Best of the Blogs: Fed's Bullard Warns of 'Looming Disaster' With Output Gap Model

Real Time Economics
Link: Fed’s Bullard Warns of ‘Looming Disaster’ With Output Gap Model
If the Federal Reserve doesn’t change the way it takes stock of the economy and its relationship to monetary policy, the U.S. may be facing a “looming disaster,” a top central bank official said Monday. At issue is the commonly held view that the Fed must use its policy tools to help the economy regain the ground it lost over the financial crisis and ensuing recession, in turn closing what economists see as the gap between the economy’s potential and its actual rates of growth, Federal Reserve Bank of St. Louis President James Bullard said. But the nature of the shock suffered over recent years is such that if this model continues to drive policy, “it may be very difficult for the U.S. to ever move off of the zero lower bound on nominal interest rates,” Bullard said. (Also Read Is This The Real Reason The Fed Decided To Keep Rates Low?)

Felix Salmon
Link: Greek Talks Descend Into Finger-Pointing
This isn’t good; the Greece talks have now moved past their clear deadline and have reached the finger-pointing stage. The broad outline of the dynamics here is now very clear: you need three different parties to agree on a deal for the whole thing to have a chance of success. Private-sector bondholders need to agree to a very deep cut in the value of their bonds; the Greek government needs to agree to enormous spending cuts over and above the 1.5% of GDP that they’ve already offered; and the Troika of the EU, ECB, and IMF needs to agree to pony up extra bailout money to cover the larger-than-expected deficits that Greece is running.

All Things D
Link: Verizon Teams With Redbox for a Netflix-Style Video Service
Here’s the Netflix-style video service that Verizon wouldn’t talk about a couple months ago: A joint venture with Redbox that promises “instantly available online and mobile content with immediate access to physical media through rental kiosks.” The two companies put out a press release without a whole lot of detail (below) but are holding a press conference shortly where we may be able to tease some more out of them. (For related content, see Infographic: As Cable Dies, Which Cities Use the Most Streaming Media?)

Dr. Housing Bubble
Link: The New American Dream of Renting
Washington and New York have no organized lobbying groups for renters.  Yet for 2012 renting is likely the best bet for many of those that still have yet to purchase a home and are thinking about diving in.  The machine wants you to be a homeowner even if it devours every last cent of your disposable income and blindly following the herd will get you economically slaughtered.  The new economic landscape brings benefits to those that rent.  The homeownership rate now has erased all the gains of the last decade because going into massive debt for an asset many cannot afford is simply not a smart move.  Household incomes have not grown over the past decade.  Many of the new jobs have relatively low job security and resemble more of the large temporary workforce that has dominated Japan for the last two decades.  I see five major reasons why renting in 2012 makes financial sense over purchasing a home even with every banking and government subsidy being thrown your way.

Bits
Link: Disruptions: Facebook Users Ask, ‘Where’s Our Cut?’
By my calculation, Mark Zuckerberg, Facebook’s founder and chief executive, owes me about $50. Without me, and the other 844,999,999 people poking, liking and sharing on the site, Facebook would look like a scene from the postapocalyptic movie “The Day After Tomorrow”: bleak, desolate and really quite sad. (Or MySpace, if that is easier to imagine.) Facebook surely would never be valued at anything close to $100 billion, which it very well could be in its coming initial public offering. In the company’s S-1 filing, submitted to the Securities and Exchange Commission this week, Facebook boasts about its statistics: annually, people “like” one trillion things; 91 billion photos are uploaded; half a billion people use Facebook on mobile phones; and hundreds of millions are annoyingly “poked.” So all this leaves me with a question: Where’s my cut? (Also Read Has There Ever Been A Higher Valuated Company With Fewer Employees Than Facebook?)