By Viral Acharya, Professor of Finance, Stern School of Business, New York University, Thomas F. Cooley Professor of Economics, Stern School of Business and Faculty of Arts and Science, New York University, Matthew Richardson, Professor of Applied Economics, Stern School of Business, New York University, Richard Sylla, Professor of Economics, Stern School of Business, New […]
Read more...It keeps getting better. From Bloomberg, we have this tired-looking plaint What were banking regulators doing while some of the biggest U.S. lenders routinely filed false foreclosure documents in local courthouses around the country? …but, since that is Jonathan Weil speaking, there’s a twist: In the case of IndyMac Federal Bank, it turns out the […]
Read more...Barack Obama is purported to have studied the Lincoln, Roosevelt, and Reagan presidencies in depth before he took office, yet he appears to have ignored one of Lincoln’s best known sayings: “You may fool all the people some of the time, you can even fool some of the people all of the time, but you […]
Read more...Today, quite a few commentators fell in with the take of the writeup by Real Time Economics on a speech by Paul Volcker given a conference on macroprudential regulation hosted by the Federal Reserve Bank of Chicago. Its lead-in: Former Federal Reserve Chairman Paul Volcker scrapped a prepared speech he had planned to deliver at […]
Read more...The normally sound Gillian Tett of the Financial Times endorses an idea that is both dangerous and unnecessary, namely, government backstopping of the system of short-term collateralized lending called repo, for “sale with agreement to repurchase.” The problem with her analysis is that her proposal treats symptoms rather than the underlying ailment. It would amount […]
Read more...Tom Adams and I saw an advance screening of the Charles Ferguson film Inside Job, a documentary on the financial crisis, due for theatrical release in New York on October 8. Given how well each of us knows the subject matter, we’re not easily swayed, but I can speak for both of us in giving […]
Read more...Various updates on the possible drivers of the GMAC announcement suspending its foreclosures in 23 states. Max Gardner, a North Carolina bankruptcy attorney who is held in high esteem and is playing a leading role in legal efforts against foreclosure fraud, provided this comment on our earlier post on the GMAC bombshell: I believe this […]
Read more...In case you lost track of this sorry affair, AIG, the biggest ward of the state in human history, continues to get the kid glove treatment. The IMF, doing the dirty work of the Washington Consensus, has repeatedly imposed far more pain on over-indebted countries than US government on the failed insurer. AIG originally agreed […]
Read more...By William K. Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City and author of The Best Way to Rob a Bank is to Own One One of the great advantages of blogs is spurring informative debate. The debates also tend to morph as commentators develop their arguments. I want to […]
Read more...There’s been an interesting dialogue between Streetwise Professor and Deus ex Macchiato on the matter of the practical impact of the pending Basel III rules, which will rejigger, in a pretty significant way, bank capital requirements (see here and here for details). The reason Basel III matters is that the Treasury has been touting it […]
Read more...This post first appeared on September 21, 2007 In an intriguing article today, “The Bank loses a game of chicken,” Martin Wolf, the Financial Times’ chief economics writer, followed the lead of the Bank of England’s Governor Mervyn King in backing down from their shared view that central bankers should be willing to let all […]
Read more...→ Rajiv Sethi Back in 1980, Avraham Beja and Barry Goldman published a theoretical paper in the Journal of Finance that explored the manner in which the composition of trading strategies in an asset market affects the volatility of prices. Their main insight was that if the prevalence of momentum based strategies was too large […]
Read more...One of the minor aspects of the econoblogger session with the Treasury on Monday (more on that shortly) is that several of the invitees said something along the lines of, “You guys did a great job in the crisis.” What is disconcerting is how this view has now become conventional wisdom, despite the panicked Fed […]
Read more...Full disclosure: I’ve known Amar Bhide for roughly 25 years (we both worked on the Citibank account at McKinsey, albeit never on the same project) and although we correspond only occasionally, I continue to regard his as a particularly keen observer and original thinker. He was briefly a proprietary trader, then an associate professor at […]
Read more...It is truly astonishing to watch how determined the economics orthodoxy is to defend its inexcusable, economy-wrecking performance in the runup to the financial crisis. Most people who preside over disasters, say from a boating accident or the failure of a venture, spend considerable amounts of time in review of what happened and self-recrimination. Yet […]
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