Bonus Guarantees Can Fuel Risky Moves

From the Wall Street Journal: Financial firms seeking to attract and retain talent are reported to be making a substantial use of guaranteed bonuses, and the French Economy Minister recently called for limits on guaranteed bonuses. While many now focus on how using guaranteed bonuses affects the level of pay, it is important to recognize […]

Court: Fed Must Make Loan Info Public

“When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know” -Matthew Winkler, the editor-in-chief of Bloomberg News. I would have […]

The Market-Perceived Monetary Policy Rule

Stanford Professor John Taylor has suggested that monetary policy could be summarized in terms of a simple rule, lowering interest rates when output is too low and raising them when inflation is too high. A number of academic papers have investigated this rule from the perspective of describing what the Federal Reserve has historically done. […]

Fun with Derivatives

Fresh off my vacation, I have jury duty tomorrow, but today I got a jump on my fun reading for the courthouse – Traders, Guns, & Money, the anecdote-packed overview of derivatives by Satyajit Das, a prolific consultant, author, and commentator on the topic. Das says that his book “does not attempt to make a […]

Odd WSJ Story on Vermont

The Wall Street Journal has an odd piece on the Vermont mortgage market today.  Odd in that the thesis appears to be completely unsupported by the rest of the piece.  The story begins: In plenty of other states, Andrea Todd would have been a homeowner years ago. Here, she bought just this month — a difference […]

A Revolution is Not a Dinner Party. Thoughts about the Future of China

This is a follow-up to Will China collapse? (5 August 2008). Recent analysis: “Get ready for lower Chinese growth“, Michael Pettis, op-ed in the Financial Times, 29 July 2009  ”The spend is nigh“, Economist, 30 July 2009 — “The second article in our series on global rebalancing asks whether China can reduce its trade surplus by consuming […]