Paul Krugman's Blog, page 638

Thousands of banks watch

One of the really bad arguments against temporary receivership for troubled banks is that we just have too many banks. Unfortunately, among those rolling out that argument has been the president.
So it's worth quoting from the otherwise not very informative Fed report on the stress tests:
All domestic BHCs with year‐end 2008 assets exceeding $100 [...:]

Apparatchiks

Adam Serwer writes about Jay Bybee's attempt to get off the hook:
So Bybee knew he was breaking the law in allowing the use of torture, but you have to understand, he only did it because he really wanted to be a federal judge. That's not exculpatory information, that's motive.
Exactly right. But you have [...:]

Health care happening

OK, it looks as if major health care reform is actually going to happen. Democrats have agreed that if Republicans try to block reform in the Senate, they will use the reconciliation process to bypass a filibuster.
Republicans will, of course, scream that this is a terrible, terrible thing - something they themselves would never [...:]

Saez does matter

Berkeley's Emmanuel Saez has won the Clark Medal - the prize given by the American Economic Association to an economist under 40. In the past it has been given only once every two years, making it scarcer than the Nobel (although it will be annual from now on), and it's a very big deal. Past [...:]

A quick note on Britain

The Darling budget is basically a confession that Britain doesn't dare do any significant discretionary fiscal stimulus. But it should be pointed out that Britain is getting a serious monetary expansion - much more than other troubled European economies.
Below are the spreads of long-term interest rates in Britain and Spain against Germany. Britain has, [...:]

The defining moment

One addendum to today's column: the truth, which I think everyone in the political/media establishments knows in their hearts, is that the nine months or so between the summer of 2002 and the beginning of the Iraq insurgency were a great national moral test - a test that most people in influential positions failed.
The Bush [...:]

Alice in financeland

So the accounting rules say that a decline in the market value of a bank's debt thanks to increased credit default swap spreads - that is, because investors think you're more likely to fail - counts as a a profit. On the other hand, if your bank looks stronger, the spreads fall, and you book [...:]

Grand unified scandal

From Jonathan Landay at McClatchy, one of the few reporters to get the story right during the march to war:
The Bush administration put relentless pressure on interrogators to use harsh methods on detainees in part to find evidence of cooperation between al Qaida and the late Iraqi dictator Saddam Hussein's regime, according to a [...:]

Vast majorities

So the market was greatly reassured when Tim Geithner declared that the "vast majority" of banks are well capitalized. Count me as baffled. I mean, maybe he was actually giving us a hint about the stress tests - but I took it as a remark that was uninformative at best, ominous at worst.
After all, there [...:]

Imformation

I really can't remember a time when I anxiously scanned the IMF's website to see what has just been released - or when so many of the Fund's reports were best read sitting down, with a cup of herbal tea. A few days ago it was the "analytical" chapters of the World Economic Outlook, with [...:]