Lawrence Summers and Ten Years Later
Professor Summers took on the task of defending the indefensible. Naturally, he, like the policies he promoted and supported, failed. He starts... Read More
It Takes A Model
The Economics profession’s obsession with mathematical models makes it incapable of addressing economic topics that are too difficult to model. The classic... Read More
Stress Tests and the Black Hole Surrounding Derivatives
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Regular readers know I have been consistently critical of the Office for Financial Research. Today, courtesy of Pam and Russ Martens, it... Read More
The Arsonists’, aka The Committee to Save the Banks, New Book: Firefighting
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The Committee to Save the Banks (Hank Paulson, Ben Bernanke and Tim Geithner) is out with a new book defending their mismanagement... Read More
Opacity, Derivatives and Financial Crises
In a terrific article, Pam and Russ Martens highlight why opacity is the necessary condition for a financial crisis and how nothing... Read More
Paul Volcker on Why Regulations are Not a Good Substitute for Transparency
In the 1930s, policymakers faced a decision on how to prevent future financial crises and another Great Depression. They could redesign the... Read More
Opacity in the Financial Markets is the Toxic Side Effect of Information Asymmetry
Wall Street bankers know they make more money selling high margin, opaque products (like structured finance securities) rather than low margin, transparent... Read More