Is the “Perfect Storm” Metaphor Appropriate for the Economic Crisis?
“The metaphor of the perfect storm is inapt. The captain’s action does not influence the height of the waves. Fed Chairman Bernanke, in contrast, participated in making and implementing interventions that worsened the financial crisis last year.” – from…
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Analysts Mull Treasury’s Calls for Derivatives Regulation
The Obama administration has called for Congress to tighten regulation on risky trade derivatives, the kind of complicated financial instrument that brought down insurer AIG. Analysts examine what the move means for financial markets.
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…
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Markets Plunge After Government Adds Billions to AIG Rescue
Stocks tumbled after the government expanded aid to struggling insurer American International Group and the company reported a huge quarterly loss. Analysts examine what this could mean for the broader financial outlook.
The subprime mortgage meltdown and subsequent downward spiral caught some officials and the public off guard. Yet there were some clear indicators of the impending crisis. Paul Solman speaks to two Nobel award-winning economists about how the economy began to…
Question/Comment: The lease is up on my Lexus and I inquired about buying it. Lexus financial said that I’d have to pay the residual value from the lease. That amount is $10,000 over market value. It was later explained to…
Question/Comment: If the amount of 62 trillion dollars is owed for credit default swaps, who or what entity eventually pays that? Not even the U.S. government can make up for an amount which is 13 times our…
Question/Comment: I watched your piece on credit default swaps, which was illuminating but I think missed one point. Isn’t much of the $55 trillion dollar market made up of hedge funds and other institutions betting that bonds and other debt…
Question/Comment: Excellent report on credit default swaps. Did anyone, Congress or the Administration, or the Clinton Administration, ever propose any regulation or restrictions on these financial instruments? Paul Solman: Ah, regulation. The “genius” of these contracts was that they functioned…
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