Submitted by DoctoRx, who comments on the economic and financial scene at EconBlog Review. In a few months during what was likely the worst financial crisis of the Great Depression- the tumultuous events of early 1933 culminating in closure of all banks in most states and then FDR’s sweeping bank “holiday”, a man who had […]
Read more...In an about-face, the Administration seems to be getting serous about trying to Do Something about the too-big-to-fail syndrome. Or is it? The proposal comes from Shiela Bair, and does not have the support of the Treasury Department. Curiously, Bloomberg reports that Bernanke has endorsed the Bair plan, which unusually puts him in opposition with […]
Read more...Wellie, we get a bit of cheery news of sorts to take the edge off the sting that Goldman, presumably alive today thanks to the many ministrations of the government, ultimately borne by chumps like you and me, is off again looting making money hand over fist. It appears that quite a lot of Goldman […]
Read more...The Lehman demise refuses to go away. It has come out that the losses appear likely to be $130 billion on what was a roughly $660 billion balance sheet. That is an insanely high level. What has caught my attention from the get-go is that blame was very quickly pinned on the disorderly bankruptcy. While […]
Read more...John Kay comes perilously close to nailing a key issue in his current Financial Times comment, “Our banks are beyond the control of mere mortal” in that he very clearly articulates the problem very well but then draws the wrong conclusion: At Oxford university, I often hear people say there is nothing wrong with the […]
Read more...There are some interesting things one learns in putting together a book. Blogging is a lot like working in watercolors, speed and confidence in execution are key, versus the oil-painting medium of a book. And you learn how many times you wind up scraping the canvas and reworking. I’m up to the sixth revision of […]
Read more...There are times I think I am hopelessly naive. For three years in the early 1990s, I had a cutting-edge Chicago-based derivatives firm, O’Connor & Associates, as a client. They had 750 employees and no customers, at least initially, which gives you an idea of the scale of their business. O’Connor did statistical arbitrage, which […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman has a good piece out today highlighting the differing economic policy agendas of the BRIC group (Brazil, Russia, India and China). In it he suggests CRIBS is a more appropriate moniker for the group as […]
Read more...I am throwing a line of thinking out in the hope of getting reader input. I put a post up a couple of days ago on looting and am still puzzling the question. I believe that deregulation led to looting, in the Akeloff/Romer sense, that people at Wall Street firms were overpaid relative to the […]
Read more...One of the things that has intrigued me about the financial crisis is that it is pretty clear that looting took place at the high end of the financial services industry, yet few have called it by that name, in part because it has been difficult to identify the mechanisms by which it occurred. Looting, […]
Read more...Elizabeth Warren, head of the Congressional Oversight Panel for the TARP, has been a vocal advocate for the need for a financial product safety commission. The notion, which seemed quixotic a few weeks ago, is getting consideration by the Obama Administration. Given how industry friendly Team Obama’s financial services industry measures have been, it runs […]
Read more...An article by Anne Siebert at VoxEU seeks to identify why bankers made such a mess of their companies. As the summary tells us: Greedy bankers are getting most of the blame for the current financial crisis. This column explains bankers did behave badly for mainly three reasons. They committed cognitive errors involving biases towards […]
Read more...Stanford Law Review has a great interview with Warren Buffett’s longstanding partner, Charlie Munger. Munger offers much less corn pone and more direct opinion than Buffett does. The entire piece is very much worth reading, but I wanted to hone in on some key topics. One is the neglect of the role of what amounts […]
Read more...Before anyone gets hysterical, the focus of the efforts by Team Obama on financial services industry pay appears to be to force the industry to stop rewarding undue risk taking. As much as I have been critical of many Administration plans, this, at least in concept, is a good one. Why? Because I sincerely doubt […]
Read more...While I harbor considerable doubts about whether the idea of having a modern version of the so-called Pecora Hearings, the 1930 Senate Banking Committee sponsored probe of the financial services industry, will be as serious and as thorough as it needs to be. The fact that the Pecora initiative got as far as it did […]
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