Perpetually Surprised
Richard Rahn has ripping good rant at Cato about politicians: Are all too many in the global political class doltish, or do they just appear that way? The current financial meltdown has revealed an amazing number of revelations from people who were surprised by the obvious. For years, liberal Democrats in Congress and some Republicans .. read more
Buffet Buys Into Goldman
Via WSJ: Warren Buffett’s Berkshire Hathaway announced plans to invest $5 billion in Goldman Sachs Group Inc., which recently decided to change its structure to a bank-holding company from an investment bank. In addition to the $5 billion from Berkshire Hathaway, which comes in the form of perpetual preferred shares, Goldman will raise at least .. read more
Banks Need Capital
Jeffrey Frankel (and many others) argues that the Paulson plan is not the right remedy. Rather than buy up bad loans, we should inject capital into the institutions that need it – and get equity for our trouble (via Vox): Examples are not tied to economists from a particular political viewpoint or party. He mentions .. read more
Bernanke on Mark to Market
In his testimony Bernanke just addressed mark to market accounting. He drew a distinction between “fire sale” prices and hold to maturity prices. He seemed to indicate that Treasury would try to find a way to buy the mortgage securities close to hold to maturity price. He did not give any indication of how they .. read more
A Unique Observation on the Housing Bubble
Randal O’Toole at the Cato Institute has the most unique take on the housing bubble I’ve seen. He blames the housing bubble on land use restrictions: The credit crisis has led to numerous calls for bigger government. Yet the truth is that big government not only let the crisis happen, it caused it. This truth .. read more
Reform What?
From Paulson’s testimoney to the Senate Banking Committee: When we get through this difficult period, which we will, our next task must be to address the problems in our financial system through a reform program that fixes our outdated financial regulatory structure, and provides strong measures to address other flaws and excesses. I have already .. read more
The Source of the Problem
There’s a good article at Vox by Barry Eichengreen about the financial crisis: The other key element in the crisis was the set of policies giving rise to global imbalances. The Bush Administration cut taxes, causing government dissaving. The Federal Reserve cut interest rates in response to the 2001 recession. All the while the financial .. read more
Democrats to Blame?
Kevin Hassett has a pretty damning article on Bloomberg that blames Democrats for the current economic mess: Sept. 22 (Bloomberg) — The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the .. read more
