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

Mashup Post: Two Marks

No original content here, just two posts that make even more sense together: Mark Thoma proves he’s an economist (not just an econometrician) by reminding everyone of the Opportunity Cost of the Oughts from a long-term perspective*:((Rdan…Attribution of the quote is in error due to a format error at Mark’s…the original is from Joseph Stiglitz […]

TARP, Yet Again: Inflationary?

Back in the old days of derivatives (the mid-1980s), there was an international commercial bank that was famous for declaring how much good derivatives had done for it. It was famous because it was common knowledge in the marketplace that the bank would have its swap counterparties “buy out” the positions where it was due […]

Vanilla

Robert Waldmann A proposed reform (already shelved) is to require banks to offer “plain vanilla” products. I am very confused about this proposal, so this is a semi bleg. I can’t see any possible benefit from the regulation (probably because I haven’t read the fine print of the draft bill). My thoughts after the jump. […]

CGI Yesterday: Interlude

I don’t have my notes all together from yesterday, but Lance Mannion hits most of the second half of the day with this, this, this, and this post. Especially check out the last one. One panelist’s description yesterday of putting glasses on a child yesterday was as if it were directly out of the opening […]

$295 Million Would Buy A Lot of T-Shirts

Ken Houghton notes that the first thing anyone learns from Pietra Rivoli’s The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade is how pernicious the U.S. subsidy of its cotton industry is.* Now the WTO has discovered the obvious: American goods will face [$294.7] […]

Mark Cuban Makes the Key Point

Ken Houghton remembers that Warren Buffett famously groused that he pays a lower percentage of his income in taxes than his secretary. Or the person who will come up with an actual cure for a cancer. Mark Cuban takes this one step further, pointing out the obvious: if we want to promote investment, “we should […]

Nails: The 2012 Republican candidate for President?

From Lenny Dyksytra’s letter to friends about his bankruptcy filing yesterday: William McKinley filed for protection while serving as Ohio’s governor in 1893. He was in debt to the tune of $130,000 (an insurmountable sum in those days!) before some friends eventually helped to bail him out. Three years later, he occupied a desk in […]

Ratings, Stocks, and Credibility

There is a reason I never believe people who judge the health of a company by its credit rating: the evidence isn’t there, and everyone in the market knows it isn’t there. Here is a prime example: General Electric (GE; the company that Jack eviscerated) has a AAA credit rating. It is also paying a […]

Reads of the Day for the start of 2009

All (somewhat***) via Mark Thoma: Thomas Frank in the WSJ tells me why I always disagree with Robert (and the Other Economists) on the role of rating agencies: And who makes sure that Moody’s and its competitors downgrade what deserves to be downgraded? In 1999 the obvious answer would have been: the market, with its […]

Whence Fall the Banks of England, England Falls, 2007 version

Shira, the kids, and the m-i-l went to see Mary Poppins on Broadway for the former’s birthday. In this version, the father still works for the bank and is given a choice early on: he can loan money to someone who promises to invest the money in business ventures in Foreign Lands and make marvelous […]