Capital Adequacy and the Stress Test

A couple weeks ago the Federal Reserve announced results of the latest Comprehensive Capital Analysis and Review (CCAR), aka stress test, for large banks.  The stress scenario included 13% unemployment, a 50% drop in stock prices and a further 20% drop in housing prices.  Basically, the scenario is a severe double dip recession.  In . . . → Read More: Capital Adequacy and the Stress Test

Strange Behaviors

Dan Walters has a piece on California’s proposed licensing of interior designers, and I recommend you read it.  Here’s his concluding paragraphs:

Is there any public interest need for such licensing?

If an interior designer botches a job – painting a wall magenta instead of puce or some such – it’s not a matter of . . . → Read More: Strange Behaviors

The 90% Versus the 10%

Last week the Federal Reserve released the Flow of Funds (FOF) report for the quarter ended December 31, 2012.  The report showed that household sector net worth increased by $1.2 trillion during the quarter to $58.5 trillion.  The financial crisis and subsequent recession has been marked by an enormous decline in household net worth, . . . → Read More: The 90% Versus the 10%

The Real Risk is Living Too Long

One of the more revered rules of thumb in retirement planning is that retirees can be comfortable in spending 4% per year of their accumulated net worth.  While the origin of this rule is not certain, it has been popularized by financial planning expert William Bengen in a series of articles dating back to . . . → Read More: The Real Risk is Living Too Long

More Support for Immigration

Brian Caplan was writing about the Charter Cities, which he likes as a second-best choice because:

The first-best solution to global poverty, therefore, is for the First World to allow much higher levels of immigration.  Unfortunately, despite its low absolute level (annual U.S. immigration is well under 1% of its population), immigration is already extremely . . . → Read More: More Support for Immigration