Question: Banks like Wells Fargo and JP Morgan recently announced better-than-expected profits. The given reason is that they are making money on the refinancing of mortgages. Doesn’t mortgage refinancing imply lower rates of interest and repayment? How can they be…

You can watch one of Paul’s recent Making $ense pieces, The Paradox of Thrift, below. Here are a few reader reactions and Paul’s responses. Question: I have a question related to your recent segment, Paradox of Thrift: Aren’t the…

Question: Why is deflation so bad? I have certainly benefited from the drop in gas prices, so I wonder what is wrong with things becoming cheaper in general? And wouldn’t that make up for previous inflation? Paul Solman: Another good…

Question: When we hear comparisons between today’s economy and that of the Great Depression, I wonder: Had as many people and institutions been as highly leveraged then as now? Were personal and institutional debt as high then as they are…

Mar 23

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After the Treasury Department released its plan today to rid banks of so-called “toxic assets” by enticing private investors to partner with the government, Paul Solman answered questions on the basics of the plan. What exactly are…

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…

One day after signing a $787 billion stimulus bill into law, President Barack Obama outlined a $75 billion plan to help stem foreclosures, which is at the heart of the nation's deepening economic woes.

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