The appropriate use of risk models: Part I

On practically every day of the past four years, we have said that it was the Fed's own policies that are causing the ever-deeper systemic weakness in the US (and now global with all central banks going "all in") economy, which in turn forces the Fed to intervene even more aggressively in an attempt to counteract, in turn generating ever more economic weakness, leading to even more intervention, which is why every incremental episode of QE is larger and longer, and why the economic baseline is ever lower in the most perverse feedback loop of the New Normal.

By CFA Institute: By Mark Harrison, CFA

The Burrill Report submits: Mayo Clinic will conduct a year-long research study to determine if home monitoring of patients with chronic diseases, using Intel's (INTC) remote patient monitoring technology, will reduce hospitalizations and emergency department visits.

Jon Danielsson, 18 February 2011Financial models are widely blamed for underestimating and thus mispricing risk prior to the crisis. This column analyses how the models failed and questions their prominent use in the post-crisis reform process. It argues that over-relying on market data and statistical forecasting models has the potential to further destabilise the financial system and increase systemic risk.Full Article: Risk and crises: How the models failed and are failing

Geza Feketekuty, 19 June 2010What is holding back the Doha Round? This column argues that while there are many reasons for the difficulties the WTO has faced, the shortcomings of the mercantilist model in framing mutually acceptable multilateral agreements is undoubtedly a major factor. The WTO needs a new kind of forum where countries can think through the issues before the give and take. Full Article: Needed: A new approach to reduce regulatory barriers to trade

Edward B. Barbier, 3 June 2010Nearly one-sixth of the more than $3 trillion in fiscal stimulus spent in 2008 and 2009 was allocated to green spending. But this column argues that without correcting existing market and policy distortions, the “greening” of the world economy will be short-lived. Now more than ever, the world needs a global green New Deal – and it needs the G20 to lead the way. Full Article: Urgently needed: A global green New Deal

Edward Harrison submits:Friday, I received a press release from the complete list of federal government regulators of the financial industry which are all but ordering banks to lend to small businesses. Clearly, regulators are concerned as comments by Marc Chandler intimated in my last post.

By Simon Johnson Senators Merkley and Levin, with support from colleagues, are proposing legislation that would apply Paul Volcker’s financial reform principles – actually, much more effectively than would the Treasury’s specific proposals.  (Link to the bill’s text.)