I have spent the entire long weekend avoiding dealing with this article by David Ranson and Penny Russell, “Does the Fed Matter?” in Friday’s Wall Street Journal. The reason is that if I got going, there is so much in it that is off beam, misleading, or just plain wrong that it would be hard […]
Read more...This article ran on MarketWatch, and I find it a sign of the times. Despite the supposedly sound state of the economy (if you call a tanking housing market and 1.3% GDP growth, which is negative in real terms, “sound”), MarketWatch nevertheless thought this story would appeal to its target audience, the investing class. The […]
Read more...This Financial Times story, “Growing biofuels demand raises food prices,” highlights increasing prices of grains and other soft commodities. The grain price rise merits particular attention, since it appears to be a structural rather than a cyclical increase. And higher grain prices in turn mean higher meat, milk, and egg prices. What this story does […]
Read more...This article on the Guardian’s website, on the failure of the Food and Drug Administration to be sufficiently pro-consumer, pro-safety in its drug approval process, does a nice job of summing up the issues (and poking holes in the FDA’s lame defenses). One particularly fine observation: Let’s not forget that a provision in the FDA […]
Read more...We Americans like to think highly of our supposed freedoms, yet we have allowed privacy and civil rights to be eroded in the name of security and convenience (and yes, I mean you, how many times have you given your personal coordinates to a website?) The EU is taking the view that Google is keeping […]
Read more...The Financial Times appears to have scooped the Wall Street Journal, Bloomberg, and the New York Times on a Bank of International Settlements report due out today, which says that investment banks are too cozy with hedge funds and that isn’t very good for the financial system. The BIS report calls for greater disclosure of […]
Read more...Last February, we questioned the wisdom of the headlong rush of Wall Street firms such as Merrill Lynch, Morgan Stanley, and Barclays to acquire subprime lenders, since it appeared that the distress in the market foretold not only a fundamental contraction but also more stringent regulation. Our skepticism appears to have been warranted. This weekend’s […]
Read more...The question of systemic risk, that is, the possibility of a generalized failure of the financial system, such as a stock market crash, is something that regulators think about a great deal and quite deliberately discuss a good bit less, since fear becomes a driving element in any market panic. The reason for the heightened […]
Read more...Bernanke normally adopts a measured tone and, as befits someone whose words can move markets, takes great care not to dwell too heavily on bad news. So it was suprising to see him issue a fairly pointed statement on risks to the banking system. His remarks on the perils of private equity loans, when taken […]
Read more...….and is growing, read “The Poverty Business” in BusinessWeek. The key factiod: Federal Reserve data show that in relative terms, that debt is getting more expensive. In 1989 households earning $30,000 or less a year paid an average annual interest rate on auto loans that was 16.8% higher than what households earning more than $90,000 […]
Read more...The headline above isn’t news per se, but someone reputable, in this case, Matt Fellowes and Mia Mabanta, have done the sleuth work of putting together the data to dimension the problem. The report says that the bottom quintile is “awash” with credit and now is one of the fastest growing segments. Ee found this […]
Read more...If a terrorist were to blow up Moodys, S&P, and Fitch, it would have a devastating impact on the financial markets. Rating agencies play a indispensable role in the debt arena. Many investors are required to consider bond ratings in their investment decision making process. Insurance companies, for example, are required to hold either all […]
Read more...One of the issues facing any regulator is how to balance the interests of its various constituencies. Over the last twenty years, the pendulum has swung away from protecting consumers to promoting business interests. On some fronts, we are seeing pressures to move in the other direction. For example, the Vioxx case, which highlighted the […]
Read more...It’s curious, and telling, that this story, “Union in move to halt Blackstone IPO,” appears as a headline story at this hour for the Financial Times (meaning it will probably be featured in the news summary in the print edition) yet has no counterpart at the Wall Street Journal or New York Times websites. The […]
Read more...The Financial Times on Monday had two stories on inflation, one a lengthy story, the other a a comment, “The problem with inflation indices,” by Gideon Munchau, triggered by the fact that the Bank of England missed its inflation targets of 2% by over a percentage point (their Consumer Price Index increased at an annualized […]
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