Seeking Alpha
View as an RSS Feed

Dr. Bill Conerly  

View Dr. Bill Conerly's Comments BY TICKER:
Latest  |  Highest rated
  • How Bad Is The Housing Market? A Forecast Update For 2014-2015 [View article]
    Dave, total non-farm jobs are up 1.7 percent (or about 2.2 million jobs). Data are from, but easiest way to look it up is

    Drew, thanks for the contribution. The economy in the oil patch and the Internet patch are up wildly more than the national average. (I can never convince New Yorkers or Texans that there's a world outside their neighborhood. :) )

    Feb 21, 2014. 02:46 PM | Likes Like |Link to Comment
  • Economic Forecast After The Federal Reserve Starts To Taper [View article]
    coindog, if it's so clear that the market will fall when the Fed starts to taper, then why doesn't the market fall now? Foreseeable events should be priced into current stock prices, don't you think?
    Nov 28, 2013. 01:20 PM | 1 Like Like |Link to Comment
  • Future Of The Dollar As World Reserve Currency [View article]
    Sleek, I'm not talking about crowding out.

    Right now there is demand for U.S. Treasury bonds from foreign governments that want to hold dollar-denominated reserves. If those governments changed their minds and decided to hold less dollar-denominated reserves, then demand for U.S. Treasury bonds would fall, the price of the bonds would fall, meaning the interest rate would rise.

    Oct 31, 2013. 12:39 PM | Likes Like |Link to Comment
  • Can Microsoft Reorganize Itself To Success? [View article]
    Atmit, I didn't mean to disagree with Rogowsky, just offer a different perspective.

    Alpine, I enjoyed reading your customer-centric questions. Another good perspective.

    Others, I've found Bing to be a good search engine, but I don't think you knock off the market leader by being "just as good as." However, I heard a local radio station running a quiz contest, telling the caller to "Bing it." I assume that Microsoft was paying to get Bing mentioned. Though the company's trademark attorneys probably had strokes over "Bing it" rather than "conduct a search using the Bing search engine."

    thanks for all your comments.
    Jul 15, 2013. 01:57 PM | Likes Like |Link to Comment
  • Interest Rate Forecast For 2013-2014 [View article]
    I think your story is not that "interest rates can't rise," but that "the U.S. government cannot afford to let interest rates rise." Those are two very different things. The Fed can be pressured by Congress and the White House to keep overnight interest rates low, but the markets determine intermediate and long-term rates. If investors think U.S. debt is unsustainable or inflation likely, then interest will have to rise to get someone to buy it. There's not much the government can do to stop it. The interest rates of late 1970s and early 1980 show that.

    Aristophanes, sorry but I'm not smart enough to understand your comment.

    May 31, 2013. 11:44 AM | Likes Like |Link to Comment
  • Oil Price Forecast For 2013-2014: Falling Prices [View article]
    Time and Silk, good questions. Every field is different. I've had a dickens of a time asking petroleum geologists about average decline rates; they keep saying that every case is unique. So I'm relying on some high-level analysis. I do know that many of the new techniques could be used elsewhere in the world, but not everywhere.

    thanks for your comments,
    May 4, 2013. 12:24 PM | Likes Like |Link to Comment
  • More Willing To Lend, Banks Are Stifled By Regulators [View article]
    The spreads are not negative. The negative number in the spreads chart shows that more banks are narrowing their spreads than are widening their spreads. So a majority of banks are accepting less profit per dollar lent, in order to increase total lending.

    Banks are, indeed, taking on more risk. However, at today's extremely low interest rates, banks cannot cover their costs without taking on some risk.

    Thanks for the comment, David.
    Nov 11, 2011. 03:44 PM | Likes Like |Link to Comment
  • Is Gold a Bubble? [View article]
    Nice discussion, my friends.

    Vuke suggested a longer term perspective. Here's a data source for gold prices: I wanted to compare with consumer prices. The Bureau of Labor Stats has them back to 1913 at You can go back to 1800 at

    Here's a little calculation: In 1800, gold price was $19.39. If it had exactly matched inflation, it would have been $248.73 in 2010. Today's price looks really good, until you think about a 210 year compounding period. If you had bought gold back in 1800 (and lived through today), you would have earned an annual return equal to inflation plus 87 hundredths of one percent.

    I agree that gold is a long-term inflation hedge, but you should have a really long time horizon. A decade or two is not long enough to guarantee keeping up with inflation, as my post stated.

    The discussion of when do we know it's a bubble reminded me of the tech boom. I was very suspicious of tech stocks as early as 1995. Barron's magazine had a series of articles "Techs to Wrecks" poo-poohing the tech rally. The problem with being too early to call the bubble is that it can keep going a long time. At some point, early skeptics are tempted to throw in the towel and go in whole hog--just in time to get slaughtered.

    If you tell me the gold rally could continue for another year or two, I won't argue--maybe it will. But ten years of gains from this point on? I'm highly doubtful.

