Fred Banks

Troubled Banks in 1991 Were 25 Times Worse Than Now

Not worse than now, but 25 TIMES WORSE THAN NOW! I wonder what I would do if one of my students were to make a claim like that. I mean, what would I do after I failed that student and my head stopped spinning.

Professor Ferdinand E. Banks (Fred)

The Perfect Storm: Semi-Annual Economic Review

Excellent article - very useful and interesting. This article deserves the widest possible circulation. Of course, to say that oil is no longer prices beyond its fundamentals is wrong, wrong and wrong, assuming that fundamentals are determined by supply and demand.

A 5-Point Plan for Getting Out of This Mess

The university system in the US is "STILL" considered to be the best in the world. Nobody in their right mind could believe this, although admittedly the US has some good schools and students and teachers.

Book Review: The Decline and Fall of the British Empire, 1781-1997

General Willoughby, General MacArthur's intelligence chief, once attempted to point out why things had not turned out the way we wanted in Korea. In his words, "the balance of weaponry had shifted". That was only partially true, but it had shifted enough so that we lost our advantage.

Now it's not just the balance of weaponry, but also - to some extent - the balance of morality. John Gordon is right: putting people like Reagan and Bush in the highest office in the country is not going to work in the long run. How can they manage something that they can't understand, and in the case of Reagan didn't want to understand? This was true for the British government immediately after WW2.

But I don't see any reason to give up, Certainly it must be clear to just about everyone that a nice strong dose of creative intelligence is really all that it will take to turn things around.

Wind Power: What We Can Learn from Denmark

Bob Lunn, Denmark's solution works because the Danes dont mind paying two or three times as much for power as the Swedes. In fact if the Swedes had not gone into the EU and hadn't closed the two reactors at Malmö, the Danes would be paying four or five times as much. The so-called "new" solution that they should be thinking about is constructing a couple of nuclear facilities.

Wind Power: What We Can Learn from Denmark

I want to thank you Tom Andersen for your observation: the price of electricity in Denmark might be the highest in the industrial world. Sure, Denmark is a wonderful country, but instead of harassing Sweden until they closed the reactors at Malmö, the government of that country should have asked them to move those reactors to another part of Sweden, and to sell them more power.

There is something important here. If the Scandinavian countries that are fairly similar in culture cannot work together where electricity and environment are concerned, how will it be possible to construct a joint energy-environmental policy with the rest of Europe - or better, with the rest of the world as the know-nothings in the Swedish, Danish and Norwegian media think is possible.

Oil Guesses Are Wrong Again, Contango Grows

Hmm. Georealist and User have some important comments, even if I have a problem accepting that contango is "normal" for the oil market. More important though, this article is valuable from a pedagogical point of view.

Reasons to Give Thanks for Capitalism

I checked your background Professor Dr Perry, but it didn't tell me why d you felt that it makes sense to write this article at the present time? Better change your television preferences from afternoon soap operas and Fox News before you say something really off-the-wall. In case there is a misunderstanding, let me say that capitalism is great when it works, but it doesn't happen to be working at the present time. So, since there isn't an alternative, it needs to be adjusted, but I think that we would all be better off if we let somebody else turn the knobs and pull the levers besides you.

(Professor Dr) Ferdinand E. Banks

Top Turkeys of 2008

The real turkey is the man who appointed the 'smartest guy in the room' to be the big boss at the Fed.

Bernanke Admits to Misjudging the Mortgage Crisis

When asked about oil, Bernanke said that the futures market indicated that there would be plenty of it around in the future, meaning about the middle of the next decade. But since the oil futures market has hardly any liquidity after 6 months or so, I think that where the most important commodity in the world is concerned, we can ignore the smartness of the smartest guy in the room..

Oil Price Decline Bad News for Future Supplies

Makes all the sense in the world to me, with the exception of the $90/b estimate and the talk about 2030. I thought that only the IEA knew exactly what was going to happen in 2030, which is a good reason for stopping your conjecture about 15 years earlier.

The GDP Effect of Lower Oil Prices

Interesting and useful contribution, and also something to remember when the economy moves out of the dumps and the price of oil starts moving toward $100/b again.

How Low Can Crude Oil and Gas Go?

It's easy to say that speculation is the cause of the big rise and fall of the oil price, but proving it is another matter. On the contrary, I never have any difficulty proving that speculation is not the reason, but unfortunately for anyone to understand the proof they need a background in elementary finance theory or, even better, an open mind.

The chief economist of a major investment bank tried to explain to me that although supply and demand was the largest factor in the price movement mentioned above, speculation played a big role. To back this claim he gave me some information on 'open interest' in the oil futures market. Unfortunately, the ratio of open interest to physical supply and demand proves just the opposite, but I saw no reason to belabor the issue. I can mention however that if one of my students made the wrong claim after one of my killer lectures, he or she would find themselves facing a failing grade if they didn't straighten up.

And by the way truth seeker, you have taken something that is very simple and made it complicated, but you are not completely wrong. .

How Low Can Crude Oil and Gas Go?

Well Socreteazz, I am an expert on the oil market, and I remember when writers on Forbes were trying to make Steve Forbes happy by agreeing with him that the oil price was going into the tank. In one article in Forbes an author agreed with Mike Lynch that the oil price was going to fall below $20/b.

As for oil prices below $50-60/b spelling disaster for one country or another, that doesn't make any sense at all to me, because I can remember when the OPEC countries were hoping against hope that the oil price would reach $28/b - which was the upper limit of what they defined as their optimal range.

Moreover, it is NOT a bubble or speculation that took the oil price to above $100/b. It was, as this year's Nobel prize winner in economics confirmed, SUPPLY AND DEMAND, although speculation might have been somewhere in the picture, though not nearly as much as certain people believe. And it was supply and demand that moved it to its present position, and will take it back up when the global macroeconomy is put back in order - whenever that might be.

By the way, plug-in hybrids and electric vehicles are an important part of the transportation future, but they won't be in time to keep the oil price from escalating again after the business cycle turns up. To bring that about Michael Moore almost has the right idea, which is a Manhattan-TYPE project.

The Downfall of Keynesian Economics and the U.S. (Part 3 of 3)

If you think that Keynes is bad, then you should have had an opportunity to listen to Milton Friedman. His speech at the 100th anniversary of the Nobel awards could only be described as fruitcake, and it left the real scientists who were there wondering if they had stumbled into a crank colony. The most grotesque part of that scene however was the presence of at least one of the most brilliant analytical American economists, who accepted to be a part of Friedman's public. No wonder Keynes said that "economics is an easy subject that is difficult". He meant difficult to understand why some of its practitioners are completely without shame.