Redstate

Posted at 8:07am on Apr. 4, 2008 Financial Markets Are Human Too

Fever for Regulation

By blackhedd

You may or may not have noticed Treasury Secretary Paulson’s speech last Monday, in which he unveiled a blueprint for modernizing the Federal government’s regulation of financial markets.

If you did notice it, you probably yawned. The report has been in the making for over a year, and although it contains a lot of good ideas, it’s neither directly responsive to the current market disorders, nor particularly likely to be enacted in whole or in part.

The editorialist at the New York Times noticed the speech, however. Their (predictable) response is that Paulson’s plan is far too reluctant to clamp down on market behavior that can result in stress (and crisis).

Unfortunately, I don’t get much sense that the editorial powers at the New York Times have direct knowledge of how real markets work. As it turns out, markets are human too.

Let me tell you what I mean…

Posted in Economy | federal reserve | Financial regulation | new york times | Paulson — Comments (5)/ Email this page » / Read More »

Posted at 9:35am on Dec. 10, 2007 Mr. Paulson Goes To China...

...And Will probably get his backside kicked again.

By blackhedd

Treasury Secretary Henry Paulson will be in China at mid-week for high-level discussions with Chinese government officials.

The topic is exchange rates. Mr. Paulson wants the yuan to appreciate against the dollar. The Chinese want the dollar to rise against the rest of the world's currencies, among other things.

Paulson won't get what he wants. But it's worth unpacking things a little, to get at the underlying issues. In particular, there are interesting political implications to some of the things China would like to do next.

More...

Posted in China | Economy | exchange rates | inflation | Paulson | yuan — Comments (11)/ Email this page » / Read More »

Posted at 9:35am on Nov. 27, 2007 Citigroup Lands in Drudge's Doghouse

An Arcane Investment Product Hits the Front Pages

By blackhedd

I was nonplussed to see a big scare headline on the Drudge Report, linking this wire story, under an ugly three-month chart of Citigroup's stock price.

I was even more weirded out to see that the story was about Structured Investment Vehicles (SIVs), a form of engineered financial product that is abstruse enough to confuse professionals, let alone the average Drudge Report reader.

Actually, there was important news from the land of SIVs today, but it came from the London-based Hong Kong-Shanghai Banking Corporation (HSBC), one of the world's largest retail banks. Our intrepid wire reporter (and others) have been spinning Citigroup as bad guys and HSBC as good guys, but as usual there's more to the story.

Read on...

Posted in Citigroup | Economy | finance | Paulson | SIV | subprime mortgage — Comments (20)/ Email this page » / Read More »