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    Thoughts From the Frontline, May 2010

    Six Impossible Things

    May 28, 2010

    Alice laughed. "There's no use trying," she said "One can't believe impossible things."

    "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."

    —From Through the Looking Glass by Lewis Carroll

    Economists and policy makers seem to want to believe impossible things in regards to the current debt crisis percolating throughout the world. And believing...

    The Case for a Fed Rate Hike

    May 22, 2010

    Everywhere there are arguments that we are in a "V"-shaped recovery. And there are signs that in fact that is the case. Today we will look at some of those, and then take up the topic of when the Fed will raise rates. We open the case and look at the evidence. Is there enough to come to a real conviction? I think there is. (And at the end of the letter I mention two conferences I am speaking at in the next few months, in Vancouver and San Francisco.)

    But first, a little housekeeping. The...

    Europe Throws a Hail Mary Pass

    May 15, 2010

    In a 1975 playoff game, the Dallas Cowboys were nearly out of time and facing elimination from the playoffs, down 14-10 against a very good Minnesota Vikings team. The Cowboys future Hall of Fame quarterback Roger Staubach had no very good options. He later said he dropped back to pass, closed his eyes and, as a good Catholic, said a Hail Mary and threw the ball as far as he could. Wide receiver Drew Pearson had to come back for the ball and, in a very controversial play, managed to catch the...

    The Center Cannot Hold

    May 7, 2010

    Turning and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the center cannot hold;
    Mere anarchy is loosed upon the world,
    The blood-dimmed tide is loosed, and everywhere
    The ceremony of innocence is drowned;
    The best lack all conviction, while the worst
    Are full of passionate intensity.

    - William Butler Yeats

    Last week we focused on the first half of a paper by the Bank of International Settlements, discussing what they characterized as the need...