Submit a Story!
topics:

Blame Basel II
Robert Waldmann gives advice to libertarians, free market fanatics and Republicans on how to blame the financial crisis on government regulation. Quite frankly, their efforts so far have been pathetic -- Let's pretend that Fannie Mae and Freddie Mac lead the way in sub-prime mortgages which were ...
Normality is just a few policy steps away
blogs.ft.com — By Ricardo Caballero Economic agents of all sorts, from creditors to consumers, are frozen waiting for some... sense of normality to be restored amid the financial crisis. However, normality is much closer —just a few bold policy steps away— than is ... (more) Normality is just a few policy steps away
Comments
Blog Reactions

links for 2008-12-14
Economist's View — ... - washingtonpost.com Report Spotlights Iraq Rebuilding Blunders - NYTimes.com How foreign car factories transformed the American South - Daniel Gross A Senator Speaks... - Adam Smith's Lost Legacy Confessions of a crass Keynesian - Willem Buiter Plant Migration Tied to Climate Change - Discover SEC Skipped Normal Inspection of Madoff Hedge Fund - naked capitalism Blame Basel II - Angry Bear Ancestors and incomes: More on the ...

Is Basel II to blame?
Marginal Revolution — Robert Waldmann has advice for libertarians: I'd look into the Lucas critique -- when policy makers assume that an empirical relationship is a natural law and attempt to exploit it, it disappears. In particular the usefulness to private agents of the ratings caused regulators to decide to use them too (and destroy them) via Basel II. Along related (but contradictory) lines, in The Economist Alan Greenspan calls for higher capital requirements.  The arguments of both Waldmann and Greenspan make perfect sense.  ...

Related Content
Structured Finance for Beginners
baselinescenario.com 3/29/2009 — For a complete list of Beginners posts, see Financial Crisis for Beginners . This is more of an advanced beginners topic - I already covered CDOs (collateralized debt obligations) in my first Beginners article - but I imagine that most of our readers are already familiar with structured ...
Meltdown
acrossthecurve.com 11/19/2008 — That is the word that one market participant used to describe the action in the CMBS market today. I am sorry to be writing this so late but I just found it as I checked emails and thought it worth posting. CMBX AAAs widened by 130 basis points. AJ ...
The Credit Rating Game
angrybear.blogspot.com 11/16/2008 — by Robert Waldmann In my teens when I learned of the existence of credit rating agencies I wondered why private firms with such power weren't corrupt. Why don't firms pay birbess to obtain high credit ratings ? I still don't know the answer but I ...
Corporate Bond Spreads: Bullish Until They’re Bearish
marketsci.wordpress.com 11/18/2008 — In this post, inspired by Crossing Wall Street , I’m going to look at the spread between AAA and BAA-rated corporate bonds and show that, generally speaking, high spreads have been bullish for the stock market, except when spreads reach extreme ...
In Defense of the Rating Agencies — IV
alephblog.com 9/22/2009 — I guess I am a glutton for punishment, but I am going to take the opposite side of the argument from what most have been saying of late regarding the rating agencies. Those who want historical context can read my earlier three pieces: In Defense of the Ratings Agencies In Defense of the ...
WAPO on AIG
angrybear.blogspot.com 12/30/2008 — Robert Waldmann Over at the Washington Post, Robert O'Harrow Jr. and Brady Dennis have a fairly interesting first of 3 articles on what went wrong at AIG. Of course, they tend to stress personalities and personal conflicts, but hey do slip in some ...
Unstable Value Funds? (III)
alephblog.com 3/5/2009 — There’s a lot that I don’t know here, but what I do know concerns me. Stable Value funds are a murky part of the market. They are murky because they don’t report the value of the underlying assets, but only the smoothed value of assets, and the rate that they are currently ...
GE Needs Fed Bailout To Finance Operations; Dividend At Risk
globaleconomicanalysis.blogspot.com 10/26/2008 — GE is struggling to get short term financing at a price it wants to pay. So what does GE do? The answer is twofold: 1) Borrow from the Commercial Paper Funding Facility 2) Pretend this is a good thing. Consider this ridiculous headline: GE to Sell CP ...
Fed Watch: Will TALF Do The Job?
economistsview.typepad.com 2/26/2009 — Tim Duy has doubts about how effective TALF will be: Will TALF Do The Job?, by Tim Duy : The Administration is putting high hopes on TALF, especially now that the program will reach as high as $1 trillion (remember when $1 trillion was a lot ...
3 Figures Explain the Foolishness of Bankers
prudentinvestor.blogspot.com 5/14/2009 — I got a strong reminder to the rule whenever people say something is very complicated that they just want to avoid telling the simple truth. Attending a panel discussion headlined "values worth fighting for" and organized by the Austrian Friedrich August von Hayek Institut on Thursday panel ...