Might the proposed new federal securities regulator weaken regulatory oversight?

The front page of today’s Globe and Mail reports the latest chapter in the federal attempt to create a national securities regulator. (Premiers push back against national securities regulator plan).   Part of the Harper government’s response to the financial crisis was to promise to remedy the patchwork of provincial securities regulators.  If securities regulators are going to avert future […]

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Ottawa Lends Vale a Billion

So, Export Development Canada (EDC) has agreed to lend Vale up to $1 billion US. This announcement comes on the heels of a bitter labour dispute at Vale’s Sudbury mines and in the midst of an ongoing strike at its Voisey’s Bay operations. The financial rationale is unclear. Although $1 billion is very large for an EDC loan, it is […]

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More on the Bond Market

Paul Krugman agrees with my view that the bond market is signaling  long term economic stagnation rather than experiencing a bubble – and he is, of course, far more influential and cogent than I. “But the argument has become even stranger recently, as it has become clear that investors aren’t worried about deficits; they’re worried about stagnation and deflation. And […]

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A Geithner Put? – Kudlow Spins the Rally

Whenever the stock market falls, CNBC’s Larry Kudlow reliably blames the Obama administration’s allegedly anti-business policies. But when the market was rising on Obama’s watch, Kudlow generally did not talk about it. On tonight’s show, he took a different tack. He repeatedly asserted that the market has recently rallied not only on strong corporate profits, but also because Tim Geithner announced (on […]

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John Loxley’s JKG Prize Lecture

At the end of May in Quebec City at the annual Canadian Economics Association conference, the PEF awarded the second John Kenneth Galbraith Prize in Economics to John Loxley. Below is the full text of John’s Galbraith Lecture (pdf version with proper footnotes and formatting here). Congrats again to John for a lifetime of amazing work! Also, thanks to one […]

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Public Auto Insurance

A recent visit by some Regina friends reminded me how affordable public automobile insurance is. They insure two cars, one of which is newer than my car, for about the same rate as my one vehicle in Toronto. My first car, which I registered with Saskatchewan Government Insurance (SGI), cost about $500 per year. My sense is that an under-25 male would have […]

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Financial Literacy … for Bankers!

            A year ago, as part of his 2009 crisis budget, Finance Minister Jim Flaherty created a Task Force on Financial Literacy.  The goal was to equip Canadians with more knowledge to traverse the minefields of high finance.  This week, just in time for Flaherty’s next budget, the Task Force released its initial “consultation” report.             On one level, this […]

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Towards a SAFER Financial System

The good folks at PERI at U Mass Amherst led by Gerry Epstein and  Jane D’Arista have just launched a new web site so theirr useful work on why and how to reign in finance can be easily accessed. http://www.peri.umass.edu/safer/ “The Economists’ Committee for Stable, Accountable, Fair and Efficient Financial Reform (SAFER) is a focal point, clearinghouse and coordinating mechanism […]

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Economic Bill of Rights

I got speak on a panel for the BC Cooperative Association this week after a screening of Michael Moore’s new film, Capitalism: A Love Story. I thought it was quite well done, and better than I expected. Less of the MM kitsch and a fairly broad sweep over the history and current foibles of American capitalism. While this approach means […]

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Recovery? What Recovery? Whose Recovery?

            This week marks the one-year anniversary of the collapse of Lehman Brothers: the darkest moment of the global financial crisis, when those in charge genuinely feared for the survival of their system.            This somber anniversary has sparked a modest flurry of retrospection in the media.  But the dominant tone (Michael Moore’s new movie aside, of course) has not […]

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What’s in Play at Pittsburgh?

The London G-20 summit last fall may go down history as the meeting that saved the world. That’s a huge exaggeration of course, but leaders did agree to a program of co-ordinated monetary and fiscal stimulus which may have arrested an economic free-fall, and they agreed to an agenda for financial re-regulation with a view to making sure that it […]

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The Wall Street Journal wants a new tax on big financial institutions

The WSJ is concerned about the implicit subsidy provided to financial institutions that are “too big to fail”(TBTF). Given the obvious willingness of the US government to support Wall Street titans during the height of the financial crisis, the market is pricing in the expectation that the government stands behind those institutions regarded as TBTF. This implicit guarantee allows the […]

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The Financial Crisis

Here’s an extremely well-written and cogent commentary on the state of the banking system and the grim consequences  for the rest of us, especially in the UK, by novelist John Lanchester, from the London Review of Books. He’s at work on a book on the same topic http://www.lrb.co.uk/v31/n10/lanc01_.html

