Robert Waldmann The second of three parts of Dennis and O’Harrow’s series on the downfall of AIG introduces two new features—credit default saps and Joseph Cassano. Together the two managed to bring down AIG. Thus far we have only read about how AIG got into the business of writing CDSs — it seemed too good […]
Robert Waldmann Over at the Washington Post, Robert O’Harrow Jr. and Brady Dennis have a fairly interesting first of 3 articles on what went wrong at AIG. Of course, they tend to stress personalities and personal conflicts, but they do slip in some good points about economics. I’d say the key bit was that AIG […]
Robert Waldmann Now that the crash has come, Robert Shiller’s editor convinced him to write another book to cash in on the fact that he predicted the crash in the second edition of Irrational Exuberance so he wrote “The Subprime Solution”. Smart move. A less comprehensible part of the Princeton University Press publishing strategy was […]
Robert Waldmann In the Washington Post Jane Black has an interesting article on an interesting policy proposal — Agsec Tom Vilsack is opening a discussion of whether federal nutrition programs can be used to encourage (or force) people to eat healthier food. The argument for pro is that obesity is a terrible problem in the […]
Robert Waldmann You knew it was coming. Hedge funds are getting public help too. I’m not waiting for people who argued against regulation on the grounds that hedge funds are lightly regulated (except for the little rule that they can only take money in chunks of 100 million) and doing fine to uhm revise their […]
Robert Waldmann Waxes poetic about the lost credibility of the AAA rating. For possible comic value I share my reflections. What went wrong with the ratings agencies ? I think the central problem is that the ratings agencies long provided a service of immense value to society, and were paid a tiny fraction of that […]
Robert Waldmann gives advice to libertarians, free market fanatics and Republicans on how to blame the financial crisis on government regulation. Quite frankly, their efforts so far have been pathetic — Let’s pretend that Fannie Mae and Freddie Mac lead the way in sub-prime mortgages which were orginally defined as mortgages that they wouldn’t touch. […]
Robert Waldmann According to Ezra Klein (who is very gentle in his criticisms) Summers wrote the following As for [Milton] Friedman — I’m not so sure he looks bad. What is most screwed up today? GSEs, Citibank, regional banks. What is most regulated? Same list. What is least screwed up? Hedge funds and the like. […]
The big news on the blogosphere today concerns parking meters in Chicago. Matt Yglesias is thrilled. Kevin Drum less so. Drum writes A private company has agreed to give City Hall an upfront payment of almost $1.2 billion to run Chicago’s parking meter system for the next 75 years. 75 years seems a wee bit […]
By Robert Waldmann Felix Salmon explains how to make a synthetic bond. you buy a synthetic IBM five-year bond instead, taking advantage of the much more liquid CDS market. Essentially, you take the $100 million that you were going to spend on IBM bonds, and you put it into a special-purpose entity called, say, Fred. […]