The latest trend on Wall Street is a practice called high-frequency trading. As this story out of MIT makes clear, it could be as big a risk as the mortgage market was.
The crash in 1987 has been blamed in part on the automated selling of stocks. As the market fell, more and more systems automatically sold. It turned what might [...]
Categories: Economics
In a blistering report, Kevin G. Hall claims that Moody’s decline in ratings quality was no accident. The article claims that bond issuers placed pressure on the ratings agencies to give favorable ratings and pushed all the ratings agencies to produce fanciful estimates of risk and rate junk investments as AAA.
The perverse system of bond issuers paying for ratings is such [...]
Categories: Economics
In a fascinating new article, Vanity Fair looks into the world of Office 39 in North Korea. This group works to find ways to close the yawning trade deficit created by sanctions imposed by the western world. North Korea’s trade deficit has grown to roughly 10 billion USD a year but sanctions seem to have [...]
Categories: Economics
The Financial Crisis Inquiry Commission is tasked by Congress to investigate the causes of our present financial troubles. The chairman, Phil Angelides, has a big task ahead of him.
He is almost certainly examining the history of the last major investigation of this type. The Pecora Commission was created in the wake of the crash of [...]
Categories: Economics