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Economics

The Nearly Complete and Utter History and Future of Banking

Ancient Greece provides evidence of banking with Greek temples and some private and civic entities, conducting financial transactions such as loans, deposits and currency exchange. Credit also existed whereby a moneylender in one Greek port would write a credit note for the client who could "cash" the note in another place. There are records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. Effectively the world's first ever banks were the religious temples which were the absolute centres of the respective communities.

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The Influence of Foreign Oil on the American Economy

Many people are calling for a new energy bill to be passed through congress. This is because of the new growth in the demand of transportation coupled with increase gas prices. The United States domestic oil production is slowly decreasing which means that the American public must depend more and more on foreign oil supplies. These increasing oil prices have an adverse impact on the United State Economy including the stock market.

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Painful First Quarter for World Financial Markets

This quarter started with huge concern about housing bubble bust followed by subprime crises which all are talking US economy towards a recession. This will be long or short recession only time will tell but impact is getting visible in low consumer confidence and same store sales reports which are falling each month. US government and Federal Reserve is trying their best to pull economy out of this downturn by giving tax concessions and lending money to banks at very low and deferred interest terms. Bear Stearns was biggest causality of this quarter whose stock fell from $80 to $3 in matter of 5 days due to its losses in mortgage backed securities which got severely devalued due to subprime crisis.

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Has the US Dollar Finally Bottomed Out?

Since the last G7 meeting about two weeks ago the price action of the US Dollar suggests that an important bottom may have been reached against the Euro. The Euro made an all time high against the Dollar at just above 1.6000 only three trading days ago. The 1.6000 level was a widely anticipated one by forex traders. Early Thursday morning on April 24, 2008 we are just under 1.5700, so a sharp reversal in underway at the moment.

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The Yen Carry Trade: The Impact of Rising Japanese Rates

One of the most significant trades that exist today is the carry trade on the Japanese yen. A basic description of the yen carry trade is that traders borrow yen in Japan at low interest rates, convert the yen into another currency, and invest the funds at a higher interest rate. The trader then earns the interest rate spread between the two currencies, but bears the risk that the yen will appreciate before the loan is repaid.

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The Relationship Between Housing and Jobs

Most economists blame the messy bursting of the housing bubble for the Great Recession, yet it's jobs that are discussed the most on the news. So what is the relationship, if any, between jobs and housing when it comes to the future of the economic recovery? Is it one of those vicious cycles where people can't get jobs until the housing market recovers, but with a shaky job market no one is buying houses to put an end to the decline in housing? Just reading that sentence is enough to cause a headache. Recently Mint.com, a personal finance website, had a map showing the future of job growth around the country.

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America’s Nightmare: When Do We Awaken?

A dear friend dreams vividly. Sometimes she awakens wondering, "Did that happen, or was I dreaming?" Dreams pretend or they portend. You could say they link experience to truths or dares. Whether we study them or not, we know they mean something.

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DORF Spells Doom For Detroit

The other day my wife and I talked about summer camps. We want our children in busy learning spaces when school vacates. For some reason the subject reminds me of a New Hampshire camp where I worked during the summers of graduate school. Every morning at camp, the grounds crew would empty trash barrels. Driving the old, dented pick-up truck made this job fun. As they drove past, I noticed that someone changed the chrome letters to read "DORF" instead of Ford.

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Fedspeak: Polyglot Perspicacity

"Twas brillig, and the slithy toves Did gyre and gimble in the wabe; All mimsy were the borogoves, And the mome raths outgrabe." Reading silently or aloud creates rhythmic nonsense, you might think. Humpty Dumpty explains, defines, and clarifies for Alice. Soon Alice sees meaning. As she does, the upside downs become the right-side ups.

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