Relevant and even prescient commentary on news, politics and the economy.

How did Lehman Manage That ? II

Robert Waldmann A year and a half ago I speculated as to how Lehman had managed to get it’s unsecured debt to be worth only 12 cents on the dollar. With my tinfoil hat firmly on, I wondered if they had written CDS on themselves. I may just be demonstrating my ignorance of the law […]

Final destination “rising public deficits” with a stopover in “falling public deficits”

Brad DeLong and Mark Thoma posit that a falling US public deficit is bad news – they are right! Deficit hysteria is now mainstream thinking, while the more appropriate hysteria should be “jobs hysteria”. How in the world is nominal income growth expected to finance a drop in consumer debt leverage if the government supports […]

Card fee games interactive

The battle over credit and debit card “swipe fees” that has been raging on Capitol Hill for the past 5 years will be heating up again soon. The credit card industry makes $125 million a day in swipe fees, so it is obvious why they are fighting to protect this “secret tax” on consumers and […]

Financial Arson Watch

Robert Waldmann Is Jim Puzzangera of the Los Angeles Times insinuating what I think he’s insinuating ? Before Washington Mutual collapsed … its executives knowingly created “a mortgage time bomb” by steering borrowers to subprime mortgages and turning the loans into securities the company knew were likely to go bad…“At times, WaMu selected and securitized […]

The PIIGS Problem: Maginot Line Economics

by Marshall Auerback, Fellow and Contributor to the Roosevelt Institute’s New Deal 2.0 Marshall Auerback warns that Germany’s obsession with a defense against the external threat of inflation is blinding them to the real risks facing Europe. The Maginot Line, named after French Minister of Defense André Maginot, was a line of defenses which France […]

Thoughts on trade policy and pegs

Lifted from comments. Vtcodger summarizes his thoughts on a layman’s approach to trade and trade policy: 1. It’s pretty clear that there is no protocol for determining if a currency is under or over valued relative to another or by how much. It’s all guesswork. 2. Foreign Exchange probably is not a marketplace that is […]

Macroeconomics: en route

The Institute for New Economic Thinking (INET) hosted its inaugural conference this weekend at King’s College Cambridge, an experiment of sorts. I had the pleasure of attending the conference, my first time to Cambridge. John Maynard Keynes wrote his *General Theory* at King’s College. And as if that wasn’t enough, I dined with blogging legends, […]

China-s march trade deficit-What does it mean?

China’s March trade deficit Patrick Chovanec on Seekingalpha asks the basic question on the direction Chinese policy makers will take regarding the currency question, but the underlying question remains unanswered… What tipped this month’s figure from a marginal surplus to a deficit was a surge in imports, up 66% from last year. But it’s going […]