Category: Money

I’ve been trying to wrap my head around the arguments about China’s currency control. Before the financial crisis got going, it was fairly easy to understand. China controlled their currency by investing in U.S. Treasury Bonds, which had the effect of keeping U.S. interest rates low. People in the U.S. borrowed money at low rates…

There have been steadily growing reports of invalid paperwork being used to foreclose on mortgages. This has now built up to the point where some large banks are suspending their foreclosure proceedings pending a review of the paperwork. This seems to be a legacy of the fast moving mortgage market before the crash; the banks…

The stock market gyrations last Thursday may be a nice example of the issue of complexity I’ve discussed in the past. When the financial markets are too hard to understand, failure modes become unpredictable. Because there is profit in complexity, or at least the chance of profit, we can expect more of this going forward.…

A friend (I’ll call him John) recently told me about a con that was run on his parents. The con artist called his parents home and pretended to be John. This was apparently done with a little social engineering: “Hello?” “Hi, Mom?” “Is this John?” “Yes, it’s John.” The caller excused the fact that he…

I have no idea whether the recent SEC lawsuit against Goldman Sachs will prevail in the courts. Goldman’s defense sounds pretty good to me: the investors were presumed to be sophisticated, and they should have been able to figure out what was going on. What ought to collapse, though, is Goldman’s reputation for putting their…