As a follow-up to my recent post about recessions and the yield curve, reader Joan F. points us to a piece by the FT’s James Mackintosh. The money quote: [T]hose keeping faith in recovery also point to the fact that the yield curve has not inverted – 10-year bonds still yield 2 percentage points more [...]
Posts Tagged ‘Finance’
Another Observation on the Yield Curve
Posted in Finance, Microeconomics, tagged Finance, Interest Rates, Macroeconomics, Recession on August 29, 2010 | 1 Comment »
The Yield Spread and the Odds of Recession
Posted in Finance, Macroeconomics, Uncategorized, tagged Finance, Interest Rates, Macroeconomics, Recession on August 26, 2010 | 2 Comments »
Worries about a double-dip recession have spawned much economic commentary … and a humorous country and western song. So how likely is a return to recession? Researchers at the San Francisco Fed took a crack at this question a few weeks ago. Their answer? It depends. When they used a traditional model based on the [...]
Investors Should Be Prepared to Face Financial Oppression
Posted in Budget, Finance, International, tagged Bonds, Budget, Debt, Deficit, Finance on August 25, 2010 | 3 Comments »
That’s the conclusion of a new report by Morgan Stanley analyst Arnaud Mares. And what, you may ask, is financial oppression? Speaking from the perspective of investors in sovereign debt, Mares defines it as “imposing on creditors real rates of return that are negative or artificially low.” Which doesn’t require outright default. Instead, it [C]an [...]
House Prices: Demographics Giveth and Taketh Away
Posted in Finance, Macroeconomics, tagged Finance, Housing, Macroeconomics, Pensions on August 6, 2010 | 6 Comments »
Over at the Bank for International Settlements, Elod Takats has a new working paper that examines how demographics may affect asset prices (ht Torsten Slok). As he notes, standard economic theories suggest that aging will lead to lower asset prices. In an overlapping generations model, for example: [T]he young save for old age by buying [...]
The Cocoa Corner: Is Choc Finger Down $150 Million?
Posted in Finance, tagged Cocoa, Finance on July 25, 2010 | 1 Comment »
In a front page story on Sunday, the New York Times suggests that commodity investor Anthony Ward may be trying to corner the cocoa market. Ward–known as Choc Finger–reportedly purchased 241,000 tons of cocoa, about 7% of the world’s annual crop. The price tag? A cool $1 billion. The NYT suggests that Ward is doing [...]
What To Do With Fannie and Freddie?
Posted in Finance, Regulation, tagged Fannie Mae, Finance, Freddie Mac, GSE, Housing on July 19, 2010 | 5 Comments »
The Economist asked several experts to recommend options for resolving Fannie Mae and Freddie Mac, the two failed mortgage giants. In addition to comments, the magazine’s web site allows users to recommend responses they like. It’s hardly scientific, but since the rankings (as of 9:15pm eastern time) work to my favor, let me rank them [...]
Fannie & Freddie Reform Gets a Boost from the Washington Post
Posted in Budget, Finance, Regulation, tagged Fannie Mae, Finance, Freddie Mac, GSE, Regulation on June 5, 2010 | 1 Comment »
Sunday’s Washington Post has an encouraging editorial about the Fannie Mae and Freddie Mac reform proposal that Phill Swagel and I recently put forward. An excerpt: [Their plan would] abolish the most toxic features of the old “government-sponsored enterprise” model. In particular, the plan would get Fannie and Freddie out of the business of directly [...]
What Should We Do with Fannie and Freddie?
Posted in Budget, Finance, Regulation, tagged Fannie Mae, Finance, Freddie Mac, GSE, Regulation on May 23, 2010 | 8 Comments »
The past few years have demonstrated that Fannie Mae and Freddie Mac, the two mortgage giants, were built on a flawed business model. One that paired private profit in good times with taxpayer burdens in bad times; created systemic risks to the world financial system; concealed the degree of federal involvement in mortgage markets; and [...]
Advice to Nasdaq and the NYSE: Cancel Only 90% of the “Erroneous” Trades
Posted in Finance, Microeconomics, Uncategorized, tagged Finance, Incentives on May 9, 2010 | 4 Comments »
Nasdaq and the New York Stock Exchange have both announced that they will cancel many trades made during the temporary market meltdown between 2:40 and 3:00 last Thursday afternoon (see, for example, this story from Reuters). These “erroneous” trades include any that were executed at a price more than 60% away from their last trade [...]
The Looming Budget Battle over the Bank Tax
Posted in Budget, Finance, Politics, tagged Banks, Budget, Deficit, Finance, TARP, Taxes on May 4, 2010 | 1 Comment »
Treasury Secretary Tim Geithner appeared before the Senate Finance Committee today to push the Administration’s proposal for a Financial Crisis Responsibility Fee, more commonly known as the Bank Tax. The purpose of the fee is to [M]ake sure that the direct costs of TARP are paid for by the major financial institutions, not by the [...]
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