The net effect was to induce a tightening mode in the markets, in bank lending and in total bank reserve growth, while [interest rates] rose significantly, especially for corporate bond issues. In retrospect, that's not looking very smart. |
The problem is, the private sector doesn't have the balance sheet capacity to take on more debt, and the banking system is not in a position to extend more credit. So monetary policy may not work at all. |
The ratio of corporate debt to gross domestic product (GDP) is at an all-time high, ... And we don't know exactly what corporate debt is because so much has been parked off the balance sheet and hidden. But, even without knowing what the off-balance-sheet debt is, corporations have too much. |
The risk to the economy is that we lose the consumer -- and I think we are losing the consumer. |
The stock market has given off false signals in terms of anticipating recessions, but it has never given off a false signal about recovery before the recession ended. |
This economy is not producing jobs in a normal way. We have serious global competitive pressures working on the economy. There continues to be a very rapid increase in productivity, which is undermining demand for labor. |
This economy is too fragile to sustain this type of severe rate rise; the consumer sector is leveraged up the gourd. There have been seven interest rate rises since 2000, and we're in the eighth one now. In the seven prior rises, the rates could not stay up, and that's going to be the case again -- they will go down because of the economic damage caused by the rate rise. |
This isn't going to be settled overnight, ... In New York, there will be debris removal and shoring up subway lines, but not massive reconstruction. People will use up the extra space available in New York, New Jersey and Connecticut. That doesn't mean they're going to be building new buildings. |
This isn't going to be settled overnight. In New York, there will be debris removal and shoring up subway lines, but not massive reconstruction. People will use up the extra space available in New York, New Jersey and Connecticut. That doesn't mean they're going to be building new buildings. |
To have an effective monetary policy, you have to have a robust borrowing and lending cycle, ... The problem is that households and businesses are both overextended, while banks have problems with their current loan base. So we don't have a viable borrowing and lending cycle, which means that monetary policy is not working effectively. |
To have an effective monetary policy, you have to have a robust borrowing and lending cycle. The problem is that households and businesses are both overextended, while banks have problems with their current loan base. So we don't have a viable borrowing and lending cycle, which means that monetary policy is not working effectively. |
We've basically been in one long recession that started in the fall of 2000, |
When [consumers] shift their income stream from purchases to saving, it slows GDP, and that's a long-term process, ... I think interest rates are going to remain very low for a couple of years. |
When [consumers] shift their income stream from purchases to saving, it slows GDP, and that's a long-term process. I think interest rates are going to remain very low for a couple of years. |
When we came out of the recession in March of 1991, GDP started rising very feebly, while the unemployment rate continued rising for another year and a half, ... The press called it a 'jobless recovery,' and it was one of the reasons [President Bill] Clinton was able to defeat former President [George] Bush. The average person on the street judges the economy by the job market. |