The Fed led by fearless Ben Bernanke has made it clear that since deflation is a significant risk and bank lending is depressed, it intends to help the banking system further by up to $1 trillion in further bond purchases. The rational investor’s response to this was clear all last week: sell banks, whose assets […]

Brazilian minister of finance Guido Mantega last week accused the major economies of starting “currency wars”. To a large extent he was trying to divert attention from his own overspending misdeeds. However this week’s decision by the Bank of Japan to enter more “quantitative easing” and Chinese premier Wen Jiabao’s aggressive response to the EU/US […]

With Brazil’s election apparently a big victory for the leftist candidate Dilma Roussef, Russia facing increasing political and economic uncertainty, India in the grip of spiraling inflation and even China’s growth prospects seeming dimmer, the great growth story of the last decade is acquiring a few dents. For the first time, it is reasonable to […]

Gordon Gekko isn’t the only jailbird 1980s financier to make a comeback this year. The junk bond market, largely the brainchild of Drexel Burnham’s Michael Milken, is set to have a record year. The difference between the two: Gekko’s financing strategies were sounder. It is now possible to identify the next bubble being blown and […]

As higher education costs escalate faster than inflation, while the global job market remains largely depressed, increasing numbers of commentators are questioning the value of higher education as a whole. The question becomes more urgent, as state budgets become increasingly burdened by higher education’s further expansion. However the answer to the question of education’s value […]

The appointment of trader/investment banker Bob Diamond to head Barclays Bank last week renewed calls for government to force a split between banking and investment banking, while in retaliation Barclays threatened to relocate its headquarters abroad. To most commentators, that seemed an overwhelming danger, but I was forced to wonder: if the behemoth “investment banking” […]

One of the great myths that sustained the late twentieth century economy was that of exponential growth. Technological change was supposed to be moving ever faster, and so economic growth would naturally also be exponential, making us all richer than our parents and immeasurably richer than our grandparents. Since 2000, this seems to have gone […]

Fed Chairman Ben Bernanke loses sleep over the possibility that the United States may suffer a repeat of the 1930s Great Depression. Inflation hawks and opponents of President Obama’s Keynesian “stimulus” warn continually of a possible repeat of the 1970s stagflation. Yet recent data is beginning to suggest a more unpleasant possibility still: that the […]

The United States is often held out as the world’s principal beacon of free-market principle. To the extent that it backslides, there is thought to be little hope for such principles in other countries. Yet as last week’s housing finance debate demonstrated again, the United States was populist before it was capitalist, and free-market principles […]

The last 15 years in global markets have been marked by one consistent factor: the ready availability, even overabundance of capital. Returns to investors have been driven down to dangerously low levels, both in debt and equity, by over-expansionary monetary policy, while asset values even after crashes have been far higher than their historical norms. […]