Tony Wikrent's blog

Econ-Fin News - Dec 5, 2008 – Basic Assumptions and Nationalization

Back in the middle of September, when the Wall Street model of investment banking collapsed into the dustbin of history Stirling Newberry wrote a series of articles laying out the underlying realities of the financial crises, and re-framing the issue as a Constitutional crisis because of the existence of a reactionary faction in American politics that is as yet unwilling to move from the existing means of storing wealth – the development of land, i.e., suburban sprawl – to a new store of wealth that would allow us to begin building a workable future. The Constitutional crisis arises because the present monetary configuration of the United States rests on the valuation of mortgages, the values of which are supposed to keep increasing as more land is developed:

 

Did the 2005 Bankruptcy “Reform” cause the world financial collapse?

Did the 2005 Bankruptcy “Reform” cause the world financial collapse?

Federal Reserve Bank of New York Staff Report No. 358 - Seismic Effects of the Bankruptcy Reform.

Remember the Bankruptcy Abuse [sic] Reform act of 2005? Yeah, the one that the credit card companies and banks got passed by buying the very best Congress money can buy. Turns out, according to the New York Fed's research, that since people going bankrupt after the BAR found it more difficult to stop paying their unsecured debts - i.e. credit cards - they were forced to stop paying their mortgages instead. Over 120,000 of them a year, according to the NY Fed researchers.

Econ-Fin News Dec 1 2008 - Bernanke's Laissez Faire Dissected

Economics and Finance News - Dec 1, 2008

Bernanke and Paulson talk about the financial collapse
John Cassidy has a lengthy article in The New Yorker today which includes some excellent insights into U.S. Federal Reserve chairman Ben Bernanke and his miserable handling of the financial collapse, including, so far as I know, the first public discussion of an August 2007 meeting in Jackson Hole, Wyoming in which the Fed’s initial approach was discussed and decided by Bernanke and a small group of top advisers.

First, Cassidy provides some interesting details on how Bernanke became Fed chairman,

“I always thought that Ben would stay in academia,” Mark Gertler, an economist at New York University who has known Bernanke well since 1979, told me. “But two things happened.”

Econ-Fin News Nov 29 2008 - This is Worse Than Great Depression

We are in a worse situation than The Great Depression
Barry Ritholtz linked to a video of Paul Solomon of the PBS News Hour interviewing with Dr. Nassim Nicholas Taleb, famous economist and author of The Black Swan : The Impact of the Highly Improbable” and Taleb’s mentor, French mathematician, Dr. Benoit Mandelbrot, Professor Emeritus of Mathematics at Yale University. Dr. Mandelbrot, a pioneer in the development of chaos theory, is regarded as the father of fractal geometry. Both say that the present economic situation is actually more serious than the Great Depression. In fact, they fear the U.S. is in the worst situation it has been in since the American Revolution.

The reason, Dr. Taleb explained, is that “Never in the history of the world have we faced so much complexity combined with so much incompetence in understanding its properties.”

Economic and Financial News - Nov 28, 2008 - World War 2 was a relative bargain

Economic and Financial News Nov 28, 2008

The following items have come to my attention the past few days, and, dear reader, I deem them worthy of your attention and perusal, and just generally good stuff for your edification and amusement.



The Washington Post notes that Americans' Food Stamp Use Nears All-Time High of over 30 million.


Compared to Wall Street bailout, World War Two was a relative bargain

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