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How Global Interest Rates Deceive Markets
January 26, 2015
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The False Information Conundrum
The Common Denominator between the Swiss and Japanese Central Banks
Time to Watch Greece Again (Sigh)
The Cayman Islands, Zurich, Florida, and New York
“You keep on using that word. I do not think it means what you think it means.”
– Inigo Montoya, The Princess Bride
“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
“Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.”
– From an 1850 essay by Frédéric Bastiat, “That Which Is Seen and That Which Is Unseen”
All right class, it’s time for an open book test. I’m going to give you a list of yields on various 10-year bonds, and I want to you to tell me what it means.
United States: 1.80%
Germany: 0.36%
France: 0.54%
Italy: 1.56%
UK: 1.48%
Canada: 1.365%
Australia: 2.63%
Japan: 0.22%
I see that hand up in the back. Yes, the list...
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