Satyajit Das is too shrewd to call the European Financial Stability Facility, informally described as a €440 billion sovereign bailout fund, a mere sleight of hand. But it’s hard not to draw that conclusion after reading his Financial Times comment today. Central banks and governments have developed an alarming fondness for the very sort of […]
Read more...When I was in the UK earlier this year, I saw a very senior financial regulator speak. In the Q&A session, someone asked him to comment on US financial reform. His reply was tantamount to “Wake me when it’s over,” and it was clear his expectations were low. One source of frustration is that the […]
Read more...Der Spiegel (hat tip reader Richard Smith) presents a detailed sketch of German thinking, specifically that of chancellor Angela Merkel and finance minister Wolfgang Schäuble, regarding how countries who fail an initial round of restructuring within the eurozone would be treated. This piece is very much worth reading, but the German proposal has all the […]
Read more...By Wallace C. Turbeville, the former CEO of VMAC LLC and a former Vice President of Goldman, Sachs & Co. who writes at New Deal 2.0 William D. Cohan’s op-ed piece in the July 7th New York Times had the same title as this article, but for the word “Don’t.” At first glance, I thought […]
Read more...I sometimes wonder whether Wolfgang Munchau of the Financial Times and Ambrose Evans-Pritchard of the Telegraph channel each other. Although they are both dubious of the eurozone’s ability to navigate its way out of its current mess, they also have an interesting habit of taking up similar issues on the same publication date. Today, both […]
Read more...We’ve pointed out from time to time that the financial services industry has lost sight of its role. While helping companies borrow and raise money, providing investment and saving vehicles and payment services are all useful activities, the cost of financial intermediation is ultimately a tax on commerce. Perversely, some businessmen complain bitterly about how […]
Read more...The New York Review of Books has an article by George Soros with his take on the challenges facing the Eurozone. It includes a good, high level recitation of the structural deficiencies in the Eurozone (in particular, its lack of a treasury), the evolution of recent stresses, and suggested remedies. While the initial discussion covers […]
Read more...The Wall Street Journal today has solid piece of reporting on how banks are avoiding writing down commercial real estate loans. And the article even invoked “extend and pretend” near the top of the piece. The Journal also provides a critical factoid: regulators unwittingly enabled this practice. I had been wondering why we hadn’t seen […]
Read more...Reader Francois T highlighted a story at Washington Monthly that I recommend highly to readers. It illustrates how the intersection of corporate pursuit of profit and regulatory backfires can produce tidy oligopolies that pursue rent-seeking behavior with impunity. From his e-mail: A well-intentioned move by Congress in 1986, followed by another one in 1996 converted […]
Read more...Martin Wolf, the Financial Times’ esteemed economics editor, launches another salvo against misguided austerity measures today. It’s also noteworthy that he argues from a Modern Monetary Theory perspective. Wolf first stresses that yields on government bonds show that inflationsitas are all wet: I have a question: do we believe that markets are unable to price […]
Read more...Although it was unclear how the high concept behind the Volcker rule would translate into legislation, we had doubts from the get-go. The idea is sound: firms that are ultimately playing with government money should be involved only in socially valuable transaction intermediation and fundraising (and all major dealers around the world are backstopped, pretenses […]
Read more...The alert John Dizard of the Financial Times has taken notice of a development that has passed most commentators by, namely, that Greece is starting to restructure state debts. This hasn’t yet gotten the attention it merits because it’s bonds issued by particular government bodies (in this case, the Greek state hospital system) and the […]
Read more...Readers may know I have perilous little sympathy for Big Pharma. The industry too often wraps itself in the mantle of science, in particular, claiming its needs its high profits and hence high prices to support its research and development efforts. In fact, it spends more on marketing than on R&D (and perilous few industries […]
Read more...Readers may recall that we harped on BP’s refusal to try to contain oil around the site of the leak, and later, its failure to do proper booming to contain and remove oil and so reduce the amount that came ashore (note that the US also failed abjectly as a second line of defense; the […]
Read more...Andy Grove, who lead Intel to dominance of an extremely competitive, risky industry, has a very important opinion piece at Bloomberg (several readers pointed to it, including John M, dr, Crocodile Chuck). He makes a series of points that are the polar opposite of the de facto US industrial policy, of the naive view that […]
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