There are three good and overlapping state of global finance pieces tonight; they all have worthy ideas and I’ll integrate them as best I can. The first is a post by Thomas Palley, “The Subprime – Trade Deficit Connection,” which is a companion piece to th Financial Times article by Stephen Roach yesterday. Roach depicted […]
Read more...William Cohan, the author of the popular and award-winning book The Last Tycoons: The Secret History of Lazard Frères & Co gives a badly flawed account the past in his comment, “Mixed portents for Wall Street’s rescuers,” in today’s Financial Times, and therefore makes a misleading comparison. Cohen goes through the recent foreign investments in […]
Read more...John Plender of the Financial Times warns us that the movement of assets from shaky players to the solvent has only just begun. Those who complain of crown jewels begin sold to foreigners had better get used to more of the same. Plender points out that investors are taking real risks, not merely that their […]
Read more...As the US government has sponsored various plans to forestall the recognition of real estate related losses, ranging from the failed SIV bailout program to New Hope Alliance subprime rate freeze program to proposals to raise Freddie Mac and Fannie Mae’s mortgage ceilings, it has begged comparison to Japan in the post-bubble years. Even though […]
Read more...The Financial Tines and the Wall Street Journal feature two treatments of the same theme, investors looking to pick up bargains in companies damaged by the subprime implosion. The Financial Times discusses the interest of the Kuwait Investment Authority in acquiring stakes in financial services firms; the Journal article is aimed at retail investors that […]
Read more...Many commentators see the euro as the logical successor to the dollar as the reserve currency. Yet the Financial Times’ Lex column points out that most currency unions fail. However, the dollar is the product of of that very type of arrangement. Nevertheless, the piece serves as an important reminder against blindly assuming current trends […]
Read more...Harvard economics professor Edward Glaeser reviewed a new book, “Bad Samaritans” by Ha-Joon Chang in the New York Sun (hat tip Mark Thoma). Glaesar focuses on his objections to the book, but nevertheless concedes, Readers who believe in free trade will not find much in Mr. Chang that challenges that belief, but the book is […]
Read more...Merrill made the announcement of its $ 6.2 billion (originally rumored to be $5 billion) cash infusion by the sovereign wealth fund Temasek and New York fund manager Davis Select Advisors today. The firm is raising additional capital through the sale of its commercial finance business to General Electric Capital. From Bloomberg: Merrill Lynch & […]
Read more...Dani Rodrik has managed to be able to debunk the economic orthodoxy, most notably in his area of expertise, namely trade and development, and still retain the respect of his peers. Of course, having tenure at Harvard (Kennedy School) doesn’t hurt. But Rodrik is also unfailingly articulate, fair-minded, and rigorous. His latest post takes issue […]
Read more...Readers may recall that a row between the US and Antigua over online gambling threatening to pull the WTO house down. By way of background, the US had lost a WTO case on online betting , and the Bush Administration acted under a WTO stipulation that allows it to set its own trade rules. But […]
Read more...Observers have worried that the US’s protectionist threats toward China may eventually lead to sanctions that are forbidden under World Trade Organization rules. For example, the summary of a VoxEU, “Trade frictions with china: Do western policymakers have an end game?” by Simon Evenett, published December 15, reads: If the US and EU continue down […]
Read more...This grim headline appears in the UK’s Telegaph in an article by Ambrose Evans-Pritchard (hat tip Financial Armageddon) which is well reasoned, once you get past its fire and brimestone tone. It argues that the countries with chronic balance of payments deficits are all in dubious shape and can no longer serve as demand engines. […]
Read more...The Economist put “The Panic About the Dollar” on its cover, which led to a speedy and lengthy analysis by Brad Setser who along with Menzie Chin are probably the most active and best informed bloggers on the currency beat. Although the Economist isn’t what it used to be, the two pieces (the leader and […]
Read more...Offhshoring, the practice of companies sending work overseas (whether to their own operations located in other countries or to foreign outsourcing companies) has become the new worry of the white collar class. The business media regularly reports on software development, legal research, and Wall Street grunt work being sent to India. And it seems that […]
Read more...Boy, the equity infusion in Citi was in some ways predictable, but it happened earlier than I anticipated. Guess the bank learned from its last rescue by Prince Alwaleed not to wait until they are desperate to find a suitor. Its alternative to shore up its weakening equity base was selling assets, but with many […]
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