Particularly confusing is the blue line in the graphs

[koganbot]

Won't have much time for livejournal in the next couple of days. In the meantime I'm linking a long post by Brad DeLong that I don't understand well after one reading, in case any of you would like to explain it to me:

Today In Financial History

The purpose of stage III policies is to boost demand relative to supply for risky assets, and thus to operate on the margin that is the spread in prices and yields between safe assets like Treasury securities and the risky assets whose falling prices are threatening the stability of the financial system and the macroeconomic flow of investment.

Comments

[carsmilesteve.livejournal.com]

ok, was kind of doing ok until the second lot of graphs, then lost any sembelance of an idea...

[carsmilesteve.livejournal.com]

what i don't understand though is why the markets (well, FTSE and Dow) haven't continued to dive today, does the system basically run on "no news is good news"?

[dubdobdee.livejournal.com]

because what was sold in a panic yesterday is not all of it worthless -- there are plenty of bargains now available

or so today's markets apparently think

(also: the assumption still is that some form of bailout will be cobbled together in the next few days -- viz free money for all traders)

[carsmilesteve.livejournal.com]

if i was a pointy-headed conspiracy theorist of some description the fact that congress shuts down for j3w1sh n3w y34r JUST when they need to sort this out would be enough for at least a couple of chapters in my self-published rantathon...

[dubdobdee.livejournal.com]

surely "pointy heads" are what the FOES of conspiracy theorists have?

[carsmilesteve.livejournal.com]

lizard heads MOAR LIKE!!

[skyecaptain.livejournal.com]

Jon Stewart went on a very funny rant about this last night. "Look! The 'Daily Show' is on...I guarantee there are more Jews here than in the Senate."

[skyecaptain.livejournal.com]

(He said "in Congress," obviously. My verbal gaffes are positively Vice Presidential.)

[dubdobdee.livejournal.com]

haha delong's approach to blogging economics has always been: "Here is some unexplained statistical information. There will be a test tomorrow. YOU ARE ON YOUR OWN!"

[jtemperance.livejournal.com]

The blue line in the second set of graphs is a supply curve. It's vertical because supply is fixed in the short run, so q is always the same.

Anywhere the supply curve (blue line) and demand curve (red line) intersects is an equilibrium. In the later examples with the S-shaped demand curve, there is often more than one possible equilibrium.