In America, the 1990 census showed a marked decrease in childbearing. 25% of the women between 30 and 34 were childless, while the comparable figure in 1976 was 16%. By 1985, the birthrate expected per average woman over her lifetime had fallen to 1.8, slightly below Europe’s level and below the “replacement rate”, the level […]
Read more...Rasmussen just released the results of a recent poll on political attitudes. It found only 53% clearly preferred capitalism (hat tip reader David H): Only 53% of American adults believe capitalism is better than socialism. The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are […]
Read more...One of the disturbing trends of the financial crisis hasn’t simply been the willy-nilly shifting of costs onto the taxpayer, even when there were investors in risk capital, aka bondholders and stockholders, who properly should take the hit first. As distressing is the repeated, flagrant disregard for the rule of law, starting with the Treasury […]
Read more...Let us go back to some basic principles: 1. Despite bank and Administration smoke-blowing to the contrary, the problem with the so-called toxic assets on bank balance sheets is NOT that they cannot be priced, but that banks do not like the prices on offer from willing buyers. We have read anecdotes suggesting that the […]
Read more...Submitted by Swedish Lex, who helped unwind Sweden’s imploded banks in the 1990s: The U.S. Secretary of the Treasury appears to be close to proposing a Faustian bargain that, seemingly, will involve considerable Government subsidies towards a limited number of economic operators. In return for the sacrifice – the creation of massive moral hazard – […]
Read more...Hoisted from comments: Say I am SAC Capital. I get to be one of the bidders on bank assets covered by the program Citi holds $100mm of face-value securities, carried at $80mm. The market bid on these securities is $30mm. Say with perfect foresight the value of all cash flows is $50mm. I bid Citi […]
Read more...Full disclosure: I am normally a fan of the Financial Times’ Gillian Tett, but her latest piece reveals she has been co-opted by the industry she covers. While there are matters of substance I take issue with (we’ll get to those soon), the whopper is the positioning. How can Tett possibly depict Gordon Gekko as […]
Read more...Watch a bit of jousting during the hearings on AIG today: Now one can take the position that Grayson is merely trying to score points, but I don’t see it that way. Instead, he is trying to make a response to a basic and unanswered question: Who were these people who wrecked AIG and other […]
Read more...I must confess to being very late to read Nassim Nicolas Taleb’s The Black Swan, and frankly had considered NOT reading it. First, it has been so widely reviewed and discussed that I had assumed the additional knowledge to be gained by reading the book itself would be marginal. Second, I’ve read a bit of […]
Read more...Faithful readers, I know the blog has become more polemic in tone over the last few months. We are in the stage of the cycle, as Warren Buffet put it, the tide has gone out and we are seeing who isn’t wearing a swimming suit. Worse, as the powers that be are desperately throwing funds […]
Read more...In the dot-bomb era, you’d read the occasional story about how former Internet high-flier employees were working at Home Depot. I am not certain what happened to those in Wall Street who lost their jobs in the 1990-1991 downturn. I know some got jobs with big corporations, a few went to DC. However, the carnage […]
Read more...I was in Kansas City at a econbloggers conference hosted by the Kauffman Foundation, and one of the breakout discussions was on the fate of finance. One participant who claimed to be have a basis for his view (it could be based on private polling or focus group research, or less scientific methods) said that […]
Read more...In case you managed to miss it, Japan has taken a huge fall in its relative economic standing by more or less standing still for almost a generation. The comparative fall is 30%. And even though visitors to Japan do not see the superficial signs of distress (infrastructure is well maintained, people are neatly dressed, […]
Read more...Kansas is in the middle of a budget brawl, and tax refunds may be on hold if it isn’t resolved pronto. From the Kansas City Star: The Kansas Finance Council was to meet at 1 p.m. today to vote on whether to borrow $225 million from healthy state funds to cover expected payments to schools, […]
Read more...The Wall Street Journal Economics Blog today featured an update of a chart prepared by Alexis de Tocqueville, author of Democracy in America, comparing the compensation of French and American civil servants, with an update (click to enlarge): The problem is that this comparison is misleading. The intent is to illustrate pay disparities over time. […]
Read more...