Category Archives: financial markets

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

From capitalism to financialism

Fredrik Erixon and Björn Weigel write, In 2013, natural persons owned only 40 percent of all issued public stock, down from 84 percent in the 1960s. And if we take all issued equity, the trend has been even more pronounced. … Continue reading

Posted in financial markets | 4 Comments

Changes in the corporate landscape

Kathleen M. Kahle and René M. Stulz write (link now fixed), US public firms are very different now compared to 1975 or 1995: fewer, larger, older, less-profitable, with more intangible capital, less investment, and other changes. The US firms that … Continue reading

Posted in financial markets | 9 Comments

Scarcity of financial intermediation?

Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas write, For the last few decades, with minor cyclical interruptions, the supply of safe assets has not kept up with global demand. The reason is straightforward: the collective growth rate of the … Continue reading

Posted in financial markets | 12 Comments

Amazon arithmetic in a bubble, continued

A commenter writes, AWS (the Amazon “cloud”), is wildly profitable (20%+ margins), and while only 10% of their revenue currently, is growing much (over 2x) faster than the rest of the business. He offers these figures for the second quarter: … Continue reading

Posted in financial markets | 4 Comments

Arithmetic in a bubble, once again

Mark J. Perry writes, Amazon and Facebook were in the news this week for “joining an exclusive club open to only the richest companies in the world: both crossed the half-a-trillion mark.” Those two companies join Apple ($785 billion as … Continue reading

Posted in financial markets | 15 Comments

How to Handle the payments system

The commenter suggests, simply nationalize the “deposits taking and transaction processing” function of the banking industry? Everyone gets a zero-service-fee fully electronic (no paper checks) account at the Federal Reserve Picture this as a retail version of the Fed Funds … Continue reading

Posted in financial markets, Monetary Economics | 23 Comments

The Grumpy Bank Holding Company Proposal

John Cochrane writes, For $100 of assets, and $100 of bank equity, let, say, $10 of that equity be traded — enough to establish a liquid market. Then, let $90 of that equity is held by a downstream entity or … Continue reading

Posted in financial markets | 7 Comments

Bank Lending and Non-bank Lending

Daniel Nevins, in Economics for Independent Thinkers, a book I mentioned the other day, thinks of non-bank lending as coming from savings and bank lending as created by fiat. I do not think in those terms. Think of an economy … Continue reading

Posted in books and book reviews, financial markets, PSST and Macro | 7 Comments

Why pick on big banks?

A reader writes, I would describe the posture of big banks (and other well-heeled financial institutions) as “pleading for mercy,” more than “buying friends and influence.” Banks are giant piles of treasure and if in the olden times they would … Continue reading

Posted in financial markets | 5 Comments