Robert Waldmann had a post entitled “How did Lehman manage That?” asking how Lehman’s debt could sell for about ten cents on the dollar. A commenter told me I was confused and that Lehman’s accountants would have warned investors if there was anything, along the line of the things I imagined, lurking in their detailed […]

One Salent Oversight notes:—————–Summary:—————–Low savings rates are the main cause of the current crisis. Moreover,the previous recession caused by the tech boom was also a result of afailure to save. The US economy (and others) have discouraged savings,which has resulted in an overinvestment in high risk ventures (such asasset price bubbles). Had savings rates been […]

rdan(h/t reader Jack) The NYT reports: Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan GreenspanMultimedia Punit Paranjpe/ReutersA LINGERING GLOBAL INFLUENCE An interview with Alan Greenspan, nicknamed the Oracle, was shown live outside the Bombay […]

Robert Waldmann What isn’t going on in financial markets ? There are various theories of the financial crisis which suggest simple solutions and have the only defect that they are fantasies. 1) The only problem is mark to market accounting. Market prices for mortgage backed securities (MBS) are very low because of a panic. Banks […]

Palin’s accent past and present

spencer National debt now exceeds 10 trillion dollars The national debt is now too big for the national debt clock. Way to go Team Bush. Actually, this just demonstrates that the major problem with Sarah Palin is that she governs like a republican. As mayor of Wallisa she: 1. Cut taxes. 2. Spent like a […]

rdan Hat tip K Harris for this link to National Public Radio and this thought as well regarding Tom’s post below: The issue at hand is that Treasury resisted the notion of equity in return for aid all the way along, and now is putting out the word that equity in return for aid is […]

by reader Denis Drew To over-price lower skilled labor or to under-price higher skilled labor — is that the question? Santa Fe’s minimum wage raise to $8.50/hr (now $9.50/hr, soon indexed) lost lower skilled workers a significant number of jobs (8.3%, adjusted for something – nominal employment rose) many to higher skilled replacements, according to […]

by cactus The Flat Tax Revolution – A Brief Second Visit It wasn’t that long ago that folks on the right were crowing about how flat tax fever was sweeping much of Europe and producing monster economic growth. (Examples abound – enter the words “flat tax revolution Europe” and you find about 200,000 hits, most […]