naked capitalism Wed 2009-12-23 10:03 EST

Guest Post: The Real Reason Newspapers Are Losing Money, And Why Bailing Out Failing Newspapers Would Create Moral Hazard in the Media

Washington's Blog

Conventional wisdom is that the Internet is responsible for destroying the profits of traditional print media like newspapers. But Michael Moore and Sean Paul Kelley are blaming the demise of newspapers on simple greed.

bailed; creating moral hazard; Failing Newspaper; Guest Post; lose money; media; naked capitalism; real reason newspapers.

zero hedge Sun 2009-11-29 12:33 EST

Fed's Bull Dudley Explains Bank Runs, Discusses Collateral Risks, Suggests Way To Prevent Systemic Collapse

An impressively comprehensive presentation by Bill Dudley before the Center for Economic Policy Studies Symposium earlier, discusses, and ties in, all the key concepts Zero Hedge has been discussing over the past several months, among these the tri-party repo system, bank runs (what and why), collateral, moral hazard, maturity mismatch, unsecured markets, Primary Dealer Credit Facility, Commercial Paper Funding Facility, and liquidity. In fact, at some points in the speech we get the feeling Mr. Dudley is indirectly refuting some of Zero Hedge's recent allegations vis-a-vis the Fed's actions and regulatory oversight. The presentation is largely devoid of bias except for some of the proposals on how to avoid future systemic meltdowns, which of course are moral hazard prevention lite and philosophy heavy.

Discusses Collateral Risks; Fed's Bull Dudley Explains Bank Runs; Prevent Systemic Collapse; suggested way; Zero Hedge.

Willem Buiter's Maverecon Thu 2009-10-15 16:51 EDT

Kornai on Soft Budget Constraints, Bail-Outs and the Financial Crisis

Nobel Prize winning economist J��nos Kornai

...Spreading of the SBC syndrome is at once a cause and an effect of the crisis. I will not say it is the only cause: the situation that led to the crisis was brought about by a complex of factors. But I will say firmly that softening of the budget constraint is one of the main causes of the crisis. The general softening tendency has been reinforced in the United States and several other countries by successive bailouts over the last ten or twenty years. Some economists, such as Professor Chenggang Xu, have been pointing for years at a close link between the crisis in East Asia and earlier bailouts. [moral hazard generalized]

bail-outs; Financial Crisis; Kornai; Soft Budget Constraints; Willem Buiter's Maverecon.

The Baseline Scenario Mon 2009-10-12 09:41 EDT

Escape from Punchbowlism

StatsGuy

When the Fed pumps money into the system to prevent deflation, the disincentive to holding cash/reserves is supposed to get money moving and thus restore the savings/investment equilibrium. In a sense, the goal is to decrease the incentive to use money as a store of value and therefore increase its use as a medium of exchange. Unfortunately, many conventional macroeconomists (unlike their brethren in the real-world finance schools) haven't admitted that this monetary stimulus ``leaks'' out of their models (which focus on closed domestic economies without moral hazard). Where does it go?

Baseline Scenario; escape; Punchbowl.

Jesse's Café Américain Mon 2009-09-14 12:03 EDT

Moral Hazard and Economic Donkeys

Jesse

Simon Johnson on moral hazard: the corruption of the capitalist system introduced by a Fed (the Economic Donkeys) that recklessly exercises a function as 'lender of last resort,' in conjunction with a political environment (less sophisticated Economic Donkeys) that can be politely described as being driven by 'regulatory capture' rather than the less euphemistic 'rampant corruption.'

Economic Donkeys; Jesse's Café Américain; moral hazard.

Jesse's Café Américain Fri 2009-09-04 19:00 EDT

Five Reasons for the Recent Surge in Gold

Jesse

1. Seasonality 2. Continuing Risks in the Financial System 3. Moral Hazard: Tipping Point In Confidence From Over a Decade of Monetary and Regulatory Policy Errors 4. Blowback from Banking Frauds on the Rest of World 5. A Failure in Political Leadership to Deliver Essential Reforms

gold; Jesse's Café Américain; reasons; recent surge.

naked capitalism Sun 2009-08-30 14:53 EDT

Party Time! Wall Street Back to Its Old Highly Levered Ways

Bloomberg reports that Wall Street is back to its free-wheeling, high-levered ways. This is a classic example of moral hazard in action. Why worry about blowing up the bank when you know the taxpayer will bail you out?

naked capitalism; Old Highly Levered Ways; Party time; Wall Street.

Tue 2009-04-21 00:00 EDT

naked capitalism: Guest Post: Moral Hazard Now Biting GM

``GM bondholders are probably wondering why they need to take a haircut on their bonds when the counterparties of Bear Sterns, Lehman, and AIG are being made whole at par after investing in far riskier securities''

Biting GM; Guest Post; moral hazard; naked capitalism.

Wed 2009-04-01 00:00 EDT

FT.com | Willem Buiter's Maverecon | The Fed's moral hazard maximising strategy

FT.com | Willem Buiter's Maverecon | The Fed's moral hazard maximising strategy

com; Fed's moral hazard maximising strategy; FT; Willem Buiter's Maverecon.

Mon 2008-07-14 00:00 EDT

Mish's Global Economic Trend Analysis: Operation "Rescue Fannie" Underway - Paulson a Blatant Liar

"likely the start of a U.S. Taxpayer Bailout of China. Disgustingly it is a U.S. Taxpayer bailout of PIMCO as well." "It is a moral hazard to the highest degree, for bondholders to be made whole in this mess."

Blatant Liar; Mish's Global Economic Trend Analysis; operations; Paulson; Rescuing Fannie; underway.

Fri 2008-06-20 00:00 EDT

Walter Bagehot Was Wrong - June 19, 2008 - The New York Sun

Walter Bagehot Was Wrong, by James Grant - June 19, 2008 - The New York Sun; Jim Grant: structuring mortgages for central bank deposit in special liquidity facilities will result in a new cycle of currency debasement; Walter Bagehot versus Thomson Hankey on central banks, moral hazard, fairness, and ready money

2008; June 19; New York Sun; Walter Bagehot; wrong.

Fri 2008-06-06 00:00 EDT

The Big Picture | Lacker: The Fed Risks Moral Hazard

Jeffrey Lacker critiques Bear Stearns bailout

Big Picture; Fed Risks Moral Hazard; Lacker.

Sat 2007-09-08 00:00 EDT

Robert Reich's Blog: Moral Hazard

moral hazard double standard; "ownership society" a cruel farce; welfare for the rich (wealthfare)

moral hazard; Robert Reich s blog.

Sat 2007-09-08 00:00 EDT

naked capitalism: Robert Reich: The Moral Hazard Double Standard

welfare for the rich; wealthfare

Moral Hazard Double Standard; naked capitalism; Robert Reich.