Thursday, January 15, 2009

Back from Holiday

Just got back from a 3 week trip to the States -- 2 weeks in California and a week near Seattle.

It was interesting to see the effects of the current recession first hand. It seemed like more than half the shops in downtown Berkeley were closed and available for lease. Telegraph Ave wasn't quite so bad, but it was clear that economic activity was down.

I attended the ASSA conference in San Francisco, and listened to several economists talking about the GFC (Global Financial Crisis). Kenneth Rogoff from Harvard gave an interesting talk on the history of financial crises and showed why the current crisis shouldn't have been too much of a surprise to students of economic history. (Rogoff's paper, titled "The Global Financial Crisis in Theory and Practice" can be downloaded at -- you'll have to search for the title). Another interesting talk was given by Frank Nothaft, chief economist at Freddie Mac. He made the interesting point that in 2007/8 volume in the mortgage backed securities market shifted from government guaranteed loans to subprime loans. Since the liquidity crisis, the subprime market has evaporated, so the share of government guaranteed loans has returned to it's previous level.

I'm probably talking to myself here -- only 4 people responded to my last post. If you have anything to add, please leave a comment. In response to the comments on the last post, I've picked up a copy of Nassim Taleb's "Fooled by Randomness" -- more later when I've finished reading it.


Anonymous Sheldrick said...

Thanks for taking your time to read Taleb. With scandals like Madoff and bailouts of banks like Bank of America, it is a surprise that people have not lost faith in finance and financial institutions. Thought I'd pass along this link to show what it takes to be a successful blogger if that's what your goal is.

4:13 pm  
Blogger Fiona said...

I have clicked through to the conference paper you noted - and I'll add that to the various online communities I keep our alums informed of, and link your blog as well, if you are happy for me to do so.

11:28 am  

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