By George Washington of Washington’s Blog. The Wall Street Journal admits this week that economists blew it: The pain of the financial crisis has economists striving to understand precisely why it happened and how to prevent a repeat… The crisis exposed the inadequacy of economists’ traditional tool kit, forcing them to revisit questions many had […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. It has been frequently charged that the Fed, under Alan Greenspan and Ben Bernanke, kept interest rates too low […]
Read more...By George Washington of Washington’s Blog. Financial insider and commentator Yves Smith wrote an essay last week entitled “MSM Reporting as Propaganda” arguing that the government has been using propaganda to make people think that things are getting better, no one is angry, and – therefore – no one should get upset: The message, quite […]
Read more...Submitted by Edward Harrison of Credit Writedowns Why is everyone saying consumer credit is falling? It’s not. But, everywhere I look, everybody is saying it is. I would like to be true to the data and not just take the government’s seasonally-adjusted numbers at face value. Judge for yourself. Here’s the data: This is what […]
Read more...An interesting post at VoxEU by Andrew K. Rose and Mark M. Spiegel does a series of analyses looking to explain how the crisis evolved internationally, but the obvious connections don’t provide an answer: The 2008 financial crisis is sometimes characterised as one where financial difficulties in the US spread to the rest of the […]
Read more...(I was going to take a week off, but Yves suggested I post this.) By George Washington of Washington’s Blog. We have to change our risk models, and not just defer to the big banks’ inaccurate models which got us into this mess. Says who? Nassim Taleb: I have been fighting risk models both as […]
Read more...By George Washington of Washington’s Blog. Unemployment is disastrous on both the individual and societal level. Individuals who look for work but can’t find it are miserable. Indeed, most people who lose their job are unprepared for their circumstances.[1] On the national level, high unemployment is both cause and effect concerning other problems with the […]
Read more...We’ve commented from time to time on dubious Chinese data releases. But this report from Foreign Policy reports on an interest aspect: that the statistics are not manipulated only in the normal bureaucratic manner (fudging them) but also by getting companies to change behavior so it can be tallied in a more flattering fashion. The […]
Read more...By Andrew Kaplan, a hedge fund manager: It has become fashionable among equities managers of the bullish persuasion to argue that a strong recovery in GDP will occur in 2010 because the “structural adjustment period” of moving back to a more normal savings rate has been completed. We’ve gone from a savings rate of barely […]
Read more...We’ve been seeing an even higher than usual amount of skepticism on China’s official data releases, as if such a thing were even possible, given the general dim view of Chinese government data. Some observers, including yours truly, had looked to electrical usage as a better barometer of economic activity. Well, it turns out that […]
Read more...If you think US economic data leaves a lot to be desired, just remember that it looks stellar in comparison to what comes out of China. The latest China fun facts versus relentlessly upbeat official figures roundup comes with the help of reader Michael. First is that China has been reporting decent growth, with the […]
Read more...A study by the Boston Fed came to the credulity-straining conclusion that securitization was not a culprit in the noteworthy dearth of loan mods on residential mortgages, Lew Ranieri remarked back in 2008 at the Milken Conference that he was appalled by what was going on, that servicers used to do mods (as in no […]
Read more...Ratings agency Standard & Poors has managed a stunt which to my knowledge has no precedent in the history of the dark art of ratings. It downgraded some not all that highly structured commercial mortgage bonds last week to an eyepopping degree, from AAA to BBB-, just this side of being junk. Then they restored […]
Read more...The very fact an op-ed piece (more accurately, comment, as they call them in the Financial Times) by Paul Boyle against airbrushed accounting needed to be written at all is troubling. A move is afoot that appears further advanced than I realized is to fool with financial firm statements so as to reduce the procyclical […]
Read more...Consensus forecasts had expected a modest fall in initial unemployment claims this week; instead they increased by 15,000. Similarly, continuing claims rose by 29,000. Bloomberg still tried to put a happy face on this not-aligned-green-shoots story. This was the third and longest paragraph of a mere four paragraph report: Recent economic data shows some areas […]
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