Dollars and Jens
Thursday, May 08, 2008
Cursory Update
It's been quiet around here, what with Dean being on the trail and me failing to keep things going.

We did get a GDP report a few weeks ago, indicating that GDP rose .6% in the first quarter (I'm pretty sure that's real, not nominal). I saw a comment that excluding inventories and exports, the number would have been negative. I didn't see this portrayed as "the falling dollar is working," but that was my thought.

I suggested to my brother last fall that I thought the Fed should raise interest rates. I've backed off of that theory somewhat - I definitely still believe the Fed's current policy is inflationary, but it may help the financial and housing sectors adjust to new realities; if the Fed can keep inflation relatively controlled and stable, which I think they can, the good it does to mitigate the economic downturn may outweigh the inherent costs of inflation. If my brother has the chance to chime in, though, I defer to him on monetary policy.

I did make the Berkshire Hathaway meeting last weekend. I took detailed notes a few years ago, but learned that someone else would put better notes on the web; CNBC's notes are here. If I had to pick one headline, I'd say it's that Buffett approves of the Fed's actions in facilitating an orderly shut-down of Bear Sterns. If I get a second headline, it's that Buffett is a better stage actor than Susan Lucci. Of course, it was his stage.

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