Wolfgang Munchau has a solid, thoughtful piece at the Financial Times which argues that the widely applauded rallies in stock and commodity markets are already looking very much like bubbles, and the efforts to contend with them (either directly, or as a result of the need to start reining in liquidity) is likely to kick […]
Read more...A fascinating and somewhat disturbing article at the New York Review of Books by Jerome Groopman looks at what counts for progress in medical diagnosis and finds it to be more of a mixed bag than most readers would assume. This won’t come as much of a surprise to those who know a bit about […]
Read more...Oooh, I can take only so much double-speak in a single sitting. The object lesson today is a Reuters article reporting on a Larry Summers speech, “Obama policies averted economic “abyss”: Summers.” Let us not forget that “Obama policies” in this case are “Larry Summers policies.” Obama has never displayed much interest in economics; he […]
Read more...An interesting post at VoxEU by Andrew K. Rose and Mark M. Spiegel does a series of analyses looking to explain how the crisis evolved internationally, but the obvious connections don’t provide an answer: The 2008 financial crisis is sometimes characterised as one where financial difficulties in the US spread to the rest of the […]
Read more...(I was going to take a week off, but Yves suggested I post this.) By George Washington of Washington’s Blog. We have to change our risk models, and not just defer to the big banks’ inaccurate models which got us into this mess. Says who? Nassim Taleb: I have been fighting risk models both as […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Let’s say I run a company. For the sake of argument, we’ll call it a shoe store in New York City. I am making $100,000 net per year now. But, I look around me and see huge opportunity for growth. So I go to my bank and ask […]
Read more...Submitted by Edward Harrison of Credit Writedowns Last week, I highlighted some of the ideas of Australian economist Steve Keen in my post, “Politics and reform: Say I’m a politician….” Keen is of the Minsky camp and he believes that an unsustainable debt bubble has build up in the industrialized world which can only be […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Evaluating the recent performance of the Fed is not a straight forward exercise. The turmoil in the financial system, […]
Read more...By Swedish Lex, an expert and advisor on EU regulatory and political affairs. The French Commission on the Measurement of Economic Performance and Social Progress presented its final Report written by Stiglitz and other leading economists at an event at la Sorbonne earlier today. The contents of Report is already being discussed widely but at […]
Read more...Reader Don B pointed out a generally top notch piece by Luigi Zingales at a new publication, National Affairs, on how the financial crisis may change attitudes towards what he calls “democratic capitalism”. Even though the article is thoughtful and well written, it does fall prey to a major bit of intellectual sloppiness that is […]
Read more...Joseph Stiglitz takes issue with the view of economists (well, economists surveyed by Bloomberg and the Wall Street Journal, which not surprisingly have a Pollyannish optimistic streak) that the economy is in or on the verge of a recovery. The real issue is the ongoing con job. Team Obama has made it clear that it […]
Read more...T. S. Eliot was right. Human beings cannot stand very much reality. As much as I have an appetite for bearish views (I figure the optimist case gets disproportionate air time), the headline of Ambrose Evans-Pritchard’s latest piece, “Our quarter-century penance is just starting,” is grim even by the standards of the bearish faithful. Evans-Pritchard, […]
Read more...Bloomberg reports that Wall Street is back to its free-wheeling, high-levered ways. This is a classic example of moral hazard in action. Why worry about blowing up the bank when you know the taxpayer will bail you out? From Bloomberg (hat tip DoctoRx): Banks are increasing lending to buyers of high-yield company loans and mortgage […]
Read more...Reader John O passed along this Bloomberg chart du jour (click to enlarge) which effectively argues that the consumer has gone down so far she has nowhere to go but up: The related article argues: ….these so-called discretionary goods and services accounted for a smaller percentage of consumer outlays last quarter than at any other […]
Read more...By Robert P. Baird of digital emunction When, back in March, the Bank of England announced that it was adopting a program of quantitative easing, The Economist reported the news with some trepidation. While recognizing that the threat of deflation was real and imminent, the magazine gave voice to the fear that “that the border […]
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