QOTD: Understatement of the Year

Posted by

The divergent policy paths taken by the world’s advanced economies provide lessons for global leaders navigating difficult post-crisis environments.

The U.S. and U.K. appear to have gotten something right, while the eurozone and Japan have fumbled. Unemployment rates after the crisis peaked at 10% in the U.S. and 8.5% in the U.K., and are down to 5.8% and 6%, respectively. The eurozone rate has climbed in the past few years to 11.5%, while Japan’s economy has fallen back into recession.

The American and British central banks embraced aggressive easy-money policies early on. Japan lurched toward consumption-tax increases to restrain budget deficits, while Europe moved slowly in addressing weaknesses in banks and stuck to a course of fiscal austerity.

What Big Economies Got Right, or Wrong, After Crisis (WSJ)

 

As the United States’ central bank now exits the extraordinary measures it undertook to defeat the financial crisis’s aftereffects – and Europe first wades into the waters of stimulus – it’s worth thinking about the consequences of trying versus not trying to save one’s economy.

We did the former, imperfectly but doggedly. Europe went the other way – raising rates into the teeth of the crisis while attempting all manner of ridiculous fiscal austerity experiments. The results of this divergence in response could not be more stark. Our capital markets are on fire, corporate profits have never been higher, real estate is stable-to-strong and unemployment is falling to levels not seen in almost a decade.

Jon Hilsenrath compares the approaches at Wall Street Journal at the link above.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. is blazing trader a scam? commented on Sep 28

    … [Trackback]

    […] There you can find 14938 additional Information on that Topic: thereformedbroker.com/2014/11/23/qotd-understatement-of-the-year/ […]

HowIInvestMyMoney