China will be there to foerever buy 0% bills. So if the man is actually concerned about people "loving something too much" it very well may be time to listen. We only hope that this is not seen as investment advice by the New York Times - as Ben Stein knows all too well, the NYT's code of ethics is not too happy with such activities.
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What's that ticking sound?
Now we know why he changed tunes all of a sudden after the meeting at the White House. Obama promised to him that if he went Pro-stimulus, he can offload that farming ranch he bought a few years back in Brazil at a nice chump change....Now that he unloads it at a nice gain, he change his tune again.
I noticed Krugman changed tunes after that Obama meeting as well.
Krugman scares me at this point.
Krugman gets a Nobel from the elites so he has the cachet to be cited as an authority and shill whatever party line the elites who gave him the Nobel desire to be fed to the masses. Something to do with the theory of reflexivity.
I am P Rankmug
+1
Krugman's Nobel was for trade theory, and had nothing to do with the role of fiscal or monetary policy, let alone investment policy. Heeding his advice on economic stimulus or asset management is like asking a podiatrist to interpret your cardiogram.
I am longjohnshorts.
+1000
So true.
I am Nintendo videogame character who has lost his way, just like Obama's economic team
/hey, wait
//are we all doing the Chumbawamba "I am ..." thing at the end of our posts now?
///that's so lame
////that guy is a complete idiot
/////let's stop doing that
He's either covering his shorts just like the ppt boys(and telling bbg the exact opposite) or he is joining the ppt gang.
Either way he can go f himself as he's nothing more than a moron and he's gono get REAMED once gold hits 4k/ounce
I suggest everyone sell "Krugman". He is waaaaaaay "over-valued".
Every non-Nobel Prize winner is now going long EWZ + short TLT. Thanks, Paul, for confirming that is a right shoulder forming.
Krugman sold his 100 share lot ?
yes his 30 days of free trades expired at end of the month - had to avoid that nasty profit eating commish
What is sadly hilarious here is that if Krugman's stimulus advice is followed then it would be quite likely that the issues he is discussing would only increase in notional value as long and the system remains afloat and his policies are followed. After all, we have already discovered that stimulus has little to do with stimulating the growth of anything besides the opposide side of the feds balance sheet as it continues to amass every residential mortgage, sub-prime motorcycle & RV loan and frequent flier mile that can be saved or created.
Please don't pick on the man. Otherwise he'll just get all crabby, call ZHers a bunch of names, and gripe that ZHers are a bunch of conspiracy theory right wing nut jobs.
PS- His name should be added to the List of Names That Cannot be Mentioned on ZH.
+1. These economists with beards scare me. What are they hiding?!
Or even scarier is the economist that looks and acts like Napoleon Dynamite that became a tenured professor at Columbia & a fed governor.
speaking of bad advice
Canadian writer says there is a "bubble" in Dennis Gartman. Apparently he launched an ETF in March 2009... and somehow the ETF is down.
http://www.fundmymutualfund.com/2009/12/dennis-gartmans-horizons-alphapr...
Short Gartman/Krugman in size.
In my opinion, there can be no clearer definition of 'talking your book' than Paul Krugman providing recent pro-stimulus commentary while clearly being significantly invested in the very intertwined world markets... I can find no disclosures by Mr. Krugman on his investments and how those investments would impact his commentary... but from his recent pro-stimulus commentary it would be a good guess that he has some investments in the U.S. equity markets in addition to Brazil.
What a tool extraordinaire!
Now it can be said in public. I was thinking it would have been four years of biting my tongue.
This Prez is less sustainable than W.
+1 Tool Alert!!!
I would bet Krugman isn't short the thirty year. But another thing he might be mentioning is the fact that Brazil and Emerging markets don't have a giant bank controlling 25% of their exchanges either.... or perhaps they do, *shrug*
And yes, tool extraordinaire like CD said.
In Brazil it's more like 50% and up, through pension funds controlled by unions tied to the current government. It has been rigged for ever and nobody really cares; retail investment is minimal.
Thanks, I'll make sure to play them for the next massive inflationary movement from the Fed
The" way forward" is scary stuff, Krugman back in August,
http://www.cnbc.com/id/15840232/?video=1209893939&play=1
A careful reading of Krugman (not that I recommend it) yields the conclusion that he really does not understand the national debt. I first noted this a few months back when he said, in effect, that the debt "was not that big a deal - it's basically money we owe ourselves." Almost an exact quote. He then makes reference to the national debt and deficit after World War II, where such a statement is closer to the truth. So Krugman does not seem aware that the public debt is currently also held by foreign central banks and other non-Americans, and that indeed their purchases of Treasuries are absolutely essential to keeping this Ponzi game going for a few more years. His Nobel had something to do with patterns of world trade, and not basic accounting or recent American economic history.
