So are we in a recession? Or aren't we? Who knows? Economists have a different view, and despite a track record as good as your local weatherman, we still listen to them for some reason.
But now a whole host are coming out with their wisdom after the fact not adding much to the dialogue but somehow their "insights" get picked up by the media. The first one is Lakshman Achuthan. Achuthan is the managing director of the Economic Cycle Research Institute and feels the Fed didn't act quickly enough when it begn cutting key interest rates last fall. The economic stimulus package also came too late, he said. (article link)
"If they had done all this in the fourth quarter … we might not have had a Bear," he said in reference to investment bank Bear Stearns which collapsed last week.
"I think we'd be having a different discussion," Achuthan said.
Achuthan pointed to the end of 2007, when inventories were low, as the time to act. A boost to the economy then would have spurred consumer spending and resulted in increased productivity, he said.
"There was an opportunity that was wasted by policymakers because they didn't understand those dynamics," he told CNN.
Thanks Lakshman. Where were you about 15 months ago?
The other economist who is also crying is John Ryding of Bear Sterns economics squad. In a note issues last Thursday, Ryding and team suggest "that the failure of the Federal Reserve between 2003 and 2006 to adequately raise the federal-funds rate to a more normalized level in part contributed to the downturn the market is experiencing - and by extension, the collapse of Bear Sterns." (quote from 3/22/08 Wall Street Journal)
While I understand that it must suck to be a Bear Sterns employee these days, I doubt Mr Ryding was arguing too much with the Fed's actions when money was cheap and Bear Sterns stock price was above $100.
Being a Monday morning quarterback sure is easy, ain't it?
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