The secret to turning a poor nation into a rich one can't be found in a World Bank report. It wasn't hatched in the corridors of the International Monetary Fund, either.
Being poor is expensive.Take, for example, one service targeted at the down-and-out: payday lending. Drive past any dusty suburban strip mall and neon lights flicker the promise of a "Cash Advance Here." Payday lenders provide very small and very short-term loans (often just a couple hundred dollars for a week or so, until the next paycheck arrives).
The iPhone has apps for reading the news, checking bank accounts, and streaming music. Now it's got one for exacting revenge on overpaid CEOs and Ponzi schemers.Squash the $treet, a creation of Last Legion Games, lets you "watch the shady bankers, creepy fraudsters, and corrupt CEOs flee their gilded offices, sprinting for the nearest escape vehicle," as the creators put it.
Yesterday was one of those days where so many people on the Internet were wrong that I almost couldn't sleep because of it. I'll restrain myself to just one example: Mark Gimein's defense of Goldman Sachs in The Big Money. (Disclosure: Newsweek and The Big Money are owned by The Washington Post Company.) I don't have any problem with a well-reasoned defense of Goldman's strong second-quarter profits, seen by some as "obscene." Bankers are supposed to be greedy and grab what they can, so...
CIT is definitely not too big to fail. At least for now. Maybe the company's CEO, Jeffrey Peek, will find a more receptive audience in the administration as bankruptcy nears, but for now, its $80 billion in assets was deemed sufficiently small enough to squeeze through the bankruptcy process.Or, looked at another way, perhaps Peek and his employees just didn't give enough money to the Democrats.
The big financial news this week is that CIT, a century-old bank, might be next in line for a government bailout.As Bloomberg notes, since 2003 the finance firm has been run by Jeffrey Peek, formerly a top executive at Merrill Lynch.
In Sunday's Washington Post, George F. Will takes a swat at Obama, arguing that his pro-government policies are "diminish[ing] America's competitive advantages." He writes:Let's guess: Will a person or institution looking for a place to invest $1 billion seek opportunities in the United States, where policy decisions are deliberately increasing taxes, debt, regulations and the cost of energy, and soon will increase the cost of borrowing and hiring?
After reading a review copy, which was delightful and provocative throughout, I asked Cowen a few follow-up questions by e-mail: A large part of your book is a call for greater acceptance of neurodiversity, and in particular the autistic and those exhibiting autistic traits.
GoldmanGate is certainly bringing out the inner spook in people. Over at Cryptogon, a blog I had never heard of with a penchant for conspiracy theories, the author set up a honey trap to lure web surfers trying to find the top-secret trading algorithm stolen from Goldman Sachs.
There was a glorious time between the mid-1980s and 2007 when inflation was low, economies boomed, and recessions were short and infrequent. In general, the business cycle -- an economics term that refers to the cycle of growth, contraction, and recovery that's a feature of every normal economy -- was subdued.
Our Beijing bureau chief, Melinda Liu, is in town and mentioned to me yesterday that the Chinese authorities are cracking down on "virtual" currencies. What's a virtual currency, you ask?
This is brilliant: using email traffic to predict a coming crisis. Two computer scientists in Australia got their hands on 517,000 emails sent by Enron employees in the 18 months before the company's demise.
There are a lot of great bits in Charlie Rose's recent interview with Michael Lewis. (The link is here, via Paul Kedrosky. Skip to 21:10 if you don't want to hear him talk about fatherhood.) A couple favorites:On the "green shoots" theory and the health of banks: "The Obama Administration has been very good at creating false confidence."On regulators' Wall Street-centered view of the world: "It's in the air they breathe, that they cannot imagine a world without Goldman Sachs.
The news that Barclays, a British bank, will pay $4 million to rename the Atlantic Ave. subway stop in New York City's Brooklyn borough has attracted quite a bit of interest.
James Kwak of Baseline Scenario follows up on the Goldman bonus report: Like most things, there are two ways to interpret this. For the optimists, if some of the big banks are making big profits, that gets us back to a normally functioning financial sector sooner and reduces the chance that they will face a panic in the short term...For the pessimists, the phoenix-rising-from-the-ashes profitability of the big banks is a direct result of massive government aid in the form of cheap money,...
Before reading this post, I suggest first playing the video below. Consider it a theme song of sorts for articles like the one excerpted below.Okay, now that you're humming along to the appropriate music, here is the relevant excerpt:Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation...
Laid Off? Start a Business: Over half of this year's Fortune 500 firms were started in a recession or bear market.An Interview with Paul Krugman: "The risk of long stagnation is really high." Krugman has become very Cassandra-like lately but he has a Nobel Prize so we more or less have to listen to him.Checkmate at the Yellowstone Club: The tale of the Montana ski resort for the ultra-wealthy is a familiar one -- reckless borrowing, the over-reaching of the rich, overpaying for property -- but...
Mr. Lewis Goes to Washington: Ken Lewis, BofA CEO (but no longer its chairman!) testifies before Congress today. Felix Salmon says he did the right thing for the country when he agreed to acquire Merrill Lynch, but probably not the right thing for his shareholders.Dollars and Sense: Tony private-equity firm KKR is losing its shirt, having borrowed tons of money to buy companies for inflated prices over the course of 2006 and 2007.