The Problems at Bank of America

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Do you hear that ticking sound? Today it was leaked that the Federal Reserve has requested a “contingency plan” for Bank of America (BAC). Supposedly, this includes the possibility of spinning off Merrill Lynch for some extra cash. Such a … Continue reading


Bundesbank Special Ops Group (Deutsche Mark Reappears?)

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It makes sense that there is a secret group within the Deutsche Bundesbank working on a plan to resurrect the Deutsche Mark. It would be a gross failure of national risk management if they did not have a plan. Call … Continue reading


Why QE2 Won’t Work

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QE2 does not address the fundamental issues that the U.S. economy faces. It is preposterous to think that reducing medium term interest rates by 25-50 basis points is going to lead to a significant increase in GDP and a reduction in unemployment.
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12 Questions About the Economy

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The following are my answers to a number of questions posed in a “Market Views” forum a few weeks ago. While we have had fresh data recently, the answers to the questions have not changed. 1. The Duke-CFO Survey was … Continue reading


Regulation’s Razor’s Edge

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Whether it is Basel 3 or the Dodd-Frank bill – or the projected increased share of government in the economy, we need to understand the impact of regulation. The following is a summary of my remarks to a Finance Symposium … Continue reading


Recession Calculus?

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  It doesn’t feel like the recession is over. The Business Cycle Dating Committee of the NBER announced on September 20, 2010 that the recession officially ended in June 2009. The Committee looked at a number of indicators. This is … Continue reading


Hold On!

Campbell Harvey analyzes the recent economic data and what it means for the U.S. longer term economic growth prospects. Continue reading


The Cult of Bailout

  What single word best characterizes policy responses in this on-going financial crisis? “BAILOUT”. It goes something like this. You take a lot of risk and reap lots of rewards (be it in pay, bonus, or social programs). You get … Continue reading


Hockey Stick or a Plank?

“Only” 36,000 jobs lost in February. That is relatively good news. The storyline was the following. Given all the snow, we should have lost more jobs. 36,000 was a relatively good number because if there was no snow we would … Continue reading


Bombs Away

Risk has greatly increased this week. There are two reasons. First, the Euro-bomb could explode anytime. Second, the U.S. government dropped a bomb in telling us that the employment losses during the current recession are far worse than people had … Continue reading