This post first appeared on March 14, 2007 One of today’s lessons is to have greater courage in my convictions. In a number of earlier posts (such as “The Rising Tide of Liquidity,” part 2 and part 3 of the same, “Where Has the (Perception of) Risk Gone“) I pointed to how toppy the markets […]
Read more...Crossposted from New Deal 2.0 By L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City. Budget deficits and government spending are necessary to end today’s crisis. In recent months, a form of mass hysteria has swept the country as fear of “unsustainable” budget deficits replaced the earlier concern about the financial crisis, […]
Read more...This post first appeared on February 18, 2007 Mirable dictu, a Wall Street Journal editorial, “How Expansions Die,” that, for the most part, has a solid foundation in reality. Although the WSJ’s news pages have been reporting on the meltdown in the subprime mortgage market (admittedly somewhat less intently than the Financial Times), both the […]
Read more...Crossposted from New Deal 2.0 Another volley from Marshall Auerback, Senior Fellow at the Roosevelt Institute, and a market analyst and commentator. Larry Summers’s misguided approach to deficits and surpluses could strangle our long-term vitality. Virtually every profile on Larry Summers tells us that he is one of the most brilliant economists of his generation, […]
Read more...RealtyTrac, as reported on Housing Wire, gave a gloomy update on the US housing market. RealtyTrac does granular collection of data on foreclosures, capturing every filing. One of the shortcomings of this approach is that processes vary by state (as in some state require more court filings over the course of a foreclosure than others). […]
Read more...If you have any doubts about how easy it is for someone who works hard in the US to get ahead, consider this factoid from Martin Wolf’s latest comment in the Financial Times, on Raghuram Rajan’s new book (see Satyajit Das’ review here: Thus, Prof Rajan notes that “of every dollar of real income growth […]
Read more...Satyajit Das is too shrewd to call the European Financial Stability Facility, informally described as a €440 billion sovereign bailout fund, a mere sleight of hand. But it’s hard not to draw that conclusion after reading his Financial Times comment today. Central banks and governments have developed an alarming fondness for the very sort of […]
Read more...The reporting so far is thin, just notices of the announcement at Bloomberg and the Wall Street Journal that Moody’s cut the rating on Portugal’s sovereign debt from Aa2 to A1. The Bloomberg headline notes that Moody’s put the outlook as stable, while the Journal pointed out that the agency expected “Portuguese government’s financial strength […]
Read more...Der Spiegel (hat tip reader Richard Smith) presents a detailed sketch of German thinking, specifically that of chancellor Angela Merkel and finance minister Wolfgang Schäuble, regarding how countries who fail an initial round of restructuring within the eurozone would be treated. This piece is very much worth reading, but the German proposal has all the […]
Read more...I sometimes wonder whether Wolfgang Munchau of the Financial Times and Ambrose Evans-Pritchard of the Telegraph channel each other. Although they are both dubious of the eurozone’s ability to navigate its way out of its current mess, they also have an interesting habit of taking up similar issues on the same publication date. Today, both […]
Read more...Distressing news continues to accumulate on the small business front. Smaller companies have been particularly hard hit by the downturn. Some of that goes with the terrain, since small businesses are more fragile than bigger ones. Nine of ten startups do not survive their first ten years. Even in typical recessions, banks cut off lending […]
Read more...By Kati Suominen, Trans-Atlantic Fellow at the German Marshall Fund in Washington, cross posted from VoxEU The global crisis has led some to question the dollar’s place as the dominant currency. This column discusses three camps in the literature: those advocating a new synthetic global currency, those arguing that a new reserve currency will emerge, […]
Read more...Is the economics version of defining deviancy downward mean that the new normal of high unemployment and inadequate job growth is seen as acceptable by policymakers (at least those not up for re-election this November)? It’s one thing to recognize that we are working through a painful hangover after a private sector borrowing binge that […]
Read more...The New York Review of Books has an article by George Soros with his take on the challenges facing the Eurozone. It includes a good, high level recitation of the structural deficiencies in the Eurozone (in particular, its lack of a treasury), the evolution of recent stresses, and suggested remedies. While the initial discussion covers […]
Read more...The Wall Street Journal today has solid piece of reporting on how banks are avoiding writing down commercial real estate loans. And the article even invoked “extend and pretend” near the top of the piece. The Journal also provides a critical factoid: regulators unwittingly enabled this practice. I had been wondering why we hadn’t seen […]
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