Go. Read. US Bank Exposure to Greece, part 3. The FT lets someone from Nomura argue that Kash’s declaration of U.S. bank exposure to Greek default in Part 2 (referenced here, but just go to Kash’s link for the gist) was overstated. Nomura and The FT lose the argument, badly. “Disasters for an economy — […]

Traditionally, non-commercial banking (i.e., everything except savings deposits and consumer loans) was about one of two things: Tax arbitrage or Regulatory arbitrage The rest is window dressing; that is, it was basic financial intermediation, usually for the purpose of helping Corporate and/or High Net Worth clients.* That was until the late 1990s and the Noughts, […]

Cross-posted at The Street Light. Absurd news today from S&P’s credit rating analysts, who have apparently been drinking liberally from the Deficit Crisis Kool-Aid: NEW YORK (MarketWatch) — Standard & Poor’s cut its ratings outlook on the U.S. to negative from stable on Monday, lighting a fire under Washington’s deficit-reduction debate and sending stock markets […]

Crossposted at The Street Light. Well, it seems as if Congressional Republicans are going to propose a complete refashioning of the Medicare program. Specifically, they are going to recommend scrapping Medicare as a provider of health insurance to seniors, and instead replace it with a system that will provide subsidies to individuals who will then […]

Crossposted at The Street Light. There’s been a bit of discussion floating around about whether the US’s deficit and debt situation makes it appropriate to draw comparisons with Greece. Of course, such a comparison is ridiculous for a number of reasons, not least because the US has its own currency. But Greece has been on […]

Crossposted at The Street Light. Last week I took a look at the way that higher labor productivity has not translated into higher worker compensation, particularly during the 1980s and 2000s. This is at odds with classical labor market theory, which suggests that as workers become more productive, their increasing value to firms should cause […]

I’ve been receiving questions about this week’s rather dramatic appreciation of the yen. Central banks around the world have been intervening today to prevent further volatility in exchange rates, but that still doesn’t explain exactly why currency traders have been so eager to buy yen this week. There are rarely easy answers to questions involving […]

Crossposted at The Street Light. Yesterday Ezra Klein had a chart (from a paper by Larry Mishel and Heidi Shierholz at EPI) showing that both private sector and public sector wages have been stagnating for the past several years, and have certainly not kept up with productivity growth. I think it’s useful to look at […]

There’s been a rather silly news item floating around the internets and business press today about the role of government in the US economy. Here’s an example from the Investors Business Daily: Is America Becoming A Welfare Nation? More than one-third of all wages and salaries in this country are actually government handouts. We should […]

Moody’s has downgraded its rating on Greek sovereign debt: Greece debt rating cut further by Moody’s Moody’s has downgraded Greece’s debt to “highly speculative” prompting an angry response from the finance ministry. Greek bonds fell after the rating agency cut its rating from Ba1 to B1. Moody’s cited “endemic tax evasion”, “very ambitious” austerity plans, […]