Sorry for the hiatus, but I am preparing a large note on the ECB, whether it is conducting QE or not, what QE at the ECB is, and finally what the prospects of an exit strategy is. This has taken most of my time the last week. I will be posting this report shortly. Meanwhile, [...]

Amusing read from Unqualified Reservations (UR) blog. Introduction comments:
Here at UR, “economics” is not the study of how real economies work. It is the study of how economies should work – in other words, of how sound economies work. Sound economies, as we’ll see, are also stable economies.
Since there are no economies on the planet [...]

Will companies that issued derivatives based on bundled student loans be the next financial dominoes that will require a government “bailout”? The country’s long dedication to education makes it a virtual certainty.
The emphasis of the role of government in education predates the establishment of the United States as a country. As early as 1642, a [...]

A recent article splashed across the front page of the mid-size mid-western city where I live tells a surprisingly unfamiliar story about how ordinary people have pocketed hundreds of thousands of dollars by investing in subprime real estate. Though the current financial crisis has brought about intense discussion about the moral hazard of borrowing beyond [...]

With the U.S. credit crunch gone global and the $700 billion bailout package now looking like a small drop of water in a tidal wave of woe, the question of blame is now all over the media.
Who caused this mess?
If you read the Wall Street Journal you could easily come away thinking that the whole [...]

It has finally happened: the federal takeover of Fannie Mae and Freddie Mac, which together own or guarantee almost half of the $12 trillion home mortgage debt. The takeover came after inspectors poring over the books of the two companies concluded that the accounting methods used by Freddie Mac had overstated the capital cushion of [...]

There seems to be no end to the foreclosure crisis. In fact it is likely to get worse.
Option Adjustable Rate Mortgages (ARMs) allow homeowners to choose a low minimum monthly payment typically for five years. The low monthly payments often fall short of the interest due on the loan. The difference is added to the [...]

According to a New York Times business editorial published on August 5th, when the Federal Reserve recently asked for comments on its proposed rules on abusive credit card practices, it received over 56,000 responses. Most of the responses were from credit card customers who were enraged over practices such as arbitrary interest rate hikes based [...]