Crisis and Neoliberal Capitalism
By David Kotz | November 17th
It is impossible to predict the course of the financial crisis.
But even if the financial crisis is contained, the
bursting of the housing bubble—which began in 2007 and
is bound to continue for some time—will have a powerful
downward impact on the economy.
Read more »
Financialization: A Primer
By Ramaa Vasudevan | November 7th
You don’t have to be an investor dabbling in the stock market to feel the power of finance. Finance pervades the lives of ordinary people in many ways, and its size and impact are only getting bigger.
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Capitalism Hits the Fan
By Rick Wolff | October 31st
The current crisis has profound social roots in America’s households and families, and political roots in government policies. It did not start with finance, and it won’t end with finance.
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Dealing with a “Rotten Tooth”
By Arthur MacEwan | October 23rd
Isn’t the bailout like having a rotten tooth extracted? The extraction is unpleasant, but it beats the alternative. Shouldn’t people quit complaining and suck it up?
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Confidence Trick
By John Miller | October 8th
Whatever the bailout will do to patch up the credit system, it will not counteract the downward spiral in housing prices that brought on the crisis. Read more »
The Fannie/Freddie Bailout
By Fred Moseley | October 5th
A look at the Fannie/Freddie bailout exposes the critical fault line—between private profits and public aims—that ran right through the hybrid structure of the mortgage giants.
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The Greed Fallacy
By Arthur MacEwan | September 19th
Various people explain the current financial crisis as a result of "greed." But there is no indication of a change in the degree or extent of greed on Wall Street in the last several years.
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Ten Weeks That Shattered a World
Fifth in a Series on the Subprime/Securitization Panic
By Larry Peterson | November 7th
Make no mistake about it. The world has experienced in the last few weeks events comparable in historical significance to the fall of the Berlin Wall. As in the fall of the Wall, there was an exceptionally sudden collapse of an hegemonic system that had seemed, to the vast majority of observers, and only weeks before the event, to be at least somewhat secure in its continued existence, if irreversibly committed to an inevitable, fundamental process of reform. Read more »
Notes on the Foreclosure Crisis
By Tom Weisskopf | November 7th
The number of home foreclosures across the United States is now approaching 2 million, and economists expect that several million more borrowers may default within another year as job losses rise and housing prices continue to fall. This constitutes a crisis that must be addressed as soon as possible, for multiple reasons. Read more »
Commercial Paper
Financialization’s (Latest) Weak Link
By Max Fraad Wolff | October 29th
There may be no better illustration of the staggering pain emanating from financial market turbulence than the carnage experienced recently in commercial paper markets worldwide. Read more »
Notes on the Financial Crisis, #3
Third in a Series
By Tom Weisskopf | October 15th
The last 10 days have brought further news of economic disaster, highly volatile stock market movements (most of them sharply downward), and indisputable evidence that the crisis is world-wide in scope. It’s no longer just Hank Paulson and his associates trying to figure out what the U.S. Government should do to stem a collapse of the U.S. financial system. Read more »
Notes on the Financial Crisis, #2
Second in a Series
By Tom Weisskopf | October 5th
Barack Obama has shown stronger signs of readiness to pursue the measures needed to make the bailout effort succeed, and in a way that is fair to all concerned. In order to follow through, he needs to be prodded and supported by substantial Democratic majorities in both houses of Congress. Read more »
Notes on the Financial Crisis, #1
First in a Series
By Tom Weisskopf | October 1st
The current financial crisis is broadly attributable to the system of (relatively) deregulated and globalized capitalism into which the U.S. economy is now thoroughly integrated. Read more »
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Banking on Bankruptcy
Fourth in a Series on the Subprime/Securitization Panic
By Larry Peterson | August 11th
In order to understand how an unstable situation at Fannie Mae and Freddie Mac tipped over into a rout that threatened the whole global financial system, we have to focus on a charming investment strategy that is becoming more and more popular every time a major financial firm finds itself under mortal attack. Read more »
Bear Stearns: Not Your Average Bailout
Third in a Series on the Subprime/Securitization Panic
By Larry Peterson | May 13th
The Fed-led rescue of Bear gave investors an unmistakable signal that the central bank would not allow what had long ceased to be perceived as a “mere” liquidity (involving availability of funds to carry out current business) crunch to finally, however belatedly, tip over into a full-blown solvency (involving conditions pertaining to whether or not business could be carried on or not at all) crisis. The unique thing about this shift was that any prior distinction between systemic solvency and the solvency of one particular institution was reduced to precious little. Read more »
Finding Spare Change for the Invisible Hand
Second in a Series on the Subprime/Securitization Panic
By Larry Peterson | March 3rd
Since our first piece on the subprime/securitization crisis came out, we’ve seen official proposals to confine the damage come and go, with price tags going up each time, while the contagion itself continues to infect regions of the financial world most people never even knew existed. Read more »
The Subprime/Securitization Market Panic
A Guide for the Perplexed
By Larry Peterson | December 14th, 2007
What does the swindling of financially benighted, sometimes greedy, and even gullible American homeowners have to do with collateral used by mysterious funds which promise outsized returns to the incredibly wealthy? And how on earth can developments in these markets cause a bank run (Northern Rock) in England, which hadn’t seen anything similar since the 1860s? Moreover, who are those even more shadowy characters lurking on the horizon—Sovereign Wealth Funds and private equity investors to name two—who stand to capitalize on the mess? Read more »
