The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, September 6, 2011

Policymakers' asymmetric reaction functions to rising/falling asset prices

A neat point from UBS:

"Politicians generally fail to appreciate that economic threats can also wear a (temporarily) positive appearance, in the form of bubbles. These are just as damaging as negative price moves – yet for some reason “rising asset markets” that misprice assets are politically perceived as good, while “falling asset markets” that misprice assets are politically perceived as bad. Even today, politicians who rush to ban naked short positions would not dream of banning naked long positions."

- Posted using BlogPress from my iPad
at 9:37 PM