Tag Archives: Financial Crisis
Peter Thiel on Irrational Faith in Economic Growth
Of the financial crisis, Thiel says, “Certain assumptions were just wrong. One was that housing prices would always go up. And that is probably a true assumption in a world where you have massive growth. When you don’t have growth, … Continue reading
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Behavioral Economics Explains All and Saves All
So says David Leonhardt in the Times. But let’s say you work for a firm that specializes in applying the latest theories in management and organizational behavior. Idea factories, like HBS and Wharton, spew out cutting edge techniques and models, … Continue reading
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To What Extent Does Behavioral Economics Explain Mania in Finance?
I say very little, but I’m willing to be convinced. One very implausible, but popular line of reasoning runs along these lines: neoclassical economics assumes every agent is rational and fully informed; the euphoria inflating the real estate bubble was … Continue reading
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Michael Lewis Out Scoops Them All
Michael Lewis has a must read article on the implosion of finance. He calls it the end of wall street. It’s an article so clear in its import that, upon reading it, the left wing Lepermessiah at the DailyKos writes: … Continue reading
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Posner Calls It a Depression
The honorable judge has gone a bit daffy. He writes: By undermining faith in free markets, the depression opens the door to more government intervention in the economy and eventually to higher taxes (though probably not until the economy improves). … Continue reading
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Applied Nozick: Finessing The Entitlement Theory
Richard Epstein uses Robert Nozick’s entitlement theory of justice to interpret the ideology behind the financial meltdown. From Epstein’s latest Forbes column: Behind this lending fiasco lay the strong collective preference for the “patterned principles” of justice that Robert Nozick … Continue reading
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Paulson Uses Nepotism to Provide Financial Stability
Today, the Wall Street Journal reports that Treasury Sec Paulson will name an old disciple from Goldman Sachs, Neel Kashkari, to manage the $700 billion bailout to buy distressed assets from financial institutions. Mr. Kashkari will get to tell his friends he’s … Continue reading
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Hedge Fund Managers Deserve Their Salaries Because They’re Smarter
The ever insightful Richard Posner writes: I do not think that the government does bear much responsibility for the crisis. I fear that the responsibility falls almost entirely on the private sector. The people running financial institutions, along with financial … Continue reading
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Attorney Generalissimo Cuomo to Einhorn: You Know Too Much!
Our man of the hour, David Einhorn, has said academic research and his firm’s experience indicate that whenever management complains about short-selling, it is a sign that management is attempting to distract investors from serious problems. Einhorn said that back … Continue reading
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