The Gold Standard  

TGS has sympathy for Tobin Tax. But, it has no sympathy for this sort of ‘regulation’. If anything, it is counterproductive and wins sympathy for financial sector free-market fundamentalists. Most reasonable people agree that the financial sector is not the same as competitive real sectors and it needs regulation, if not for any other reason, [...]

Dani Rodrik says that banks are losing support of economists in maintaining their grip on the political establishment. He bases his observations on the revision in IMF thinking (published in February 2010) on the utility of capital controls as one more weapon in the policy arsenal of sovereign governments. From here, he reckons that it [...]

I have not posted in a long time. It was not meant to be this way. It just happened. Let me break the stalemate with a post on bubbles. Nothing original. It just so happens to be the topic on which I spoke in Mumbai over the weekend. The Indian Alumni Association of the Asian [...]

Recently, I came across the following observations in a research note provided by a vendor:
Some have blamed the Federal Reserve for inflating yet another asset bubble. If this is the end result, so be it. Debt deflation and the associated recession are rooted in a balance-sheet crisis. As such, the remedy must be oriented toward [...]

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 [...]

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, [...]

Macroman writes thus:
Markets might be screaming “you suck!” to Macro Man, but trust him: the feeling is mutual.
Exactly!, I say.
John Hussman writes in his weekly column,
Probably my clearest drawback as an investment manager is that I have too often assumed that investors should recognize what seemed to me to be patently obvious dangers (the predictable [...]

Bloomberg reports that Treasury Secretary Geithner had seen stronger than expected economic recovery signs. Substantiation inside the text of the news item simply refers to normalisation of financial conditions. I am not sure that is ’stronger than expected’ economic recovery.  Separately, finance ministers of G-7 called for a ’strong dollar’, again, according to Bloomberg:

Oct. 3 [...]

Perhaps, had he seen this piece in ‘Economist’ Jim Grant might have waited to make the switch to being a bull. Jim Grant was, for years, known to be a bear on the US way of running an economy and its consequences for asset markets. On September 19th, he switched sides and explained why he [...]