On Friday I noted that Citigroup wouldn’t have reported a profit if it hadn’t been for a $2.5 billion derivatives valuation adjustment “mainly due to the widening of Citi’s CDS spreads.” Citi’s CDS spreads widen when traders think Citi is more likely to default. So basically, Citi was able to report a profit because fears grew that it …
I spent a couple hours this morning listening to yesterday’s JP Morgan Chase earnings call and this morning’s Citigroup call. And I wrote this about it.
In my post Wednesday about asset-price bubbles and income inequality, I cited finance scholar Richard Roll’s 1987 discovery that economic data and news seemed to explain less than 40% of the stock market’s movements. I had totally forgotten about superquant David Leinweber‘s subsequent—and totally brilliant—discovery: that butter …
The FT’s John Gapper thinks it would be a big mistake for Treasury to allow Goldman Sachs to pay its way out of the strictures of the Troubled Asset Relief Program. He writes:
[W]e now know unambiguously that Goldman is a “systemically important financial firm”. In other words, Goldman is too big to fail and would be bailed out by
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There’s been a debate going on for a few years about whether the big rise in income inequality in the U.S. over the past three decades has been at least partly a political phenomenon or purely an economic one. The first camp, whose members include political scientist Larry Bartels and economists Thomas Piketty and Emmanuel Saez (pdf), …
My favorite Ghanaian libertarian think-tanker, Bright Simons, writes:
China isn’t in Africa merely to snap up raw materials, exploit African labor, or build geopolitical influence. Rather, its goals blend a combination of all the above with a need to beta-test future global brands, open new markets, enhance its soft power through
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Back in January, the IRS issued a report (pdf) on the income tax returns of the 400 highest-income taxpayers in the U.S. I missed it when it came out, but I’ve been looking through it and it provides a nice, simple demonstration of the fallaciousness of Ari Fleischer’s argument about the tax burden. Fleischer bemoans the fact that the …
Consumer prices fell 0.4% from March 2008 to March 2009, the first such year-over-year decline since 1955. That’s the headline out of today’s inflation report from the Bureau of Labor Statistics. As with almost all such headlines, though, it’s misleading. The big fall in prices actually came last October through December, as the global …
I was too sick to blog yesterday (big-time congestion + fever + I’m a wimp), and am still too sick to blog much today, but when I saw that the most-viewed piece on wsj.com is another one of Ari Fleischer’s muddle-headed screeds on taxes, I perked up at least a little. Ari Fleischer’s tax ideas always get my adrenaline flowing. His point …
The latest Sports Illustrated has a nice little reminiscence from Jariah Beard about his years of caddying (1979-1982) for Fuzzy Zoeller at the Masters. Before 1983, only Augusta locals were allowed to caddy at the tournament. Beard tells about the fun that was had in 1979, when Zoeller won the tournament on his first try, then
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I heard this on my favorite Dutch radio show a while back, and when I discovered today that it’s on YouTube, I could not but share. It’s the Leonard Cohen song “Dance me to the end of love,” sung by Frisian singer-songwriter Elske de Wall and what appears to be her sister Femke. Sung in Frisian, of course (the new title, “Dunsje my de …
My new column is about the thrilling rebirth of the special drawing right, the currency of the International Monetary Fund. Need I say more?
One expert on the subject who was very helpful, but didn’t make it into the column, was C. Fred Bergsten, director of the Peterson Institute for International Economics. Bergsten was extolling the …
