Some reformers have argued that we are at the end of a regulatory paradigm and need to consider fundamental change in securities laws. A major obstacle, given that capital markets are now global, is the need for greater international cooperation and possibly even a new international body. It turns out some foreign regulators are already […]
Read more...Normally, I have the highest regard for Martin Wolf, the Financial Times’ lead economics writer. He is forthright, data-driven, articulate, sober, and insightful. However, I take issue with his current article, “The Federal Reserve must prolong the party,” and see its failings as symptomatic of the state of economics. In brief, Wolf argues that the […]
Read more...A Bloomberg story reports that large corporate law firms such as Kirkland & Ellis and Jones Day are facing not merely pressure, but explicit client demands, to send junior level work overseas. This is a more troubling development than might appear obvious at first blush. This sort of behavior confirms Princeton economist Alan Blinder’s views […]
Read more...The UK’s Times, in “The Kimono Traders,” gives a detailed portrayal of the activities of Japan’s army of retail currency traders, who are overwhelmingly female. They also happen to be aggressive and confident speculators, and control enough in the way of financial assets so as to dominate the activities of foreign institutional investors who are […]
Read more...Apologies to be somewhat late to this item and more terse (and spare on links for some of the arguments) than I’d normally be (I’m at sea and the satellite connection is pricey). Monday, the Financial Times reported that a poll it commissioned jointly with Harris found widespread international opposition to globalization, as well as […]
Read more...Although I haven’t followed the debate over New York-London market competitiveness that closely, it was clear when the study on the US’s standing was commissioned, the sponsors already knew what answers they wanted to report, and emasculating Sarbanes-Oxley (Sarbox or SOX) was an idee fixe. It didn’t seem to occur to people like Hank Paulson […]
Read more...Reuters tells us that hedge funds that had previously steered clear of the Mexican mortgage backed bond market, deeming it to be too small, are now stepping up their investments there in the wake of US subprime problems. It won’t take much in the way of capital inflows to lower interest rates of Mexican MBS, […]
Read more...Has the Murdoch era already begun? Two days in a row we have had page one stories in the Wall Street Journal that managed to skew the facts. Today’s piece, “Foreign Investors Face New Hurdles Across the Globe,” is misleading in a minor and a major way. The minor way is likely to be apparent […]
Read more...The Bear Stearns/CDO drama has taken attention away from other worrisome conditions in the economy, and the biggest one is “global imbalances,” which is shorthand for the US running continuing, large current account deficits that are financed for the most part by foreign central banks, particularly those of China, Japan, and Saudi Arabia. We’ve lived […]
Read more...A bit of good news for the beleaguered American white collar worker: wages have gone up so much in India that “offshoring,” or moving functions overseas, looks like a losing proposition when all costs are factored in. From “Bangalore wages spur ‘reverse offshoring’” in the Financial Times: The rising cost of paying engineers in Bangalore […]
Read more...The concept that cheap imports result in job losses should be a no-brainer, but it is still greeted with considerable resistance in some circles. Let’s be clear on a few points: while open trade in theory creates benefits to all parties, the system we have isn’t open trade, but managed trade. Most other countries negotiate […]
Read more...Dani Rodrik posted the findings of a paper by Anna Maria Mayda, Kevin O’Rourke, and Richard Sinnot that concludes that that public has less protectionist leanings in countries with a larger government sector (which presumably means more social services). Rodrik was surprised by their conclusion. I am surprised that Rodrik is surprised. Martin Wolf, the […]
Read more...One of the hopes, or more accurately, fantasies of a few months ago was that increased business investment would offset slowing consumer spending. This forecast defied basic logic. Why would businesses take on more risk if consumer buying, the big driver of the economy, was sluggish? One would expect lower rather than higher capex. And […]
Read more...An interesting shift is taking place in the economics world. Not so long ago, anyone who had anything to say against free trade was dismissed as being economically illiterate. In a surprisingly short period of time, the consensus seems to be shifting towards a willingness to admit that while free trade produces substantial benefits in […]
Read more...Martin Wolf has an excellent story today in the Financial Times, “Unfettered finance is fast reshaping the global economy,” in which he describes the change from “managerial capitalism” to “global financial capitalism.” Wolf takes pains to avoid taking sides on whether this development is a good thing or a bad thing, but one senses that […]
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