Financial Markets

New House Speaker Nancy Pelosi has put the 2002 Sarbanes-Oxley (SOX) regulatory monster at the top of her list of things to tackle in January 2007.

Despite their horrible reputation, stock speculators perform a crucial service in the market economy. Their attempts to buy low and sell high quickly eliminate mispricings in the stock market.

Perhaps most importantly, the very source of the crises would remain in place: the concept of "price index targeting," which rests on the erroneous "stabilization" idea, a concept that is in full contradiction to the notion of free markets: "Human action originates change. As far as there is human action there is no stability, but ceaseless alteration."

My disagreement with Ms. Baum regarding central banking is at base a disagreement about what exactly is money and credit.

Both Phelps and another Nobel Laureate Milton Friedman have introduced more confusion rather than clarity regarding the explanation of the phenomenon of stagflation.

In this article we have shown that causality cannot be established by statistical means without a coherent definition of what money is and how it is related to the prices of financial assets. Contrary to various experts who dismiss the importance of money in driving the stock prices, we have shown that this dismissal is based on a wrongheaded framework of thinking.

In other words, in seeking to boost sales by exploiting the possibilities of modern finance (in a perfectly legal manner), GMAC and Ford Motor Credit, GE and John Deere (among countless others) may have misled our preening, erstwhile Maestro into financing the whole wasteful bubble of the late 1990s!

Thanks to Sarbanes-Oxley,

Danilo Nogueira provides a brief history of the Brazilian inflation in The Language of Inflation

One of of the most underreported repercussions of the ill-advised SarbOx legislation is