Friday, January 30, 2009
University of Chicago professor Eugene Fama (EF) has a 13 January 2009 post at his new blog with Kenneth French, Dartmouth professor, Fama/French Forum, about financing bailouts, link: http://www.dimensional.com/famafrench/2009/01/bailouts-and-stimulus-plans.html. What EF did looks like accounting to me. Some of what EF wrote reads like Milton Friedman.
Tom Selling (TS) uses the "Largest Possible Entity" (LPE) concept at his Accounting Onion on 7 December 2008, link: http://accountingonion.typepad.com/theaccountingonion/2008/12/the-preliminary.html. This LPE notion blows aways virtually all the smoke of Keynesian economics by distinguishing "real" from "financial" assets. Once you realize: cash, receivables, payables, options, etc., are not real assets, you can dismantle Keynes on your own. TS's LPE is a more powerful analytical engine than even he thinks.