Airplane Crashes and Financial Crashes

When an airplane crashes, investigators rush to the scene, gather evidence, and ultimately hope to emerge with updated safety suggestions. It would be wonderful if we, when assessing the “flash crash” or slower stock market dives, could also diagnose the…

A History of Financial Regulation

The Plunge Protection Team is composed of the chair of the Federal Reserve, the Secretary of the Treasury, the SEC, and the Commodities Futures Trading Commission.  Officially called the Working Group on Financial Markets, this group was formed after the…

A One-Handed Economist?

Let’s not look at CDOs, SIVs, ARMs, TIPs or ATMs. Nor do we need specifically to consider credit default swaps, securitization, hedge funds or venture capital. Instead, we can go to the question that Robert Litan asks at the end…

Recent Black Swan Events

Thinking about probable new financial regulation, I remembered Nassim Nicholas Taleb

The FCIC Sounds Good

Reading Dr. Ed’s Morning Briefing (a great newsletter from Ed Yardeni–the 1/13 briefing), I was encouraged to hear about a member of the new Financial Crisis Inquiry Commission (The new FCIC website is at www.fcic.gov). One of eight commissioners on…