Deregulatory Problems; Malignant Markets; Spurious Solutions to Oil Problem

MWF (Friday) Briefing:

Stagflation of the 70s was largely seen as a regulatory problem and hence a government problem imposed on markets.  That was the set up for deregulation that ensued during the Reagan years to the opposite extreme.  This time around, it's perceived as market failure.  It hasn't prevented capital inflows into the U.S. from foreign investors... and the high price of oil has led to spurious accusations on the part of lawmakers and band aid solutions that cause more hassle.

• Over the five years from 2002 through 2006, gross capital flows into the United States totaled $6.2 trillion. Foreigners invested an average of over $5 billion in the United States every day, despite relatively low returns compared to investments in other countries and the widespread expectation of continued dollar depreciation. Moreover, over two-thirds of U.S. external liabilities were held by the private sector by the end of 2006. What motivates the individual decisions that drive these capital inflows, and can this massive net transfer of capital into the United States last? NBER

• Chief of BP leaves Russia after being denied work visa.  NYT

• "The ICE as a dark market? “It’s absurd,” Mr. Sprecher says. As he sees it, he may run “the most regulated commodity exchanges in the country right now.”" NYT