Bob Murphy

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Market Thinks Much More Likely Uncle Sam Will Default

According to this Fortune article, the premium on a credit default swap–basically an insurance contract against bond default–for the US Treasury has more than quadrupled since January, though Treasury debt is still considered the safest in the world.

Bailout: Karl Marx’s Comeback?

So argues Martin Masse in the Financial Post: In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in […]

I’m Pulling Out Some Extra Cash

The FDIC has asked for an increase in the size of accounts it can fully insure, presumably to forestall bank runs. I encourage everyone to have larger cash balances than normal; at least a few days’ worth. It’s true that an FDIC-insured account is “safe,” but Robert Wenzel explains that the FDIC purposely makes you […]

Two Ladies on the Bailout

Judy Shelton has a fantastic op ed in today’s WSJ on the need for a gold standard. I kept waiting for “her” to say, “Surprise! It’s really Ron Paul writing! Gotcha!” Here’s my favorite part that you rarely see mentioned in mainstream “free market” outlets: If capitalism depends on designating a person of godlike abilities […]

"Why Rescue AIG But Not Lehman?"

One possible reason: Goldman Sachs would have lost $20 billion if AIG failed, whereas Lehman is a competitor. According to this article: The seeds of much of the financial chaos engulfing America were sown in London, by a single unit of AIG, the financial services firm recently bailed out by the US Treasury. The New […]

Diamond Hill CEO Explains Why He Wanted Off the SEC’s No-Short List

So far as I know, only Diamond Hill and JMP Investments have asked to be taken off the SEC’s list. I wonder if there is behind-the-scenes pressure for other firms not to follow suit, because it seems like free advertising for firms with relatively clean balance sheets. Either that, or the other 800+ firms on […]

The Great Bank Robbery of 2008

I give the lowdown here. Incidentally, much of this is repetition for “long time” Free Advice readers, but one novelty is that I discuss the claim that the taxpayers might make money on the deal: Some analysts think that the price paid for these “toxic” assets is important. No it isn’t. The government officials running […]

The $700 Billion Pelosi Speech

Here is the “partisan” speech that allegedly so angered the Republicans that they decided to vote against the Paulson bailout after all. I can’t decide which side is less ridiculous on this one. On the one hand, Barney Frank had a good comeback, when he said of the defecting Republicans something like, “So their feelings […]