Earlier this week the New York Times ran a story claiming that insiders at the New York Federal Reserve had actually concluded that the Fed did have the authority to rescue Lehman. The implication of the story seems to be that not doing so was a tragic mistake.
In his latest book, Rethinking Housing Bubbles, Nobel Prize winner Vernon Smith, the father of experimental economics, offers a number of lessons that could greatly improve the stability of our financial system.
The well-being of a banking sector depends on the ability of political institutions to limit rent-seeking by populist groups.
In the Dodd-Frank Act, Congress, without irony, decided the best way to end too big to fail was to have a committee of regulators label certain companies too big to fail.
I’m a little behind on my comedy watching, as I get a regular dose just living in Washington DC, but last week comedians John Oliver and Sarah Silverman focused an entire segment on payday lending...
A central flaw in Los Angeles’ logic is that the inflection point in prices came before that in delinquencies.
Compared to most asset classes, CLOs performed well during the financial crisis, even if new issuance fell for a short time following the crisis.
The current reform plan that has garnered bipartisan support, the one proposed by Senators Tim Johnson and Mike Crapo, would wind down Fannie and Freddie and replace them with new entities. In doing so it would also largely codify the Treasury’s zeroing out of Fannie and Freddie’s private shareholders.
Low rates are often defended as “putting money in the consumers’ pocket” but that couldn’t be further from the truth. It simply transfers money from one set of consumers to another.
The Banking Committee approved Yellen 14 to 8, with only one Democrat, Sen. Joe Manchin (D-W.Va.), voting against her and she is likely to be voted on by the full Senate by the middle of December.
Natural disasters illustrate the industry’s ability to manage and absorb large losses. The losses from hurricanes Katrina and Andrew, and the Northridge earthquake, were all comparable to the losses from 9/11, so there is nothing particularly special about the level of terror damage.
We have regularly seen tribes attacked whenever they dared engage in commercial activity — such as selling cigarettes or operating casinos — that does not conform to the prudish tastes of upper-class America.
While Yellen is likely to receive a frosty reception from Republicans, she has a very good chance of garnering the necessary 60 votes needed to achieve Senate confirmation.
If you think bubbles are a great avenue for wealth creation, then Yellen is the Fed chair for you. If you, however, suspect bubbles are damaging to our economy, then you might rightly be concerned that she repeats her San Francisco performance on a national level.
Sadly, most of what's past for financial reform has been useless or outright harmful. The hours put into financial reform should not be our measure of success, but rather the effectiveness of those reforms and their actual relationship to the causes of the financial crisis.
We see what starts to look like a pattern here: downgrade the United States and expect some abuse.
The president wants “no more leaving taxpayers on the hook for irresponsibility or bad decisions,” but then he implies that government should continue to stand behind risk in the housing market.
Since 2010, the number of minimum wage workers has declined by over 800,000. Given the increase in minimum wage in 2009 and the relatively weak labor market, I think it’s a safe bet that most of these workers left the labor force rather than received a big raise.
Setting aside the fact that the government can come take your home, with or without a mortgage, it’s hard to say you really “own” it unless it’s all yours.
Given their role in the companies’ failures, we should encouraging long-time Fannie/Freddie employees to leave, not stay.
Today, at 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for October 24th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 22nd, 2014 | John Ransom
In Other News: Massachusetts School Board Moves to the Right of Democrats - Becomes Socialist | Michael Schaus
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 20th, 2014 | John Ransom