Big Picture ->

Credit Suisse Takes Bigger Than Expected Writedown

Credit Suisse, which heretofore looked somewhat immune to credit market problems, has joined its peers in having a loss-making quarter. A Sf5.3 billion writedown on leveraged loans and mortgage instruments was the proximate cause.

Note the quarterly deficit was more than three times the consensus estimate. The CEO was also loath to declare the debt crisis to be in remission.

“This bear growls on”

In a post at the Telegraph, Ambrose Evans-Pritchard reviews the case for why the credit markets might be on the mend and finds it wanting. While some of his arguments are familiar, the part I found interesting was his belief (contrary to Wolfgang Munchau at the Financial Times’ piece “Pessimism about the eurozone is misplaced”) that neither Europe’s banks nor its economy will fare well: “Far from being the shock absorber, Europe may prove to be the accelerator of this post-bubble denouement.”

Economics ->

Front Page Coverage, But Where is the Economics?

The Wednesday April 23rd edition of The Washington Post has a story about a UN report on the food crisis that is spreading throughout the world.  The proposed solution to the “silent tsunami” is government policies of aid and a mix of command and control.  Josette Sheeran of the World Food Program is quoted as stating that “I think much of the world is waking up to the fact that food doesn’t spontaneously show up on grocery store shelves.”

Didn’t Adam Smith tell us in The Wealth of Nations that the butcher, the baker and the brewer provides us with our daily meals not due to benevolence but self-interest directed toward mutually beneficial exchange?