In The News

World Rides to Wall Street's Rescue

David Enrich January 17, 2008
Nations with hefty savings accounts, including Singapore and Saudi Arabia, are devoting billions to rescuing US banks in trouble, a result of the sub-prime mortgage crisis. “After flooding the world with capital that fed both economic growth and excess, battered U.S. financial institutions now are turning to countries and companies that not so long ago were suffering through their own disasters...

Southeast Asian Democratization in the Era of Globalization

Roy Voragen January 16, 2008
Anticipating the consequences of globalization is one way of adapting to the rapid change. Increasingly, individuals acquire wealth not so much through hard work or innovation than by predicting globalization’s intricate twisting paths. Cities and citizens in the developed nations, while they complain about globalization, are better prepared for adapting to the effects than citizens in developing...

The IMF’s Next Mission?

Harold James January 10, 2008
With imbalances threatening ongoing disruption to the global economy, Harold James, history and international relations professor at Princeton University, proposes a new task for the International Monetary Fund. In the past, the IMF has served as a crisis manager for global economic problems, and James proposes that the IMF assist nations with massive sovereign funds. China has $1 trillion in...

The Invisible Hand of Globalization

Susan Froetschel January 3, 2008
Despite exponentially-advancing understanding of economic forces over the 20th century, Adam Smith’s invisible hand continues to elude. In his recently published book none other than former Chairman of the US Federal Reserve Alan Greenspan essentially throws up his hands. Every time a financial crisis hits the world, like the current turmoil caused by sub-prime mortgage lending in the US, calls...

2008: Year of Reckoning?

Ernesto Zedillo December 21, 2007
Economists debate whether huge global imbalances are dangerous or matter of course. But a specific financial tool as simple as home loans in the US has revealed the intricate ties linking global financial markets, resulting in “the credit-crunch drama,” explains Ernesto Zedillo, director of the Yale Center for the Study of Globalization. Recklessness in the sub-prime mortgage market has also...

The Global Money Machine

David Roche December 17, 2007
The sub-prime mortgage crisis – the big stack of US home loans that went to people who could not afford payments – has led to a global credit crunch. Record low interest rates created a huge supply of credit, which in turn led to higher prices for homes and other assets. An appetite for risk, rather than actual asset values or funds backing the loans, drove the supply of credit and the price for...

A Queue in the Sand

Stanley Reed December 7, 2007
The Middle East is rich with oil money, ready to invest in all kinds of megadeals, reports BusinessWeek. For example, state-owned Abu Dhabi Investment Authority stepped forward to buy a $7.5 billion stake in Citigroup, a bank ailing from the US sub-prime mortgage crisis. Some borrowers purchased homes with loans that offered low rates for only a year or two; as the rates increase, the homeowners...