Stress will bring out an organism’s or an organization’s defenses, and the beleagured Obama administration is looking mighty defensive these days. The great unwashed public isn’t buying its PR about its supposed accomplishments, such as the disgrace that it misbrands as financial reform (which 80% are skeptical will prevent a future crisis) and health care […]
Read more...By Yves Smith and Tom Adams, an attorney and former monoline executive Update and correction 4:45 PM: We owe an apology to readers and to Louise Story of the New York Times, for an apparent error in our analysis. We have been informed that, remarkably, there were two separate Pyxis vehicles which were issued in […]
Read more...In the 1980s, when unemployment hit 8%, Ronald Reagan’s administration was concerned and took steps to address the problem. One of the causes had been the 60% increase in the dollar versus the yen, which allowed the Japanese to make deep inroads into the US. One of the responses was the so-called Plaza Accord, in […]
Read more...I generally refrain from reproducing significant parts of another commentator’s work, but a Paul Krugman post debunking the depiction of state and municipal employees as welfare queens merits more attention than a mere link. Krugman points to a paper by Jonathan Schmidt, who has parsed the data on private v. public sector worker pay level, […]
Read more...As discussed in ECONNED and on this blog, clearinghouses are not a solution to the systemic risk posed by credit default swaps, since there is no way to have a CDS counterparty post adequate margin and have the product be viable (to put it more simply, adequate margin make CDS uneconomic). So for CDS, the […]
Read more...We pointed out that reappointing Ben Bernanke as Federal Reserve chairman would be inconceivable in the private sector, since CEOs who preside over disasters are dismissed (captains have the good taste to go down with their ships). But of course, Bernanke is a failure only if you believe that the Fed’s official mandate – soundness […]
Read more...The press has been duly supportive of the successful effort by Bill Gates and Warren Buffet to get other mega-rich individuals to give away at least half their wealth to charity. But is this the unalloyed boon that it is presented as being? William Langley, in the Telegraph, points out that the new model of […]
Read more...Gretchen Morgenson is often a target of heated criticism on the blogosphere, which I have argued more than once is overdone. While her articles on executive compensation and securities litigation are consistently well reported, she has an appetite for the wilder side of finance, and often looks a bit out of her depth. Typically, she […]
Read more...There are a lot of bad things you can say about Fannie and Freddie: that they were part of the oversubsidization of housing in America, that they’ve had an overlarge side business of funneling cash to friendly politicians, that some of their “innovative” practices, like requiring the use of the electronic mortgage registration system, MERS, […]
Read more...Don’t expect this updated assessment, that Medicare now is expected to be viable till 2029, to stem the expected push to gut Social Security and Medicare. From Bloomberg: Medicare will gain an extra 12 years of fiscal life as a result of the health law signed in March by President Barack Obama, a government report […]
Read more...Nassim Nicholas Taleb has an intriguing piece at Huffington Post, “The Regulator Franchise, or the Alan Blinder Problem,” with a juicy anecdote at its core. It highlights a critical issue: how we’ve come to accept what other eras would view as dubious conduct as business as usual. Note that Taleb does a particularly artful job […]
Read more...I suppose I should be flattered that I keep being misbranded as an economist. You can view the segment here. Enjoy!
Read more...Dean Baker has regularly made fun of the idea that the Chinese are concerned that they will show losses on their large dollar positions, mainly in invested mainly in US Treasuries. As serious traders will tell you, it’s actually easy to manipulate a market, but hard to make money doing it. As Baker put it: […]
Read more...It should come as no surprise that a financial services industry powerful enough to water down meaningful reform in the US and internationally (Basel III rules were weakened to allow, for instance, that mortgage servicing rights be included in regulatory capital calculations) would probably have its way in blocking the nomination of Elizabeth Warren as […]
Read more...A school of political and economic argument goes something like this: every economic ill can be cured by tax cuts. It’s clearly rubbish when stated that way, yet the same logic is given far too much credence every time it is overused. A very good piece by William Gale at the Washington Post, “Five myths […]
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