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The Inviolate Principle...?

May 29, 2009

Those naive financial journalists at The Atlantic are back! Andrew Gelman pointed me toward this misguided look at the latest auto bankruptcy (you know the one I mean). Key quote: Purists -- and virtually every academic economist one happens to encounter -- wonder what happened to the once inviolate principle of rewarding risk-takers. You'll have […]

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The Man who Broke the CDS?

March 24, 2009

George Soros has written an opinion in today's WSJ calling for the regulation - and elimination - of CDS. He notes that CDS are instruments which allow speculation on default: What makes [CDS] toxic is that such speculation can be self-validating. I find his nature-of-the-security argument severely lacking: The negative effect is reinforced by the […]

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