Presumably speaking for God, the Pope comes down against free markets. The NY Fed's Dudley says the Fed should try to prick bubbles. The automakers' amazingly quick escape from bankruptcy. Clampdown on speculative commodities trading could be coming. Questioning the UK's quantitative easing program. --Zubin Jelveh
2nd stimulus views: Bartlett, Krugman, McCardle, Krugman, Clusterstock, and Noam. The case against having insurance regulators oversee credit default swaps. An amazing NYT interactive feature suggests we're poised for a turnaround. In praise of economic bloggers like Mark Thoma. Japan's porn habit is straining the country's cellular network. --Zubin Jelveh
In Sunday's New York Times, Gretchen Morgenson wonders why loan modification rates have been so pitiful even though the government has stepped in to offer financial incentives for banks to undertake them. Morgenson interviews a law professor who expresses dismay over the fact that mortgage servicers seem to be acting against their own economic interests: Given losses like these, Mr. White said he was perplexed that lenders and their representatives were resisting reducing principal when they modify loans. His data shows how rare it is for lenders to reduce principal.
Chinese stocks are up 68% in 2009. How current health care proposals would reduce one type of rationing. Excellent financial crisis interactive feature from the Council on Foreign Relations. When should banks draw down their capital buffer? Satisfied workers are good for stock prices. --Zubin Jelveh
A little more than a year ago, people started to worry that mortgage holders who were underwater but could still afford mortgage payments would just walk away from their homes and, in the process, send real estate prices even lower. But historical data, plus the fact that nobody seems to have actually documented widespread cases of walk-aways (granted that's not necessarily an easy task), reduced concerns over a potential jingle-mail problem. Now Stan Liebowitz of the University of Texas at Dallas purports in a WSJ op-ed to have data showing that the walk away decision is the biggest driver o
Deja vu? Wage growth nonexistent on Main Street but soaring on Wall St. California sets a 3.75% interest rate on its IOUs. Who broke Harvard's finances? Meet Japan's Paul Krugman. China bans virtual currencies. --Zubin Jelveh
So much for the zero lower bound. Buried in the statement accompanying the Riksbank's interest rate cut today was the news that Sweden's central bank had cut its deposit rate to -0.25%. This is the first time (I believe) a major central bank has targeted negative rates. The deposit rate is analogous to the Fed's recently acquired ability to pay interest on reserves. Both rates are meant to act as a floor on the central banks' key monetary policy tool--the fed funds rate in the U.S. and the repo rate in Sweden. (For what it's worth, that floor hasn't always been impervious.
Fiscal emergency declared in California. Obama's consumer protection agency is making banks very nervous. Has the Treasury double-crossed investors? Who says rates are 0%? Fed funds closed at 7% on Tuesday. A case for why low rates didn't cause the subprime crisis. The NYSE could shut down its CDS clearing service. --Zubin Jelveh
A couple of timely reports from the New York and San Francisco Fed banks out in recent days. First, with news that Wal-Mart has thrown its support behind an employer mandate, the SF Fed takes a look at how such a system has fared in Hawaii, which passed legislation in 1974 requiring companies to provide coverage for most employees working 20 or more hours per week. Their findings provide a mixed bag for thinking about the cost, benefits, and reasons for considering a federal-level employer mandate.
Home prices fell again in April but we may have reached a bottom. And jobless claims could fall sharply during the rest of 2009. The NYSE gets a little less transparent. Hard to believe, but trickle-down economics doesn't work. Does the "tipping point" really exist? When art and finance collide: The swap spread mambo. --Zubin Jelveh