The Stash

If I had to put a number on it, I'd say Krugman is 10 percent more alarmist than I am, 75 percent more skeptical of the Obama administration, and about 25 percent more liberal. (And probably 100 percent smarter.) But, man, am I grateful he's around writing these columns. If Krugman weren't regularly asking questions from such prominent real estate, it's hard to imagine Treasury facing the kind of skepticism it faces.

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Earlier today I noticed that the silver lining from the Fed's beige book looked more like a copper-nickel alloy. But tonight's Goldman Sachs economic report has some genuinely (if modestly) encouraging news.

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A reader notes that, with Citigroup now trading at around $1, yesterday's CitiCoke graphic has been overtaken by events. This person proposes an update: CitiFrosty--after the frozen refreshment from Wendy's 99-cent menu. Enjoy. (Graphic made possible by Flickr.) --Noam Scheiber

Some of us have been alarmed by the European Central Bank's apparent refusal to acknowledge that deflation (and its really, really bad economic consequences) is a genuine possibility. So it's reassuring to see the ECB start to follow the Fed's lead and move more aggressively to prevent it. According to today's Wall Street Journal, the bank is cutting its benchmark interest rate half a point to 1.5%, its lowest level ever.

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Yesterday the Fed released its "beige book," an eight-times-a-year update on the economy based on reporting from its 12 regional outposts. I'm not sure what was more depressing, the genuinely bad information, or the Times' attempt to find some good news: There were a few, faint silver linings: Philadelphia and Chicago reported that their regional economies “remained weak” but did not get weaker. Consumer spending picked up slightly after a dismal holiday shopping season, and prices eased because of weakened demand.

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Harvard economist Robert Barro has a Wall Street Journal op-ed today writing up his recent attempt to quantify the chances of a depression. His short answer: 20 percent.   I don't have time to read Barro's full paper now. (You can read the abstract here--the details look slightly different than the details in the piece.) But there is one methodological issue I'd raise based on his short description. It has to do with the difference between the post-war experience of developed countries and, well, everyone else.

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Amazing story of the week: Japan’s automakers are seeking billions in loans from the Japanese government, and it looks like they are going to get them, and they’ll get them in dollar-denominated assets that they can use to help Americans get loans to buy their cars. Here’s the report courtesy of CNN: Honda is considering borrowing billions of yen in dollar-denominated loans from the Japan Bank of International Cooperation for its U.S. financing unit, American Honda Finance Corp., the report said, without citing a source.

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First Read writes up the results of the latest NBC/Wall Street Journal poll, and it looks like the GOP's rejectionist strategy is working about as well as it did last fall (with the caveat that no sequel ever does quite as well as the original): Obama’s favorability rating is at 68% (an all-time high in our survey), 67% say they feel more hopeful about his leadership, 60% approve of his job in the White House, and 49% have a positive view of the Democratic Party (which is also near a high).

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....as usual. Today's effort: This [the current approach], then, is loss-socialisation in action – it guarantees a public buffer to protect creditors. This could end up giving the government a controlling shareholding in some institutions: Citigroup, for example. But, say the quibblers, this is not nationalisation. What then are the pros and cons of this approach, compared with taking institutions over outright? Douglas Elliott of the Brookings Institution analyses this question in an intriguing paper. Part of the answer, he suggests, is that it is unclear whether banks are insolvent.

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So I'm reading Matt Yglesias's blog and I notice he's recommending a post by Hendrik Hertzberg on Charles Krauthammer's ideological evolution. Being a fan of Hertzberg's and a detractor of Krauthammer's, and working at the magazine where both launched their journalism careers (I think), I naturally click through. And it doesn't disappoint. But then it occurs to me that it's been a week or two since I last caught up on Hertzberg's blog. So I read through a few more equally terrific items, until I notice that Hertzberg is recommending an Yglesias post I'd somehow missed.

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