Entries Tagged 'Economics and Investing' ↓

Greece: Europe’s Identified Patient

Reprinted from Huffington Post

The German government s determined not to negotiate anew the terms for the expiring 712 billion Euro bailout of Greece.

I have three objections to the German line of “reasoning” about Greek debt.

(1) “Charitable” giving that was really out of self-interest 

Here’s what Martin Wolf, well-known British economist and writer for the Financial Times had to say about self-interest and loans  in June, 2011 in his editorial, “Time for common sense on Greece”. Continue reading →

Greece – Who Really Should Pay?

Reprinted from Huffington Post

This time around, it’s Greeks who should beware of foreigners bearing gifts…

Ever since the financial crisis of 2008 hit Greece, I’ve wondered who really should pay.

Today, trying to find a reason for my unease with what’s happening to the Greek people, I took a look at the definitions of two forms of risk that investors can incur when buying foreign debt: Systemic Risk and Sovereign Risk.

Systemic Risk

Systemic risk is a term that came up quite frequently during the global Financial Crisis of 2008. I could never quite figure out what the term meant just by reading about systemic risk as part of a larger context in news stories.

Recently, however, I saw that familiar term used in relation to medical treatments. What I read was that chemotherapy imposes a systemic risk on the body while surgery and radiation treatments for cancer are more targeted risks to the patient.

In regard to investing, Wikipedia says, “In finance, systemic risk is the risk of collapse of an entire financial system or entire market”

We all know, or think we know, what an entire body is, but what is meant by “an entire market”? Continue reading →

Two Mystery Books Connected With Economics

Fatal Equilibrium by Marshall Jevons (Ballentine Books 1985)

Fatal Equilibrium I reviewed Marshall Jevons’ (pseudonym for two economists’) first book, Murder at the Margin, a couple years ago. I sent for the sequel, Fatal Equilibrium, but was sorely disappointed.

Fatal Equilibrium has a few moments of levity, but overall it lacks the delightful explorations of economic theory in response to a murder when Professor Henry Spearman and his wife are vacationing on a remote Caribbean island resort.

On the contrary, Fatal Equilibrium is didactic, cerebral, and as bloodless as the murder of its main character, Dennis Gossen, a quite unlikeable tenure candidate in the Economics Department at Harvard University.

Unfortunately, if you’re a fan of Harvard or Cambridge, Massachusetts you won’t see either place in this book—the only memorable setting for Henry Spearman’s economic thoughts is at the clothing sales melee in the basement of Filene’s Department Store. Continue reading →