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Banks, Japanese trade, the currency wars and deflation
There are no big themes dominating the news today. So it is a perfect time to hit a couple of themes with an economic and market theme approach. Let’s talk banks, Japanese trade, the currency wars and...
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The coming Greek bank nationalization, bail-in and privatization
The existence of capital controls eliminates contagion and makes it possible to bail-in deposits that would normally be considered to have systemic consequences. The more I look at it, the less benign...
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Tuning out political hysteria in the US
Ever since Donald Trump unexpectedly won the US presidential election, there has been an unending stream of anti-Trump tirades in the media. The emotions creating this wave of criticism make it...
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Financial conditions have eased enough to get the Fed to hike in March
For years, many Fed watchers have claimed that the Federal Reserve has a secret third mandate beyond inflation and full employment. And this past February 21st, for the first time a Fed President said...
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Why the Fed was talking to big money investors, leading to a major leak
I think I have the answer to at least one question: why was the Fed talking to big money investors in the first place. My thoughts follow below. This website is now reader-supported via Patreon....
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How the Fed handles financial stability is key to avoiding a crisis
The Fed should not use rate policy to deal with financial stability concerns. The Fed should concentrate rate policy on its dual mandate and that’s it. Instead the Fed should use non-rate mechanisms to...
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Crony capitalism and redistribution
This is a thought piece. And so it’s going to be relatively) brief since I haven’t fleshed out all of my ideas here. But I want to run something by you based on a piece Matt Klein wrote over at FT...
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The Economics of Rising Populism
Fear political populism and the loss of democracy but embrace economic populism as necessary. This website is now reader-supported via Patreon. Full-text emails are available on that platform,...
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Threats from Artificial Intelligence and Walmart’s earnings
Technological disruption poses serious threats to incumbent businesses. Here are two examples from Artificial intelligence and Walmart's earnings showing how this disruption occurs. This website is now...
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Margin debt is at a record high in US markets
The Federal Reserve has to be concerned about financial stability. When the credit markets become an integral facet sustaining asset markets, markets and the economy become interwoven in a bad way This...
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The Future is Coming (Wonkish, but Short): LIBOR Alternative
The London Inter-Bank Offered Rate is an important benchmark for trillions of dollars of contracts. The problem is that it was rigged. The Secured Overnight Financing Rate may be an interesting...
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Facebook and the regulation of privacy
In 2012, to protect user privacy, the FTC mandated regulatory controls at Facebook that it has not made. Therefore, Facebook faces potential fines and greater regulatory oversight. This will be...
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Countercyclical capital buffers as the Fed’s third tightening channel
Last week, Lael Brainard gave an important speech on financial stability. In effect, she said the Fed is likely to require increased capital buffers in the future. The key to if and when is in how...
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The procyclical forces behind the Fed’s rate hike train
At least initially, rate increases can be procyclical. Moreover, in this particular cycle, fiscal and regulatory policy are acting procyclically too. That means you need a lot of rate hikes to get a...
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Adam Smith and the meaning of high profit margins at Google and Facebook
There are two ways to explain persistently high corporate profit margins. One interpretation is about inequity, and implicitly about corporatism masquerading as liberty. And the other is about network...
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China’s pullback from and trade war with the US, Germany’s rebound and the EM...
Lots of positives. The earnings data looks good. This Goldilocks period for the US looks set to continue. Even Germany has shown some signs of economic strength recently. This website is now...
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A few thoughts on the collapse of the Qualcomm-NXP deal
China just torpedoed a major global deal between two non-Chinese chipmakers. It is a signal of China's market power. Some thoughts below This website is now reader-supported via Patreon. Full-text...
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On the economics of the Google Android case
A general challenge facing competition authorities in the digital era is learning how to apply the traditional tools of competition policy in multi-sided platform environments. This column argues that...
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How Trump can thank his presidency to the lack of prosecution of white-collar...
Ten years after the financial crisis, Trump’s rise to power is a consequence of poor governance. This website is now reader-supported via Patreon. Full-text emails are available on that platform,...
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US economic strength continues as yields begin to climb
Today's daily post will feature a number of articles on topics I think should be on your radar screen, with a few thoughts from me on each article. And I want to lead with the Department of Labor's...
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