Morgan Stanley economist Stephen Roach provides some of the more interesting economic commentary coming out of the large financial firms. Although he is not an Austrian he often reaches some similar conclusions as many of the analysts on the Mises site.
Roach has been one of the few skeptics of the economic recovery among major analysts. This week features Roach’s commentary The Mother of All Carry Trades, a skeptical critique of the orgy of debt-financed consumption that the Fed’s policy of low interest rates has encouraged, and the consequences of trying to unwind it (”it will take nothing short of a miracle to extricate the self-indulgent American consumer from this mess.”).
Also on the Morgan Stanley site this week is Andy Xie on the Hong Kong housing market. This week on the Mises site, Mark Thornton writes “Housing bubbles typically do not pop like a balloon; they don’t even crash like stock markets. Rather, the air in housing bubbles tends to leak out slowly—painfully slowly”. Xie’s article provides a case study of this process in action as speculative buyers who were willing to overpay based on the prospect of further appreciation are having trouble unloading their properties.
