Some Morning Links For Your Curious Mind
1. Book Review: Panic Of 1907 - Via Conglomerate Blog – The Panic of 1907, published last year by Robert Bruner and Sean Carr, is a good blow by blow account of the action stations nature of a financial crisis, in this case one that began with a freezing of the credit markets, blew up with an ill-timed effort to corner a commodities provider, and was famously resolved by private initiative.
2. The Return Of The Shareholder – Via Harvard Law Blog – Less than two decades after Francis Fukuyama famously enshrined market-based liberal democracy as an optimal system at “the end of history,” Barack Obama used his inaugural address to warn the nation that, “without a watchful eye, the market can spin out of control.” The change in tenor from capitalist triumphalism to our current trepidation is indeed remarkable.
3. Radio Show: Galbraith Doesn’t See Financial Crisis Ending Any Time Soon – Via Bloomberg
4. Paul Krugman: Doesn’t Like The Bailout. Says Its For Bunglers – Via NYT – Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash. Am I being unfair? I hope so. But right now that’s what seems to be happening.
5. Moral Hazard Or Hazardous Materials By James Surowiecki @ New Yorker - In the course of the ongoing financial crisis, we’ve been ceaselessly reminded of the dangers of moral hazard—the idea that if people are insulated from the negative effects of their gambles they are more likely to act rashly. When Bear Stearns was bailed out, last spring, the move was attacked for exacerbating the threat of moral hazard. When Lehman Brothers was allowed to go bankrupt, in mid-September, the decision was praised by some for reducing the risk of moral hazard. These days, moral-hazard concerns are making policymakers cautious about stemming the rise in foreclosures, and about dealing with ailing banks: if we bail out banks or homeowners, we’re told, it will only encourage more recklessness.
