On the occasion of President Obama’s inauguration, we are publishing pieces on the two elements of the economy that we believe require the most urgent attention by the incoming administration – the repair of the banking system and, in this report, the unemployment crisis. Highlights Much has been written on the similarities between the economic … Read more
The Satyam scandal has shaken corporate India, and damaged its reputation with investors, domestic and foreign. It turns out that founder and CEO B. Ramalinga Raju invented $ 1 billion in cash, which never existed. How could the auditors miss this fraud? Bernard Madoff relied on a classic Ponzi scheme, and the ability to hide … Read more
` Jeff Madrick makes the case for government: No New Tax Cuts, by Jeff Madrick, Boston Review: …Even Friedman acknowledged that free markets do not adequately supply some public goods, like primary education and roads. … And there are other strong theoretical arguments to be made for state intervention in areas of information economics, behavioral … Read more
José María Aznar López was appointed the fourth President of the Government (Presidente del Gobierno) of Spain in the recent post-Franco democratic stage that started on 6 December 1978 with the approval in referendum of the current Constitution by a majority popular vote. Previous Presidents include centrists Adolfo Suárez González (1977-1981) and Leopoldo Calvo Sotelo … Read more
José Luis Rodríguez Zapatero became the fifth President of Spain’s young democracy on March 14, 2004, three days after Islamist terrorists killed 191 and injured thousands in Madrid commuter trains, the worst terrorist massacre in Spain’s history. The apparently surprising victory does however not reveal Zapatero’s ever-growing determination to reach the highest political office in … Read more
In a speech last week on “Policy Coordination Among Central Banks”, Ben Bernanke, US Federal Reserve chairman, drew attention to the way that the Fed’s swap line with other central banks has been used to facilitate lender of last resort funding for dollar-denominated assets held outside the US. We should be thinking here about mortgage-backed securities (and their collateralised … Read more
On 30 October 1938, the American Radio Drama series Mercury Theatre aired “The War of the Worlds”, directed by Orson Welles. Adapted from H.G. Welles’ novel, the first half of the broadcast was scripted as a series of dramatic news bulletins of a Martian invasion. Listeners who had missed or ignored the opening credits assumed … Read more
On October 2, the U.S. House Oversight and Government Reform Committee announced a Hearing on Regulation of Hedge Funds scheduled for Thursday, November 13, 2008. The focus is on the causes and impacts of the financial crisis on Wall Street, and the Committee will hear from hedge fund managers who have earned over $1 Billion. … Read more
Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system. Such recapitalization – via the use of public resources – … Read more
Following the publication of the New York Times profile article about me as Dr Doom a number of readers have asked me for the text of the two speeches – cited at the beginning of the NYT article – that I gave at the IMF, one in September 2006 and the other in September 2007, … Read more