Financial Bubbles | timiacono.com

The Student Loan Hockey Sticks

Via this Bloomberg story on Friday by Noah Smith come the two charts below that help to explain why the nation’s student loan mess (that continues to slowly spiral out of control despite pleas from indebted students) will not likely see any substantive reform efforts.

Granted, the lower chart is a bit misleading because it doesn’t include Federal Reserve assets (another even more impressive hockey stick) or land owned by the federal government. Nonetheless, this is the sort of thing where it is sure to end very badly and whoever touches it between now and then is likely to be blamed for that outcome.

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Best Job at the ECB

Who says monetary policy is boring?

Greece may be careening toward default amid growing concern that the global financial system is again ripe for a crisis, but spirits were lifted yesterday when activist Josephine Witt paid a visit to the European Central Bank policy committee as they gathered in Frankfurt.

See here, here, and here for more on this important development, highlighted by some amusing photos of an understandably alarmed ECB chief Mario Draghi after Ms. Witt (with her low rise jeans and thong underwear) jumped up on top of the conference table where Draghi was sitting, about to explain the policy committee’s latest thinking.

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Cops and Stocks

This Vice News story covering some of the latest critiques of Thomas Pikkety’s Capital in the Twenty-First Century (e.g., most of the recent rise in wealth inequality is due to rising home prices) and asking whether we should raise taxes on the rich is interesting, but not quite as interesting as the accompanying photo, part of which is shown below.

All the recent police shootings combined with the American obesity epidemic and the ongoing bull market in just about every asset class all kind of come together in this photo in a way that doesn’t make you feel particularly good about living in the U.S. in 2015.

Secular Stagnation in Economic Theory

Starting at about the 3:40 mark, Kingston University Economist Steve Keen details how the recent Ben Bernanke/Larry Summers debate over secular stagnation is all kind of a waste of time since one of the most important drivers of economic activity – private sector credit creation – is routinely omitted from the discussion.

Future historians are not likely to be kind to the current crop of world-renowned economists who, in the aftermath of the worst financial crisis in 80 years, seem to have made little progress improving the tools of their trade in a manner that might help us all avert another financial crisis in the not-too-distant future.

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