On the heels of yesterday's post about student loans and their growth. I want you to know that Wall Street is hot on the problem. They've made a quiet proposal to the "supercommittee" that's supposedly addressing government deficits to have the government subsidize the banks via fees without creating any more student loans or taking … Continue reading Banks Want to Do To Student Loans What They Did to Mortgages
A colleague (non-econ) asks: What's a "derivative" in plain terms? The plainest answer, yet not very helpful, is that derivatives are a Wall Street cross between the Frankenstein monster and the blob: they're a banker-made monster that's out of control and swallowing the global economy. But let's look at derivatives in a less inflammatory way. … Continue reading What’s A Derivative?
Wall Street hasn't learned and isn't repentant. We're likely to have another crisis. Maybe this year, maybe next. Maybe they keep it together for a few years. But sooner or later this house of cards falls. Derivatives is one of the dirty words of the financial crisis. Though these often-risky bets were blamed by many … Continue reading Bailed-Out Banks Haven’t Changed
Chrysler files bankruptcy. Let's be clear about who is responsible here. It is the banks, bondholders, and Wall St. that created the derivatives and Credit Default Swap (CDS) monster. Derivatives have already created the current economic depression (Bear Stearns, Lehman, Merrill, etc). Now the presence of CDS's distorts the normal workings of a market economy … Continue reading Debt revamps hindered by credit default swaps Dealscape