3-Sep-10 News -- Expert Jeremy Siegel makes no sense

[John]

3-Sep-10 News -- Financial expert Jeremy Siegel makes no sense at all

** 3-Sep-10 News -- Financial expert Jeremy Siegel makes no sense at all
** http://www.generationaldynamics.com/cgi ... 03#e100903

Contents:
"TV interview with Prof Jeremy Siegel makes no sense"
"'There's nowhere to go but up'"
"Additional links"
Bond spreads increasing to crisis levels for PIIGS countries
Afghanistan's banking system is near collapse
Iran's stock market may also be near collapse
Red Cross aid workers in Pakistan face angry crowds
Russia's ban on exporting wheat extended till next year
Speakers of remote language do not use words like 'left' and 'right'
In Japan, real men go to a hotel with virtual girlfriends.
Heavy drinkers live longer than those who abstain from drinking.

[thrive]

He defended quantitative easing in the case of Japan:

"I think we would get bang for the buck. I think QE or quantitative easing got a bad rap - people say it failed in Japan. The truth of the matter is it really didn't fail in Japan - they planned to actually stop, after a given period. It did stop the deflation. And I think that it would support prices and assets and the economy if we move forward on that."

This is an absolutely remarkable statement. As I reported a few days ago, Japan has recently announced its 17th consecutive month of deflation. Japan is still in a deflationary spiral 20 years after its stock market bubble crashed in 1990. So what on earth does Siegel mean?

John, I am thinking back to that Richard Koo presentation you posted a while ago. From what I read, Japan, over the past 20 years, has not tried just one approach that failed. So can anyone say QE did not work or that debt reduction did not work, or whatever-the-policy did not work?

it seems like Richard Koo was saying something like this; Japan had rival political parties changing monetary policies OVER and OVER during the past 20 years. Japan's PoliticalParty#1 did stimulus and the enconomy began to recover, then PoliticalParty#2 came in and paid down debt and the economy faltered, then PoliticalParty #1 was voted back in and applied stimulus again and the economy began to recover. Then PoliticalParty#2 came back in and paid down debt,and then PoliticalParty#1 did stimulus....

The link to the presentation has changed over time, and here is the link;
http://csis.org/event/economic-outlook- ... ichard-koo

Thanks for another excellent thought-provoking post and for your work with Generational Dynamics.

[John]

See the following:

http://generationaldynamics.com/forum/v ... 6492#p6492

John

[alecberg]

I believe the reason these people believe this stuff is because of a Confirmation Bias. Basically, they only pay attention to information that supports their position. See http://en.wikipedia.org/wiki/Confirmation_bias

[The Grey Badger]

Or why I have "This Time is Different: 8 centuries of financial folly" out from the library and will probably look into buying it.

I have not trusted any of the financial experts or economists or any of the talking heads on the subject of the economy since the crash . "THID" points out on about the first page that most of them are using data that goes clear! back! to! (gasp, how ancient!) 1980.

Gaaah.