Got to love the heavyweights, especially when they get into a debate of sorts with other heavyweights.
Here's a quote from heavyweight Harvard economists Ken Rogoff on CNBC over a comment by Marc Faber, another heavyweight, a well-known doomster, about high debt levels possibly coming home to roost in the second half of this year.
Faber's comment was most likely designed to send some shivers down investors' spines. Maybe Faber has a big short position already in place. Not beyond the pale is it? Here's an excerpt from Rogoff's interview.
Downplaying the likelihood of that scenario, Rogoff acknowledged that overall debt levels are "very high." But as long as interest rates "stay benign," he doesn't see debt as a big problem.
Here's an economist hedging at his very best. Can one get more abstract than the "stay benign" remark.
And who gets to define benign, the Fed? The Street? Rogoff went on to point out that debt levels this high would only be "worrisome" if interest rates were not so low. Rogoff then rolled out his big line of the interview: "I don't think all the lights are blinking red yet." Really?
So let's dissect that briefly. Should investors wait until they all are blinking red or is that when Rogoff will start pulling on his worry cap? Is the market a true discounter or does it too wait until all the lights are blinking red?
You got to love these heavyweights, especially those who inhabit the safe confines of academia and the Eccles Building on Constitution Avenue. Most are infatuated with the sound of their own voice and not much else.
http://www.cnbc.com/id/101658541
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