Ah, when it rains, it pours, We Americans get news that the US federal deficits are over the trillion mark even before Obama and Congress pull out the checkbook in an effort to buy some prosperity, when we also are told, via the New York Times, that China, our biggest creditor provider, is likely to […]
Read more...Willem Buiter is being proven right even sooner than he probably expected. The CBO provided a simply atrocious (but I imagine not surprising if you are up on such matters) report that the Federal budget deficit will come in just shy of $1.2 trillion, and that before any stimulus related deficits are added in, which […]
Read more...Diamond clues to beasts’ demise BBC Old Gastrointestinal Drug Slows Aging PhysOrg Judge doesn’t buy state secrets privilege, OKs wiretap suit Ars Technica State’s jobless claims systems overwhelmed WTVN (hat tip reader Jim) Merrill’s financial advisers’ loyalty questioned Financial Times. The headline is a bit weird. Retail brokers are loyal to their book, which they […]
Read more...Reader Michael sent a host of updates on China, which might collectively be called, “Lousy China News Wrap.” And I don’t think he was cherry picking The eye-catching one was a coded story on capital flight from China, “China warns of risks from “abnormal” cross-border capital flow,” from Xinhua. The reason that capital is exiting […]
Read more...OK, you gotta help me. Private equity is basically levered equity. Yes, the claim to add value in various ways, but many academic studies question that theory. The big source of profits is leverage and financial engineering. Neither of those approaches were spectacularly successful in any sector I can think of in 2008. In addition, […]
Read more...Although Manhattan real estate is an expected casualty of the financial carnage, it nevertheless serves as a useful, albeit lagging indicator of the depth of distress. Even though residential purchases have fallen over the last year, the price impact (so far) has been muted. That is in part due to the fact that 2007 was […]
Read more...Many readers are not keen about the idea of a fiscal stimulus program (I presume they are of the Austrian view, that taking the pain, no matter how bad, is the better course of action. And your humble blogger believes that stimulus without cleaning up our broken financial system is likely to have blunted impact). […]
Read more...Playing golf can ‘damage hearing’ BBC Milky Way faster and heavier than thought Cosmos A Moment Of Tooth Washington Post Clutching at historians FT Alphaville (hat tip reader Don) The Winds of Protectionism Are Gaining Strength Michael Panzner The End of the Financial World as We Know It Michael Lewis and David Einhorn, New York […]
Read more...Jon Danielsson has provided a great post at VoxEU (hat tip Independent Accountant) that calls into question the very premise of modern risk management, namely, that risk can be accurately quantified. This notion goes far further than the discussion of Value at Risk last the weekend keying off an article in the New York Times […]
Read more...It is hard to work up much sympathy for newly-less-well-off hedge fund managers, given how rich the good times were. Nevertheless, they face continued pressure from redemptions, and (for most) high water mark provisions mean that they will probably get no or little in the way of upside fees (the 20 of the “2 and […]
Read more...Fence hope for Tasmanian Devils BBC Contemplating the Consumerist sale and the adpocalypse Ars Technica How Bush Broke the Government American Prospect It breaks my heart to see Israel’s stupidity Michael Lerner, Times Online Twaddle thrives amid the turmoil Lucy Kellaway, Financial Times Personal Letter from Satan to Paulson Karl Denninger (hat tip reader Richard […]
Read more...I am a big fan of Willem Buiter, even on those rare occasions when he is wrong. He is unusually blunt for a Serious Economist, and is willing to take on orthodox views and institutions frontally. He has, for instance, been quite critical of the Fed. He created a firestorm at its last conference in […]
Read more...The Wall Street Journal has sent a news alert that says that Obama is mulling a stimulus plan that will rely more heavily on tax cuts than initially envisaged as a way to win needed Republican support. The Journal says tax cuts could be as much as $310 billion, or 40%, of a total package […]
Read more...SAR #9003/Weekender CK Michaelson ‘This is economic war!’ Jarislowsky warns Financial Post Consumer cash crisis turns the screw on the high street Independent Chinese Manufacturing Contracts as Exports Decline Bloomberg Low Interest Rates Generating Low Buyer Interest Diana Olick. An important factoid that was easy to miss over the holidays. Fifth of small firms to […]
Read more...The New York Times Sunday Magazine has a long piece by Joe Nocera on value at risk models, which tries to assess how much they can be held accountable for risk management failures on Wall Street. The piece so badly misses the basics about VaR that it is hard to take it seriously, although many […]
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