The week ahead will be a good one for economic policy wonks.
It has started well with the US economy achieving growth in the Third Quarter. Australia, of course, has its central bank monthly meeting, and the results will be announced at about the time the Melbourne Cup is being run. Damned imposition on a public holiday, really.
Before reviewing all the evidence, Henry’s feeling is that there will be another 25 basis point hike, followed by a rest in December so Glenn Stevens cannot be accused of ruining Christmas. Now of course, the bold Mr. Stevens has been joined by Norway and there are reports that India and South Korea are thinking hard about joining the rate hike fun.
Henry must draw readers’ attentions to an interesting review of yet another book on the Great Crash of 2008. The review is by John Gapper of the Financial Times. The book is by Andrew Ross Sorkin, and is called Too Big to Fail.
Gapper claims this book has broken the curse of Barbarians at the Gate, and will tell you everything you can imagine you need to know about the machinations on Wall Street as the world’s financial system wobbled on its axis. The review does not offer an answer to the question of why Lehman Brothers was allowed to fail, but presumably the book will do so.
Gapper’s almost final thought is about the “absurdity” of the omnipresence of Wall Street.
“Who did Mr Paulson and Tim Geithner of the New York Federal Reserve call when one bank trembled? Another bank, to advise it on what to do and a couple more who might want to buy it.”
Oh, the other central banks meeting next week are the US Fed, the Bank of England and the European Central Bank. Anything but “no rate hike” will be interesting.
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