Global population is estimated to reach 7 billion this year.  The United Nations is projecting that global population may reach 15 billion by the end of the century.  This projection is based on population growth continuing at its current growth rate of a shade under 1% per year.  However, extrapolation of the current growth rate… Read more

“Value at Risk is like an air bag that works well all the time except when you have an accident” David Einhorn Value at Risk (VaR) is a well-accepted measure of market risk.  It is defined as the minimum loss that could be expected to occur over a specified (short) horizon with a specified (low)… Read more

Weakness in housing activity and housing prices continues to be a major drag on the overall economy.  My colleagues at CERF have long maintained that the homeownership rate (HOR) needs to fall back to its historical norm of 64% before housing can recover.  Their view has been that the attempt to increase the HOR by… Read more

In the 1960s, the Federal Reserve attempted to conduct an operation to lower longer term yields and raise short-term yields.  This maneuver was called “Operation Twist” and the purpose was to stimulate private sector borrowing and spending.  It is generally agreed that the policy was modestly successful in temporarily pushing long-term rates lower. There are… Read more

In a widely read NYT editorial, famous investor Warren Buffett has proposed tax increases for the rich, like himself.  Although one of the richest men in the world, Mr. Buffett claims that he pays a lower tax rate than the secretaries in his office.  That seems really strange.  The data put forth by Warren are… Read more

A bank’s capital ratio is a ratio in which the numerator is a measure of capital (like common equity) and the denominator is a measure of assets (usually risk-weighted assets). Bank executives sometimes take the reciprocal of this ratio and call it “leverage.” More commonly, leverage is defined to be the ratio of debt to… Read more