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I really like Nicole Gelinas’s articles in the City Journal. She says she has Austrian “tendencies.” She has written a wonderful article (“The Mortgage Hangover”) on the aftermath of the housing crisis and why the real estate market and the economy is not recovering. She contends that among the reasons that we have not been able [...] A curious thing happened in the RMBS and CMBS markets (ABX) this Spring: it crashed and ultimately recovered only somewhat (at least for the super senior tranches). DoctoRx, who follows things like spreads closely, brought this activity to my attention. Neither of us saw any underlying economic factors that would explain this phenomenon. So what [...] Let us assume for the purpose of argument that our corporate bond market is and always has been backed by federal government insurance. In its many years of operations companies would float bonds at relatively low interest rates because of the government’s guarantee. Industry would be financed for their various projects, and, perhaps because of the lower [...] |
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