Monthly Archives: April 2007

Larry Summers on Climate Change Realism

Larry Summers, in a Financial Times comment “We need to bring climate idealism down to earth“, takes up “the best is the enemy of the good” theme as it applies to global warming. He argues that the Kyoto accords haven’t accomplished much because neither the targets nor the penalties are binding, that carbon markets run […]

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Were Half the Subprime Borrowers Ripped Off?

That’s what Lewis Ranieri, who can lay claim to founding the mortgage-backed securities market, said in presentation at a Milken Institute conference last week. He asserted that 50% of the subprime borrowers qualified for loans from the FHA, Freddie Mac, or Fannie Mae on much more favorable terms. Tanta at Calculated Risk looks to see […]

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Lewis Ranieri on the Subprime Mess

Thanks to Tanta at Calculated Risk, we have a rush transcript from a presentation by Lew Ranieri at the Milken Institute conference on financial innovation. Ranieri is credited with creating the mortgage backed securities business, has continued to be active in the industry, and has sounded warnings on subprimes. I found three points to be […]

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More Downbeat News on Growth

We have a combination of further, and generally not positive, analysis of the disappointing first quarter GDP growth report (1.3%). Consider that personal consumption expenditures, the strongest item in the report, grew at a 3.8% rate, but that was still a decline from the previous quarter’s 4.2% level. Now add in the fact that spending […]

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FT vs. WSJ on Financial Stability Report by Bank of England

While most US readers believe that the Journal’s ideological bias is limited to its editorial pages, we have repeatedly seen (and commented on) skewed reporting as well. Specifically, the Journal tends to put a positive spin on economic (as opposed to company-specific) reporting. Today’s object lesson is the Bank of England’s latest edition of its […]

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Are Doctors Overrated?

One of the obstacles often cited in reining in US medical costs is that doctor salaries would have to fall, and therefore good people would no longer come into the profession (they’d either launch a hedge fund or go into the unregulated, better paid part of the business, like plastic surgery). But that assumes that […]

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The End of the World Event Tree: Why We Are Likely to Do Nothing

Australian economist John Quiggin posted a high level event chart of the how Seriously Bad scenarios might play themselves out (from a talk by sustainability expert Chris Moran) and what the policy response might be. It includes probability estimates from 80 students. However, as the chart shows, the rational calculus doesn’t bode well for forestalling […]

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Dow 13,000 Doubts

The cliche is that the market climbs a wall of worries, but the specter of the Dow breaking 13,000 was accompanied by a chorus of arguments from informed observers that the enthusiasm was overdone. Roughly six weeks ago, in “How long will the markets be able to defy gravity?,” the Financial Times’ Martin Wolf looked […]

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"Leveraged loans risk copying subprime – Fink"

In an interview with the Financial Times, Larry Fink, the CEO of BlackRock, one of the world’s largest fund management groups, warns of burgeoning risk in the leveraged loan market, arguing it has the potential to go the way of subprimes, and urges the Fed to take interest. Now this story has more significance than […]

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Bill Moyers on the Supine Press and the Selling of the War

This is four years too late, but for those readers (particularly those outside the US) who wonder how Americans were conned into believing going into Iraq was warranted and desirable, watch this video (or read the transcript). The Bush Administration disinformation wouldn’t have worked if the press had exhibited any backbone. This documentary goes through […]

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