For the past three years, stock markets have been either placid or up. That is especially true of U.S. stocks, but global markets have largely followed suit. Bonds have been similarly subdued. Over the past two weeks, that calm has been shattered.
Read moreGreenberg’s Folly
Maurice “Hank” Greenberg, the former CEO and one of the largest shareholders of the American International Group, claims that the $180-billion federal bailout of AIG in 2008 actually cost AIG shareholders tens of billions of dollars.
Read moreNaomi Klein Is Wrong
The gathering of delegates in New York last week for the latest and likely futile installment of climate talks at the United Nations prompted a new round of familiar questions: Why have the governments of the world so far been unable to stem climate change?
Read moreWhy Indie Bookstores Are on the Rise Again
The recent news of the opening of an independent bookstore on Manhattan’s Upper West Side was greeted with surprise and delight, since a neighborhood once flush with such stores had become a retail book desert. The opening coincides with the relocation of the Bank Street Bookstore near Columbia University, leading the New York Times to declare, “Print is not dead yet — at least not on the Upper West Side.”
Read moreSubprime Loans Are Back!
Five years after the worst of the financial crisis, subprime loans are creeping back, this time primarily in the form of auto loans. As U.S. auto sales have surged, credit standards have moved lower, with more than a quarter of all auto financing now classified as subprime.
Read moreThe Fed Is Not As Powerful As We Think
This past week marked the annual gathering of bankers, financial officials, and other economic experts hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming. On Friday, Fed Chair Janet Yellen and European Central Bank head Mario Draghi both spoke; in a slow week for the markets, these speeches received the bulk of the econ media’s attention, and Yellen’s remarks were heralded for days as the week’s major financial event.
Read moreAmericans’ Outlook on the Economy Just Doesn’t Square With the Facts
Six years after the beginning of the financial crisis of 2008–2009, the best that can be said about the public mood in the United States is that people are no longer catastrophically pessimistic. Instead, they are deeply pessimistic.
Read moreDouble Default
n July 30, Argentina failed to make a payment on some of its outstanding sovereign debt. Which means that for the second time since 2001, Argentina has done what is increasingly rare for sovereign countries in the world today: defaulted on its debt.
Read morePunitive Damages
ast week Citigroup finally reached a settlement with the U.S. Department of Justice over shoddy mortgage securities transactions in the years immediately before the 2008–2009 financial crisis. The bank agreed to pay $7 billion. That follows a $13 billion settlement paid last year by JPMorgan Chase & Co., and comes just as Bank of America is negotiating a settlement with the Justice Department sure to top $12 billion.
Read moreDon’t Kill the Export-Import Bank
ashington politics may be considerably calmer than in recent summers (remember the crisis and credit downgrade of 2011?). But there remain simmering tensions looking only for an appropriate outlet. Over the past few weeks, the normally quiet Export-Import Bank, whose existence is likely a mystery to the vast majority of citizens, has become that outlet.
Read moreHow India’s Economic Rise Could Bolster America’s Economy
In the coming weeks, the new government of Indian Prime Minister Narendra Modi—elected with a huge mandate and parliamentary majority in May—will release its first budget. Modi campaigned on a program of radically reforming the Indian economy, and this budget—and indeed his entire economic program—is hotly anticipated.
Read moreNo Sex, Please, We’re French
The government of France has just made what on the face of it appears to be a nonannouncement announcement: It will not include illegal drugs and prostitution in its official calculation of the country’s gross domestic product.
Read moreEasy Money
In the past few months, stock markets around the world have continued to rally modestly while bond yields around the world have continued their quiet decline. This is not what most expected, especially after December, when the Federal Reserve began paring back its hypereasy money policy of “quantitative easing.”
Read moreIn the Context of No Context
Twenty-five years ago, China made a choice. Rather than embrace the demands for greater political openness emanating from the students and protesters camped in Beijing’s Tiananmen Square, the leadership of the Communist Party decided to crush the protests with lethal force on June 4, 1989, leading to hundreds and perhaps thousands of deaths.
Read moreJunk Bonds Are Back!
Interest rates have been falling once again. The yield on the 10-year U.S. Treasury, which acts as a global benchmark of sorts, dipped as low as 2.44 percent last week, which is well below where rates began the year—and lower than at most points throughout the 20th century and into the first decade of the 21st.* At no point between 1961 and 2011 were rates as low as they are now, and for most of that time, the yield on the 10-year was above 6 percent.
Read moreDeflating Expectations
n a Reuters poll out this week, most economists say they are expecting more robust inflation this year, to the tune of 2 percent. The poll accurately reflects the plethora of emails from research firms in my inbox—a slowly building chorus predicting rising prices along with an uptick in overall economic activity.
Read moreAirbnb Will Hand Over “Anonymized” Records to New York Attorney General
Airbnb and the New York Attorney General's Office announced Wednesday that they had reached an agreement on a months-long conflict over Airbnb hosts in the state. Under the terms of the agreement, Airbnb will hand over "anonymized" data stripped of names, email addresses, apartment numbers, and other personally identifiable information. New York State Attorney General Eric Schneiderman will have a year to weed out hosts in violation of local laws and can require Airbnb to disclose the identities of those with suspicious activity.
Read moreEconomists Think That Wages Are Going to Rise This Year
America, Meet Alibaba
The largest company you’ve never heard of is about to become a publicly traded U.S. company. After months of heated speculation within the financial world, Alibaba filed papers to list its shares in the United States. Its possible size? Somewhere between $150 billion and $200 billion dollars.
Read moreCassandras Everywhere
All is placid in financeland. Stocks in the U.S. and globally have been in a holding pattern since December; bonds as well. Overall economic data—limited though it may be and flawed though it certainly is—shows steady unspectacular growth in the United States
Read more