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Obras de Mohamed El-Erian

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Authored by a "Senior Fellow" at my alma mater I felt obligated to understand him a bit. An enthusiastic writer, he surveys the issues surrounding the 2008 financial crash and its aftermath, concluding that the critical role played by Central Banks is no longer ideal and that new approaches are needed to preserve society.

I found his arguments fairly mainstream and unexceptional, particularly in light of all that's happened since he wrote in 2016.
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richardSprague | 2 reseñas más. | Mar 22, 2020 |
The Only Game in Town is an exploration of central banks in the economy. The brilliant Mr. El-Erian sees a coming crisis. One that can be avoided, but we must take action to avoid it.

He lauds the Federal Reserve and The European Central Bank for taking decisive steps to stop the financial crisis of 2008. The central banks created liquidity and propped up the financial system and financial institutions. The central banks continued their work to heal the economies as countries entered the Great Recession and slowly crawled back out.

Mr. El-Erian points out that central banks have a very limited set of tools. Its up to the political leaders to use their broader set of tools to create and implement programs that will fix the lagging economies. If not, the crisis will come.

The Federal Reserve is keeping the key interest rates low to stimulate the economy. That is resulting in asset bubbles as investors and companies pile on cheap debt. It is hurting long term investors who are far to one side on the risk curve looking for safe returns.

With its limited set of tools, the Federal Reserve is not able to create inclusive growth. It's not able to invest in infrastructure and education. It's up to the political system. The political system is failing us. Congress went 5 years without passing a budget, one of its core duties.

The Only Game in Town is both hopeful and pessimistic at the same time. Its well worth your time to pick up a copy and read.
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dougcornelius | 2 reseñas más. | Apr 19, 2016 |
Central banks are forever fighting today’s war with yesterday’s weapons. Every recession is different, and central banks have to worry and flail their way back to a smoother ride, because this time is different. We’ve seen money supply tools come and go, interest rate tools lose their impact and of course, regulation all but disappear. The current tool is QE, necessary because so much of the money supply is beyond the control of the Fed. It will probably prove outmoded next time.

The meat of the book is ten short chapters summarizing ten factors that demonstrate how weak our economies are. None of them is news. This is standard fodder for pundits everywhere. Things like unemployment, inequality and so on. Then there are four policy prescriptions, all commonly discussed, and none likely to happen.

And that’s the problem with the book – nothing new. We already know that everything is out of whack. Stockmarkets rise on bad news. Company shares improve on layoff announcements. Markets fall with the decrease in the price of oil. The US is at full employment, but 40% of working age Americans have no job. Despite record trading numbers, liquidity is one of the highest risks. Banks trade government bonds rather than lend to business. Corporates see more value buying back their shares than investing in their businesses. The distortions are enormous. And it’s the central bank that did this, because its tools are wrong.

About 140 pages in, El-Erian finally hits the nail on the head, calling for governments to reject the financial engineering that has opened gaping holes for big finance to exploit, and instead focus on economic growth policies so the markets will respond (more) rationally.

But while economists and bankers argue about the significance of cyclical and secular drivers, they’re still in little enders vs big enders hell. The view from above is completely different. Until and unless political leaders rein in the banks’ ability to create money at will and grow too big to fail, this period will continue. And central bankers will not have tools to do their job.

El-Erian spends a great deal of time referring to an upcoming T, where a choice of left or right will be made. The wrong choice could lead to recession or worse. The right choice could lead to more of the same or better. There is nothing special going on here. We all face these decisions continually. We constantly make the wrong choice, and muddle through somehow. The insight here is minimal.

A book by Mohamed El-Erian should offer uncommon depth and uncommon insight, if not uncommon proposals. The Only Game In Town is merely common. It is superficial punditry; necessary for some, but disappointing from El-Erian.

David Wineberg
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DavidWineberg | 2 reseñas más. | Dec 17, 2015 |
While the author is no doubt a brilliant economist and investor, he is no writer. Reading this book is like slogging through an economics textbook but without the lectures to explain it. I've had more fun at the dentist's. I think it is a worthwhile read, however, because it offers insight into the thinking of one of the most respected leaders of our economy and the investment world. If one follows the premise that markets follow the leader, El-Erian is a leader who will be followed, and has been. The rush to foreign markets is either a cause or the effect of this man's thinking, and attention must be paid.… (más)
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terbby | otra reseña | Dec 14, 2009 |

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