Assistant Professor | Finance, Real Estate, & Law | Cal Poly Pomona
Note that MF Global apparently used repo financing to move those high-risk bonds off its balance sheet, making its capital position look better than it was. Hmm. Didn’t Lehman also use the artifice of repo financing to dress up its balance sheet? Why don’t accountants fix this stuff?
— Sheila Bair (former FDIC Chairwoman)
A lot of readers want to know what I think about the financial regulation bill that Congress passed. Unfortunately, I’ve been too busy traveling to read it or keep up with this week’s commentary. I’ll address it in more detail in the coming weeks and months. For now, the best I can do is repost the two most important columns I’ve written during the regulation debate with a brief follow-up on whether this bill addresses those issues. Continue reading “We’ve Only Just Begun”
10. Why Cap-and-Trade Should (and Does) Have Appeal to Politicians — Robert W. Hahn & Robert N. Stavins, The Complete Guide to Modern Day Climate Change — Scott A. Mandia, and Come On! You Don’t Give the Same Discount Rate to Insurance as Stock, and That Includes Global Warming Insurance — Richard H. Serlin
9. Return of the Death Squads — Jeremy Kryt and Are Aid Donors Now Running Haiti? — Daniel Altman
8. Nukes for Sale — Jeremy Bernstein and A New Start — Tara McKelvey
7. Why Do Harvard Kids Head to Wall Street? An Interview with an Ex-Wall Street Recruit — Ezra Klein
6. Cruel Ethiopia — Helen Epstein and The State of Liberal Democracy in Africa: Resurgence or Retreat? — Tony Leon
5. The Myth of a Kinder, Gentler War — Michael A. Cohen and Army Researchers: Why the Kandahar Offensive Could Backfire — Nathan Hodge
4. Chris Dodd’s Carve-Outs for Cronies — Mark A. Calabria and Big Business Pleads for Loopholes in Financial Regulatory Reform — Steven Pearlstein
3. FDIC Rebuts Inaccurate Op-Ed and Final Financial Reform Push — Christopher Papagianis
2. Six Doctrines in Search of a Policy Regime — Paul Krugman, Pesos, Ponzi and Financial Sector Profits — Paul Krugman, and Minsky vs. Krugman — Arnold Kling
1. Sex, Drugs, and HIV: Let’s Get Rational — Elizabeth Pisani and The Pay-Any-Price Principle — David Sirota
BONUS: Bank Regulation: Strict Liquidity Thresholds Needed — Anthony W. Orlando
10. The Wonderful “Failure” of the Milwaukee Voucher Program — Scott Sumner
9. Why Immigration Can’t Save Social Security — Andrew G. Biggs
8. The PIIGS Problem: Maginot Line Economics — Marshall Auerback
7. Bye-Bye, Global Cooling Myth: Hottest March and Hottest Jan-Feb-Mar on Record — Joseph Romm, Record Atlantic SSTs Continue; Very Active Hurricane Season Foreseen by CRU and TSR — Jeff Masters, and Newsweek Gets Coal Terribly Wrong — Daniel Stone
6. How Mathematics Might Have Caused the Financial Crisis — Mark Thoma and The Non-Existent Hand — Joseph Stiglitz
5. The Price of Assassination — Robert Wright and Gary Hart
4. Hilda Solis: Labor’s New Sheriff — Esther Kaplan and Cui Bono? — Kevin Drum
3. Why Cap-and-Trade Should (and Does) Have Appeal to Politicians — Robert W. Hahn & Robert N. Stavins, The Complete Guide to Modern Day Climate Change — Scott A. Mandia, and Come On! You Don’t Give the Same Discount Rate to Insurance as Stock, and That Includes Global Warming Insurance! — Richard H. Serlin
2. The Myth of a Kinder, Gentler War — Michael A. Cohen and Army Researchers: Why the Kandahar Offensive Could Backfire — Nathan Hodge
1. FDIC Rebuts Inaccurate Op-Ed and Final Financial Reform Push — Christopher Papagianis
BONUS: Change We Can Believe In — Steven Strogatz
The Federal Reserve just can’t catch a break.
Back in 2001, the Fed caught hell for allowing the dot-com bubble to escalate so steeply. For the following two years, it found itself between inflation hawks who worried about historic low interest rates and deflation hawks who thought high unemployment was a harbinger of Japan-style depression.
After giving the Fed a breather for a few years, observers jumped on them in 2007 for ignoring warnings about predatory lending, in March 2008 for fostering moral hazard with the Bear Stearns deal, in September 2008 for crashing the economy by letting Lehman Brothers fail, and in the rest of 2008 for lowering interest rates too slowly before and during the crisis. In 2009, they were sandwiched between economists who wanted more aggressive, “unconventional” monetary policy and those who cautioned against loading up the Fed’s balance sheet with dangerous assets. Continue reading “Between a Rock and a Hard Place, But It Didn’t Have to Be This Way”