The last 30 years have been notable for the rise of hedge funds, organizations that compete with the top Wall Street investment banks in remuneration, while charging their investors fees far above those traditional for investment management services. Hedge funds had a mixed record in 2007-08; there were several large failures but also some notable […]

New York Times columnist Paul Krugman, in a talk show August 14, remarked that the fiscal stimulus caused by a fake Alien invasion of the United States would best rescue the U.S. economy, providing the inflation and growth that according to him it needs (a real Alien invasion would be equally efficacious, but might cause […]

The decision by Standard and Poor’s to downgrade the U.S. credit rating to AA plus caused a stock market slump and an extraordinary rally in U.S. Treasuries, the latter further proof if you needed one that markets are often irrational. In spite of Ben Bernanke’s Flying Dutchmen-like attempt Tuesday to nail interest rates to zero […]

The potential downgrade to AA in the U.S. credit rating has exposed one massive fallacy of modern finance: there is no such thing as “risk-free” investment. Much of the modern finance canon will need to be re-written, or better still, scrapped altogether. However this discovery has considerable implications even for those of us who adhere […]