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A Tale of Two Chairmen

By | April 8th, 2010|

He was the best of Chairmen, he was the worst of Chairmen. It was an age of heroes, it was an age of villains. We were all retiring at 30, we were all working until we dropped. It’s fascinating to watch the transformation of Chairman Greenspan from Maestro to mud. Ten years ago news hounds hung on his every word. Now…. What a difference a [...]

A Bank Bailout

By | April 7th, 2010|

So where will the biggest losses come from? Earlier this year the Treasury revised its estimates of TARP losses down from almost $350 billion to just over $100 billion. Where did the extra money come from? Surprisingly, it came from the banks. Many of the big banks quickly paid back their TARP loans—with interest—and bought back their stock warrants after Ken Feinberg was put in [...]

Hidden Assets

By | April 6th, 2010|

When I was in school, it was a commonly assumed that overpopulation was humanity’s greatest risk. Now, it seems, that assumption has been turned on its head. Over the next 40 years, demographers estimate that the US population will grow by another 100 million. This population will be young and energetic, with only a quarter over 60. Our 2.6% annual growth will be partly driven [...]


By | April 5th, 2010|

When domestic politics gets rough, go for the foreigners. That was Henry IV’s final advice to his son in a memorable scene. And that may be what’s playing out now as Treasury evaluates whether China is a currency manipulator. Yesterday Treasury announced that they would postpone this evaluation until after several multilateral trade meetings at which China would be present. This is important, because it [...]

Good Enough For Now

By | April 2nd, 2010|

Last week we heard about employment, and it looks okay. Last week’s employment report had loads of data, almost all of it good news. Temporary employment continues to grow. Manufacturing payrolls are going up. Hours are going up. These are all leading elements of the employment picture, for obvious reasons: when things pick up in an economy, employers increase hours and add to temp staff [...]

A Leap of Faith

By | April 1st, 2010|

This weekend Apple will ask its customers to take a leap of faith. At least it won’t be a leap in the dark. On Sunday consumers can buy a wifi-equipped iPad from the Apple Store for $500-800. It’s Apple’s attempt to fill the middle ground between the smartphone and a laptop. Tablet PCs have been with us since the ‘90s without ever catching on. Apple [...]

Surprise, Surprise, Surprise, (Part 3)

By | March 31st, 2010|

Surprise, surprise, surprise. They cheated their clients, too. People who work with other people’s money are supposed to abide by a series of rules called fiduciary duties. The duty of care states that you’re supposed to know what you’re doing. The duty of loyalty states that you’re supposed to put yourself in the money-owner’s shoes. This can conflict with an advisor’s self-interest. So when brokers [...]

Surprise, Surprise — Not

By | March 30th, 2010|

So after all this, who do you trust? Between Ponzi schemers and conflicted bankers, where do you put your money? After all, you can’t just stuff it in a mattress. It’s not very comfortable, and if everyone did that, there’d be a lot more stolen beds. There are basically three criteria: you want someone competent, you want someone who understands you, and you absolutely want [...]

Surprise, Surprise, Surprise, (Part 2)

By | March 29th, 2010|

So that’s why we need financial reform. That’s what some have said in response to the kinds of abuses I mentioned yesterday. Surely municipalities need protection against the depredations of financial shysters. Only, it’s already illegal to hold sham auctions and collude. New regulations wouldn’t change a thing. That may be why the biggest banks are all getting behind the proposed financial reform legislation. Surely [...]