Archive for the ‘Economics’ Category

Paul Krugman wins Nobel Prize

Monday, October 13th, 2008 by BH

Announcement details here. Paul Krugman's academic writing reflected a convergence of theory and a considerable amount of luck. From the early days when John Von Neumann created game theory and John Nash improved upon his ideas, game theory moved quickly through the social sciences. This happened especially fast in economics. ...

How the Credit Crisis could Have Been Avoided

Sunday, October 12th, 2008 by BH

Andrew Gelman, a statistician and political science professor, explains. HT goes to Andrew Gelman, at his other blog.

Easing Entry

Saturday, October 11th, 2008 by BH

In a couple of posts Casey B. Mulligan, an economist at the University of Chicago channels our own AS. Mulligan, like AS, believes we should relax capital requirements for new banks and help expedite the destruction of old banks. Here's AS from way back in July. I did a follow ...

Pushing On A String?

Wednesday, October 8th, 2008 by BH

This is one of those terms that's been getting thrown around a lot lately. So perhaps a little definition is in order. Here's wikipedia's: Pushing on a string is a metaphor for influence that is more effective in moving things in one direction than another. If something is connected to ...

Michael Lewis

Wednesday, October 8th, 2008 by BH

Is leaving Portfolio and The New York Times Magazine, and presumably Bloomberg to take a job at Vanity Fair. This is a major coup for VF since Lewis is one of the best financial writers around. Very interesting stuff (NYO). The article has a brief discussion about some of Lewis' ...

Fear, Supersized

Tuesday, October 7th, 2008 by BH

Bill Gross caputures current market sentiment (Pimco): We are to the point of fearing fear itself. America in all its resplendent free market capitalistic glory is on the auction block with few bidders. How this came to be is obvious in retrospect: too much exuberant leverage, not enough regulation; too strong ...

New Bridges

Monday, October 6th, 2008 by BH

A while back Steve Landsburg wrote (The Atlantic): Banks don't lend their own money; they lend other people's (their depositors' and their stockholders'). Just because the banks disappear doesn't mean the lenders will. Borrowers will still want to borrow and lenders will still want to lend. The only question is whether ...

Experts

Wednesday, October 1st, 2008 by BH

Experts are constantly telling investors what to buy. Sometimes they give us good advice and sometimes not. So surely the fact that there are experts who give investment advice can't explain the trillion-dollar bubble and subsequent meltdown we're now witnessing. The key additional fact is that experts were selling advice ...

Clarity

Tuesday, September 30th, 2008 by BH

Why the vote on the Paulson Plan failed, from Dani Rodrik: It is so obvious that I am puzzled why no-one is talking about it.  If so many House members voted against the plan so as not to run afoul of their local constituents, it must be the case that those ...

Wal-Mart

Monday, September 29th, 2008 by BH

While discussing the financial crisis at lunch today our discussion turned to the giant from Bentonville. You may remember that several years ago banks were freaking out that Wal-Mart might enter their marketplace (BW): The retailing giant's relentless push into financial services is starting to send shivers through the banking industry. ...

Reasons to Scoff at a Bailout

Sunday, September 28th, 2008 by BH

Casey B. Mulligan, now a blogger, writes: The non-financial sector today looks nothing like it did in 1930. The weak correlation between asset prices and non-financial sector performance and the strong profitability of today’s non-financial capital are two good reasons to scoff at the idea that the non-financial sector will collapse ...

You Put Your Left Foot in, You Take Your Left Foot Out…

Saturday, September 27th, 2008 by BH

Ben S. Bernanke jumped into the political fray this week when he urged quick action from Congress to deal with "grave threats'' to the financial system. Now he's trying to jump back out. The Federal Reserve chairman hasn't returned to Capitol Hill after two days of congressional testimony earlier this week. ...

Skepticism

Tuesday, September 23rd, 2008 by BH

Ryan Avent offers lots of wisdom and debunks some of the silliness of David Cay Johnson (the Bellows): But what about things like credit cards and revolving business loans? Look, if we get to the point where banks are restricting basic credit lines on which nearly all Americans depend for use ...

More on the Bailout

Tuesday, September 23rd, 2008 by BH

Russell Roberts and Menzie Chin discuss the Paulson's plan on Minnesotta Public Radio (MPR). Here's Roberts on the role of Fannie and Freddie in our current crisis.  Here's Menzie Chinn on how far housing market prices still have to fall (hint: they're going down for a long while yet.)

The Surge

Monday, September 22nd, 2008 by BH

An interesting program evaluation. (HT)

Executive Compensation

Monday, September 22nd, 2008 by BH

I left work in a hurry today because I was running late for my regularly scheduled guitar lessons. As I ran up the creaky and aged stairs and smelled the musty mix of dust, guitars and old men, I heard a strange discussion. Instead of their normal jam session, these ...

Signs of the Coming Apocolypse?

Sunday, September 21st, 2008 by BH

Via Drudge: The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post. Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - ...

Which One is Not Like the Others?

Sunday, September 21st, 2008 by BH

Against Intellectual Property, by Stephen N. Kinsella (free online). Against Intellectual Monopoly, by Michelle Boldrin and David K. Levine (free online). Free Culture, by Lawrence Lessig (free online). The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives, by Michael Heller (not free online).

Blame

Wednesday, September 17th, 2008 by BH

Michael Lewis must be experiencing deja vu. If you've never read Liar's Poker, now would be the time. From Bloomberg: ``If I knew more I could find someone to blame,'' said Linda Burke, a 57-year-old service consultant at AT&T in Atlanta, speaking, no doubt, for the American people. She'll probably never get ...

Flight to Safety

Wednesday, September 17th, 2008 by BH

Wow. Just wow. Yields for 1 month treasury bills dropped to 0.07% and for 3 month bills the yields fell even farther to 0.03%. Even compared to last week this is an amazing drop and it is even more stark compared to last year, let alone before all of the ...