Archives: Posts From February 2008

Ambac's Bailout Shows Little Faith
By Colin Gustafson | Tue, 26 Feb 2008 at 9:34 AM | Permalink
Excerpt: A troubled bond insurer, Ambac Financial Group Inc., may be inching closer to a deal that could salvage its top-notch credit rating, but a skeptical blogger, Yves Smith (Naked Capitalism), writes that the proposed rescue plan is a token gesture that does ...

Trimming Expectations To Spur a Rate Cut
By Colin Gustafson | Tue, 19 Feb 2008 at 9:48 AM | Permalink
Excerpt: The chairman of the Federal Reserve, Ben Bernanke, is all but certain to slash interest rates again, this time to as low as 2%, but only after market participants have tempered their expectations, an economist at the University of Oregon, Tim Duy, writes ...

The Rising Demand For Dollars
By Colin Gustafson | Fri, 15 Feb 2008 at 10:08 AM | Permalink
Excerpt: Robust demand for dollars among foreign central banks could exacerbate the nation's trade deficit and stymie economic growth, economist blogger Yves Smith warns. His admonition comes a day after fellow blogger Brad Setser hailed recent evidence of a ...

Linking Poverty With Death
By Colin Gustafson | Wed, 13 Feb 2008 at 10:11 AM | Permalink
Excerpt: It's widely known that severe poverty and high death rates go hand in hand. What is an open question, however, is the "causation" between the two, a University of Oregon economist, Mark Thoma (Economist's View), observes: Do ill people die in poverty ...

Sovereign Wealth Funds and Transparency
By Colin Gustafson | Tue, 12 Feb 2008 at 10:17 AM | Permalink
Excerpt: Two economist bloggers are voicing skepticism this week about the International Monetary Fund's efforts to establish a code of conduct among sovereign wealth funds. For months, IMF officials have been pressuring these funds — many of which own large ...

Looking Beyond Neoclassical Paradigm
By Colin Gustafson | Mon, 11 Feb 2008 at 10:24 AM | Permalink
Excerpt: When American economists debate economic development policy in Third World nations, they traditionally follow two prevailing schools of thought: the free market argument or the interventionist belief. But as blogger Yves Smith notes (Naked Capitalism), ...

American Exceptionalism in Economic Policy
By Colin Gustafson | Fri, 8 Feb 2008 at 10:28 AM | Permalink
Excerpt: As the possibility of a recession looms, foreign economists are criticizing American policymakers for adhering to the belief that they must avoid a recession at all costs — be it through tax rebates, as proposed in the $145 billion economic stimulus ...

Equity Valuation in a Volatile Market
By Colin Gustafson | Wed, 6 Feb 2008 at 10:34 AM | Permalink
Excerpt: According to the so-called Fed model of equity valuation, investors measure whether equities are undervalued or overvalued by comparing the yield on the S&P 500 Index to the yield on a 10-year Treasury bill. Equity researcher Barry Ritholtz (The Big ...

Nonmonetary Currencies and Dishonesty
By Colin Gustafson | Tue, 5 Feb 2008 at 10:39 AM | Permalink
Excerpt: A behavioral economist at the Massachusetts Institute of Technology (Predictably Irrational) has a unique theory about how rogue trader Jerome Kerviel may have rationalized making billions of dollars in allegedly fraudulent stock transactions while his ...