Free Republic

Placebo Effects: Part 1 By: Satyajit Das Mixed Metaphors… Botanical commentators are finding ‘green shoots’. The astronomically minded have seen ‘glimmers’. The meteorologically minded have spoken about the storms ‘abating’. Strong rallies in equity and debt markets have confirmed the recovery for the ‘true believers’. The Global Financial Crisis ("GFC") crisis is over! It is useful to remember Winston Churchill’s observation after the British expeditionary force’s escape from Dunkirk: "[Britain] must be very careful not to assign to this deliverance the attributes of a victory". There may be confusion between ‘stabilisation’ and ‘recovery’. The ‘green shoots’ theory is based on...

A second half recovery is suddenly not a sure thing An end to the green-shoot rally? By Greg Robb, MarketWatch WASHINGTON (MarketWatch) -- For months, policymakers from Federal Reserve Chairman Ben Bernanke on down told investors that a second-half recovery was a safe bet. Investors, optimists by nature, eventually bought in. But now, even though the second half has actually arrived, the curtain on the recovery has so far remained down and questions are being raised on whether it will go up at all. Suddenly notable economists say the whole thing might not happen. Others, including Harvard economist Martin Feldstein,...