Category Archives: markets

Were mortgage securities badly mis-rated?

Juan Ospina and Harald Uhlig write, AAA securities did ok: on average, their total cumulated losses up to 2013 are 2.3 percent. . .Losses for other rating segments were substantially higher, e.g. reaching above 50 percent for non-investment grade bonds. … Continue reading

Posted in Financial Crisis of 2008, financial markets, Housing and housing finance | 20 Comments

Would you buy this book?

The title is Predicting the Markets: A Professional Autobiography. It has many favorable reviews on Amazon, but they seem to pre-date the official release of the book, which makes one suspicious. Maybe you will download the Kindle sample and leave … Continue reading

Posted in books and book reviews, Economic History, financial markets | 6 Comments

Off-topic: fantasy inefficiency

A commenter asks, Have you thought about efficient markets and fantasy baseball? I.e., if you knew the market prices (via aggregating other auctions from this year) for a standard Yahoo! league, can you think of a better strategy than trying … Continue reading

Posted in financial markets | 2 Comments

Bitcoin and the prospects for a dollar collapse

For Medium, I take a skeptical view of the value of Bitcoin as a hedge against hyperinflation. For citizens looking for hard assets, gold is not the only option. Other commodities, such as copper or wheat, are traded in futures … Continue reading

Posted in financial markets, government debt crisis | 9 Comments

Credit scoring and securitization

Amar Bhide writes, more than just soft information is lost when lenders rely on generic credit scores. Practical obstacles — and in some cases political considerations — exclude from the scores factors, such as income and education, that self-evidently affect creditworthiness. Moreover, score-based lenders, … Continue reading

Posted in financial markets | 4 Comments

My essay on financial bubbles

For Medium, I wrote on financial bubbles, with plenty of Bitcoin trolling thrown in. it is mathematically impossible for all of the bullish investors to get out with a profit. If a stock goes from $10 a share to $100 … Continue reading

Posted in behavioral economics, financial markets | 3 Comments

Karl Denninger on Bitcoin

He writes, All existing cryptocurrencies are designed around a math problem that gets exponentially harder to solve as time goes on. However, the number of “coins” you achieve for solving it is fixed irrespective of where on the curve you … Continue reading

Posted in financial markets, Monetary Economics | 11 Comments

How I think about Bitcoin

Tyler Cowen writes, With crypto-assets, I am carrying wealth more generally into the future. The person who most wants that payoff structure for the wealth carry will end up owning the crypto-asset. Read the whole thing, with which I do … Continue reading

Posted in business economics, financial markets | 17 Comments

Cantercap Charlie on finance and the 2008 crisis

He wrote, if banks are doing their job, the banking system is illiquid, and the rest of the economy —us— have lots of cash. In Econ 101 this is known as “maturity transformation.” Liquidity-wise, the banking system is simply the … Continue reading

Posted in Financial Crisis of 2008, financial markets | 8 Comments

The Cowen-Cochrane dispute on banking

You can start with Tyler, and work backwards. I don’t think it is easy to get around having a part of the economy which is both systemically risky, and also debt-intertangled, as the evolution of shadow banking over the last … Continue reading

Posted in financial markets, Tyler Cowen is my Favorite Blogger | 7 Comments