Is the economics version of defining deviancy downward mean that the new normal of high unemployment and inadequate job growth is seen as acceptable by policymakers (at least those not up for re-election this November)? It’s one thing to recognize that we are working through a painful hangover after a private sector borrowing binge that […]
Read more...The New York Review of Books has an article by George Soros with his take on the challenges facing the Eurozone. It includes a good, high level recitation of the structural deficiencies in the Eurozone (in particular, its lack of a treasury), the evolution of recent stresses, and suggested remedies. While the initial discussion covers […]
Read more...Although it was unclear how the high concept behind the Volcker rule would translate into legislation, we had doubts from the get-go. The idea is sound: firms that are ultimately playing with government money should be involved only in socially valuable transaction intermediation and fundraising (and all major dealers around the world are backstopped, pretenses […]
Read more...The alert John Dizard of the Financial Times has taken notice of a development that has passed most commentators by, namely, that Greece is starting to restructure state debts. This hasn’t yet gotten the attention it merits because it’s bonds issued by particular government bodies (in this case, the Greek state hospital system) and the […]
Read more...I had the pleasure of finally meeting Steve Keen (he and his wife Melina are in New York) and it turns out he is adventuresome eater as well as thinker (he ordered maguro and natto even though I warned him, although I must say this restaurant’s version was actually gaijin friendly). Steve told me about […]
Read more...The stress tests conducted on 19 large American banks by the US Treasury in 2009 were an amazingly effective exercise in salesmanship and sleight of hand. Banking industry experts, including Bill Black, Chris Whalen, and Josh Rosner, dismissed the process as mere theatrics: too little staffing and not enough “stress” in the economic forecasts and […]
Read more...By Marshall Auerback, a portfolio strategist and fund manager Wolfgang Munchnau is right. Only a closer union can save the euro. In the longer term, it will be necessary to put in place a permanent fiscal arrangement through which the central euro zone authorities distribute funds to be used by member nations. Ideally this should […]
Read more...The Financial Crisis Inquiry Commission grilled Goldman chief operating officer Jonathan Cohn and CFO David Viniar this week, with today’s session focusing on AIG, and in particular, whether Goldman’s collateral calls were abusive and damaged the insurer. Readers know that I have perilous little sympathy for Goldman. However, it is important that investigations focus on […]
Read more...When a CEO has a major foot in mouth episode, it’s usually the result of uncontrolled candor. And today’s outburst by GE CEO Jeffrey Immelt appears to be true to form. According to the Financial Times, the GE cheiftan said some less that politic things about China and Obama at a private gathering which his […]
Read more...This is a wonderful short video by RSAnimate based on a talk by radical, as in Marxist, sociologist David Walker. For those who recoil, Marx was the first to take note of the propensity of capitalism towards instability. By contrast, neoclassical economics, which has dominated policymaking in advanced economies, posits that economies have a propensity […]
Read more...The New York Times has unearthed a damning tidbit about the bailout of AIG: When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill […]
Read more...We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced […]
Read more...This Sydney Morning Herald story (hat tip reader Gordon) highlights a Bank of England report that not only points out the magnitude of the financing needs of major banks over the next few years, a daunting $5 trillion, but also indicates that US and European bank refinancings are falling short of their rollover calendar. This […]
Read more...By Richard Smith, a London-based capital markets IT consultant In my last post, “Tracking the Rabbit through the Anaconda” , I mocked Geithner a bit and promised you all a spot of moaning about what’s missing from the financial reform bill. Well, the anaconda has now had the time it needed to produce its offering. […]
Read more...A reader with considerable experience in real estate who has asked to remain anonymous pointed to an article in Housing Wire describing some possible unintended consequences of the Administration’s push for more short sales: This past week, I received an email from one of my dearest friends that has really stuck with me. It illuminates […]
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