Archive for November, 2008
Top Five Causes Of The Financial Crisis
1. Alternative Realities: The Black-Scholes Revolution Hatched by two Berkeley finance professors, the Black-Scholes model of pricing options securities took hold in the financial industry in the 1980s. It was known as “Portfolio Insurance” because it purported to free traders of all market risk, at least theoretically. While the
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Throwing Stones At Glass-Steagall
There is so much that all of us can do to make sure another financial crisis of the magnitude we are currrently experiencing (and will continue to experience), does not happen again. The culture of excess, greed, the tyranny of self-interest, and social irresponsibility, are some of the core causes
Obama Beefs
So I’ve got two beefs with Barack Obama’s decision-making these days: First, why hasn’t Barack Obama gone to Georgia to help Jim Martin take down Chambliss in the Senate run-off? The current conjecture is that, one, Obama doesn’t want to risk pie on his face if Martin loses
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Hard to Put A Smile On This One
At a press conference in the early 80s, Sam Donaldson asked Ronald Reagan if Reagan took any responsibility for the continuing recession, to which Reagan responded: “Yes, because for many years I was a Democrat.” The room broke out in laughter. In the 1980 presidential debate, President
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No Reason To Believe
So I just finished listening to Nobel Prize winner Paul Krugman speak on the financial meltdown. (I can’t imagine he’s speaking about anything else these days.) Krugman refers to the so-called “shadow banking system” that has emerged over the years. Banks need not be “big
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Blind Optimism: Is It The End?
I spent the the last hour or so reading Michael Lewis’s brilliant essay entitled “The End” regarding what many are calling the final crash of Wall Street as we know it.
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Bailouts and Rescues and TARPs, Oh My
RHETORIC CHECK: To Bailout or not to Bailout Listen to the language. In my former life I used to work for Frank Luntz, the Republican pollster who created the Contract With America, and he taught me no more important lesson. So: how is the language of “bailouts” and “rescue packages”
The World Ain’t Fair
CitiGroup fails. A couple days later, the government ponies up major relief. Lehman Brothers fails. Same thing. Bear Stearns, same. But when the Big Three automakers are on their last legs, well, they’re going to have come up with a detailed “plan,” whatever that means, if they
The Resurrection of Common Sense
The Employee Free Choice Act (“EFCA”), which makes unionization simpler, died in the Senate last year. Union advocates are hoping Barack Obama can perform some CPR. Obama has stated that if the EFCA comes across his desk, he will sign it into law. Still, union interests probably shouldn’t count
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Health Care: What Can YOU Do?
In 2007, national health expenditures were $2.3 trillion, and are increasing at a rate 2 times the rate of inflation. That’s $7,600 per person. These expenditures represent 16% of the GDP. (The figure is 9.7 percent in Canada and 9.5 percent
