Financial Crisis

The Futility of Annual Top 10 Predictions

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In every recent year, a black swan event has made top 10 lists appear quaintly naive and unimaginative. Our list is probably no better.

This time of year, top 10 predictions are all the rage. These lists can be interesting and entertaining but how useful are they really?

This question goes to the heart of forecasting. How futile or how useful is an attempt to forecast the economy, or technology, or world events for the next twelve months? There are three answers.  read more »

Obama's not so glorious legacy

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Like a child star who reached his peak at age 15, Barack Obama could never fulfill the inflated expectations that accompanied his election. After all not only was he heralded as the “smartest” president in history within months of assuming the White House, but he also secured the Nobel Peace Prize during his first year in office. Usually, it takes actually settling a conflict or two — like Richard Nixon or Jimmy Carter — to win such plaudits.  read more »

A Capital Improvement and Revitalization Idea for Detroit

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You may have heard that Detroit is in the midst of a modest but enduring revival in and around its downtown. Residents and businesses are returning to the city, filling long-vacant skyscrapers, prompting new commercial development and revitalizing adjacent old neighborhoods. As a former Detroiter I'm excited to see the turnaround. After so many false starts, Detroit's post-bankruptcy rebound seems very real.  read more »

The Incompetence Hypothesis to Explain the Great Recession

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Seeking an understanding of the Great Recession, I am finding that most of the 2008 financial crisis and its aftermath can be explained by incompetence. In the final weeks of writing a book on the systemic failure in US capital markets, I had to re-read the Securities and Exchange Commission (SEC) Inspector General’s 2009 report on their failure to stop Bernard Madoff despite having received credible evidence of a Ponzi scheme.  read more »

Seven Years Ago, Wall Street was the Villain. Now it Gets to Call the Shots

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The recent passage by Congress of new legislation favourable to loosening controls on risky Wall Street trading is just the most recent example of the consolidation of plutocratic power in Washington.  read more »

10 Steps to Financial System Stability: Lessons Not Learned

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Recently, BloombergView writer Michael Lewis called attention to tape recordings made by a Federal Reserve Bank of New York bank examiner who was stationed inside Goldman Sachs’ offices for several months during 2011-2012. She released the tapes to This American Life who aired her story on September 26, 2014.  read more »

Apocalypse Soon? Uneasiness with The Economy

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Seven in 10 Americans say the country is on the wrong track. Americans are unhappy, worried and pessimistic, and their spending is down according to a University of Michigan report. But the same report shows that consumer sentiment is up. Consumer confidence is up, according to the Conference Board, and our own Consumer Demand Index indicates that spending plans are up.  read more »

Are Law School Grads the Future's Paralegals?

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According to recent figures, in the United Kingdom paralegals already make up (as a mean average) 44 percent of all fee earners in solicitors firms, and are on track to outnumber solicitors in firms within a decade. In the US, the Bureau of Labor Statistics projects a 16.7 percent growth in paralegal jobs between 2012 and 2022, adding 46,200 positions. Jobs for attorneys are expected to grow only about 10 percent during that period.  read more »

Subjects:

Searching Out The Half-Full Glass

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There is a shiny, brittle skin to the economic recovery that conceals an unhealthy flesh underneath. It is tempting to call this condition a glass half empty. But seeking the healthy and the fit in nontraditional places has become a quest for more and more Americans who are leading us down a pathway that diverges, from the mainstream towards a new future. Out of earshot of the mainstream media and off of Main Street, there is a glass half full.  read more »

Some Implications of Detroit’s Bankruptcy

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There’s been so much ink spilled over Detroit’s bankruptcy that I haven’t felt the need to add much to it. But this week the judge overseeing the case ruled that the city of Detroit is eligible for bankruptcy. He also went ahead and ruled that pensions can be cut for the city’s retirees. Meanwhile, the city has received an appraisal of less than $2 billion for the most famous paintings in the Detroit Institute of the Arts.

A couple of thoughts on this:  read more »