Posts filed under “Think Tank”

Brooksley Born finally gets to tell her story on national TV.  Note the pathetic apology by Arthur Levitt below for being part of the Greenspan-Rubin-Summers gang that tried to ruin Ms. Born’s career in Washington in the name of making the world safe for OTC derivatives.  And notice that this was one of the early good works of the President’s Working Group on financial services, an unconstitutional entity that should be outlawed.  Fortunately there has been enough continuing interest in the media to get the story out.   Chris

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FRONTLINE INVESTIGATES THE ROOTS OF THE FINANCIAL CRISIS

FRONTLINE Presents
The Warning
Tuesday, October 20, 2009, at 9 P.M. ET on PBS

www.pbs.org/frontline/warning

“We didn’t truly know the dangers of the market, because it was a dark market,” says Brooksley Born, the head of an obscure federal regulatory agency — the Commodity Futures Trading Commission (CFTC) — who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country’s key economic powerbrokers to take actions that could have helped avert the crisis. “They were totally opposed to it,” Born says. “That puzzled me. What was it that was in this market that had to be hidden?”

In The Warning, airing Tuesday, Oct. 20, 2009, at 9 P.M. ET on PBS (check local listings), veteran FRONTLINE producer Michael Kirk (Inside the Meltdown, Breaking the Bank) unearths the hidden history of the nation’s worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

“I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”
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Category: Markets, Think Tank

Updated earnings cheat sheet

Here is an update from my earnings and revenue cheat sheet and the trends still remain similar to Q2 in that most companies are beating eps estimates while slightly more than half are beating revenue forecasts. The relative positive though is the amount of the beats are exceeding what was seen in Q2. I have…Read More

Category: MacroNotes

Europe Round Up

From a major NY trading desk: European markets opened a few points above flat, fell by nearly -1%, and have since rallied back to the unchanged mark: DAX -0.1%; CAC -0.2%; FTSE -0.1%. Earnings season is now in full swing in the U.K. and on the continent. Dutch supermarket chain Ahold is modestly lower after…Read More

Category: Economy, Employment, Think Tank

Bank of Canda doesn’t go the way of the RBA

In contrast to the Reserve Bank of Australia, the Bank of Canada decided to keep rates at the historical low level of .25% and the strength of the Canadian $ seems to be the main motivation. The RBA spent more time focused on the possible imprudence of keeping rates at emergency levels when it was…Read More

Category: MacroNotes

Economic data

Sept PPI fell a sharp .6% vs expectations of flat and the core also unexpectedly fell .1% vs a forecasted rise of .1%. The headline drop was led by a 2.4% fall in energy prices, especially in gasoline which was down by 5.4%. This will reverse though in Oct as gasoline prices are back up…Read More

Category: MacroNotes

David Einhorn, Value Investing Congress, October 19, 2009

Einhorn Vic 2009 Speech

Category: Bailouts, Credit, Markets, Think Tank

The big multinational companies continue to deliver and other stuff

Earnings overall continue to be excellent with a higher % of revenue beats than Q2. Apple of course was incredibly impressive. The big multinational companies with healthy exposure outside of the US definitely took advantage of the stronger rebound overseas. Emerging markets, led by Brazil, may be under pressure today after Brazil’s decision to levy…Read More

Category: MacroNotes

NAHB index unexpectedly falls

The Oct Nat’l Assoc of Home Builders index, an index measuring home building sentiment, was 18, 2 pts below forecasts and down from 19. Present conditions fell 1 pt while future expectations fell 2 pts. Prospective Buyers Traffic fell 3 pts as the West, South and Midwest regions dropped with the West showing the biggest…Read More

Category: MacroNotes

Bernanke speaks and stays on topic

Bernanke talks nothing about monetary policy and keeps his speech focused on Asia and our trade relationship with them. His bottom line, the US needs to save more, Asia needs to consume more and this would rebalance trade imbalances. Of course with US interest rates at zero, savings in the US has been more of…Read More

Category: MacroNotes

Bernanke on Asia and the Global Financial Crisis

Chairman Ben S. Bernanke

At the Federal Reserve Bank of San Francisco’s Conference on Asia and the Global Financial Crisis, Santa Barbara, California

October 19, 2009

Asia and the Global Financial Crisis

The rise of the Asian economies since World War II has been one of the great success stories in the history of economic development.  Japan’s transition to an economic powerhouse was followed by the rapid ascent of the Asian tigers, and subsequently by China taking a prominent place on the world economic stage.1 Since the beginning of this decade, Asia has accounted for more than one-third of the world’s economic growth, raising its share of global gross domestic product (GDP) from 28 percent to 32 percent.2 Importantly, its economic success has resulted in large-scale reductions in poverty and substantial improvements in the standards of living of hundreds of millions of people.  China and India, which together account for almost 40 percent of the world’s population, have seen real per capita incomes rise more than 10-fold and 3-fold, respectively, since 1980.  As would be expected given the increasing size and sophistication of their economies, the nations of the region have also begun to exert a substantial influence on global economic developments and on international governance in the economic and financial spheres.

It is widely agreed that a key source of Asia’s rapid advancement has been the openness of countries in the region to global trade and finance.  Notwithstanding this consensus, the considerable progress of these countries in developing domestic institutions, policies, and industrial capacity–together with their strong growth in the initial phase of the ongoing global financial crisis–led some to speculate that the Asian economies had “decoupled” from the advanced economies of North America and Europe.  Of course, in hindsight, given the magnitude of the shocks that have struck these advanced economies over the past two years, as well as their strong economic and financial links to Asia, it should not have been surprising that Asia was ultimately hit quite hard by the global downturn, even though the origins of the turmoil were elsewhere.

As a prelude to the papers and discussions to follow, I will provide a brief overview of the Asian experience during the global financial crisis.  I will highlight the diversity of experiences, both within Asia and between Asia and other regions, and draw some inferences about the different channels through which the effects of the financial crisis were transmitted around the world.  I will discuss Asia’s policy response to the economic and financial consequences of the crisis.  Finally, I will focus on medium-term challenges.  For both Asia and the United States, perhaps the greatest medium-term challenge is to achieve more balanced growth and, in the process, to further reduce global imbalances.

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Category: Federal Reserve, Think Tank