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Wednesday, August 20, 2003

New Productivity Paradox?

Barry Ritholtz doesn't just have opinions about Iraq, he's also an economist and markets analyst. He too is interested in the US GDP Jobs Disconnect and has even coined the expression New Productivity Paradox to describe the shortfall between productivity and GDP growth. His blog The Big Picture is one of the few economics blogs I've come across which is actually really engaged with the nitty gritty of the 'dismal science' and the 'ever so vulgar' custom of making calls. Good luck to him, he's going on the blogroll. Incidentally in the piece below - just in case it isn't clear - the second extract (August 7th) is from our very own blogger Barry. He is in fact asking the same question Frans was asking yesterday, how can a good geek spot a winning meme. You should be so lucky. I like his confidence though, Blogs will soon be surpassing mainstream media. I am inclined to agree though I still have to write up why.

I love catching a meme before the Major Media does. Sometimes I'll read an interesting analysis on someone else's blog (or even write one myself), and almost forget about it. Until a week or a month later, when it shows up as a front page story in a major publication.

I've been seeing that happening a lot lately. Blogs have been supplementing, and will soon be surpassing, the mainstream media.

Here's an example:

"The Fed has in very short order lost pretty much all credibility with bond-market participants," said Stephen Stanley, economist at bond dealer RBS Greenwich Capital. As a result, "Whether it's right or wrong that the market feels that way, the Fed will be unable to jawbone long-term rates lower." Indeed, yields have headed higher since the Fed on Tuesday indicated an unusually explicit willingness to keep rates low for a "considerable period." -Fed Missed Mark on Impact Of Cut on Bond Market, by Greg Ip, WSJ, Friday, August 15, 2003

versus this

"The new Fed fear is deflation. For a while, they seemed to have successfully jawboned the bond market into believing that rates would stay low for a long, long time. The Fed Chief even suggested that they stood ready to make open market purchases to ensure rates stay low. As Bond buyers have discovered to their chagrin, this statement has turned out to be false (at least so far). The fixed income crowd has become Wile E. Coyote to Greenspan’s Roadrunner. The Fed Chief painted a tunnel entrance on a wall, and they ran face first into it. Forgive the equity crowd their snickering, as they had already paid their tuition to learn that costly lesson." -The ACME Federal Reserve, August 07, 2003

If some geek can figure out how to scan, digest and analyze blogs for early meme detection (i.e., pre-WSJ), perhaps the next gold rush will be Investment Blogging. Could "blog millionaires" ever replace dot com millionaires? I doubt it. But there is so much good stuff in the blogosphere, I'm looking forward to seeing how people figure out how to sift through it all in real time.

And just to show Barry isn't the only one in the blogsphere who can do the business, try looking at this. Back in April when everyone plus my aunty was busying writing down their China cards in the wake of the Sars crisis, yours truly was saying what?

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