The Financialization of the world economy
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João Santos There’s ample evidence that securitization led mortgage lenders to take more risk, thereby contributing to a large increase in mortgage delinquencies during the financial crisis. In this post, I discuss evidence from a recent research study I undertook with Vitaly Bord suggesting that securitization also led to riskier corporate lending. We show that during the boom years of securitization, corporate loans that banks securitized at loan origination underperformed similar, unsecuritized loans originated by the same banks.
Gerry Epstein: Financialization of the economy has been developing since the late 19th century and is now at historic Levels 2012-10-03 06:39:15 Bio Gerald Epstein is codirector of the Political Economy Research Institute (PERI) and Professor of Economics. He received his Ph.D. in economics from Princeton University. He has published widely on a variety of progressive economic policy issues, especially in the areas of central banking and international finance, and is the editor or co-editor of six volumes. Transcript
Finance capitalism - curators...
The other day the new MSFE students showed up at Columbia for orientation and I had to welcome them. These are some notes from what I said. Part 1 Background Several years ago, my son, who did a PhD thesis on the reception history of Max Weber, the founding father of sociology, introduced me to two influential essays by Weber, entitled respectively Science as a Vocation and Politics as a Vocation .
Structured Finance / Derviatives / Securitization
How has financialization changed the real economy? James and Simon do an excellent job tracing the history of the conflict between the financial sector and the government in their book "13 Bankers." They do this history in two dimensions: first as a history of the United States' complicated relationship with the financial sector and large, concentrated banks, and second as a cross-section of the world in the late 1990s and early 21st century. From Andrew Jackson to recent problems in South Korea, they tell a narrative that connects ways in which the financial sector, when too big and too connected, is capable of capturing their regulators. One thing that worries financial reformers is that we are rebuilding the financial sector of 2005-2007 with some additional legal powers for regulators to use in the middle of a crisis.
Crude oil, copper, cotton, soybeans, and live cattle – a seemingly unrelated set of commodities – went through a synchronised boom and bust cycle between 2006 and 2008 (see Figure 1). Figure 1. Commodity prices
Proposals for adequate regulation and enforcement in the financial markets often run into objections from advocates of free-market capitalism.
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By Justin Lahart A couple of weeks ago in Mobile, Ala., this correspondent watched a shipyard auction where spools of copper cable were fetching prices that had some participants shaking their heads. In a bidding frenzy, one buyer won every single spool, spending about $1,000,000 in total.
In Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market into a Casino , James McTague, Barron’s Washington Editor, chronicles the effects of High Frequency Trading (HFT) from the crash of October 1987 to last year’s Flash Crash.
Derivatives Ownership Even More Concentrated Than Ever