Political Equinox

Treasury

Timothy Geithner – Geithner appears to be President-elect Obama’s first choice for Secretary of Treasury. The current President of the New York Federal Reserve Bank has been in the thick of orchestrating the bailout and currently serves as chairman of the Federal Open Market Committee. Geithner graduated from Dartmouth College with a bachelor’s degree in government and Asian studies and then received his masters in International Economics and East Asian Studies from the Johns Hopkins School of Advanced International Studies.

Education

Tim Kaine – Kaine will be reaching the end of his time as Governor in 2010, as he is term-limited. Therefore, he could be an interesting snag for the Obama campaign despite the fact that he was passed over for the …

Last Thursday evening I had the honor of witnessing an intriguing lecture by St. Louis Federal Reserve Bank President James Bullard who received his PhD is Economics from Indiana University.

Bullard spoke specifically on the topic of the recent financial crisis focusing on systemic risk, which he defined as “the possibility that the failure of one firm will lead to the failure of other firms.” However, Bullard said the difficulty lies in defining when there is adequate systemic risk to call for government intervention.

Three Pillars of Systemic Risk

Interconnectedness – Recent examples of systemic risk has focused on investment banks interconnecting themselves with complex financial instruments. For example’s sake, suppose Bank A purchases an option from Bank B to hedge risk, if …