The Financial Times – Wolfgang Munchau: Perils of placing faith in a thin theory The Reinhart and Rogoff thesis, as it is understood by policy makers, incorporates two separate myths. The first is the existence of the 90 per cent threshold. The second is about causality. The first was debunked last week by Thomas Herndon,… Continue reading More Oversimplification Of The Reinhart/Rogoff Debate
The Economist – The economy: That swooning feeling Once again, after a promising start to the year, the economy is spluttering FOR America’s economy, April is the cruellest month. In each of the past three years the economic recovery started with a burst of momentum, only to swoon over the spring and summer. Sadly, there… Continue reading The Slumping Economy
The Economist – Buttonwood: Like chess, only without the dice It is hard to find an economic explanation for gold’s sharp fall GOLD suffered its biggest two-day fall in 30 years on April 12th and 15th. When an asset falls so sharply in price, it is tempting to believe that significant economic changes must be… Continue reading Why Gold Crashed?
New York Magazine – Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement Most Ph.D. students spend their days reading esoteric books and stressing out about the tenure-track job market. Thomas Herndon, a 28-year-old economics grad student at UMass Amherst, just used part of his spring semester to shake the intellectual foundation… Continue reading The Reinhart/Rogoff Debate Continues
The New York Times – Wall St. Redux: Arcane Names Hiding Big Risk The alchemists of Wall Street are at it again. The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that… Continue reading Banks New Alchemy
Bloomberg Businessweek – How Student Debt Holds You Back Paying for college has long been seen as a good investment because college graduates fare better on the job market than people with just a high school degree. New research by the Federal Reserve Bank of New York, though, shows that the payoff is diminished for… Continue reading Why Are Student Loans Booming?
The Wall Street Journal – BOJ’s Bond Buying Worries Traders Under Mr. Kuroda, the traditionally conservative central bank on April 4 launched its largest asset-buying plan ever, pledging to purchase approximately ¥7.5 trillion ($76 billion) in bonds every month as it doubles its holdings over the next two years. Analysts and traders say the buying,… Continue reading Is The BoJ Hurting Liquidity?
Bloomberg.com – Three Fed Presidents Say Disinflation May Prompt Easing Three regional Federal Reserve bank presidents said a further decline in U.S. inflation below the Fed’s 2 percent goal may signal a need for more accommodation. “If inflation looked like it was going to sag further on a persistent basis, I would certainly consider stimulus… Continue reading The Drum Beat For More QE Grows
The Economist – Sovereign-debt markets: An illusory haven What lessons should investors learn from the Argentine and Greek restructurings? WHY do governments pay their debts? The deference with which most state borrowers treat their creditors is one of the mysteries of economics. Unlike individuals or companies, countries cannot be forced to make good on their… Continue reading Sovereign Debt
The Economist – Hedge funds: Launch bad Breaking into the hedge-fund world is harder than before IF SETTING up a hedge fund were easy, more people would do it: bar inheritance or winning the lottery, there are few swifter paths to immense riches. Sadly for aspiring plutocrats, it is getting ever harder to launch a… Continue reading Hedge Funds
Bloomberg.com – Jonathan Weil: Wall Street Guys Always Make the Best Villains It’s a good thing for Wall Street’s cops that they have a guy like Anastasios “Tommy” Belesis to kick around, because they would have to invent him if they didn’t. The 38-year-old founder and chief executive officer of John Thomas Financial Inc. probably… Continue reading Wall Street Guys