News Links 01/31/2012
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NIALL FERGUSON: Okay, I Admit It—Paul Krugman Was Right
Professor Ferguson’s take on the United States has changed notably over the past year. He still thinks the U.S. budget deficit is unsustainable and that our entitlement programs will ultimately have to be cut. But he has changed his mind about the U.S.’s ability to sustain its huge debt load.
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New masters of the media universe | feature | Business | The Observer
Before the global meltdown, financial news was strictly for geeks and struggled to get on the news. Now, financial correspondents have become celebrities
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What Portugal’s Surging Bond Yields Means For Europe’s Crisis – MarketBeat – WSJ
Although the government in Portugal is not as indebted as it is in Greece, we think it is also likely to default before too long. Portugal’s existing bail-out package should ensure that is fully funded until the end of 2012. But with the 10-year government bond yield now above 16%, it may have to seek a second rescue deal well before that deadline expires.
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Neville Chamberlain was Right – J. Bradford DeLong – Project Syndicate
. If there was ever a place where expansionary austerity should work well – where private investment and exports should stand up as government purchases stood down, confirming its advocates’ view of the world – it is Britain today.
But Britain today is not that place. And if expansionary austerity is not working in Britain, how well can it possibly work in countries that are less open, that can’t use the exchange-rate channel to boost exports, and that lack the long-term confidence that investors and businesses have in Britain?
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Gingrich Labels Romney ‘Wall Street Elite’ – Bloomberg
“Your problem in Florida is that you worked for Freddie Mac at a time that Freddie Mac was not doing the right thing for the American people, and that you are selling influence in Washington at a time when we needed people to stand up for the truth in Washington,” Romney said.
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“Mortgage Fraud is a Top Priority for This Administration” « naked capitalism
Since the President is now establishing yet another committee to look into the mortgage fraud crisis, I figured it would be useful to look into the history of the Obama and Bush administrations’ approaches to the problem of vast financial fraud. As with most Obama government activities, it’s largely a story of policy continuity with the last administration, though the boom-bust cycle meant that there was not a huge amount of public pressure on the Bush administration to act, so their PR apparatus was less visible.
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ZIRP and Interest Income – Tim Duy’s Fed Watch
If the Obama Administration takes advantage of low interest rates and is able to push forward with refinancing efforts for underwater borrowers, then we can expect an at least temporary economic boost of potentially substantial magnitude. See Joe Gagnon for estimates. I would expect more modest outcomes, as the Administration has proved itself capable of half-hearted efforts in the past. Anything, however, would be helpful at this point.
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