Federal Reserve Chairman Alan Greenspan said last Thursday, during questioning by the Senate's special committee on aging, that he does not believe that a housing price bubble exists on a national level in the United States. "Is Greenspan right?" asks Frank Shostak. To provide an answer to this question one needs to establish—or define—exactly what a bubble is.
The cry of the Wall Street reformer is always the same: Let's have more regulators and regulations to correct the problem of prior regulators and regulations! Gregory Bresiger reviews Arthur Levitt's new book.
The Spitzer settlement is a travesty of justice. If it is true that individuals in the securities industry perpetrated fraud in order to garner investment banking fees, they should be criminally prosecuted and punished. Only a corrupt politician would ignore possible crimes in return for an industry’s support in future political campaigns. The liberal New York democrat helped himself, not investors.
Frank Shostak explains why Greenspan's latest move to cut interest rates will not only not help, but it will actually delay recovery by months or even many quarters. The fundamental problems inhibiting recovery are too severe to be fixed by mere money creation.
The Spitzer restructuring of Wall Street will not achieve its stated objective of restoring confidence in the stock market, writes James Sheehan. Instead, it will create a government sanctioned stock research cartel, the legacy of which will be higher costs, more inefficiency, and less competition.
It is hard to understand the vague and ill-defined laws Martha Stewart and Sam Waksal are accused of violating. But the premise of the law is not hard to divine: Competition in capital markets must proceed from a level playing field. All investors are entitled to the same information advantage irrespective of effort and abilities. In a word, socialism!
The alarm raised by mainstream economists that corporate cost cutting will undermine the real foundation of the economy is based on a flawed view of the essence of savings. On the contrary, writes Frank Shostak, cost cutting is an important means in correcting previous erroneous decisions so that real wealth can be generated again.
Martha Stewart, one of our most productive citizens, is being targeted for destruction by our most unproductive entity, the federal government. To understand the law of insider trading, writes James Ostrowski, you have to be a real insider. Yet, ignorance of the law is no excuse (unless you are a judge).
The Dow would be several thousand points higher, were it not for government regulation that causes corporations to divert immeasurable resources to pandering to government regulators rather than pursuing profits. A major ingredient of stock prices is expected profitability, writes Thomas DiLorenzo, which regulation affects profoundly.
