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

The purpose of government debt…

An important post from Izabella Kaminska at FT Alphaville and recommended reading (h/t rjs):  On the new purpose of government debt –   Frances Coppola has whipped up an absolutely fabulous commentary on this Bank of Iinternational Settlements working paper on safe assets, which cuts straight to the point of. As she neatly expresses, in our new […]

Trade and Development

Trade and Development Run 75411 picked up this recent report over at Economists View where someone (Goldilocksisableachblond?) pointed to a recent UN report TRADE AND DEVELOPMENT REPORT, 2012 Run says: There are some interesting comments within the Overview to the much longer report, which I found germaine to what is happening in the US and […]

Populist rehetoric for the election campaign

Via The Dailey Beast is a link to Lehman Brother’s e-mails and documents and an unanswered question for investors and the public With the Occupy protesters resuming battle stations, and Mitt Romney in place as the presumptive Republican nominee, President Obama has begun to fashion his campaign as a crusade for the 99 percent–a fight […]

Where Has All The Money Gone, Part II – Finance Sector

In Part I we saw that labor’s earnings have lagged far behind GDP growth.  (More on earnings stagnation here) Meanwhile, corporate profits have grown at a rate that, until recently, increased over time, and they are now at a historically high fraction of GDP.Here is a specific look at the Finance Sector. The graph shows […]

A Billion Here, A Billion There…

This is why Andrew Leonard (h/t Yves Smith) gets paid for blogging and I don’t. He tries to do the impossible: make sense out of Michelle Bachmann’s “economics“: 1) The interest can easily be paid for … Bachmann is making the argument here that the U.S. can choose to pay its creditors — the various […]

Consumption and compensation: explicit and implicit wealth effects in finance

Readers of this blog know that I am in finance, specifically global fixed income. This blog post covers wealth effects in the financial industry, which is a relatively dominant share of total US compensation, 7.3% in 2009 and likely higher now (data are truncated at 2009). My view is that economists underestimate the wealth effects […]

How We Got Here, and Why We’re Not Getting Out, in One Paragraph

The NYT pretends that the Cuomo/Rattner battle is about personalities, but briefly let’s the mask slip: Neither side seems willing to budge, each insisting he is the wronged party: the attorney general feels deceived and affronted, and the Wall Street money manager feels persecuted for conduct he views as standard business practice. “‘Feels’ deceived and […]

In Other News, 90% of VeloNews Readers Consider Themselves Above-Average Cyclist

Floyd Norris discovers a mathematical impossibility: Asked to rank, on a scale of one (excellent) to five (poor), the ability of their board’s compensation committee to “effectively manage C.E.O. compensation, 83 percent of the directors chose one or two, and only 4 percent picked four or five. But asked, “In general, do you believe U.S. […]

The Gift that Keeps on Giving

During the discussions about the Fannie Mae project I still regret having turned down, one of the topics was which security would be better for a portfolio (assuming their risk-adjusted prices provided the same value): a four-year-old MBS or a seven-year-old MBS? I noted that the four-year-old MBS provided more potential upside but came gradually […]

Three to Read for the Solvency Crisis

Simon Johnson on the possible consequences of Goldman Going Greek. Economics of Contempt explains why economist John Cochrane should not be allowed to talk about finance. (Bonus coverage: EofC’s previous piece on John Taylor) Alea’s jck on how all the talk about risk management became mainstreamed.