Economy

How Much Will Wall Street Shrink?
September 18, 2009

Today's Journal story on the declining allure of a finance career has some interesting numbers: Although the biggest banks are showing a revived appetite for risk taking and certain exotic instruments such as credit derivatives, many of the vanished jobs aren't expected to be back soon. The White House Council of Economic Advisers expects finance and insurance jobs to decline to 4.1% of the work force in 2016 from 4.8% at the end of last year, a point at which many were already gone. ... Harvard's 2009 graduating class shows the shift in career directions.

Evan Bayh is Hyperventilating
September 18, 2009

I understand Evan Bayh's concern about the deficit--it is large, and eventually the bond markets (particularly our foreign creditors) might have something to say about it. But, for the moment, I think he needs to take a couple deep breaths. The big problem with his op-ed in today's Journal is that it doesn't deal directly with the biggest source of the recent spike in the 10-year deficit--namely, the worst recession since the 1930s.

Citigroup's Pandit: Making $100 Million Ain't Right
September 18, 2009

The Citigroup CEO apparently made the comment in response to a question at a 92nd Street Y event last night. The question was about his star commodities trader, Andrew Hall. Interestingly, the Journal piece adds this detail: "The response elicited murmurs from the audience, which included Citigroup employees." One wonders if those were murmurs of agreement or disagreement...

China's More Exotic Demands
September 18, 2009

As Noam explains in his piece about the U.S.-China Strategic & Economic Dialogue (S&ED), Beijing has been rooting for major alterations to the U.S. health care system—especially ones that reduce long-term pressure on the federal budget.

Maybe Securitization Didn't Cause the Crisis
September 18, 2009

Soon forthcoming in the top-ranked Quarterly Journal of Economics is a very well- received paper by four economists with convincing evidence of what many believe was the primary cause of the subprime boom and bust: That securitization took away the incentive for lenders to properly vet borrowers. But there's some new evidence questioning the paper's findings.

Worth Reading
September 17, 2009

Surowiecki on the shortcomings of the Baucus healthcare bill. In monetary policy, it's better to prick a bubble that clean up after it pops. Cool interactive graphic from Economy.com tracking the recovery by state. Ezra Klein interviews the CBO's Doug Elmendorf. A case against restricting bankers' bonuses.  

Is the CBO Biased Against Health Care Reform?
September 17, 2009

A number of CBO-watchers were asking that question when the agency started scoring health care bills a few months back. As Washington and Lee law professor Timothy Stoltzfus Jost put it in Politico: It is much easier to score costs than cost-savings. Legislation pending in both the House and Senate in fact includes state-of-the art proposals that many health policy experts do believe will result in real savings, as the CBO recognizes.

The Real Banker Boondoggle
September 17, 2009

Laurence Grafstein: What financiers owe the public.

Is Treasury Courting Inflation?
September 16, 2009

Deborah Solomon and Jon Hilsenrath at the WSJ inform us that, in order to keep from hitting the $12.1 billion trillion debt ceiling, the Treasury Department is winding down a one-year-old program it created to borrow funds on behalf of the Fed: Since last year, the Treasury has been selling special short-term securities and placing the proceeds in an account at the Fed.

Worth Reading
September 16, 2009

What recession? Wages are rising. (Or are they?) First firm to participate in toxic loans progam is selected. Lehman owes about $2 billion in back taxes. Barclays shows that accounting hijinks are alive and well. Scott Sumner: the Fed caused the crisis by printing too little money. Felix Salmon gets profiled.

Pages