Alternative Headlines, or, Putting Financial Penalties in Context “Royal Bank of Scotland Group PLC on Wednesday agreed to pay $5.5 billion to the U.S. Federal Housing Finance Agency to settle a probe into its sale of toxic mortgage-backed securities in the run up to the financial crisis.” —The Wall Street Journal (July 12, 2017). Shelling...Read More
Former Treasury Secretary Henry Paulson Redefines Chutzpah* (Again) “I believe that the root cause of every financial crisis, the root cause, is flawed government policies.” — Henry Paulson –Andrew Ross Sorkin, “Five Years After TARP, Misgivings on Bonuses“; The New York Times (8/26/2013) Surprise, surprise, Henry Paulson exonerates himself and the banking industry generally for its role...Read More
The Financial Crisis for Beginners (or Grandmothers) Mystified by the financial crisis? Here’s one of the simplest — and most accurate — descriptions I’ve encountered yet: My mother is paying taxes to the government. The government is giving her money to the banks. The banks are gambling like they’re watching “Fast Money.’ But my mother...Read More
Cloudy Crystal Ball To get some historical perspective on today’s financial crisis — and possibly divine some hint of where things go from here — I’ve been skimming “This Time is Different: 8 Centuries of Financial Folly.” The co-authors, Kenneth Rogoff and Carmen Reinhart, are highly pedigreed economics professors; almost half of their exhaustively researched,...Read More
California’s Financial Mess You have to wonder if California’s political paralysis foreshadows the future of the nation as a whole. –Paul Krugman, “State of Paralysis“; The New York Times (5/25/09) Just in case you’ve been enjoying a blissfully off-line Memorial Day weekend, the big story percolating on the leading op-ed pages and blogs at the...Read More
“Who’s Who” Discussion of Financial CrisisBest read of the weekend: a roundtable called “The Crisis and How to Deal With It.” Participants are a “who’s who” of finance and public policy: Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, and George Soros. Warning: their (quite sober) analyses are not for the easily spooked or faint...Read More
