The indispensable Greg Ip, in today’s W$J, tries to explain what makes the Bernanke approach different from the Greenspan one:
The Fed historically has had two major economic duties. Maintaining financial stability is one. Controlling inflation while preventing recession is the other.
To Mr. Greenspan, market confidence and the
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My post Tuesday on the evils of teaser-rate mortgages engendered a lot of comment. This probably had less to do with the actual content of the post than with the fact that it was linked to on the CNNMoney home page, but whatever. It’s a topic folks are interested in these days, for good reason.
Now Harvard economist David Laibson, whom …
In his Maverecon blog, London School of Economics prof Willem Buiter, whose interesting ideas about what central banks should do in times like these have been getting a lot of attention lately, offers an explanation of why financial markets do that voodoo that they do. They’re manic-depressive–or, to use what Buiter calls a “wimpish …
I keep getting offers in the mail from an outfit called Allied Mortgage that says it can cut my mortgage payments in half by refinancing at 6.125%. I don’t see how that’s possible, given that my current rate (on a 7/1 ARM) is less than that. I saw a similar offer in an ad online the other day (I think it was from Lending Tree, but am not …
Bond guru Bill Gross’s suggestion that we need a zillion-dollar federal bailout for homeowners who are having trouble paying off their mortgages is generating all sorts of talk in the econoblogosphere. No one seems to entirely buy Gross’s notion that we need a “Reconstruction Mortgage Corporation” that would presumably buy up troubled …
Gretchen Morgenson has a big piece on Countrywide’s mortgage-lending practices in Sunday’s NYT. She makes them look really bad:
Countrywide’s entire operation, from its computer system to its incentive pay structure and financing arrangements, is intended to wring maximum profits out of the mortgage lending boom no matter what it costs
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I’ll be doing a commentary on PBS’s Nightly Business Report this evening. Actually, I’ve already taped it, but whatever. It’s a shorter version, adapted for TV, of my column in the current Time about the Fed and its role as stopper of modern bank runs. I’ll post the text of it after it airs. If you feel compelled to watch, check your …
In one of the most entertaining of the many entertaining passages in Robert Heilbronner’s The Worldly Philosophers, Austrian-born economist Joseph Schumpeter regales his Harvard students in the mid-1930s with these encouraging words:
Chentleman, you are vorried about the depression. You should not be. For capitalism, a depression is a
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Barry Ritholtz reprints a scary e-mail from a friend in the collaterized debt obligation business (don’t you have a friend in the CDO business?):
I was talking to CDO managers in mid-’05 that were saying how rich sub-prime MBS was and how wrong everyone was for buying that stuff at the spreads they were. To a man, they all agreed they
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My new column is in the issue of Time with Mother Theresa on the cover and online here. It begins:
Much of what Ben Bernanke spends his days doing oscillates between the incomprehensibly arcane and the unspeakably dull. Lately, though, the Federal Reserve chairman has a stark, even exciting task at hand. He’s been imitating Jimmy Stewart
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I checked out Fed Chairman Ben Bernanke’s 2000 book Essays on the Great Depression at the library the other day. It’s not what you’d call a page turner, but it does offer some cool insights into his thinking. It’s a collection of lectures and journal articles, some going as far back as the early 1980s, but as he doesn’t disavow any of …
The collective wigging out of the quantitative hedge funds earlier this month has been one of the most fascinating stories to come out of the market’s summer troubles. Joe Nocera wrote the best layman’s explanation in his NYT column on Saturday (a column that, I feel obliged to note because it makes me sound important, could not have …
