Jamie Dimon had no difficulty understanding one of the cardinal rules of Chicago politics, "Don't back no losers." That makes his apparent move to the Republicans very interesting.

Under the Dodd-Frank financial-reform law, large nonbank firms may be declared systemically important because their failure will cause a systemic breakdown. In effect, this amounts to a government statement that these firms are too big to fail.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default - those that were held or guaranteed by Fannie and Freddie, and those that had been securitized by Wall Street. This drove down housing prices and threw Fannie and Freddie into insolvency. 

At a time when Fannie Mae and Freddie Mac are in serious financial difficulties, the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department have both indicated that covered bonds might be an important new way to finance mortgages in the United States. Covered bonds are used extensively and successfully...

The underlying idea—that financial institutions are "interconnected" and the failure of one will drag down others - is not implausible. But like so much else that underlies the Dodd-Frank Act, it was accepted as true—and acted upon—without much evidence, or even much thought.

At AEI conferences in December 2007 and April 2008, the same five AEI economists had widely divergent views about the direction the economy would take, but all agreed that things would become clearer when more data were available about the scope of market turmoil and the health of the economy....

Online registration for this event is now closed. Walk-in registrations will be accepted.

Recently, two large players in the mutual fund business, Citigroup and Merrill Lynch, sold off control of their fund businesses to smaller, more specialized organizations. In addition, many smaller investment advisory organizations have been leaving the field,...

No one seems to know where the current turmoil in the financial markets is going. The continued unfolding of losses in subprime mortgages; the huge writeoffs by Citibank, Merrill Lynch, and other major financial players around the world; and the absence of a market for asset-backed securities are either temporary...