I have a modest proposal. I believe it will rein in the banks, and compel them to behave properly. Here it is.

If any bank fails to comply in the future with federal capital or lending guidelines, then the US Treasury receives an option to acquire warrants in the common stock of that bank or [...]

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Last week, Professor Gary Gorton (of Yale and the NBER) took Fed officials on a whirlwind tour of US bank panics. He focused on two periods:

1864 – 1913, in which newly established and lightly regulated commercial banks spread across the country, and suffered from frequent panics and failures; and
1934 – 2007, the “Quiet Period” [...]

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On April 27th the Administration buzzed Manhattan with an F-16 and a Boeing 747. On May 5th, it cracked down on General Mills, the maker of Cheerios, an illegal drug found in many schools, playgrounds, and lunchboxes.

So you may have missed the May 12th critique suggesting that inept government policies threaten to disrupt more than [...]

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Two widely respected investment firms – Research Affiliates and Deutsche Bank – recently reviewed the relative performance of diverse asset classes over decades (Research Affiliates) and months (Deutsche Bank).

Each provides justification – even in tough times like these – that portfolio diversification rules!

The Long View – 40 Years

“Why bother with bonds?” asks Robert Arnott, [...]

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