Ideology and Lack of Mathematical Razzle-Dazzle Prevent Economists Accepting the Information Matrix or Understanding Transparency
Since the Great Financial Crisis began on August 9, 2007, I have talked with lots and lots of Economic PhDs. Several of... Read More
Japanese Pension Fund in Vanguard of Rewarding Good Disclosure
Japan’s $1.36 trillion Government Pension Investment Fund (GPIF) is a leader in rewarding companies that provide good disclosure by buying more of... Read More
Deutsche Bank Still Relying on “Trust Us” in Setting up Bad Bank
Ultimately, the opacity of Deutsche Bank and the bad bank it is setting up prevents the market from being able to answer... Read More
“But I trusted Tim [Geithner] …”
In the HBO/Vice documentary Panic, Barack Obama showed just how difficult it is to defend the indefensible. Particularly when he has to defend... Read More
The Myth of Information Overload
Even more than Wall Street, the Priesthood of the Economic PhDs champions greater levels of opacity in the global financial system. Why?... Read More
Morningstar joins rather than disrupts rating firms
Recently, Morningstar announced a large acquisition aimed at making it more competitive with and possibly gain entry into the S&P, Moody’s and... Read More
Opaque Securities and Certificate of Dumb Investment
Bloomberg’s Matt Levine recently wrote about what he calls a Certificate of Dumb Investment that investors should sign before buying certain investments.... Read More
MMT: I say tomaato, they say tomato
In an earlier post, Even with MMT, Economics still struggles with financial crises, I managed to convey much more disagreement with the advocates of... Read More
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