Financial Markets

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Greenspan: The Liar, The Fraud

Booms and BustsFinancial MarketsCalculation and Knowledge


Alan Greenspan is in the news a lot currently because of the release of his new book. I haven't read the book. Nor will I read it if it means that I have to buy it or if reading it means that Alan Greenspan in any other way will financially benefit from it. Enriching a hypocritical fraud like...

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Bush to Provide for the New Socialist Man

Big GovernmentFinancial MarketsInterventionism


The media is reporting that George Bush has ruled out a government bailout of mortgage lenders, but instead, the Bush package is sure to provide indirect bailouts for homeowners in debt up to their eyeballs. This...

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The Unfolding Credit Crisis

Booms and BustsFinancial MarketsInterventionism


With the collapse in the price of sub-prime mortgage backed securities and credit derivatives, the credit boom has moved into the crisis phase. This is the place in the cycle where it becomes clear to the market the investments made possible by unfunded credit were mal-investments and they are...

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Fascinating theory. Is it plausible?

Financial Markets


I was speaking to a banker this past weekend who put the blame on the subprime problem squarely on the campaign against "red lining" and the Community Reinvestment Act enforcement, which forced banks to give super risky loans to people without...

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Credit crunch + Market Rout = Central bank intervention

Booms and BustsFinancial MarketsCapital and Interest TheoryInterventionism


The turmoil in financial markets is eliciting the usual response from the central bankers, all up there in their Hueys, 'Die Walkuere' blasting out of their beat boxes. But the fixation on the 'sub-prime' angle and on the Fed's role in isolation only tells part of the story. While...

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The Housing Bubble and the Credit Crunch

Booms and BustsFinancial MarketsInterventionism


The turmoil in the credit markets now emanating from the collapse of the housing bubble can be understood in the light of the theory of the business cycle developed by Ludwig von Mises and F.A. Hayek. These authors showed that credit expansion distorts the pattern of spending and capital...

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Are Stock Markets a Swindle?

Financial MarketsMoney and BanksMoney and BankingPolitical Theory


Aside from the error identified by Shostak this morning, another error concerning financial markets is that they are systematically irrational - the very opposite error of the EMH.


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Size of Sovereign Wealth Funds

Financial Markets


I have written before for the blog about the emerging "sovereign wealth funds" (see: 1 2 3...

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Australia & The Inverted Yield Curve

Booms and BustsFinancial Markets


One myth upheld even by many people who has a basically sound outlook on monetary issues is the view that an inverted yield curve (where short term interest rates are higher than long term interest rates) will cause a recession. It is a well known fact that the yield curve tends to invert just...

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China: The New Global Hedge Fund

Financial MarketsGlobal Economy


I have been covering the story of the sovereign governments' ongoing ventures into capital markets with their accumulated currency reserves (see: 1 2...

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