Are banks firms?

New Thinking about Modigliani-Miller

In the debate over financial reform, one of the major themes has been the need to protect the public purse from the cost of future bailouts by requiring too-big-to-fail banks to hold a larger buffer of private capital. Read more

Chinese property: a money view

The Chinese property market may finally be boiling over; there are certainly enough signs that the bubble is ready to burst. I won't try to call the peak. What's more useful is to try to understand all of the moving parts, and a money view of the problem lets us do exactly that. Read more

Kansas City-style Financial Reform

A New Glass-Steagall?

Jazz, barbecue, and now Kansas City has also its own distinctive style of financial reform, put forward in a recent paper by Hoenig and Morr Read more

Single-tranche open market operations: there's a bigger picture

We continue to learn about what the Fed did during the crisis. Read more

International money, take 1

As a matter of accounting, if the U.S. as a whole buys from the rest of the world more than it sells to the rest of the world, then it must, on net, also be borrowing from the rest of the world. Perry has previously put this into a money-view context. Read more

New Economic Thinking on Greece

Bailout, Default, or Plan C

The Greek debt crisis is once again upon us, and the FT is filled with articles about ramifications for the Eurozone, and recommendations for what to do now. Read more

The New Lombard Street

Further Thoughts

In the aftermath of the Lehman-AIG collapse of September 2008, I set myself the challenge to write a kind of update of Bagehot's famous 1873 Lombard Street:  A Description of the London Money Market. Read more

In the Crosshairs

Sense about Social Security

“The financial health of Medicare and Social Security is deteriorating faster than expected,” so says the Financial Times, my own favorite paper of record, reporting on the newly issued annual Trustees Repor Read more

Shadow money, still contracting

These days, one hears worries of impending inflation. Read more

Mr. Market's Rorschach Test

Currencies or Commodities?

Last Thursday, the ECB announced that it would not be raising the policy interest rate, and hinted strongly that it would not be raising the rate in June either. This latter was a surprise, and Mr. Market did not like it much, as reflected in the slide of the euro against the dollar. Read more