Month: May 2016

The Bear’s Lair: Bring out the random number generators!

According to the Financial Times, the major international investment banks are cutting their spending on “quants” and their mathematical risk management models by about 40% from the current average of $100-150 million annually per bank. The regulators no longer give a risk capital allocation benefit for banks with “sophisticated” truly incomprehensible modeling systems, so there […]

The Bear’s Lair: A nation without productivity growth

As I have discussed recently in this column, the world’s adoption of ultra-low “funny money” interest rate policies over a number of years has caused productivity growth to slow markedly, and in the most extreme case of Japan, to go into reverse. Since we appear unlikely to change interest rate policies in the near future, […]

The Bear’s Lair: Nationalist and globalist threats to prosperity

It appears that the U.S. electorate in November will be faced with a Hobson’s Choice between two alternatives: a protectionist nationalist who will raise trade barriers and make the nation poorer versus a regulating environmentalist Keynesian who will equally impoverish the country and indeed the world in general. All over the world, political choices are […]

The Bear’s Lair: The world does not need bankers taking more risks

Writing in the Wall Street Journal on Monday, Peter Wallison of the American Enterprise Institute argued that world growth was excessively subdued because Dodd-Frank and other repressive financial regulations were preventing bankers from taking risks. I agree entirely with Wallison’s detestation of regulation, and admire his previous analyses of Fannie Mae and Freddie Mac’s contribution […]

The Bear’s Lair: Goldman needed a post-2008 clearout

Goldman Sachs announced this week that it was to offer consumer savings accounts over the Internet, with a minimum of $1. It’s not a bad marketing idea; no doubt a “Bank of Dr. Evil” branded savings account would also go well. It appears to indicate that Goldman’s confidence in its core investment banking business is […]