Posts over the last few weeks had been:
- A look at some of the causes of the financial crisis and some thoughts on where the new regulations should focus. This speech noted recently by Mark Thoma is also a good summary. It is a bit odd that the US regulators still do not seem to acknowledge their role in the crisis.
- China's position on the yuan. The story is changing a bit with China's economy apparently shifting to domestic consumption without any currency adjustment but my conclusion is still the same.
- A news summary for the last full week in March.
- Another summary focusing on mortgage delinquencies. The note on yields possibly reaching a peak still holds with bonds trading strong last week and likely to benefit from continued Goldman / financial regulation fall out in equities.
- I celebrated the reappearance of Global Trader's Diary by looking up an old discussion on Fed policy and whether it was leading to distortions in the markets and underlying economy. While not exactly predicting the crisis, it was fair to say many people saw the highly leveraged environment as ripe for catastrophe. Naming GM, AIG, and FNM in 2005 as trouble spots, was a reflection of consensus among financial professionals and not due to any personal insight. How were these problems allowed to fester until 2008? I would give myself poor marks in estimating the timing of debt problems but I think the Fed failed in its dual mandate to maintain maximum employment. A less leveraged economy in 2005 would almost certainly have led to an earlier adjustment of US saving rates and consumption patterns leading to a smaller shock to employment.
- Another update on mortgage delinquencies as Equifax data contradicted the city by city delinquency rates from CoreLogic.
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