Casey Mulligan's post, on the liquidity trap argument, is spot on. Here's another simple thought experiment. Let's say that, for reasons of technology, currency disappeared. All transactions would be made with POS or cell phones, backed by interest-bearing assets, in one form or another. You might think that's unlikely today but [...]
NY Fed economist Erkko Etula finds that he can predict oil prices using the volume of broker-dealer financial assets. Washington University Professor James Morley and separately Kansas City Fed economist Todd Clark haven't given up on the Great Moderation. My colleague Eli Berman discusses his book Radical, Religious,' [...]
The Austrian government has nationalized the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing power parity, an American HGAA [...]
Foreigners bought a net $20.7b of longer term US assets in Oct, below forecasts of $37.1b, and about half the level seen in Sept. Treasury purchases totaled $38.9b down from $44.7b in Sept. Net selling in government agency paper totaled $5.6b, up from $1.8b in Sept. Foreigners sold corporate debt [...]
What's the correlation between wealth and risk appetite? I suspect that it's somewhat bell-shaped: when you're very poor you can't afford to take any risks, while if you're entering the middle classes you often feel that you have to take risks, especially with your retirement assets, if you're going to [...]
Holidays and taxes are the perfect package, right? OK, maybe not.
But with all the seasonal festivities to distract us, it's easy to put off making some tax moves that could help cut your 2009 IRS bill or reduce your 2010 tax liability.
Well, Don't Mess With Taxes wants to help.' [...]
Here is a graph of bank failures, by number of institutions and assets, from the December Congressional Oversight Panel’s Troubled Asset Relief Program report. (ht Catherine Rampell): 
[...] 
As shoppers were emptying their purses on Black Friday bargains, Dubai’s attempt to reschedule its debt roiled financial markets, plunging risky assets into the red. The government of Dubai requested a six-month payment freeze on the $59 billion debt issued by Dubai World – a state-owned conglomerate that has become [...]
Words from the (investment) wise for the week that was (November 23–29, 2009)
As shoppers were emptying their purses on Black Friday bargains, Dubai’s attempt to reschedule its debt roiled financial markets, plunging risky assets into the red. The government of Dubai requested a six-month payment freeze on the $59 [...]
A number of readers wrote me this morning and asked what I thought of Paul Krugman's column today. Krugman writes:
As Gary Gorton and Andrew Metrick of Yale have shown, by 2007 the United States banking system had become crucially dependent on “repo” transactions, in which financial institutions sell assets [...]
Here’s a letter that I just sent to the New York Times:
Paul Krugman supports a “Tobin tax” as a means of reducing speculation (”Taxing the Speculators,” Nov. 27).
Bad idea. Speculators buy assets only when they predict that these assets’ prices will rise; speculators sell assets only when they predict [...]
In lieu of a Thanksgiving post, I give you this excellent thread, where you can enjoy JKH schooling me on the importance of real assets while the charming Nick Rowe avoids being schooled at all. Read all the comments, they are worth it. [...] The Fund seeks to provide qualified investors with an opportunity to achieve long-term capital appreciation through investment in Emotional Assets. Its objective is to deliver a stable target growth rate of 15% per annum, with predictable volatility - at the same time preserving capital.
Words from the (investment) wise for the week that was (November 16 – 22, 2009)
Stock markets succumbed to a bout of profit-taking last week, sparked by concerns that the rally has overshot the pace of economic recovery. Riskier assets were showing signs of fatigue as the US dollar – [...]
WHEN last we checked in on Bill Gross, he was writing about, um, death, before telling us all that assets have way over-performed over the past 50 years. In his latest missive, [...]
Would you take investment advice from this man?
WHEN last we checked in on Bill Gross, he was writing about, um, death, before telling us all that assets have way over-performed over the past 50 years. In his latest missive, by contrast, Mr Gross is merely rewriting history:My point [...]
What are the consequences of allowing multi-billion-dollar systemically important multinational corporations to report their assets using proprietary mark-to-model tools involving discredited Monte Carlo simulations? I think we all know the answer to that one. But unbelievably, after such shenanigans contributed enormously to the greatest financial meltdown in living memory, the [...]