I would think the dollar would be rallying in a vote of confidence for Bernanke's appearance tomorrow?
And O did it without a Tonkin Gulf - woah. I think that if they tried the public would 'know' immediately. I think we have a 'silent' (ridiculed, marginalized) majority shaping into a third political party: The Tin-hatters.
Look at this Fedspeak orifice Chris Matthews:
http://www.youtube.com/watch?v=sTbJcixsLq8
Fail! Don't insult our intelligence - O is the Commander-in-Chief! Blowback's a bitch. This kind of stuff is driving people into the arms of Faux Noise.
Seriously - who to you all think the candidates are for Treas Sec when Timmay gets Fritzed in the next couple of months:
Dimon
Krugman
El Erian
Corzine. Besides, it doesn't take much to envision what some in the media would say to an Egyptian being nominated to be SecTreas.
How about a dual citizen? Like Chertoff.
http://en.wikipedia.org/wiki/Stanley_Fischer
Krugman's advice seems to be what's over-valued here.
I am Chumbawamba.
I can spot one thing overvalued, without reading the article:
-Nobel Prize
Krugman should be working in car wash and the economics department at Princeton should be donated back to the Fed.
Well, heck, he is a Nobel Prize Winning Winner...ergo, listen up and keep your mouth shut. Did he have his name formally changed to include the prize winning claptrap?
I find that people that criticize Krugman don't understand him or his arguments, nor, do they read his columns, again, they criticize third hand. More of the same here.
You'd all do yourselves a favor and attempt to understand his ideas before commenting.
Lastly, Krugman doesn't kiss anyone's ass. Again, had you read his stuff, you'd find that he went after Bush and now Obama and Timmy are getting some. Now, typically the financial press are just a bunch of ass kissers, so, you're going to have to get used to someone who doesn't. But, it's not really that hard.
Some of his points:
- There is no Current risk of inflation.
- The stimulus helped, but the recession turned much deeper.
- We may need more stimulus, to get people working again.
On the question of stimulus, you've got to ask yourself, is this current level of economic activity sufficient for your business? Would you rather see things get worse? Or, would you rather stop the slid and start some growth to get American's working again.
Last, is it cheaper to go into stimulus mode,
or let nearly 20% of the population lose all Unemployment Benefits, and start another Bigger wave of Bankruptcy and Foreclosure?
"There is no Current risk of inflation."
You should go to John Cochrane's web page. He's got a really nice way of thinking about this issue. He sets up the value of government claims as the discounted present value of the tax revenues minus program spending. Once you think about it that way, you'll understand that money and government bonds can break at any point when the expectations shift to unsustainability. Even if the government isn't printing money like crazy at that point in time.
"The stimulus helped, but the recession turned much deeper."
"We may need more stimulus, to get people working again."
There is no credible evidence whatsoever about stimulus helping anything this time or ever. Robert Barro's military spending regressions are the best, but even those don't pass the smell test. If Krugman claims that stimulus has helped, it's not based on credible evidence.
The right way out of this recession is to do what they did in Finland in 1992. The wrong way deeper into this recession is to do what they did in Japan at about the same time.
I looked up "useful idiot", "Keynesian clown" and "stupid prick who should be in jail for life" on my Web Dictionary and there was a picture of Krugman at each entry. Ex Enron advisor.
Based on who has been receiving Nobel prizes lately, Krugman is about as credible as ... well ... Obama.
The pro-stimulus, pro American debt, cheerleaders will have hell to pay pretty soon. Main Street is NOT happy. I hear the tar is being warmed up and the chickens are being plucked as we speak.
Please, he was not a winner of the Nobel prize. He won the "Nobel" prize. There is a difference.
Paul’s understanding of economic policy was always hard-constrained by the ”bondholders receiving NO haircut – under ANY condition” brick wall (bought the crunch). At first, well hidden behind the libor and ted spreads theme then latter on - even when he finally realized that this was in fact preventing his whimpy thoughts (and boosting the level of unemployment in the US) to venture beyond the any 101 textbook of your choice level at max – he failed to un-wonk his daily leaflets in any meaningful way. But yes, that does in fact qualify him for any and all all the following “posts”; WH counselling, stimulus 2.0 cheerleading, T sec or even the not so grand Fed chair anymore.
And incidentally, please, do nationalize the fed (or else the fed will privatize you).