A quick recap of Soros’s prepared remarks at the Senate hearings on energy market manipulation, which I watched just now. The billionaire said that he had a view of bubbles that departed from conventional wisdom about financial markets. They start with a trend but the dymamic becomes self reinforcing and increasingly disconnected from reality. For […]
Read more...While some writers in the US have taken note of the fact that the Fed’s rate cuts have propelled the US into negative real interest rate territory, until recently, the role of overly-permissive monetary policy in inflation-fraught countries like China and the Gulf States has gotten comparatively little attention. Last week, the Economist devoted an […]
Read more...Bloomberg reports that the Commodity Futures Trading Commission, which has opened an investigation into whether market manipulation may be influencing oil prices, is taking a hard look at physical delivery and storage. A particular focus is the role of Cushing in the trading of West Texas Intermediate Crude, one of the two most important contracts […]
Read more...There’s an odd little story on the home page of the Financial Times website, odd in three respects. First, it discusses a development, namely, the launch of a credit derivatives clearinghouse that is important enough that it ought to be reported more broadly, yet several searches on Google News came up empty-handed. Readers no doubt […]
Read more...Willem Buiter decided to provide some further thoughts on regulatory reform over the holiday weekend. Given the nature of posting, and the difficulty of devising banking reforms, most proposals are going to fall short on detail. But this one falls a bit shorter than I’d like. For instance, Buiter clearly assumes international cooperation; these ideas […]
Read more...Steve Waldman, in a colorful post, “A run on central banks?” contends that the rapid rise of commodities prices isn’t the result of mundane factors like negative real interest rates, but a more fundamental cause: loss of faith in the monetary authorities: Just as the fear of a bank’s insolvency can precipitate a run that […]
Read more...Reader Richard Kline is providing a mini-series that was prompted by an anonymous reader who had observed that a complex systems theory view might raise doubts about regulatory policy. Financial overseers believe that liquidity is always and ever good, but that view may be naive: Perhaps a lesson to be learned here is that liquidity […]
Read more...Ken Funnell at Bank Lawyer’s Blog tells us that Ohio is about to put legislation into effect that will kill payday lending: The new Ohio law would limit borrowers to four short-term loans a year and cap annual interest rates at 28 percent. The bill also would limit loan amounts to $500 per loan, or […]
Read more...The warning from the ECB’s chief Jean-Claude Trichet. that the worst of the credit crunch may lie ahead, deserves to be taken far more seriously than other cautionary warnings. First, he has a reasonably good reading on what is happening with European banks (and our sources with inside connections have maintained for some time that […]
Read more...Reader Richard Kline is providing a mini-series that was prompted by an anonymous reader who had observed that a complex systems theory view might raise doubts about regulatory policy. Financial overseers believe that liquidity is always and ever good, but that view may be naive: Perhaps a lesson to be learned here is that liquidity […]
Read more...Mark Thoma has posted a nice little piece by his colleague Tim Duy on what a housing bubble looks like (as in charts, not in those “what were they thinking” pictures of overpriced shoeboxes now going begging). It illustrates very nicely the most basic symptom of pricing gone awry: how housing prices hit unprecedented highs […]
Read more...The ECB has uncovered gambling in Casablanca. The central bank is shocked to learn that banks appear to be originating crappy assets solely for the purpose of dumping them in a liquidity facility intended to help them through a rough patch, not to provide an ongoing subsidy. Regulators should know better. Indulgent parents generally wind […]
Read more...Willem Buiter argues that the focus on oil and food price shocks, which economists view as relative price changes rather than inflation, is muddying the discussion about inflation. He sees considerable evidence of widespread inflation and it’s central bankers’ fault. From Buiter: Inflation is rising just about everywhere. Why is this and what can be […]
Read more...Jim Hamilton must feel like a Cassandra. Last August, he warned that the GSEs were in danger of having the ambiguous status of their implied guarantee tested. That came in January, and was finessed with various new Fed facilities. Hamilton has also warned repeatedly that the Fed needs to consider institutional reform, not merely bailing […]
Read more...The fulminating over what to do about our miscreant socialized unrepentant and as yet unreconstituted financial services sector continues. Since massive subsidies have been extended in the form of help to the mortgage business and an alphabet soup of Federal Reserve facilities, with nary a demand made of the beneficiaries of this largess, it seems […]
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