Category Archives: Financial Crisis

Inside Job

The movie you should see this season is Inside Job. It is a documentary about the 2008 financial crisis, examining its causes, the mechanisms by which it was perpetrated, the apologists and academic architects, and the after-effects. The press kit (a .pdf) is worth examining, here is the NYT review, here is Felix Salmon’s take. […]

Selfishness, finance, and the 'greatest trade ever'

I just finished reading Gregory Zuckerman’s new book The Greatest Trade Ever: The behind the scenes story of how John Paulson defied Wall Street and made financial history. The story is about how JP, a relatively staid merger expert, became intensely bearish on the housing market in 2004. He took a $2 billion in assets […]

If you don't trust the seller, don't buy the product!

First of all, kudos to McClatchy’s news service for running a slew of articles critical of Goldman Sachs during this financial crisis. The firm displays a disastrous combination of connectedness and high prestige on the one hand, and unconscionable financial practices on the other. They are not at all alone, or even the worst, but […]

The state of the economy

The current state of the economy, mostly financial, and I’m feeling pretty bleak about it. I’m looking at a few indicators, and I’m not particularly impressed with what I see.

Where have you gone, structured finance?

One of the more interesting question post-meltdown (do we even still call it that? we really need a name for the ‘financial events of 2007-2008’) is whether structured finance is, for all intents and purposes, dead. Structured finance is the general term that includes the securitization of debt. These vehicles go by names like Asset-backed […]

Bank holding company? An i-bank? Goldman Sachs

Congress is starting to ask questions about the ways Goldman Sachs measures risk, considering their supposed switch from an investment bank to a bank holding company. And they should. Plus, I think I was wrong about GS paying its profit-makers.

Regulating financial activities or organizations?

Two ways to regulate futures markets are by regulating the organizations that comprise the financial markets, or by regulating the financial activities in which any organization participates. This is an attempt to think about these differences.

Something doesn't square

How can it be that the NYT reports that JP Morgan is 110% awesome: “The strong showing may put to rest some worries that the bank was allowed to pay back its $25 billion taxpayer investment too early, after it passed the Treasury Department’s stress test in May.” But the Wall Street Journal can report […]

Hey look, the NYT is fellating Goldman Sachs again

Oh Yes, it’s their ‘trading prowess’, their ability to “embrace risks that its rivals feared to take and, for the most part, manage those risks better than its rivals dreamed possible.” Don’t pay attention to those last few sentences, though. The $13 billion government subsidy via the bailout of AIG, and the $28 billion in […]

What criticism with knowledge looks like

I complained last week that Duncan Watts’ editorial was an argument without much substance, effectively an argument based on deep knowledge of networks but shallow knowledge of markets. At the end of last week, James K. Galbraith testified for the Subcommittee on Domestic Monetary Policy and Technology. And it was pretty awesome. First, it was […]