pacalis

Volcker's Wake Up Call: Spread the Word

1. “[Financial engineering] moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
2. “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy”

I agree with the moving around rents and lack of productivity, the main points. But if rents have vastly increased, by definition productivity must also have increased, everything else (outputs/inputs) being equal. Otherwise there is an argument that financial engineering has increased the scales of inputs and outputs (productivity fixed) thus leading to rent increases, but this is not what I think he was saying, is it?

Or does he mean the variability of rents has increased?

Is Dubai's Default a Black Swan Event?

Dubai is the poster child of the unsustainable.

PS If you buy 4 nights at the grand millennium hotel this week you can get complimentary ski tickets. Enjoy!

Five Reasons the Market Could Crash This Fall

All this doom and gloom.... My view is that recent bullish trends are grounded in the simple recognition that boomers are simply getting way more productive. Profits are down because of fantastic wage increases and incentive-based profit sharing. And unemployment figures just represent the number of loafers on longer term holidays. No worries! :)

Bear's Bigger Bid

I like your blog but this is a wimpy comment.

Obviously the funk on this is so high even the house that Morgan built is flip flopping.

But maybe throwing around an extra $1B isn't a big deal when you're getting the opportunity to run down $30B for free.

The Fed: On the Cusp of Moral Hazard

$30 billion bailout for a company with $16B in revenues and $6B in market cap pre-fed involvement. Negotiated in secret. And without congressional authority or mandate.

It's infuriating.