In his latest column, Martin Wolf reviews Andrew Smithers’ latest book and uses the opportunity to jettison the Efficient Markets Hypothesis.
The efficient market hypothesis, which has had a dominant role in financial economics, proposes that all relevant information is in the price. Prices will then move only in response to news. The movement of the [...]
Volcker’s Advice
To the Editor:
Re “Volcker’s Voice, Often Heeded, Fails to Sell a Bank Strategy” (front page, Oct. 21):
As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I would agree with Paul A. Volcker (and also Mervyn King, governor of the Bank of England) that some kind of separation between [...]
Business Standard writes a good editorial on the need for fiscal deficit consolidation in India. It is a timely reminder:
The deterioration in fiscal parameters in 2008-09 and 2009-10 has been on account of both the fiscal stimulus and pre-election populism…..If during the downturn monetary policy had to accommodate the needs of fiscal policy, in months [...]
Seventh question: Is there any evidence of irresponsible lending, like the sub prime in U.S.A.?
There is no direct evidence of any large scale lending in India that could be characterized as irresponsible lending. But, a study should be made of commercial banks’ lending and support to micro-finance institutions, which are profit-seeking (MFI-PS). Here also, one [...]
The Business Standard has published the full text of the speech that Dr. Y. V. Reddy had delivered recently at the S. Guhan Memorial Lecture in Chennai on October 22nd. The full text can be accessed here and a summary article based on that speech, can be accessed here.
Some remarks stand out:
Is (India’s) macro economic [...]
One of my friends forwarded me this blog post by Paul Krugman and asked me what Paul meant by ‘that right now the United States has nothing to fear from Chinese threats to diversify out of the dollar’.
What he means is this:
If China sells dollars and puts the proceeds into other currencies, it helps the [...]
It is a strange piece by Bibek Debroy in Indian Express. He rails against government controls in the end. Not many would quarrel with that. But, what does government control has to do with asset price bubbles. It is in the domain of monetary policy makers. To say that it is hard to spot bubbles [...]
‘Economist’ (Oct. 22, 2009 issue) ends a piece on American banks with this pithy observation on the state of the health of the American banking system:
Right now America’s banking system resembles a pyramid. At the top, two or three firms are doing well. But beneath them are a handful of giant conglomerates that are struggling [...]
Gilian Tett in FT:
In the meantime, it is crystal clear that the longer that money remains ultra cheap, the more traders will have an incentive to gamble (particularly if they privately suspect that today’s boom will be short-lived and want to score big over the next year). Somehow all this feels horribly familiar; I just [...]
Via BaselineScenario, I landed on this article by Joe Nocera. It needs no explanation. It lambasts the American Bankers’ Association for lobbying against the Consumer Protection Bill that has been watered down by Mr. Barney Frank already. It is self-explanatory. I do not want to spoil your fun by citing selectively. Read the whole stuff, [...]
Bare Talk at Mint
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