Stories by Zachary Karabell

  • jp-morgan-nb10

    Risky Business

    The $2 billion lesson of JPMorgan Chase.
  • Easy Money Is Back

    Since the financial meltdown, it's become conventional wisdom that prior to the crisis, the world was awash in too much easy money—and that now it doesn't have enough. It's a tidy thesis, widely accepted. It's also wrong. What's remarkable about our post-crisis reality isn't that we're not capital-starved; on the contrary, we're still swimming in excess liquidity. During those months of panic, all that cash didn't evaporate. A lot of it just got stashed on the sidelines. Now the global pool is growing again, and the next market bubbles are already popping up.Take equity markets. Worldwide, their total capitalization as of November 2009 was about $50 trillion, which is roughly equal to the pre-crisis level. That rebound is due in large part to the trillions in government bailouts and handouts, which provided a short-term economic jump-start (the longer-term effect is still very much up for grabs). As a result of such largesse, U.S. banks are now better capitalized than they've been...
  • How to Save Trade Partners That are Too Big to Fail

    America and China accounted for half of global GDP growth last year. To stay strong, they must work more closely together. America, still the global leader, needs to take charge. Karabell sees five ways the U.S. can strengthen the one trade partnership that is too big to fail. ...
  • China's Relationship With America

    Many in the Middle Kingdom would like to break out of what they have come to see as a failed marriage with America.
  • Jobs Cuts Just Aren't Fair

    Young, minority men who didn't earn much to begin with are hit hardest by unemployment.
  • Karabell On The New Unemployment Figures

    As the equity markets take another huge step down, it's assumed that American consumers are so shell shocked by their loss of wealth in both homes and stocks that they will continue to hoard what little cash they have. Yet the relentless negativity about the state of the American consumer may well be overblown. Consumers didn't begin this crisis, but they may very well end it.It doesn't seem that way right now. In a spate of polls in recent weeks, somewhere between half and two thirds of all Americans say that they are worried that they will lose their jobs. That fear seems to gain more traction with each passing month, especially with payrolls shrinking as rapidly as they did this month, with 651,000 jobs lost and the unemployment rate spiking to 8.1 percent. And as more people fear for the economic future, they have continued to pare their spending, which has in turn deepened the economic downturn.The fear is real, but is it merited? For starters, it's worth noting that...
  • Confessions Of A Pundit

    Economic commentators may be insightful, but they're not neutral. Market forces shape their views.
  • Dubai: Too Big to Fail

    The emirate can do better than survive. Vision got it to where it is, and now vision will carry it through.
  • So Much for Bush's 'Ownership Society'

    Remember the ownership society? President George W. Bush championed the concept when he was running for re-election in 2004, envisioning a world in which every American family owned a house and a stock portfolio, and government stayed out of the way of the American Dream.These families were, of course, conservative, or at a minimum traditional and nuclear, consisting of a heterosexual married couple and at least two kids living in a stand-alone home with a yard, a car or two and a multimedia room with a flat-screen television. The latter was a new addition to this 21st-century simulacrum of the 1950s "Leave It to Beaver" idyll. But the dream was the same.Such a country would be more stable, Bush argued, and more prosperous. "America is a stronger country every single time a family moves into a home of their own," he said in October 2004. To achieve his vision, Bush pushed new policies encouraging homeownership, like the "zero-down-payment initiative," which was much as it sounds—a...
  • The End of the Ownership Society

    Remember the ownership society? It was a vision woven by President George W. Bush when he was running for re-election in 2004, which saw every American family in a home, and a government that stayed out of the way of the American Dream. The families were, of course, conservative, or at a minimum traditional and nuclear, consisting of a heterosexual married couple and at least two kids living in a stand-alone home with a yard, a car or two and a multimedia room with a flat-screen television. OK, so the latter was a new addition, a 21st-century simulacrum of the 1950s "Leave It to Beaver" idyll. But the dream was the same.The goal was to secure stability and prosperity, and the ownership dream was the way to achieve that. "America is a stronger country every single time a family moves into a home of their own," said Bush in a speech back in October 2004. To achieve that vision, Bush pushed new policies encouraging homeownership, such as the "zero-down-payment initiative," which was...
  • It’s A Small World After All

    These models assume that different markets don't move in sync with each other. But that's no longer the case.
  • Are Transparent Banks Healthier?

    Both Enron and Parmalat disclosed massive amounts of data as required but were still able to deceive the public.
  • What's In After Greed?

    American culture at the end of 2002 is adrift. As quickly as the New Economy rose, it fell, leaving America rudderless once again. In the 1970s, after the seeming failure of big government to improve people's lives, it took several years for the free-market ethos of the 1980s to assert itself. Now we are in a new vacuum, but we will soon discover a new Zeitgeist.Already, there are hints of what that will be. Best-seller Jan Karon has sold more than 10 million copies of her novels, which weave a comforting picture of small-town life and religious values. The "Left Behind" novels of Tim LaHaye represent a darker take on similar themes, and have already sold more than 30 million copies. LaHaye chronicles an apocalyptic time in the near future when the Antichrist returns, the Rapture begins and a few pure souls struggle to survive Armageddon. In a related vein, Oprah Winfrey's book club favored novels of troubled family life and communities, and her protege Dr. Phil has developed his...
  • The Battle Of The Experts

    New crises produce new experts. A high-profile trial means that we'll see defense attorneys and prosecutors airing their differences on CNN. An election logjam means we'll hear from political consultants and campaign reporters. The events of September 11 dramatically altered the news agenda. Americans now care about Islam, and a group of scholars has emerged to explain it to them. A Princeton professor talks with Charlie Rose on PBS; a Johns Hopkins academic sits next to Dan Rather during the CBS nightly news; a Georgetown teacher entertains questions on CNN. Since the attacks of September 11, these scholars are in the spotlight, and at stake is not only whether the West can come to terms with Islam, but whether the world can prevent the destruction of suicidal extremism. ...
  • Misunderstanding Islam

    In the wake of September 11, the reading interests of the American public have changed. To a lesser extent, so have the interests of readers throughout the Western world. This may not rank as one of the more significant consequences of the attack on the Pentagon and the World Trade Center, but it does reflect a new awareness on the part of millions of people--an awareness of just how ignorant they have been about Muslims.Reflecting this shift, the American best-seller lists are now populated by books about the Taliban, biological and chemical warfare and Islam. More than a year ago Karen Armstrong--a former nun and author of several superb books on religion--published "Islam: A Short History." In both England and the United States, it was respectfully reviewed. Now, it is selling thousands of copies each week.For many readers, Armstrong's slender volume is the only source of information about a religion and culture that shapes the lives of 1 billion people around the world. That...
  • The True Face Of Islam

    Islam may be one of the world's most important religions, but in the West, at least, it has an image problem. Hizbullah in Lebanon, Hamas in the West Bank, fundamentalist violence in Indonesia, the "mullocracy" of Iran, all are seen as representative of the rage that is Islam. That, in fact, was the main thrust of a Feb. 19 piece in NEWSWEEK on Osama bin Laden and the new wave of Islamic terrorist groups. ...