Sudip Bandyopadhyay’s Blog

“I can calculate the motions of heavenly bodies, but not the madness of people.” – Sir Issac Newton, 1721, after the South Sea bubble burst.  Sir Issac Newton is said to have lost his life’s savings during the South Sea bubble.  We think to ourselves, “A smart guy like that should have known better”.  It [...]

John Maynard Keynes is alleged to have said: “When the facts change, I change my mind” . Investors and lenders have moved from trusting anybody to trusting nobody.  The fear driving today’s breakdown in financial markets is as exaggerated as the greed that drove the opposite behaviour a little while ago.  But unjustified panic also [...]

According to a recent Morgan Stanley report, China has simply grown too big to keep expanding at the 10 per cent rate it has sustained for 30 years, and is likely to slow to 8 percent at best next year and for the foreseeable future.Indian iron ore exporters recently warned that demand from steel mills [...]

For years the connection between the dollar and the size of the US
government debt has inspired one of the scariest scenarios in international
finance.  The US depends on foreign investors to finance its budget
shortfalls : 47% of Treasury bonds are held abroad.  When foreigners buy
this debt they support the US currency, since they need dollars to [...]

If it has been such a struggle for the Bush administration to command support for a financial rescue from its own side in Congress, how much worse would the situation be if pan-European action was needed to shore up the European Union’s banks?  More cautious Europeans  were looking at Europe’s vulnerable banks and asking what [...]