…Calmly observing the changing world

If your weather hasn’t cast a pall over June as it has here in the Pacific Northwest, the news and the economy surely have.  The oil spill in the Gulf of Mexico highlights governmental incompetence, the G20 lacks unified economic policy, some place called Kyrgyzstan is a complete basket case, and currencies and markets gyrate [...]

Supposedly, countries around Europe are tightening their belts.  Gone are the days of reckless spending, they say.  The Tories are ruthlessly slashing services after taking power: Chancellor of the Exchequer George Osborne announced today a 25 percent cut in spending over the next four years, excluding overseas aid and the National Health Service. The move [...]

When we are children, we conceive of banks as places to safely deposit money. If, by chance, you grew up watching It’s A Wonderful Life every Christmas, you probably have the idea that money deposited in banks is loaned out into your community: If modern banking truly worked this way, you would understand that when [...]

We’ve been watching Greece teeter on the brink for what now seems like an eternity. In another trend, we’ve been watching Fitch attempt to get tough with its ratings, in an effort to brand itself as the good rating agency. Both trends continued today, as Fitch downgraded Greece’s debt rating to BBB+. The Hellenic Republic [...]

Marxist czars are ascending to heights of power over the American economy. Bankrupt corporations stay in business by borrowing money at near-zero interest rates from the equally bankrupt government. The invisible hand of the market has been replaced by the translucent hand of the Federal Reserve as they no longer conceal their “ongoing market activities”. [...]

Last night we made our second attempt at signing loan documents – we barely made it as we finished up at 11:58PM. The long, grueling battle was triggered when we embarked on a course called an “e-signing”. Instead of physically signing documents, we could just click a button with a notary present. As with most [...]

At the Riksbank, which now has a deposit rate of minus 0.25 per cent, the most vocal advocate of the policy is deputy governor Lars Svensson, a world-renowned expert on monetary policy theory and a close associate of Ben Bernanke, chairman of the US Federal Reserve, since they worked together at Princeton University. CNN (Financial [...]

I suppose it is a sign of the times that the FDIC’s Failed Bank List was updated with some new features. When I heard that the FDIC closed an astounding seven banks just on Friday, I had to take a closer look, and happily found that the list is now sortable, and has grown so [...]

If you listen closely, you will hear “The New Normal” as the catchphrase of those economists who understand that the “old normal” can never return. This appears at first to be a useful insight, until you realize that by the new normal, these economists mean a quantitatively different normal. That is, it will be a lot [...]

This evening, I attempted to watch Obama’s address to Congress, which (on my Tivo) CBS had inappropriately labeled “State of the Union”. After nearly fainting at the dreadful commentary by the CBS reporters (I don’t watch much news), I quickly fast-forwarded to the President’s speech. As I watched Obama, I could perceive none of the [...]