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Bank Mergers – The Left was Right

My personal theory as to why the Canadian banking system survived the great global financial crisis relatively unscathed is that calls by the big Canadian banks in the late 1990s to allow mergers were successfully resisted. Had the big banks been allowed to merge to pursue their global ambitions, they would have ramped up their US and high risk foreign […]

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The Stock Market Rally

Having been chastised for giving what I thought was faint praise to Iggy for moving on EI a couple of days ago , I’m going to really, really stick my head out here and wonder if Alan Greenspan has a point when it comes to potential positive linkages between the stock market and the real economy. http://blogs.ft.com/capitalismblog/2009/03/30/equities-show-us-the-way-to-recovery/ I think that […]

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Bonds, lame bonds

Below is a dispatch on bond rating agencies from my former CCPA colleague, Stuart Murray: Here is some more grist for the blog.  Bloomberg just published a very interesting and informative article on the role of the bond rating agencies in the current meltdown. http://bloomberg.com/apps/news?pid=20601109&sid=au4oIx.judz4&refer=home The pitchforks are out for Moody’s and S&P, as they gave glowing ratings for the […]

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CBC “Bottom Line” Panel: Paper & Reality

I have enjoyed being one of the three economists appearing on the occasional “Bottom Line” panel which CBC TV has been running on its National News.  My fellow panelists (Patricia Croft from RBC Securities and Mark Mullins of the Fraser Institute) are personable, informed, and for the most part non-dogmatic about things.  (I know it will surprise many PEF readers […]

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Have the media learned anything from the crisis?

It makes my blood boil when I see headlines like this one from the Globe online: “Economic optimism boosts markets”. They are, of course, not talking about the markets that matter for most families’ day-to-day lives – those markets are still tanking. No, the Globe is talking about the stock market, as if an uptick of optimism among our financial […]

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The Future of Capitalism

Some weekend reading: Amartya Sen, that other voice of sanity among recent Nobel laureates in economics, draws lines between the current economic crisis and the history of economic thought (with an emphasis on Smith, Keynes and Pigou), and what that all means for a “new capitalism”. Then, over at the Financial Times, a whole series looks at the future of […]

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The D Word

Not deficit, with a small d, but Depression with a big one. By now, everyone has come around to accepting that we are in a recession. Even though we have not had the rule-of-thumb two quarters of negative growth, rising unemployment, collapsing housing starts, drops in retail sales and so forth all tell us we are in a recession. Technically […]

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The Big Easy

Having dropped its overnight interest rate to 0.5%, the Bank of England also announced a package of quantitative easing, of some £75 to 150 billion worth: It will create £75bn and use it to buy government bonds (gilts) and corporate debt over the next three months to boost the flow of money in the economy. The Bank has been given […]

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Don’t Take Away MY Defined Benefit Pension!

File this one under “painfully ironic”: The Ontario Securities Commission (public agency charged with monitoring the behaviour of the stock market industry) recently advertized for a Senior Economist.  Duties include collecting & interpreting data, monitoring developments in securities markets, helping Commission staff understand economic concepts, blah blah blah. The fun part is the compensation: competitive salary, benefits, and — here’s […]

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Obama’s Bank Bail Out

Martin Wolf of the Financial Times has written a pretty scathing critique of the new US Administation’s overhaul of the TARP program.  I am increasingly convinced by Duncan Cameron’s  argument that – in the US at least – the best way out is to nationalize the banks, run them as a public utility, and compensate the shareholders only if there […]

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The utter stupidity of P3s in BC

For the “we told you so” file. The BC government has been insisting on P3s (so-called “public-private partnerships” where the private sector builds and operates infrastructure) all over the province. We at the CCPA have consistently argued that this practice is foolish: more complicated, more expensive, and leaving taxpayers holding the bag if anything bad should happen. As a companion […]

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Re Regulating Finance

http://www.tuac.org/en/public/e-docs/00/00/03/91/document_doc.phtml This is a very useful discussion/policy paper from Pierre Habbard of the Trade Union Advisory Committee to the OECD. Executive summary 1. The latest phase of the financial crisis that broke out in the summer 2007 was marked by a dramatic turn in mid-September with the collapse of Wall Street, US insurance group AIG, and the subsequent asset destruction […]

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Reading the Crisis

I highly recommend “The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis” by Graham Turner. “Graham Turner is one of only a handful of economists to understand the roots of the current financial crisis, its implications for all of us and crucially what should be done now. I strongly recommend you read this book.” —Larry Elliott, Guardian “A […]

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