After pretending an unwonted firmness for a few weeks, the central banks in both Britain and the United States caved this week, accepting financial sector bailouts and in the Fed’s case lowering interest rates. Moral hazard has thus been made immoral certainty; financial market participants who indulge in grossly speculative activity can be “highly confident” […]

It is now becoming clear that whether or not he relinquishes the presidency nominally, Vladimir Putin will remain in effective control of Russia for many years after 2008. In that event, his “spook” economic and political priorities, honed during his decades with the KGB, will doubtless rule Russian policy. Since Putin appears most comfortable in […]

Free market economics is famously predicated on “market rationality,” the idea that each participant in the economy acts as a coolly reasoning “homo economicus” in purchase and investment decisions. Yet as the disintegration of the 1995-2007 credit bubble continues it is becoming more and more obvious that in several areas economic decision-making during this period […]

The 45% drop in earnings at Freddie Mac, for a quarter that ended in June, predating August’s intensification of the mortgage market crisis, indicates an uncomfortable reality. President George W. Bush may attempt to hold back the tide of foreclosures by handing out yet more federal guarantees to subprime borrowers, but that will only delay […]