To keep the public blaming Wall Street for their current miseries, the Obama administration has announced that it is reviewing banking regulation, with a view to appointing a single regulator for the financial services industry. Skeptical as I am of the value of regulation, I am only too well aware that different regulatory systems make […]

Britain was put on negative credit watch by Standard and Poor’s for downward re-rating from its current AAA this week. The United States, Japan and several other countries are running record deficits, yet their bond yields are still close to all-time lows. That brings up an awkward question: what happens if the global investment community, […]

Over the last thirty years, the capital markets have been restructured through the tenets of modern finance, in its various forms which together have gained six Nobel Prizes (Modigliani, Sharpe, Markowitz, Miller, Merton, Scholes) and might have generated a couple more (Fama and Black.) This has been enormously profitable for the financial services sector, which […]

Stock markets have shown clear signs of irrational exuberance in recent weeks, on evidence that the US and global economy is exhibiting “green shoots” of impending recovery. Since, while I have said several times that the economy appears to be approaching a near-term bottom, I don’t expect recovery to impend any time soon, I thought […]

The potential swine flu pandemic has emphasized once again the vulnerability of the global economy to being knocked off an even course by unexpected events, not all of which are as obviously based in past economic policy as the US housing finance disaster. Wars, epidemics, serious terrorist attacks and doubtless in the future ecological crises […]

Last Wednesday’s British budget did very little to rectify that country’s yawning fiscal deficit, but what little it did was almost entirely at the expense of the country’s high income earners, those making over 150,000 pounds ($210,000). The fascinating question is: if British governments return to their pre-1979 high-tax ways, as seems likely, what will […]

The alphabet soup of possible shapes for this recession is now clarifying somewhat. The recent strength in several US and global indicators, before fiscal stimulus has had time to kick in, indicates that the panic among governments after September’s financial crisis was overblown. Indeed the strength in economic indicators, combined with the global stock market […]

Relatively little rested economically on the result of last November’s US Presidential election. John McCain was politically well towards the big-government wing of the Republican party, while President Barack Obama, after an initial burst of public spending will be forced by economic reality to retrench during his remaining years in office. There is however an […]

With increasing frequency over the last few weeks, economic statistics have emerged suggesting that the first shoots of economic spring are emerging and that the bottom of the US and global recession is only just round the corner. Higher vehicle sales and factory orders, the Institute of Supply Management monthly index and slightly higher personal […]

Zhou Xiaochuan, Governor of the People’s Bank of China said this week that the International Monetary Fund’s Special Drawing Right should replace the dollar as the world’s main currency. The political reasons for his proposal are clear, its merits rather less so. Could the world economy work better with a global central bank, whether in […]