I talked yesterday with Steve Weisman, my colleague at the Peterson Institute for International Economics, about where the global economy is likely heading. Steve asked very good questions about U.S. monetary policy and what effects it will have. You can listen to our conversation here.
Category Archives: Interviews
The allegations are pretty simple. As part of each securitization, Goldman had to produce a registration statement and prospectus. In theory, as any investor knows, you are supposed to read the prospectus before buying a security. The claim is that these statements and prospectuses (someone help me with that plural) contained false statements regarding the underwriting standards used when making the underlying mortgages. The bulk of the complaint (pages 12-28) goes originator by originator and compares the statements made about that originator’s lending practices in the prospectus to information that has since emerged about how these lenders actually made loans.
One thing that struck me was how open these prospectuses were about what was going on. For example, here’s a passage on Countrywide’s “no income/no asset” loans:
FLYP, which I can only describe as an online multimedia magazine, has a “cover story” entitled “Now What?” on the challenges the country faces and various perspectives on what the Obama administration should do about them. Simon is interviewed (in video) for “pages” 7 (domestic economy) and 10 (global financial system), but there are also sections on foreign policy, energy, the environment, health care, and so on.
(I should add that FLYP is very slick and well-produced – you might enjoy browsing around the other stories and issues, although the user interface is not particularly intuitive.)
The global picture continues to worsen and Friday was a pretty bad day. I took part in a good summary discussion hosted by Jeff Brown on the Lehrer NewsHour last night. The topics ranged from the rising dollar to falling oil prices to Treasury’s investments in insurance companies to loan modifications for homeowners.
But I don’t think anyone should throw up their hands, abandon their personal strategies, or think that any part of the sky is falling. Here’s why. Continue reading
One of my life’s ambitions is to be on This American Life. Now you can do the next best thing. NPR’s excellent Planet Money podcast is looking for people to talk about their personal economic situations; the hosts, joined by my co-author Simon Johnson, will talk about how you fit into the global economy and the financial crisis. It’s all explained here.
See here for a range of views (including Simon’s). On balance, the government owns some shares – and it twisted some arms to get them – but the percentages are pretty low, it has no voting rights, the conditions are pretty light (basically just the limits on executive compensation), and the bottom line is that the banks got a pretty good deal relative to what they might have hoped for from private investors. Some will no doubt complain of socialism, but these investments give the government limited if any influence over bank operations.
Of course, the government still has the power of regulation, which most people expect (and hope) will be greatly strengthened.