Category Archives: Globalization

Mirable Dictu: Businesses Want More Regulations (If They Write Them)

We’ve never understood why regulation has such a bad name in America. Yes, there are all kinds of terrible specific implementations of the concept “regulation.” But the difficulty of getting it right doesn’t mean the concept should be rejected out of hand, since it turns out the alternative of “no regulation” isn’t so hot. And […]

Scary Words From Martin Wolf: End of Global Imbalances

Martin Wolf, the Financial Times’ highly regarded chief economics editor, has a particularly sobering article today, “Challenge of rescuing world economy,” and Wolf is a serious sort to begin with. Wolf uses a couple of less widely discussed presentations from the Fed’s conference at Jackson Hole as his point of departure. He contrasts one by […]

Thomas Palley on "America’s Distorted Expansion"

Economist Thomas Palley has a very interesting post today on our current economic conundrum, and he traces the problems to blind faith in globalization rather than permissive monetary policy or out of control financial innovation. Palley starts from an earlier point than most do, noting that our recent expansion has been unbalanced. He sees the […]

Foreigners Demanding a Say in US Market Regulation

Some reformers have argued that we are at the end of a regulatory paradigm and need to consider fundamental change in securities laws. A major obstacle, given that capital markets are now global, is the need for greater international cooperation and possibly even a new international body. It turns out some foreign regulators are already […]

Martin Wolf Defends the Fed

Normally, I have the highest regard for Martin Wolf, the Financial Times’ lead economics writer. He is forthright, data-driven, articulate, sober, and insightful. However, I take issue with his current article, “The Federal Reserve must prolong the party,” and see its failings as symptomatic of the state of economics. In brief, Wolf argues that the […]

White Collar Workers of the World Unite! You Have Nothing to Keep but Your Jobs!

A Bloomberg story reports that large corporate law firms such as Kirkland & Ellis and Jones Day are facing not merely pressure, but explicit client demands, to send junior level work overseas. This is a more troubling development than might appear obvious at first blush. This sort of behavior confirms Princeton economist Alan Blinder’s views […]

On the Power of Japan’s Retail Currency Speculators

The UK’s Times, in “The Kimono Traders,” gives a detailed portrayal of the activities of Japan’s army of retail currency traders, who are overwhelmingly female. They also happen to be aggressive and confident speculators, and control enough in the way of financial assets so as to dominate the activities of foreign institutional investors who are […]

Sarbox Not Responsible for Decline in New York Market Competitiveness

Although I haven’t followed the debate over New York-London market competitiveness that closely, it was clear when the study on the US’s standing was commissioned, the sponsors already knew what answers they wanted to report, and emasculating Sarbanes-Oxley (Sarbox or SOX) was an idee fixe. It didn’t seem to occur to people like Hank Paulson […]

"Hedge funds eye Mexico amid US subprime woes"

Reuters tells us that hedge funds that had previously steered clear of the Mexican mortgage backed bond market, deeming it to be too small, are now stepping up their investments there in the wake of US subprime problems. It won’t take much in the way of capital inflows to lower interest rates of Mexican MBS, […]

Nouriel Roubini on the Instability of Bretton Woods 2

The Bear Stearns/CDO drama has taken attention away from other worrisome conditions in the economy, and the biggest one is “global imbalances,” which is shorthand for the US running continuing, large current account deficits that are financed for the most part by foreign central banks, particularly those of China, Japan, and Saudi Arabia. We’ve lived […]

Wage Increases in India Make Offshoring Unattractive

A bit of good news for the beleaguered American white collar worker: wages have gone up so much in India that “offshoring,” or moving functions overseas, looks like a losing proposition when all costs are factored in. From “Bangalore wages spur ‘reverse offshoring’” in the Financial Times: The rising cost of paying engineers in Bangalore […]

Wal-Mart’s Imports Cost US Jobs

The concept that cheap imports result in job losses should be a no-brainer, but it is still greeted with considerable resistance in some circles. Let’s be clear on a few points: while open trade in theory creates benefits to all parties, the system we have isn’t open trade, but managed trade. Most other countries negotiate […]