In The News

“Fed, We Have a Problem”

Jeffrey Garten September 12, 2007
Governments with checks and balances are accustomed to internal quarrels over the best ways to solve problems. Such is the case for the US in confronting a sub-prime mortgage crisis that threatens consumer spending, credit availability and jobs around the globe. Firms and investors facing immediate losses from the crisis urge the chairman of the US Federal Reserve System, Ben Bernanke, to lower...

Paulson Urges Restraint in Policy on China Trade

Steven R. Weisman September 11, 2007
US Treasury Secretary Henry Paulson warned that any legislation aimed at punishing China could aggravate jittery markets and increase volatility. “Unilateral actions aimed at another nation” – especially a nation that continues to fund hefty portions of US debt – could disrupt the global economy, he warns. Increasing numbers of US firms report logging more revenue from overseas sales than those...

Calls Grow for Foreigners to Have a Say on US Market Rules

Heather Timmons September 1, 2007
Some US homeowners have adjustable rates on their home mortgages. As interest rates rise, they struggle to repay loans and keep the homes. The problem went global after lenders sold those loans: Financial firms packaged mortgages with other types of debt; US credit-rating agencies slapped high rates on the packages; and investors in Asia and Europe purchased the loan packages, assuming that the...

In an Interconnected World, American Homeowner Woes Can Be Felt From Beijing to Rio de Janeiro

The Associated Press August 31, 2007
The biggest surprise about the US mortgage crisis – even for the experts – is how some bad home loans led to a credit crunch that hurts insurance, textile, telecommunications and other industries around the globe. To prevent an economic slowdown, central banks around the world have inserted billions into the credit markets. Manufacturers around the globe worry about reports that debt-laden...

US Action on Free Trade Is Left Hanging

Peter G. Gosselin August 27, 2007
The two major parties in the US are at odds on many issues, but actions and agendas of both in recent months reveal growing mistrust for a global economy and global competition. In recent years, the developed world has steadily lost manufacturing jobs to developing nations with few environmental protections. Wages remain stagnant, and many workers claim they have not experienced globalization’s...

A Fear of Foreign Investments

Steven R. Weisman August 23, 2007
The US debt has given many countries excess liquidity – and the ability to buy companies abroad. Although so far there has been no turmoil as a result of foreign buy-outs, Germany expresses concern about Russia purchasing strategic energy routes in Europe for political gain. Even in the US, there has been public outcry when China and Dubai tried to buy oil and port firms, respectively. To avoid...

Amid the Mortgage Defaults, America's Day of Reckoning

Joseph E. Stiglitz August 22, 2007
As President George W. Bush’s tax cut for the rich did not help to stimulate a lagging economy during the 2001 recession, the Fed sought to lift by a drastic interest rate cut. Unfortunately, this only made matters worse as more Americans went into large debt. In recent years, lured by "subprime" mortgages and "teaser rates," many Americans overextended themselves, resulting...