Comments on: Conventional wisdom or hollow factoid? http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/ Sun, 12 Feb 2012 03:01:38 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Andrew Norton http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-168021 Andrew Norton Mon, 20 Aug 2007 21:29:09 +0000 http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-168021 Though as I understand it, the 1993 and 1996 elections should probably not be in sample, as the RBA was given greater independence to act after the 1996 election. Apart from Macfarlane's comments about the 2001 election there had been such a tradition of political involvement in interest rate setting that there was probaby an expectation that bad news would not be announced in the lead up to an election. Though as I understand it, the 1993 and 1996 elections should probably not be in sample, as the RBA was given greater independence to act after the 1996 election. Apart from Macfarlane’s comments about the 2001 election there had been such a tradition of political involvement in interest rate setting that there was probaby an expectation that bad news would not be announced in the lead up to an election.

]]> By: Jc http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167801 Jc Mon, 20 Aug 2007 15:40:34 +0000 http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167801 Glenn Stevens not a hard money guy? Well he's offering advice to the Bank of Japan too. From blooomberg: Among those cheering him on (BOJ Governor) is Reserve Bank of Australia Governor Glenn Stevens, who said in his semiannual testimony to his country's parliament Aug. 17 that ``the sooner the Japanese interest rates are able to be normal again, the better from the point of view of the global financial system.'' This flies in the face of IMF advice to the Japanese not to raise rates for fear of destabilizing the financial markets. I think we may have caught a tiger by the tail with Stevens. I hope the pols understand what they have. Note the date on which the comment was made as were in the middle of the big storm. Glenn Stevens not a hard money guy? Well he’s offering advice to the Bank of Japan too.

From blooomberg:
Among those cheering him on (BOJ Governor) is Reserve Bank of Australia Governor Glenn Stevens, who said in his semiannual testimony to his country’s parliament Aug. 17 that “the sooner the Japanese interest rates are able to be normal again, the better from the point of view of the global financial system.”

This flies in the face of IMF advice to the Japanese not to raise rates for fear of destabilizing the financial markets.

I think we may have caught a tiger by the tail with Stevens. I hope the pols understand what they have. Note the date on which the comment was made as were in the middle of the big storm.

]]> By: Jc http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167721 Jc Mon, 20 Aug 2007 06:09:03 +0000 http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167721 As an aside For anyone wanting to know what the hell is going on in the financial markets but was too afraid to ask :-) there is a truly terrif scribe over at FT who does a fantasitc job at explaining the worlds credit markets. every central banker in the world should be reading her columns first thing in the morings when they first appear. Her name is Gillian Tett Want to know what happened last week: http://www.ft.com/cms/s/0/ea5fa08e-4d24-11dc-a51d-0000779fd2ac.html I thought Rams was insured for all their obligations..... well there may be a long line at the insurers office if things get out of hand. http://www.ft.com/cms/s/0/8479d180-4eb5-11dc-85e7-0000779fd2ac.html As an aside

For anyone wanting to know what the hell is going on in the financial markets but was too afraid to ask :-) there is a truly terrif scribe over at FT who does a fantasitc job at explaining the worlds credit markets.

every central banker in the world should be reading her columns first thing in the morings when they first appear.

Her name is Gillian Tett

Want to know what happened last week:

http://www.ft.com/cms/s/0/ea5fa08e-4d24-11dc-a51d-0000779fd2ac.html

I thought Rams was insured for all their obligations….. well there may be a long line at the insurers office if things get out of hand.

http://www.ft.com/cms/s/0/8479d180-4eb5-11dc-85e7-0000779fd2ac.html

]]> By: Jc http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167715 Jc Mon, 20 Aug 2007 05:22:00 +0000 http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167715 Steven''s comment has implications for lot's of things. The central bank governor is one person we need to listen to. These people choose their words very carefully and the nuance is something that should never be missed. Steven's is basically saying that he will be adhering to the covenants of his job description that is to ensure we have sound money along with non-inflationary growth. I can't recall the exact wording..... This is something the workchoice roll backers ought to be listening to. Any whiff of wages tampering through some back handed legislative/union accord and this guy will be pushing down on the brake harder than an F1 car at the end of a straight. I couldn't imagine there is anyone who would disagree with him holding on to those priciples. Steven”s comment has implications for lot’s of things. The central bank governor is one person we need to listen to. These people choose their words very carefully and the nuance is something that should never be missed.

Steven’s is basically saying that he will be adhering to the covenants of his job description that is to ensure we have sound money along with non-inflationary growth. I can’t recall the exact wording…..

This is something the workchoice roll backers ought to be listening to. Any whiff of wages tampering through some back handed legislative/union accord and this guy will be pushing down on the brake harder than an F1 car at the end of a straight.

I couldn’t imagine there is anyone who would disagree with him holding on to those priciples.

]]> By: Nicholas Gruen http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167271 Nicholas Gruen Sun, 19 Aug 2007 14:59:31 +0000 http://clubtroppo.com.au/2007/08/19/conventional-wisdom-or-hollow-factoid/#comment-167271 Thanks for tracking down the quote. I was thinking of it in my post but didn't go hunting for it. I think you make out a good case that the 'convention' has been worked up as a factoid by the media since Macfarlane's comment. But I think the comment was ill judged. I don't hugely mind the first half of it - though it's a pretty slippery slope to say you accelerate and or delay possible changes in rate because of the way it might 'play' politically. It's hard enough to get the moves right without adding that complication. But judged against the inevitable fog of the monetary war against inflation, the second half of the quote clearly suggests a pretty heavy onus of proof against a move. I think that's wrong. It's nice to see Stevens knock it so comfortably on the head. Thanks for tracking down the quote. I was thinking of it in my post but didn’t go hunting for it. I think you make out a good case that the ‘convention’ has been worked up as a factoid by the media since Macfarlane’s comment. But I think the comment was ill judged. I don’t hugely mind the first half of it – though it’s a pretty slippery slope to say you accelerate and or delay possible changes in rate because of the way it might ‘play’ politically. It’s hard enough to get the moves right without adding that complication.

But judged against the inevitable fog of the monetary war against inflation, the second half of the quote clearly suggests a pretty heavy onus of proof against a move. I think that’s wrong. It’s nice to see Stevens knock it so comfortably on the head.

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