A timely and frightening exploration of the causes and consequences of the emerging foreclosure mess. This close cousin of the earlier sub-prime mortgage debacle provides even more evidence of the financial industry’s hubris and inescapable self-interest.
As the saying goes: garbage in, garbage out…

As Canadians sparred over fake lakes, budget-busting security, and the global capitalist conspiracy, the world’s twenty most influential leaders convened in Toronto this past June to negotiate a response to the worst financial crisis in generations. At issue was an age old debate between two economic philosophies: stimulus as a life vest versus stimulus as a straitjacket. The pro-life camp was championed by consumerist America and its global supply chain. The pro-restraint camp was led by conservative Germany and its regional demand chain. At risk were millions of jobs, trillions in debt, and quite possibly the fate of our modern political economy.

Armies of bulls and bears are camped out on either side of the great debate over the future of the global economy. Armed with the latest statistics and plenty of financial incentive, both sides are engaged in massive media campaigns to rally anyone left on the fence — principally retail investors who were either burned in the great collapse of 2008-09 or sat out the fast and furious rally over the past 14 months. As the rhetoric heats up, it becomes increasingly difficult to choose sides. A careful examination of these competing wagers provides a more holistic perspective for anyone brave enough to join the fight.

Churchill argued that democracy is the worst form of government, except for all the others. With capitalism now falling under similar fire, modern politicians, businesspeople and academics are once again questioning both the failures of free markets and the failures of government. As pundits gather on either side of the debate — casting blame and contempt across the regulatory divide — one often overlooked explanation for all the recent chaos is the time-honored tendency for human society to self-destruct. Behavioral economists and psychologists are having a field day watching our worst decision-making biases play themselves out in political and capital markets.

“Zapatero is not a good driver. It’s like a boat, which in calm waters steers fine, but when it gets bumpy, they are not prepared.” The same could be said for many of the world’s C-level leaders, so it’s perhaps not surprising that both companies and countries are finding out the hard way that credit can dry up when the sea gets choppy…

Assuming that our lot in life is simply a function of hard work, acquired skills, and a bit of good luck, the only real difference between liberals and conservatives is the degree to which we believe that those who fall on hard times – for whatever reason beyond their control – deserve a helping hand. How we publicly spend on that assistance is not only a question of socio-political philosophy, but also a matter of practical statecraft. Whether “leveling the playing field” or simply “setting the rules of the game”, pharohs, kings, and presidents have all made use of their regulatory oversight with varying degrees of success. This piece in the Boston Review by noted macroeconomist Dean Baker explores the …

Recent reports have pegged open interest in the world’s largest IPO at nearly US$400 billion. That’s a lot of capital ready to speculate on a still unproven Chinese macroeconomy, particularly in the face of its ongoing structural woes. Could this be the end of the beginning for capitalism in China? Or perhaps the beginning of the end…
The Enduring Allure of China
by Peter Zeihan, Stratfor.com

The Industrial and Commercial Bank of China (ICBC) is expected to raise nearly $22 billion in an initial public offering (IPO) — the largest in history — after shares are made available to retail investors Oct. 27. The ICBC offering is the latest in a series of IPOs involving Chinese banks, into which Western investment firms have …

An engaging fictional dialogue between former Secretary of State Warren Christopher and former Syrian President Hafaz el-Assad, from Thomas L. Friedman’s 2000 National Bestseller…
To illustrate this ever-present tension between today’s globalization system and the olive trees in us all, I once tried to imagine how a discussion would go if a very decent American Secretary of State, such as Warren Christopher, were to try to explain globalization to a not so decent leader, such as Syrian President Hafez el-Assad—a man of olive trees and the Cold War. It would sound like this:
Warren Christopher: “Hafez—you don’t mind if I call you Hafez? Hafez, you are yesterday’s man. You’re still living the Cold War. I know you’ve only traveled outside the Middle …