Wednesday, August 26, 2009

08.31.09 - Until human voices wake us

Character and Circumstance, from TheMoneyIllusion. "But we also have to overcome our perception that elections are about the future course of our country. Actually, they are about picking managers who will oversea public policy as we move into a future that is determined by the changing zeitgeist." A continuing position in the debate about structure versus personality, from a public policy perspective.

The Economics of Contempt picks on James Kwak and Simon Johnson over their critique of financial innovation, specifically CDOs and CDSs. The Free Exchange Blog weighs in. Personally, I think that there is a bit of complaining about "rain on a rainy day" problem here, insofar as I think that the final note on the securitization binge of the 00's won't be written until a few years after the Recast Wave of 11-12 has fully passed through the bank's balance sheet and we can see how well these financial innovations worked through The End Of The World™. But let us not let that stop pundits from punditing. Edit (Five Minutes After Originally Posted): Why financial innovation is bad. Wintermute. In addition to my new favorite word ("glibertarian"), Wintermutes throw three excellent points in the "Con" column for securitization. He fails, of course, in the putting the problem solved (#4) as insufficient housing stock versus demand for highly rated long dated paper.

"Better" Corporate Governance Made Banks Riskier. Clusterstock. Banks run more for the benefit of shareholders (fickle, demanding, short sighted, non-banker shareholders) fared worse during the crisis.

Do Markets Increase Trust? The Stash.

Oil and the Great Moderation. Hattip Paul Kedrosky. "Around half of the reduced volatility of inflation is explained by better monetary policy alone, and 57% of the reduced volatility of GDP growth is attributed to smaller TFP shocks." If we dovetail this with James Hamilton's observation on the causes here and the consequences of the Oil Shock of 2007 - 2008, well, I am reminded of an observation Milton Friedman made in A Monetary History of the United States, 1867-1960, wherein he observered Gold's ability to manage the money supply "better" than the young Federal Reserve because of its unmerciful impersonality.

Back to spreadsheets homework.

In which we begin another excercise in Internet Meta-Linking

So, as the campus is flooded with bright eyed first year MBA students, feverishly tapping on their laptops and re-learning excel, I thought I would aggregate - on some sort of regular basis - articles and blog posts that I have run into that are interesting. I assume that this would be interesting to other MBA students, mainly as a transitive property of personality.

Oh, sure, I could just repost the entirety of Abnormal Returns each day, but that would be cheating, and that blog is directed more towards a technical audience.

I may or may not post original works of thought and expression, but that may be a good thing, depending on your frame of reference.