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Indian rupee falls further amid Fed stimulus concerns

"The Indian rupee has fallen to a new all-time low against the US dollar, amid concerns the Federal Reserve will soon scale back its stimulus measures. Foreign investors have been pulling money out of India, as the economy has slowed and the cost of borrowing in dollars has risen. The Reserve Bank of India (RBI) is rumoured to have intervened to stem the slide in the currency. The Indian rupee has declined by nearly 16% against the US dollar since May and is Asia's worst performing currency so far this year. Its further decline on Tuesday was mirrored by falls in markets across other developing markets, particularly in Asia." Continue reading →

Continue ReadingIndian rupee falls further amid Fed stimulus concerns

Are Dividends Overrated?

"Many investors like dividend-paying stocks because they are looking for income. Maybe they are retired. Maybe they want to supplement other income sources. But investing for dividend income is probably not the most efficient approach—even for these types of people. Warren Buffett talks about this issue in his latest letter to the shareholders of Berkshire Hathaway. He gives a good explanation of why it's better for investors when companies reinvest their profits in growth rather than pay out dividends. That is assuming the companies have any decently profitable investment opportunities, which is to say, almost all of the time." Continue reading →

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The Source of Systemic Crisis: Risk and Moral Hazard

"No government agency ever projects deep, long-lasting recessions, because such a period of stagnation would upend all the rosy projections that the status quo is eternally sustainable and stable. Where does all this lead us? To this: Programs that backstop banks and social insurance systems like Medicare are not like fire or life insurance because they are effectively open-ended in terms of costs and in exposure to risk. A system which pools risk without distributing it to the participants and eliminates the causal connection between risk and consequence introduces moral hazard on a grand scale." Continue reading →

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Wanted: A Boring Leader for the Fed

"Quantitative easing has amounted to an audacious experiment in trickle-down economics. Among other things, it has artificially boosted the stock market in the hope that enriching a few — the top 1 percent of American households owned 42 percent of the nation’s financial assets in 2010 — will help the many. Meanwhile, retirees who don’t dare buy stocks have seen their modest bank deposits stagnate with interest rates near zero. Economists hate to admit it, but the profession is as much faith as science. Counting on monetary policy to secure full employment is like attempting vascular surgery with a dull ax." Continue reading →

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Greece will need third bailout, German minister says

"A month before general elections in Germany, finance minister Wolfgang Schaeuble has broken the taboo of admitting that Greece will need a third bailout when the current one runs out, in 2014. 'There will have to be another programme in Greece,' Schaeuble said on Tuesday during a campaign rally in the northern-German town of Ahrensburg. As part of a third programme, he mentioned another lowering of the interest rates on the loans the eurozone has given to Greece. So far, the German government has steered clear of admitting that the current bailout, worth €130 billion, will not suffice to get Greece out of the vicious spiral of deficit and debt." Continue reading →

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To Make Sense of the Coins Act, Follow the Money

"The American people might be surprised to learn that for the past 20 years a handful of lobbyists and lawmakers—mostly from states with mining and metal-processing interests—have been pushing a proposal to take away dollar bills, and force the public to use metal coins instead. The advocacy group promoting the Coins Act has the same address as PMX Industries, a South Korean firm located in Cedar Rapids, Iowa, that supplies the U.S. Mint with the metal used to make dollar coins. The company in 2011 donated a combined $500,000 to the Harkin Institute of Public Policy at Iowa State University named after the senator." Continue reading →

Continue ReadingTo Make Sense of the Coins Act, Follow the Money

The Impending Collapse of the Global “Bernanke Bubble”

"In the past few months, the Turkish lira has depreciated by 4.5% against the dollar, while its dollar-denominated debt stands at $172 billion or 22% of its GDP. Goldman Sachs forecasts a further 15% fall in the Turkish lira, spurring a financial crisis as it becomes more and more expensive to buy dollars to service these loans, most of which are short term. Furthermore, 'some of the biggest beneficiaries of the Fed’s largess were . . . among the politically connected elite in emerging nations like Turkey, where vanity towers, glitzy shopping malls and even grander projects to come have become representative of the nation’s new dynamism.'" Continue reading →

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Show Me the Manual: An Internet Town Hall [2012]

"Recorded live on location at Code for America, this town hall deals with the question of Incorporation by Reference, a legal technique where private standards become federal law, available only for those with sufficient means to be informed citizens. Featuring Jennifer Pahlka, Tim O'Reilly, Carl Malamud, and the 2012 Code for America Fellows, this program was recorded on May 4, 2012." Continue reading →

Continue ReadingShow Me the Manual: An Internet Town Hall [2012]