Louis the XIV’s finance minister, Jean-Baptiste Colbert once described the art of taxation as plucking the maximum amount of feathers from the goose with the least amount of hissing. Credit card companies have managed to do the tax man one better. They don’t care what the goose does, as long as they get their feathers. […]
Read more...Those of you who live in New York City doubtless recall how Mayor Rudolph Giuliani initially secured his reputation. The city was perceived to be out of control. Crimes, petty and not so petty, were rampant. Most people felt a bit anxious on the street at night. Couples, once they had children, decamped to the […]
Read more...One thing people in a position of power often have trouble understanding is that it is sometimes necessary to cede a bit of one’s authority to minimize interference in the long run. In that way, you get to choose the concessions you make, and you have the further advantage of looking gracious and cooperative. The […]
Read more...Ah, a man after our own heart (we too have written about Pollyanna markets and complacency about risk). In a nicely understated piece at Seeking Alpha, “Short-Lived Economic Pessimism: Pollyanna is Back – With a Vengeance,” Michael Panzer writes about how various regulators have been perternaturally cheerful this week.The piece is very much worth reading […]
Read more...A Wall Street Journal story, “Payday Lenders Strike a Defensive Pose,” discussed the growing Congressional interest in restricting payday lending, and the attempts by the industry to clean up its act around the margin. By any standard, payday lending is predatory lending. Typical terms are $15 for every $100 borrowed for two weeks. That’s 390% […]
Read more...As we’ve noted, Wall Street firms have been investing in various means of profiting from likely future regulation of carbon emissions, particularly carbon trading. A study by Dr. Robert Shapiro, undersecretary of Commerce in the Clinton Administration (which we found thanks to Greg Mankiw’s blog), concludes that carbon taxes would be more effective than emissions […]
Read more...This post on Thomas Palley’s blog, which I found thanks to Mark Thoma’s Economist’s View, argues cogently for an expansion, rather than a rollback, of Sarbanes-Oxley, the corporate governance reforms implemented in 2002 in the wake of big corporate accounting scandals, such as Enron and WorldCom. Palley, an economist, observes that Sarbox has not stopped […]
Read more...Before we go any further with this item, in which rats in a study developed cancer from consuming genetically modified potatoes, it’s important to note that this was one study and the study was “badly flawed”. Half the rats died (which half?) and the results were based only on the survivors. But this item post-worthy […]
Read more...A reader comment on Angry Bear on the climate change and environmental degradation was sufficiently articulate and well argued to be featured as a separate post. The writer Stormy makes a number of important points: 1. The IPCC Report is actually conservative; it doesn’t touch the issue of species die-off, already occurring at alarming levels […]
Read more...This informative commentary in today’s Financial Times, by Jerome Guillet, an investment banker specializing in the energy sector, makes the observation that the energy projects that get built are the ones that are cheapest to get financed, but in the end, are often not the cheapest to operate. Utilities, which can obtain government guaranteed financing, […]
Read more...We have been hard on the Journal for its tendency to politicize news coverage and omit stories that point to systemic financial risk. So we would like to give credit to the Journal when credit is due. This morning, the Wall Street Journal had a first page story on the stock market mania in China, […]
Read more...The Financial Times, as is often the case, carried a story on hedge fund risks that was not covered in the Wall Street Journal or the New York Times. Titled “Regulators concerned at hedge fund collateral,” it discusses how an international group of financial regulators is working with some of the biggest Wall Street firms […]
Read more...We’ve taken note of excessive optimism and leverage (see, as examples, “The Rising Tide of Liquidity” and “More Signs of a Toppy Market“). Now the European Central Bank is also sounding cautionary notes. Ever since Alan Greenspan’s famous “irrational exuberance” observation produced a 140 point (then 2%) fall in the Dow, central bankers have been […]
Read more...Free market fundamentalists, most of which have never been within hailing distance of a real market (save perhaps a ceremonial visit to the New York Stock Exchange) view market prices as virtuous and seem woefully ignorant of the games speculators and market-makers play (see our post, “Are Speculators Driving Energy Prices?“) An article in the […]
Read more...There is a widespread belief in the US that editorializing in the Wall Street Journal is limited to the editorial page. We’ve seen in the past that this just ain’t so (see posts of January 12 and January 16). And today we have a doozy. We have a real news event, reported as the lead […]
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