The disruptions in the credit markets have begun to affect international trade. It’s where I’ve learned about something called “trade credit” which finances ships traveling across oceans. Increases in lending rates have hurt Asian economies:
Instead of relying on broad capital markets as is common in American and Europe, they seek credit in more traditional ways: [...]
Prior to talk of economic concepts as capital theory and monetary policy we should step back and examine the fundamental needs for a functioning economy that provides desired goods and services at the most efficient prices. We need to step back from the abstractions of equilibrium models and high-level mathematics and get at the underlying [...]
Even with the dramatic drop in stock prices it’s not wise to abandon the markets:
With stocks in the tank, who wants to hear about how important they are to saving for retirement, college, or your dream home theater? Big mistake. The only possible reason to be down on stocks as a long-term savings vehicle is [...]
Paul Krugman is surely one of the most controversial Nobel Prize winners in some time. Let me first state the guy has a research track record to be a yearly contender for the Nobel Prize in economics. Once upon a time before Krugman became an unreadable Left-wing shrill he wrote interesting, if still center-left, books [...]
Be careful getting whiplash watching the stock market oscillate:
Stocks snapped a brutal losing streak in resounding fashion as the Dow Jones Industrial Average enjoyed its biggest one-day point gain ever following new moves by governments to shore up the global financial system.
The Dow leapt 936.42 points, or 11.1%, to 9387.61. The rally ended an eight-day [...]
Nick Schulz and Arnold Kling examine some reasons for increased income inequality. They place a lot of blame/credit on technology, “winner-take-most markets,” family structure, and immigration. I think part of income inequality can be laid on people having the luxury of taking greater risks that could result in tremendous monetary rewards.
We live in a society [...]
The New York branch of the Federal Reserve will hold a meeting tomorrow about setting up a clearinghouse or market to trade credit default swaps:
The Fed will hold a meeting with “a small number of banks and buy-side firms” to discuss progress being made on creating a central counterparty, said a New York Fed spokesman [...]
To invest in Islamic bonds one has to deal with something foreign to Western financial markets: “religious interpretation risk.”
“Fatally Flawed Bonds“
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Are we entering “The Chinese Century?” James Pethokoukis doesn’t think so.
Desmond Lachman wonders if the current credit crunch requires more extensive policy changes than managing an economic downturn.
Brad Setser notes the Federal Reserve is back in the middle of credit allocation and asks if we should also be worried China’s increasing influence.
A former chief economist [...]
Zachary Karabell points out the Chinese consumer is doing what he or she can to maintain the world economy. [via Mark Perry]
Two University of Michigan economics, based on early data, find most of the 2008 economic stimulus checks went into savings.
King Banian wonders why the sluggish economy hasn’t helped Sen. Barack Obama in the polls.
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Freddie Mac announced bigger than expected losses and based on its assets minus its liabilities the company has a negative fair value.
A report produced by Wall Street banks criticizes itself for excess risk-taking and security complexity that lead to the current financial crisis.
James Pethokoukis approves of Sen. Barack Obama’s emphasis on economic growth but wishes [...]
Alan Greenspan thinks more banks will need to be rescued. [via Dean Baker]
Former SEC chairman Arthur Levitt wants the SEC to focus on “disclosure, transparency, fairness and accountability” instead of trying to prick market bubbles.
Fritz Foley finds the timing of crimes is related to when welfare checks are distributed.
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Auto consumers respond to high gas prices by buying more fuel-efficient (and smaller) cars.
Despite the economic obstacles its faced the IMF thinks the United States has held up well in these trying times.
Gordon Crovitz warns against turning the FCC into the ICC and treating the internet like the railroads.
Mark Perry reminds us “There is no [...]
The Commerce Department reported that while overall construction fell 0.4% in June nonresidential building reached an all-time high. But as compared to a year ago total construction is down 5.9%. Foreclosures dropping more homes onto the market could hurt residential building while the credit crunch could slow down nonresidential construction:
Analysts believe that housing still has [...]
The unemployment rate went up to 5.7% with the American economy losing 51,000 jobs in July. When you combine that with the surprise $15.5 billion loss from GM it’s plain the economic slowdown continues.
“Jobless Rate Climbs to 5.7% as 51,000 Jobs Lost in July” [via memeorandum]
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