Mar 18 How and Why Is the Fed Creating $1 Trillion? By Business Desk Question: How and why is the Fed creating $1 trillion in new funds to buy securities? Paul Solman: They’ve been calling Fed chairman Bernanke “Helicopter Ben” since he told conservative economics icon Milton Friedman, in a speech a few… Continue reading
Mar 18 Why Are Pension Funds Investing in Hedge Funds? Question: Why were pension funds allowed to “invest” in a hedge fund? Hedge funds are nothing more than gambling. Paul Solman: Because pension funds are supposedly big enough and therefore sophisticated enough to know what they’re doing and take considered… Continue reading
Mar 17 How Do We Get Banks Lending Again? Question: Given our collective financial plight and our need for credit to survive, how do we get banks to be banks again (read: lend)? Can it be legislated – and if not, how can we surmount our impasse? Paul Solman:… Continue reading
Mar 16 Should the Stimulus Be Spent on R&D Instead? Question: What is the approximate rate of return on investment in the National Institutes of Health, National Science Foundation, and other agencies that sponsor research in this country? At one time, I read that it was something like 1:17 (investment:return). Continue reading
Mar 16 How Much Responsibility Do Boards of Directors Bear? Question: It seems the press is ignoring the elephant in the banking bath tub: Members of each board of directors had responsibility to their shareholders, yet I never hear that being discussed. And I’ve only had a whiff of who… Continue reading
Mar 13 If China Is Worried About U.S. Debt, How Worried Should We Be? Question: China’s Premier Wen Jiabao said today he was “worried” about China’s $1 trillion investment in U.S. securities. So, should the United States be worried about his worry? Paul Solman: In response to any economic problem these days, I’m… Continue reading
Mar 13 Why Are So Many Companies Collapsing So Suddenly? Question: Can you explain why, when these huge companies collapse, the bleeding isn’t slow and steady? Is it that they cannot forecast months ahead of time and see the end approaching? Or, have they just been operating with leveraged assets… Continue reading
Mar 12 How Are Losses on Mortgage Derivatives Calculated? Question: If there is no way to currently value the mortgages on which the value of derivatives (collateralized mortgage obligations, etc.) depend, how are losses on those derivatives — such as AIG $62 billion… Continue reading
Mar 11 What Are Mark-to-Market Rules? Question: What are mark-to-market rules? And should they be changed? Paul Solman: When it comes to the current crisis, this is the question (or one major question): To “mark to market” or not to “mark to market”? Consider a… Continue reading
Mar 11 What’s Happening to Manufacturers Who Don’t Lower Their Prices? Question: How did that guy who owns Not Your Daughter’s Blue Jeans (Editor’s Note: Here’s Paul’s segment profiling the company in March 2008) wind up after the holiday purchase time? I saw a pair of the blue jeans in… Continue reading