Giving the SEC Teeth

The problems at the SEC were decades in the making. The agency is supposed to be an investor’s advocate, the chief law enforcement agency for the markets. But that has hardly been how they have been managed, funded and operated run in recent years. Essentially the largest prosecutor’s office in the country, the SEC has […]

Asset Allocation

I appeared last Friday on a the PBS program WealthTrack, where the topic was asset allocation, in particular, as host Consuelo Mack put it, how to build an all weather portfolio. I was the skeptic of the group. I don’t think there is some magic asset allocation that protects you from the buffetings of financial […]

Back-Door Resolution Authority

Tyler Cowen quotes from Robert Pozen’s yet-to-be-released book: “In my view, the adverse repercussions of Lehman’ failure could have been substantially reduced if the federal regulators had made clear that they would protect all holders of Lehman’s commercial paper with a maturity of less than 60 days and guaranteed the completion of all trades with […]

Currency Futures Liquidity ahead of the Forward Market?

At NSE, currency futures did $1.8 billion yesterday. With this, India is starting to look like a rare country where the turnover of the currency futures market is big when compared with the currency forward market. (Gurnain pointed out, in the comments to this post, that this is the case in Brazil. I’m not aware […]

We’re Still a Nation of Spenders, Not Squirrels

Will we be spenders or savers? It is a big question for the economy. Without a rise in consumer spending it is hard to get economic growth. It is also a big question for retailers and other businesses relying on consumer demand. The evidence on what has been happening so far is mixed. Official figures […]

Germany’s 2009 Bundestag Election: a Political Realignment in Progress?

by Manuel Alvarez-Rivera, Puerto Rico  Voters in Germany gave a substantial plurality to Chancellor Angela Merkel’s right-of-center Christian Democratic Union (CDU) and its Bavarian counterpart, the Christian Social Union (CSU), in a general election held last Sunday to choose members of the Bundestag, the lower house of Germany’s bicameral legislature. Moreover, Chancellor Merkel – who […]

The People’s Republic Turns 60: A New Era for China?

The celebration of Communist China’s 60th anniversary, which marks a full cycle in the Chinese calendar, will highlight the country’s rising economic and geopolitical status. China’s modernizing army will parade the nation’s growing geopolitical clout before the world, and the sheer scale of the spectacle (imagine a militarized version of the Olympic opening ceremony) will leave little doubt about its economic recovery.  But while the world will be watching, the show is really for a domestic audience.

Vice President Xi Jinping, tapped by the Chinese Communist Party (CCP) to replace President Hu Jintao after the 18th Party Congress scheduled for late 2012, is charged with organizing the anniversary celebrations.  Xi was not Hu’s first choice within the “fifth generation” of leaders to succeed him. Rather, Xi emerged as the compromise candidate in 2007 because he was acceptable to all three main factions within the Chinese Communist Party:  the “prince-lings” with strong family connections within the party, the populists tied to the Chinese Communist Youth League, and the weakened but still powerful “Shanghai Gang,” a group which owes its status to the retired former President Jiang Zemin.

The Fed Draining Reserves

Prof. Jim Hamilton at Econbrowser (thanks Mark Thoma for the link) addresses one of the Fed’s standard methods of draining liquidity from the banking system: reverse repurchase agreements. Basically, the Fed will transfer some of its assets to the banking system via short-term loans taken out with its Primary Dealers, presumably offering standard (Treasuries) and […]

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