From the NY Times
Nobody knows anything.]]>
I have said from the outset that the CFMA (Commodities Futures Modernization Act), product of Senator Phil Gramm and the Enron lobbyists, and signed into law by Bill Clinton, were, along with the gross negligence of the ratings agencies, the chief enablers of this entire credit crisis.
GOP, anyone like to step up to the plate for your share in this?
]]>Once the measures fail, the only hope is that Barack Obama will come in and play the role of the IMF: "Here's a bunch of Federal dollars you can have if and only if you change the two-thirds rule and eliminate the Prop. 13 rip-off for business." It might even work.]]>
Since 2007, I have made 17 loans of different sizes through Kiva, 11 of which have been fully repaid, 5 of which are in repayment, and 1 which defaulted. The defaulter did manage to repay 40% of the original principal.
Kiva says that my portfolio default rate is 3.74%, more than the average user's 1.76% (so much for my acumen as a micro-banker). However, I am fairly certain I am still ahead of Countrywide's mortgage default rate by a comfortable margin. My personal portfolio and lender page is at Kiva here. I recommend the experience and Kiva highly.
]]>Fairly strong stuff from Phillips, former Republican strategist turned populist, sounding an awful lot like my pal Al who sends me weekly missives on the imminent collapse of the US financial system.
]]>Let's not be in such a big rush to knock down barriers. The Government's biggest financial mistake of the past generation was to raise deposit insurance to $100,000 while allowing housing S.& L.'s to plunge into commercial lending. That all but removed the element of risk from foolish or corrupt loans and helped bring on the S.& L. debacle.
Beware the slippery slope to crony capitalism...."
That's Safire in a 1998 NYT Op-Ed arguing against the proposed merger of Citibank and Travelers Insurance. His thesis - knocking down the walls between "safe" government-guaranteed banking and risk capital is a really bad idea. A lesson we are now having to relearn.
Thanks to The Big Picture for the pointer,.
]]>Animal Spirits by UC Berkeley economist George Akerlof and Yale economist Robert Shiller is no less than an attempt to wholly reformulate our understanding of economics through the lens of behavioral economics. More than a little cumbersome in its writing (as with prior Shiller books), it offers so far (I am on Chapter Three) fascinating and even groundbreaking insights into the likely role of consumer confidence and fear in the rise and fall of economic cycles. Written in the heat of the current economic crisis, the book promises to address remedies for how to get us out of this mess. Shiller is one of our best contemporary economists (as is Akerlof) and strikes a very reasoned balance between the competing pulls of the Chicago Classical and neo-liberal Keynesian schools of economic thought.
]]>In light of the multi-billion dollar frauds perpetrated on investors by Bernie Madoff and Sir Allen Stanford (pictured), the WSJ's "Wealth Blog" recalls this neglected but good old-fashioned rule of thumb.