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Monetary System
The Alchemy of Securitization
This is a cross-post from the new economic blog Global Economic Intersection. Ratings agencies have been criticized for inadequately determining risk in the massive collection of debt securities created in the credit bubble. A second…
Simon Johnson: The Coming Meta-Boom and Meta-Bust
Simon Johnson, a former chief economist for the International Monetary Fund and author of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, says the recently passed Dodd-Frank Financial Reform Act does little to…
Institutional Investors now suing Bank of America for put backs on MBS
Felix Salmon is right. This is going to be a big, big problem for the financial institutions. A group of investors holding $16.5 billion of mortgage bonds took a step toward a possible suit against a Bank of America Corp unit for…
QE2 Won’t Save Our Sinking Ship
by L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute. Fed Chairman…
The Subprime Debacle: Act 2
Note from 19 Oct 2010: It has come to our attention that the substance of this post was originally penned by Gonzalo Lira, who posted it both at his site and at Zero Hedge this time last week. Initially we thought that there was some sort…
Josh Rosner on Problem Loans in Banks’ Mortgage Backed Securities
In the wake of Felix Salmon's investigative reporting on how mortgage backed securities were put together with problematic loans, an increasing amount of focus has turned to the banks' liability to investors. In the video below, Josh Rosner…
Bank Holiday is Best Solution for Epidemic of Mortgage Fraud
by L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute. We have long known…
The Currency Trilemma
Morgan Stanley has an interesting piece out today, arguing there is no 'currency war'... yet. Win Thin made some points on this score yesterday, pointing to real effective exchange rates in developing countries. Morgan Stanley's Manoj…
Does focusing on deficit reduction reduce deficits?
The short answer to my question is no. I was thinking about this early today and here's what I have come up with as a more fleshed out answer. Budget deficits are the result of an ex-post accounting identity. In plain English this means…
Is bank lending on the cusp of increasing in the US?
Asha Bangalore of Northern Trust writes: Recent data indicate bank credit has increased in July and August (chart 2A), while partial September data suggest another monthly gain. This is a positive and noteworthy development, but…