The best irony is unintended. I was reminded of that this week, after reading a well-argued op-ed piece in the Financial Times by Richard Shelby. The Alabama senator makes a good case that purchasing an Airbus tanker for the Air…
Category: Other
Is Fed throwing good T-bills after bad mortgage debt?
On occasion, when you want to do something that you are not permitted to do, you can circumvent the ban by getting a stand-in to act for you. For example, a bunch of high school sophomores may want to drink…
Wall Street’s herds moving on to new troughs
Investment managers, spooked by falling stock markets, are seeking alternative investments. Unfortunately, they are like drunken hogs: as they flee one mess, they create another. The comparison comes from an old tale of Minnesota farm life. Decades ago, a farmer…
Lenders hold key to mortgage trap
Mortgage lenders and servicers face a classic ‘prisoners’ dilemma’ with mortgages headed toward default. Like small-time safecrackers being sweated in a precinct house, they know what course is best for them to follow — as long as they can trust…
Gas tax is our best option–for now
Now that the Legislature has overridden the governor’s veto of the first gas tax increase in 20 years, it is a good time to consider if we can do things better in the future. Is there any better alternative to…
Saving key to real recovery
Will U.S. households save more? That may seem an odd question after all the discussion lately about getting Americans to spend more. If you believe current economic problems are just a transitory phase in the business cycle, increased saving is…
Merger talks should raise antitrust flags
Airline merger fever is flourishing right now, with Delta, Northwest, United and Continental all considering possible partners. Yet, economists of a certain age stand agape at the lack of concern about declining competition levels in aviation. Some people seem to…
Placing bets on commodities boom
The last few years have taught economists and commodity producers much about what people are willing to pay for grains and metals. For economists, this is useful additional data about the demand functions for soybeans or corn or copper or…
Subprime may be the least of it
Don’t be too overly optimistic that mortgage-backed securities are the only dodgy financial instruments out there. Consider this analogy: People with whom I have worked know my office usually is a mess. Can they safely assume that my home office…
Muni-bond insurers latest to feel sting of risk
Today’s financial problems have one benefit: They are helping people learn about financial markets. Just as the breakup of Yugoslavia taught people the difference between Bosnia, Serbia and Croatia, the current market woes are teaching people the differences between “collateralized…