Monetary System

If the public sector balance must over time move from around -10 percent to around -3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by…

It just isn't going to work, and it's very interesting that the man who invested this type of what I call a voodoo economic policy -George H.W. Bush, Carnegie Mellon University, 10 April 1980, in reference to Ronald Reagan’s…

Wray’s view: Banks are bigger than before the crisis. But, despite their books showing profits, it is not clear if they are adequately reserving for loans and liabilities already on their balance sheets. The right approach is to actually…

Legislation to modify debit-card interchange fees cannot compete with celebrity gossip. It is not surprising that lobbying efforts have changed the minds of 19 senators who formerly aligned themselves with consumers and small banks (to…

Listen to what Jeffrey Gundlach has to say about subprime bonds -- yes subprime. Hint: he thinks banks will have to take more credit writedowns.

Apparently, the upcoming film on the credit crisis ‘Too Big To Fail’ can be boiled down in these 80 seconds of preview clips. Enjoy.

You should notice that the title of this post is “make accounting gains” instead of “earned” because it is not clear at all that US banks earned $29 billion. After all, the FDIC has indicated that these accounting gains are driven by lower…

So, the Fed has basically just announced it will stop QE2. It will then start selling Treasuries. And remember, this is at the same time the Treasury is selling $10 billion a month in mortgage securities. Only after this will rates be…

Frederick Sheehan argues that we are overleveraged, undercollateralized, and accentuating these unsustainable imbalances through economic policy to smooth out volatility.

As James Galbraith has argued, the problem is said to be no more serious than some clogged plumbing. A bit of Drano in the form of government handouts and guarantees should be sufficient to get credit flowing again. Nonsense. Private debt…