Not With a Bang but a Whimper: The SEC Enforcement Team’s Propaganda Campaign

The New York Times has one of those “inside” stories that unintentionally demonstrate the collapse of justice and financial reporting.  This genre involves the media reporting gravely (and uncritically) the administration’s claims that its failure to prosecute any elite for the largest and most destructive financial frauds in history actually demonstrates the exceptional ethical rectitude of the […]

Happy Anniversary Lehman Brothers, And What We Haven’t Learned About Wall Street Over the Past Five Years

While attention is focused on Syria, the gambling addiction of Wall Street’s biggest banks is more dangerous than ever. Five years ago this September, Lehman Brothers went bankrupt, and the Street hurtled toward the worst financial crisis in eighty years. Yet the biggest Wall Street banks are far larger now than they were then. And […]

Creating Effective Regulation Is the Imperative Issue at the Federal Reserve

The only positive aspect of the public contest to pick a successor for Ben Bernanke that the White House has inexplicably sparked is that economists are acknowledging that the next head of the Fed must act to create (not “restore”) effective regulation by the agency.  It is long past time to have a serious discussion […]

Margin Requirements for OTC Derivatives: Regulators Listen, but Do They Hear?

Introduction On 2 September 2013, the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) published their long-awaited final policy document dealing with “Margin requirements for non-centrally cleared derivatives”. Scope Subject to certain exemptions discussed below, the final rules apply to financial firms and systemically important non-financial entities (“Covered Entities”) […]

Finance as Economic Cholesterol

A country’s income depends on its accumulated wealth and how efficiently and innovatively this wealth is employed to produce goods and services. Does what a country produce matters? Are there constraints or drivers of wealth accumulation that can be associated with specific economic activities within a country? The question is as old as development economics. […]

Overt Money Financing and Public Debt

Purpose and Concepts The purposes of this brief note are two-fold: first, to establish, by country, the extent to which public sector borrowing contributed to the rise in public debt over the period since 2008; and, second, to draw some policy inferences. The two indicative fiscal parameters used in this analysis are: Borrowing = general […]

Strauss on CNBC: Drug-Testing Post Was a Question of ‘Equity’

Steven Strauss sat down with CNBC’s Carl Quintanilla to delve into his provocative post on inequality between the treatment of welfare aid recipients and corporate aid recipients, suggesting that while he is not “for” drug testing, simple equality suggests that if the unemployed are being tested, then there is no reason not to test bank CEOs […]

QE3 and beyond

Now that we’ve closed the books on 2012, I thought it might be useful to take a look at where monetary policy has led us over the last four years. The fireworks began when the collapse of Lehman Brothers in September 2008 led to a freezing of credit for all kinds of essential economic activities. […]

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