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Archive for The Financial Crisis

Information? Knowledge? and Wisdom?

Andy Spero | July 18, 2010 | 0 Comment(s) |

Which One (or more) Is (are) Missing?

Peggy Noonan has an excellent column in this weekend’s edition of The Wall Street Journal: Youth Has Outlived Its Usefulness.

In it, she laments the lack of wise old men (and women) in positions of power or near those in powerful positions.

That’s something that we have written about by asking “where have the grownups gone?” (See the first second and third fourth results; we forgot to consider this post now appears at the top of the search results.) In those posts we lamented the

… Read the rest

It’s the Uncertainty, Stupid.

Andy Spero | June 22, 2010 | 0 Comment(s) |

Small version of two very different bell curvesWe’re a couple days late in mentioning it, but if you haven’t seen the excerpt of the new book, Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, by Anatole Kaletsky, we suggest that you read it.  The excerpt, The Benefits of the Bust, was published in this past Saturday’s edition of The Wall Street Journal.

Much of it deals with the inadequacy of economics as a science, including economists inability to say anything relevant about the financial crisis and the implications about various proposed solutions… Read the rest

Financial-overhaul, Bank Ratings & Scenario Analysis

Andy Spero | May 24, 2010 | 0 Comment(s) |

Have Banks or Regulators Required Such Analyses?

There’s an interesting article in today’s edition of The Wall Street Journal with the title, Overhaul Puts Bank Ratings at Risk.

The article explains how the version of the financial industry regulation bill that was passed by the Senate significantly weakens implicit government support for banks that were or may still be presumed to be “too-big-to-fail.” If that version of the bill becomes law “TBTF” will have been transformed to “NTBTF,” depending upon the whims and fears of the regime in charge… Read the rest

The Silliness of Demonizing Goldman Sachs

Andy Spero | April 28, 2010 | 0 Comment(s) |

What is the world coming to when we feel sorry for managers, traders, and structurers at Goldman Sachs?

We haven’t written extensively about financial matters lately, because frankly, when considering whether to write about such topics, we feel like the weatherman, Phil Connors, in “Ground Hog Day.” It’s the same old, same old. (Now, if you folks want to pay for it, we’ll be quite happy to write more, and it would seem new and fresh and exciting. Let us know.)

However, the travesty of the SEC’s fraud case,… Read the rest

Correcting Finance Industry Misconceptions

Andy Spero | March 31, 2010 | 0 Comment(s) |

The April 5th edition of National Review has a three-article, Financial Special section, consisting of:

  1. We Didn’t Deregulate by Veronique de Rugy (not on-line, yet)
  2. Break Up The Banks by Arnold Kling
  3. Resolve to Reform by Stephen Spruiell & Kevin D. Williamson (not on-line, yet)

All are worth reading but for slightly different reasons.

Ms. de Rugy does a very nice job of summarizing the misconception that there was general deregulation of financial firms in recent years. She also makes the point that certain policies and responses… Read the rest

Populism and Prosecutions?

Andy Spero | February 9, 2010 | 0 Comment(s) |

Mere Speculation

We’re reading a new book about the financial crisis that is very thought-provoking. We’ll write more about the book in the coming days and weeks, but while reading it, a rather depressing thought kept popping into our head.

If after Scott Brown’s election victory–and as some pundits predict–the Obama administration plans to veer towards more populist positions and actions, we wouldn’t be surprised to see more indictments of investors and traders who were responsible for large losses at both large banks and at hedge funds during the financial crisis.… Read the rest

How Were the Last Nine Months of 2009 like 1932?

Andy Spero | January 26, 2010 | 0 Comment(s) |

We mentioned the answer to our question in Sunday’s post, Bernanke: No, but it is worth repeating as a stand-alone post.

Many supporters of Ben Bernanke (and other politicians) cite last year’s increase in the stock market as evidence that the he or they “saved the economy” and/or “prevented a depression.”

For those readers who don’t have the percentages memorized, the Dow Jones Industrial Average increased about 20% in 2009. From its nadir early last March, it increased about 61% by year-end. (Yeah, January and February ’09 were particularly… Read the rest

Good (Late) News from the SEC

Andy Spero | January 25, 2010 | 0 Comment(s) |

We Missed It a Few Months Ago

On the front page of the The ‘Money & Investing’ section of today’s edition of The Wall Street Journal, there is an article entitled, At SEC a Scholar Who Saw It Coming.

The article is about Henry Hu, who manages the newly-formed Risk, Strategy and Financial Innovation division at the SEC.

Though he sounds like a good guy, we don’t know much about Mr. Hu, but that’s not why we’re writing. It also mentions that in November, Mr. Wu hired Richard Bookstaber… Read the rest

Bernanke: No.

Andy Spero | January 24, 2010 | 0 Comment(s) |

FWIW: we say no to a second term.

This weekend there are many reports and commentaries regarding the U.S. Senate vote to confirm Ben Bernanke to a second term as the Chairman of the Federal Reserve. For example, see the article Backers Rally to Bernanke in The Wall Street Journal.

Mr. Bernanke neither deserves a second term nor can we, as a nation and economy, afford it.

Don’t Blame Him for any Bubbles

Many commentators, analysts, and economists blame Mr. Bernanke’s (and his predecessor, Alan Greenspan’s) easy money policies for… Read the rest

The Volcker Rule: Obama’s Right…

Andy Spero | January 22, 2010 | 0 Comment(s) |

…To Propose a Ban on Prop Trading at Insured Institutions

We applaud President Obama’s proposal to eliminate proprietary trading at insured institutions. In fact, long-time readers will recall that we first recommended a ban on this site on October 1, 2008–near the height of the financial panic.

Our reasons are simple.

One can argue about the need for federal deposit insurance, but if such insurance exists, we see no reason that tax payers should subsidize risk-taking at insured institutions. If one wishes to benefit as a ward of the state,… Read the rest

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