In The News

Paulson Financial Regulation Reform Plan Already Faces Discounting

April 4, 2008
The mortgage-backed securities crisis has resulted in turmoil in the global markets, but politics could get in the way of any quick fixes of the US financial system, reports Thomson Financial News. Three short-term recommendations in the proposal from Treasury Secretary Henry Paulson include expanding a presidential working group on the financial markets; establishing a federal commission to...

Why Spanish Banks Seem Immune to the Subprime Virus

February 20, 2008
The subprime crisis that originated in the US – with lenders giving out mortgages to many people who could not afford future payments – has begun to weaken European banks as well. Credit-rating agencies assured investors that US mortgages were a safe investment, and banks purchased securities packages that included problem loans. As prices for homes in the US market fall and homeowners struggle...

Decoupling Demystified

Nayan Chanda February 8, 2008
Reality always trumps theory. Nayan Chanda points out that this was seen when aftershocks from the American stockmarket meltdown put to rest the theory of ‘decoupling’. The stockmarket jitters that ran from Tokyo to Shanghai to Mumbai shows that Asian growth is very much linked, further proving that in a globalized world, you can run, but cannot hide. – YaleGlobal

Buyers, Not Savers, Caused America’s Deficit

Richard Duncan February 5, 2008
Financial analysts scrutinize Alan Greenspan’s 2007 autobiography, “The Age of Turbulence,” for any clues about the current economic downturn. Analyst and author Richard Duncan takes issue with the chapter in Greenspan’s book on current accounts and debt, noting that that the former chairman of the US Federal Reserve argues, “High savings and unattractive investments at home, occurring at a time...

A Fear That the Cure Could Be Poison

Edmund L. Andrews February 1, 2008
Central banks like the US Federal Reserve raise interest rates to slow an economy and lower them to stimulate it. But economists admit that a complex global economy, with transactions moving at rapid pace, complicates their task. Economist must wait for data to come in long after an economy reacts to events. For example, economists are yet uncertain about whether or not a recession is underway in...

Globalization and the Markets – Part II

Xu Sitao January 24, 2008
As anxiety spread about a possible recession hitting the US, stock-indexes went into sharp decline in Europe and Asia. Not surprisingly, worried investors scrutinize the Chinese stock market, as conventional wisdom suggests that China investments are the world’s next over-valued bubble. But analyst Steven Xu points out that the Chinese market could continue to grow, especially this year as China...

Globalization and the Markets – Part I

David Dapice January 22, 2008
Stock-market indexes have tumbled like dominos around the globe, exposing vulnerability of intricate economic connections. A crisis in one nation – and the panic – can quickly bounce from one country to the next. A major cause behind the stock-market plunges the world over are US financial instruments designed to spread and protect risk by including all manner of home mortgages, explains...