Although by some measures (such as debt-to-GDP and deficit-to-GDP ratios) Russia’s fiscal situation appears favorable relative to that of the United States, for a variety of reasons, and for now, the US can finance its massive and burgeoning spending in a way that Russia cannot match. The fiscal...
Posted to
Economics
on 09-02-2010
Filed under: Politics, Economics, Russia, Energy
I saw the headline of this Matt Leising article, “Lehman Derivatives Records a Mess,” and reflexively thought it would be about its OTC trades (of which there were, if memory serves, over 900,000 if memory serves).
I was wrong. It was about its exchange traded–and cleared–positions...
Posted to
Economics
on 08-31-2010
Filed under: Politics, Economics, Financial crisis, Commodities, Derivatives, Exchanges, Clearing
Ruh-roh.
An airport trade is when somebody puts on a trade far bigger than he can afford. He then heads to the airport with a one way ticket to a foreign nation, preferably one without an extradition treaty. If the trade is a winner, the guy enjoys a blowout vacation then returns as the conquering hero...
Posted to
Economics
on 08-31-2010
Filed under: Politics, Economics, Financial crisis
It is flattering to know that the always insightful (and knowledgeable) David at Deus ex Macchiato found insightful my observation that capital requirements can result in crowded trades–and hence systemic risk. I think the idea is pretty straightforward. It’s all about incentives.
Risk-based...
Posted to
Economics
on 08-29-2010
Filed under: Politics, Economics, Financial crisis