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Category Archive for 'Financial Institutions'

I’ve had a number of students ask me for letters of recommendation┬áto help them secure their summer internships. Almost all of these internships are unpaid. Three quick observations: (1) It seems to be that high-end jobs have completely outsourced basic training to their future employees instead of it being done by them. You should see […]

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You are probably familiar with the old saw that under “capitalism” people focus exclusively on the short-run at the expense of the long-run. Never mind of course the absurdity of the political system which takes this idea to the extreme – we can’t possibly expect folks to apply their logic consistently across all human institutions. […]

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If you read the Fed’s consolidated financial statements for fun and take them seriously, you would learn that the Fed’s current leverage ratio is … … … 77:1. It’s just a number of course.

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Just how badly are public pensions underfunded? Here’s a great way to extract an answer: A good response occurred to me, to those cited by Josh who want to argue that underfunding is a mere $1 trillion. OK, let’s issue the extra $1 trillion of Federal debt. Put it in with the pension assets. Now, […]

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We just learned that our school is increasing its sticker price by “only” 3.9% this year. Now the fully-loaded cost of attendance is a snail’s-breath shy of $60,000 per year. With one caveat let’s proceed. The caveat is that this fully-loaded cost is paid by very few people – most students are receiving some kind […]

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I have long argued that the one hope for Americans who wish to see bipartisanism in politics prevail, and for the left and the right to reach more common ground, is to banish the teaching of economics! Yup, I mean it. Nothing brings political harmony like economic illiteracy, shared equally by members of all political […]

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So, I am really wishy-washy about what I think of securitization. In many respects, I appreciate that it allocates risk to those most able to bear it, it seems to expand the amount of liquidity in certain markets, and used properly can be an effective way for firms to raise money without relinquishing certain rights […]

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I am reading Reinhart and Rogoff’s excellent book on financial crises. In it, they point out that emerging markets suffer from what they call “debt intolerance” – you can get into serious troubles even when you are running what seem to be low levels of debt. To illustrate they show that 50% of defaults on […]

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The average nominal price for a share of stock on the New York Stock exchange has been about $35 since the Great Depression. Read more about why here (gated).

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New institutions like private stock markets emerge. It will be entertaining to watch the dogs in DC chasing their tails after they institute their new financial institution regulatory overhaul, and when they try to regulate hedge funds, derivatives, money funds and more. A key point from the article: Besides the economy, startup investors say the […]

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