    Thanks for all the great comments.
    May 2, 2011. 07:54 PM | Likes Like |Link to Comment
  • Why the Synthetic CDO Matters in the Goldman Sachs Case [View article]
    bankval4 makes a good point. I had assumed that everyone in the business knew that many or most of the shorts were naked; that may not be the case. (It may not be the case that most shorts were naked; it may not the be case that most longs knew how many shorts were naked).

    rangrrob, I'm not convinced that this is the sort of stuff that made the financial system fail. Two years ago I wrote a series of blog posts about the mortgage crisis (access here: To the issues that I listed there I'd add the high leverage of the investment banks. Securitization was part of the problem, but other issues were major contributors as well.
    Apr 21, 2010. 01:07 PM | Likes Like |Link to Comment
  • Bank Credit: The Worst of the Tightening Is Over [View article]
    Saintshawn29, I'd love to see more data, too, but the Fed only started the survey back in 1990. I met with Greenspan that year, feeling pretty cool to be with the Maestro, and he asked when banks would start lending again. Oops, that's the one question I couldn't answer. The survey was a result of his wanting to know about bank attitudes.
    Nov 12, 2009. 08:34 PM | Likes Like |Link to Comment
  • Two Good Economics Books: Spin-Free Economics, Animal Spirits [View article]
    This has been an exceptionally good discussion (aside from the algebra). Here are my thoughts on the Keynsian, Austrian, monetarist controversy.

    Keynes's work led to a mechanistic, mathematical approach in the hands of Sir John Hicks and others, exemplified by the IS-LM model. Yet Keynes's actual words sound--Austrian! He writes at length about decision-making under uncertainty. That business executives making capital investment decisions don't know what the price of their output will be in the future, but they must make decisions now. He channels (without crediting him) Frank Knight's distinction between risk (a game where we know the relevant probabilities) and uncertainty (a game where we don't know the probabilities). Keynes writes about what people do when they don't know the probabilities, which sounds a lot like modern behavioral finance: people do what seemed to work in the past and what others are doing now. I have no doubt that we live in a world with this uncertainty, which sounds Austrian.

    (In the 1968 Axel Leijonhufvud wrote an insightful book called On Keynesian Economics and the Economics of Keynes which highlights the differences between the mechanistic view and the "true" economics of Keynes.)

    What does this non-mechanistic, uncertainty-filled view mean for the macroeconomy? The economy will not be perfectly, smoothly functioning, even in the absence of government policy mistakes. That sounds pretty Keynesian.

    However, this conclusion says nothing about the magnitude of the market failures. Will they be little missteps of neglible consequence, or massive depressions? To answer that question I like Milton Friedman's Monetary History of the United States, 1867-1960. I'm convinced that the greatest macroeconomic problems have been the result of policy errors, although I'll concede that private sector errors in decision-making have contributed to instability.

    Finally, pointing at least some of the blame at the private sector does not prove that the public sector can save us. In the real world we have a Federal Reserve chairman who is tremendously afraid that we'll enter a depression on his watch. (I suspect, without any evidence whatsoever, that his advice to someone else would have been different than what he actually did as chairman.) We have a Congress that is totally focused on their own political power and the next election. We have a President who is also focused on political power and the next election. (And I could have written that at about Mr. Bush as well as Mr. Obama.) Can this political decision-making process give us policy action of the right timing and magnitude to stabilize the economy? How about to simply do more good than harm? I am not at all convinced of that.

    My interest is mostly in how business leaders should adjust their plans to account for changes in the economy. One theme I'm emphasizing is that companies should dial up their economic contingency planning, because we'll continue to a more cyclical economy in the coming years.
    Sep 6, 2009. 02:50 PM | 3 Likes Like |Link to Comment
  • Economic Outlook: Savings Will Soon Drive Increased Spending [View article]
    My apologies; the chart's vertical axis should have been labeled "$ billion change, month to month." The definition of disposable income used is straight from BEA; subtracts from income taxes but not any spending at all; plenty of explanation at Also note that the data are at an annual rate. Quick calculation is that it comes out to an extra $128 per household per month.

    You are right that this is not much, but the decline in consumer spending last fall was much smaller per household--but it had massive effects on the economy.
    Jul 9, 2009. 01:32 PM | Likes Like |Link to Comment
  • Don't Buy the Housing Headlines [View article]
    Thanks for the comments, folks. Here are some reactions:

    JoeDirect and smalltownbanker are both right: a few markets are hugely disastrous, and the recovery will not start there. It's actually good for the country as a whole for the housing oversupply to be highly concentrated in a few states. The excess supply in Florida does little to lower demand in, say, Maryland. Once the states that are not hugely overbuilt get a bit of growth, then contractors go back to work and sawmills reopen. We can get some strength in total economic activity even with some pockets of weakness.

    Regarding the housing vacancies, Griz's comments point up the importance of looking at true supply, which is best measured in the Census Bureau's vacancy stats. The usual measures, based on homes listed for sale, can be very misleading.

    Thanks for the comments, friends.
    Mar 18, 2009. 06:42 PM | 2 Likes Like |Link to Comment
  • Consumers Shouldn't Be So Gloomy [View article]
    Jplout: BLS publishes several alternative measures of unemployment, which might better reflect the underlying level. But they all show the same trend relative to past data.

    iThinkBig: interesting decomposition into three camps. What's the data source for the split between megacorps and small business?

    pepster: there's actually data on that from BLS Consumer Expenditure surveys. Spending on apparel is almost, but not quite, as large as spending on gasoline.

    Jul 1, 2008. 03:08 PM | Likes Like |Link to Comment