Category Archives: Economic fundamentals

On the Fat Fingered Trade and Market Freakout

We’ll know in due course, now that an investigation is underway, why the equity markets in the US went into complete freefall for about twenty minutes, with the Dow dropping 998 points. Per Bloomberg: Larry Leibowitz, chief operating officer of NYSE Euronext, said trades sent to electronic networks fueled the drop. While the first half […]

Auerback: Yes, Virginia. There is a Difference Between Greece and the US

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Many market analysts, commentators and economists claim to be having a hard time finding a metric in which the US is in better financial shape than Greece. Ken Rogoff, for example, recently warned that a Greek default would usher in […]

Greenspan Hid Fed Debate Over Housing Bubble to Keep Control

Ryan Grim at Huffington Post has parsed recently released transcripts of 2004 Fed Open Market Committee discussions that show the debate over the rapid rise in housing prices and concerns about global imbalances were downplayed at Greenspan’s insistence. For instance, the minutes reveal that Fed governor from Atlanta, Jack Guynn, was worried about signs of […]

Auerback/Mosler: Greece CAN Go it Alone

By Marshall Auerback, a fund manager and investment strategist and Warren Mosler, a fund manager and co-founder and Distinguished Research Associate of The Center for Full Employment And Price Stability at the University of Missouri in Kansas City. Greece can successfully issue and place new debt at low interest rates. The trick is to insert […]

Bank Runs in Greece – Harbinger of Another Axis of Euromarket Risk?

Sometimes I can miss the blindingly obvious. Like other observers of the widening sovereign debt crisis in Europe, we’ve commented on the fact that the big reason for Germany to work towards a rescue (more likely, the end game is a restructuring) of Greece and other Club Med members at risk is that its own […]

Alford: Fed Talk As Policy

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. The Fed believes that it has succeeded in making monetary policy significantly more transparent. Furthermore, the Fed believes that […]

S&P Downgrades Spain

S&P cut Spain’s long term rating to AA today with a negative outlook. From Bloomberg: S&P said in a statement today that the outlook on Spain is negative, reflecting the chance of a possible further downgrade if the “budgetary position underperforms to a greater extent than we currently anticipate.” Spain was last cut by S&P […]

More Proof the Bubble is Back

A correspondent e-mailed me about his belief that credit market valuations are more than a big dubious. For instance, subordinated tranches of commercial real estate bonds, which at the lows of last year were trading at 30 cents on the dollar are now at 90 cents. He thinks (and this is a space he knows) […]

Guest Post: Will Policy Exits Just Be Revolving Doors?

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Both fiscal and monetary policymakers have said that they will begin to unwind the stimulative policy stances when the […]

Marshall Auerback: Troubles in the EuroZone – Will the Contagion Affect the U.S.?

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. A recent poll by Douglas Schoen and Patrick Caddell suggests that swing voters in the US, who are key to the fate of the Democratic Party, care most about three things: reigniting the economy, reducing the deficit and creating jobs. […]

Was Greece Rescue Futile, and is Portugal Next?

We met last week with a savvy German investor, one who unlike many of his peers, is well aware of the German bank exposure to Greek and other Club Med debt. He argued that Greece will default within six months. That view might have seemed extreme a week ago, but as Wolfgang Munchau points out […]

Is Obama Winning in DC and Losing the Country?

A pair of articles, one at the Washington Post, the other at Politico, look at the significance of continuing slide in Obama’s poll ratings. At the WaPo, pollsters Douglas Schoen and Pat Caddell are firmly of the view that Obama is out of touch with the mood in the heartland, and needs a sharp course […]

The Origins of the Next Crisis

William White, the former chief economist at the Bank of International Settlements (BIS) gave an important speech at George Soros’ Inaugural Institute of New Economic Thinking (INET) conference in Cambridge. While everyone is casting about for the one magic bullet solution which would have prevented this and future crises, he placed the blame for the […]

Gonzalo Lira: “Systemic Contradictions”: The Eurozone De Facto Currency Peg, and the Death Spiral We Are Currently Witnessing

By Gonzalo Lira, a novelist and filmmaker (and economist) currently living in Chile Critics of free-market capitalism, especially of the Marxist persuasion, love talking about its “systemic contradictions”. Especially European critics—they adore using that steam-roller phrase: “systemic contradictions”. It sounds so thrillingly lapidary, so discussion-ending, so terminal. Nothing can escape its grasp, or the base […]

Soros, Galbraith and Stiglitz on resisting inevitability in Greece

Yves is holed up at the Institute of New Economic Thinking (INET) conference in Cambridge. The effort, sponsored by George Soros, is a much needed collaboration of ideas to help prevent a crisis like the one we are now experiencing. She claims they are working hard of course. Hence, her lack of posts. Marshall Auerback […]