By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute Reader note: please see yesterday’s post for a discussion of the fiscal balances map. As evident from the financial balances map, there are a whole range of possible combinations of current account […]
Read more...I’ve missed Willem Buiter, who offered wonderfully trenchant commentary at his Financial-Times hosted blog, only to be forced into dreary moderation (at least in his public pronouncements, I suspect his has difficulty containing himself in private) by taking a job as Citigroup’s chief economist. Buiter has long been concerned about the vulnerability of the UK, […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute The question of fiscal sustainability looms large at the moment – not just in the peripheral nations of the eurozone, but also in the UK, the US, and Japan. More restrictive fiscal […]
Read more...Credit default swaps played a much more central role in the financial crisis than is widely understood, and they continue to get a free pass in financial reform proposals that they do not deserve. As we have discussed on this blog, and recount in more detail in the book ECONNED, central clearing and/or putting them […]
Read more...We have pointed out more than once that a major impediment to reform of the financial services industry is that a small number of firms control infrastructure crucial to modern capitalism: 1. Credit is essential to any society beyond the barter stage 2. Debt markets are now at least as important in providing credit as […]
Read more...Bloomberg reports that former Treasury Secretary and Citigroup board member Robert Rubin will be summoned before the Financial Crisis Inquiry Commission in April, with Alan Greenspan and Chuck Prince likely to be tapped as well. On the one hand, it’s a welcome sign that the FCIC will be interviewing many of the major figures responsible […]
Read more...Goldman may have made a fatal mistake. Fatal not to the existence of the firm, but to its standing, reputation, legitimacy, and ultimately, to the thing it covets most, its profits. Power is most effective when it is used as sparingly as possible. Niall Ferguson, in book The Cash Nexus, stressed the importance of financing […]
Read more...The financial press has for the most part looked at the possibility of sovereign debt crises in Greece, Spain, and Portugal through a deal-making window: will Germany and other EU surplus countries back a rescue package, and if so, with what strings attached? There has certainly been ample speculation, particularly since a bailout of Greece […]
Read more...Martin Wolf, the Financial Times’ highly respected chief economics commentor, weighs in with a pretty pessimistic piece tonight. This makes for a companion to Peter Boone and Simon Johnson’s Doomsday cycle post from yesterday. Let us cut to the chase of Wolf’s argument: Now, after the implosion, we witness the extraordinary rescue efforts. So what […]
Read more...As readers may recall, we had argued over a series of posts that the proposed Volcker rule, to bar proprietary trading at commercial banks, did not go far enough in reducing systemic risk. While the concept was so sketchy that it was difficult to be certain what it meant, it appeared to have two serious […]
Read more...Sorry for two AIG stories in succession; I just posted the other one when I saw the Bloomberg story just released, “Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs.” I’m a bit puzzled as to what the fracas is about here. The formerly redacted Schedule A, the list of the CDOs that the […]
Read more...A very good article in The Nation by Sebastian Jones, “The Media-Lobbying Complex,” (hat tip Tom F) has gone peculiarly unnoticed in the blogosphere, which is a real shame. It does some good, old-fashioned reporting to identify 75 individuals who were regularly presented on TV as experts, and by implication independent, when in fact they […]
Read more...Kenneth Rogoff, former IMF chief economist warned that a series of sovereign debt defaults is likely to be in the offing. From Bloomberg: Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years. I predict we will again,” Rogoff,…said at a forum in Tokyo today. He said financial markets […]
Read more...By Marshall Auerback, a fund manager and investment strategist and L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City In recent weeks there has been much discussion about what to do about Greece. These questions become all the more relevant as the country attempts to float a multibillion-euro bond issue later […]
Read more...From “Financial Economics, Deregulation and OTC Derivatives: Interview with Yves Smith of Naked Capitalism,” The Institutional Risk Analyst, February 22, 2010 “Wall Street once ran from a graveyard to a river. It now runs from an ocean to an ocean, and beyond. It has become, in Dr. Charles A. Beard’s measured words, a new Appian […]
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