In The News

Western Union Empire Moves Migrant Cash Home

Jason DeParle December 5, 2007
Technology and circumstances can lift or dash industry fortunes in a heartbeat. Western Union was a company that went bankrupt in the early days of the internet. But even as the internet became established in homes and offices, worker mobility increased, with growing numbers of migrants looking for safe, easy ways to send money home to families. So Western Union is back in business, earning...

Foreclosures Hit a Snag for Lenders

Gretchen Morgenson December 4, 2007
Homebuyers in the US borrowed money, some with adjustable-rate mortgages that offered low payments early in the loan’s term. Mortgage companies and banks packaged these loans into huge pools and resold the securities to global investors eager to cash in on the higher payments promised during the later years of the loans. With the loans secured by people’s homes, investors assumed the deals...

Who Gains When the Dollar Sinks?

Scott B. MacDonald November 27, 2007
The US currency has sharply declined in value in recent years, which inevitably diminishes the nation’s economic health and influence abroad. So far, the US economy has been spared the full consequences of its struggling currency because the dollar’s historic strength has put it at the center of the world economy since World War II. Many nations' currencies are pegged to the dollar, and the...

The Limits of a Smaller, Poorer China

Albert Keidel November 26, 2007
“Purchasing power parity” is a complex economic theory that suggests identical goods cost the same in different countries and allows economists to account for the influence of exchange rates and inflation on prices. Relying on that system of measurement, an Asian Development Bank report this summer included Chinese participation in price surveys for the first time. As a result of that...

Why FAS 157 Strikes Dread Into Bankers

William Rees-Mogg November 14, 2007
Accounting rules organize how money is classified and valued – and investors expect transparency. New accounting standards, designed with that goal in mind, go into effect on November 15, 2007, and could exacerbate already volatile financial markets. By classifying a company's assets according to marketability, the new rules highlight those that are most risky, like sub-prime mortgages, and...

The Dollar in Danger

Sebastian Mallaby November 14, 2007
Overseas investors are skittish about investing in the US, in light of the recent sub-prime mortgage defaults. The US government functions by taking on debt. But as foreign investors resist investing in low-yield government notes and similar instruments described as low risk, the dollar sinks in value. The value of many currencies and commodities, including oil, are linked to the dollar. So many...

EBay: The Place for Microfinance

Catherine Holahan October 24, 2007
Ebay, the internet auction site, is getting into the micro-loan business, by which investors can provide loans for $50 or more to small businesses. “The key to micro-lending is that it fosters self-reliance and, eventually, sustainable economic growth in a way that charity does not,” says Tracey Pettengill Turner, as reported by Catherine Holahan in Businessweek.com. Turner started MicroPlace.com...