This title by Yoram Bauman will be released on January 19, 2010.Click here to Pre-order now!
Tuesday, September 29, 2009
Cartoon Economics
This title by Yoram Bauman will be released on January 19, 2010.Click here to Pre-order now!
Monday, September 28, 2009
IMF on recovery
Click here to read an article from the Economist with analysis for the economic recovery by IMF economists.
Nobel Prize
Who will win the next Nobel Prize in Economics? Click here to see the 2009 Nobel Prize predictions from Thomson Reuters.
Thursday, September 24, 2009
Games People Play
Click here to examine your knowledge in Game Theory. In this resource you can find quizzes, tests, teaching materials e.t.c
Slam Dunks....
Mikhail D. Prokhorov, a Russian tycoon and one of the richest man in Russia, agreed to pay $200 million in order to buy New Jersey Nets. Prokhorov would become the first overseas owner of a N.B.A team. Click here to read the article from Ney York Times.
Tuesday, September 22, 2009
Financial WINDOWS
The Bill & Melinda Gates Foundation the world's richest charitable foundation best known for its work combating malaria, AIDS and other diseases, this week announced an effort to bring banking, including savings accounts, to the poor. To save what?
Click here for the answer.
GOOD YEARs (Part Two)
Further my previous post for protectionism take a look at the following articles:www.economist.com
www.ft.com
Monday, September 21, 2009
Levine vs Krugman
Click here to read the reaction of Prof. David Levine (Washington University) to the article of Prof. Paul Kruman (Princeton University) posted in this blog on Monday, September 7, 2009.
Institutions On Short Selling
Short selling, the method in which the speculator sells in the market borrowed shares and buy them back at a lower price making profit from falling prices, has been a basic target during the credit crisis. The biggest concern is that short selling has often been associated with market abuse. Most institutions that lend shares to short sellers think there is a link between short selling and share price movements. Click here to read the article from Financial Times.
Thursday, September 17, 2009
Human CAPITAL
Take a look at the following graph from DealBook (New York Times) by Thomson Reuters of banker movements from July 2008 to May 2009. The financial meltdown leads a substantial number of “golden boys” from one firm to another. Others open there own companies and few left the world of finance…but was it for the better?
Mr. "Bubble"
Back to summer of 2005 Yale University professor Robert Shiller predicted that the U.S. housing market “bubble” will collapse. The only question was when. We all know how the story ends. The U.S. housing market faced the worst collapse since Great Depression with home prices fallen almost 50 – 60 per cent in some U.S. areas. The last month of 2008 the Case-Shiller home price index which measures housing prices nationwide, reported its largest price drop in its history. Take a look at the following chart based on Case-Shiller index, adjusted for inflation. Since World War II the index seems to move naturally at 110 on the index scale except from the small “bubbles” in the 70s and 80s with a movement at 125 on the index scale. As you can see in the recent boom we have a movement at 200 on the index scale….
It is fully understood how bad things are for the U.S. housing market and how late the recovery would be with people not ready to spend again and with a high inventory of homes remain unsold. Prof. Shiller support that the prices will continue to fall for a while, but at a slower pace, and then stabilize. Also he doesn’t exclude the possibility to have an other housing “bubble” but not sooner than the next five to 10 years.
Click here for more information from CNN Money.
Ben on Crisis
Federal Reserve Chairman Ben Bernanke said Tuesday that the worst recession since the 1930s is probably over but also mentioned that the moderate recovery of the economy that we may face in 2010 basically due to financial and credit problems, won’t be enough to pull down unemployment rates.
“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was,” Mr. Bernanke said.
Click here to read the article from New York Times.
Wednesday, September 16, 2009
Cochrane vs Krugman
Click here to read the reaction of Prof. John Cohrane (Chicago Booth School of Business) to the article of Prof. Paul Kruman (Princeton University) posted in this blog on Monday, September 7, 2009.
GOOD YEARs
According to Investopedia protectionism refers to government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. It is true that although the world economy has shown small signs of recovery, future remains uncertain. Can trade protectionism policies delay recovery?
As I mentioned in a previous post, China has turned to domestic demand in order to cover the losses from the reduction in global demand but exports remain the key part of China's economic engine. “Love-hate” relationship between China and U.S. in global trade deteriorated early this week after Obama’s decision to impose a new tariff of 35 per cent on Chinese tire imports on top of an existing 4 per cent tariff sending, as Chinese government officers support, a dangerous protectionist signal before a G20 summit in September that could influence global recovery. Chinese sources claim that China would now investigate the imports of U.S. vehicles and agricultural products….Are we going towards a tariff war?
For your information the U.S. trade deficit with China totaled $103 billion in the first half of 2009 and about $268 billion in 2008. See also the below Graph from the U.S. Department of Commerce with the U.S. imports from China.
For more information also visit the following links:
Tuesday, September 15, 2009
Stiglitz on Crisis
J. Stiglitz, the Nobel Prize winning economist, said that bank problems are bigger now than pre - Lehman Brothers collapse before one year and that the U.S. has failed to fix the underlying problems of its banking system after the credit crunch.Stiglitz’s views follow those of former Federal Reserve Chairman P. Volker, who has advised Obama’s administration to curtail the size of banks, and Bank of Israel Governor S. Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”
Find below some key points from the interview and click here to read the full article from Bloomberg:
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger.”
“The problems are worse than they were in 2007 before the crisis.”
“The leaders of the G-20 will make some small steps forward, given the power of the banks” and “any step forward is a move in the right direction.”
“The administration seems very reluctant to do what is necessary. Yes they’ll do something, the question is: Will they do as much as required?”
“We’re going into an extended period of weak economy, of economic malaise.”
Monday, September 14, 2009
History Lessons...
Take a look at the following chart shows the five largest declines in U.S. real gross domestic product (GDP) since the end of World War II + the Great Depression period. As you can see, the current downturn is in the running to be the worst in the post-war period if we don’t add in our analysis the Great Depression period (red bar). It is obvious that the economy would have to fall much further in order to the losses to come near those experienced in the Great Depression period.
See also the following updated chart from the same author with almost the same results. The current downturn is definately the worst since World War II but not the worst since the Great Depression (red bar) excluding from our analysis the period after World War II (green bar).
Click here to see the article from Donald Marron.
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