Simon Johnson on the Economic Crisis

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Johnson: US, world markets jittery

"If financial regulations do not go far enough to address the core weaknesses in our financial system, stock market worries will continue to come back. It will recede from time to time, people will feel confident, but then there'll be problems around the world and people will worry again about the stability of the financial system," says MIT Sloan Prof. Simon Johnson in this radio interview. The Takeaway is a co-production of Public Radio International and WNYC Radio in collaboration with the BBC World Service, The New York Times and WGBH Boston.

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Johnson: Hazy global outlook

In this live television broadcast on the European debt crisis, MIT Sloan Prof. Simon Johnson says, "The big question is France. Does France move from being viewed as a safe haven to being viewed as a risky sovereign borrower? That has not happened yet, and as long as that doesn't happen, I think the eurozone will come through this."

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Is the SEC still working for Wall Street?

"Nothing other than a balanced panel on June 2 would be acceptable. At the very least, the SEC needs to increase the panel to 10 people - 5 for and 5 against," writes MIT Sloan Prof. Simon Johnson. "And all the issues need to be on the table."

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Johnson: Senators named to work out sweeping bank-reform bill

"The Lincoln provision is likely to be removed or new higher capital requirements for the derivatives units may be eliminated," says MIT Sloan Prof. Simon Johnson.

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Johnson: How the eurozone encouraged a race to the bottom

"Given the incentive problems in the eurozone, it is no wonder more nations want to join -- the requirement is just to appear prudent for a few years," writes MIT Sloan Prof. Simon Johnson in this co-authored opinion piece.

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The Wall Street Takeover and the Next Financial Meltdown with Simon Johnson

"The US banks were definitely involved early on in the European schemes. But they probably were more of a pump and dump kind of role -- so they sold it to other people and then they got out before the balloon went up," says Simon Johnson in this live radio interview.

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Johnson: PIIGS can't fly. Here's why

In questioning European Union countries' ability to contribute to a Greek financial rescue, the author of this opinion piece refers to MIT Sloan Prof. Simon Johnson's point that Portugal, Spain, and Italy owe "a great deal of money to their EU neighbors."

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Johnson: Why Greece's economy should matter to everyone

"It feels like a whole set of dominoes," says MIT Sloan Prof. Simon Johnson on the risk of Greece's debt crisis spreading damage to other European nations.

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Johnson: '13 Bankers,' financialization and the real economy

The author cites excerpts from MIT Sloan Prof. Simon Johnson's 13 Bankers in a story on the impact of the existing financial sector on the real economy.

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Johnson: The impact of banking deregulation

This review of 13 Bankers calls MIT Sloan Prof. Simon Johnson's recommendation to break up big banks "a provocative prescription for avoiding a repeat of the panic of 2008."

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Johnson: Big bank breakup time gets boost from Goldman

In this opinion piece, MIT Sloan Prof. Simon Johnson stresses that we shouldn't lose track of the broader economic and political context around the Securities and Exchange Commission case against Goldman Sachs Group Inc. In fact, the SEC lawsuit and associated discussion make clear three points.

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Johnson: Your money, their pockets

MIT Sloan Prof. Simon Johnson's co-authored book, 13 Bankers, is reviewed in the Sunday Book Review.

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Johnson: The men behind the curtain

"This is very sophisticated disinformation... This group -- they call themselves 'Stop Too Big To Fail' -- is wrapping itself in some of the same appearances. Of course, when you see the TV ad there is absolutely no mistaking it. This is an anti-reform ad," says Simon Johnson in a television interview with Rachel Maddow about his experience with an anti-financial reform group that falsely represented itself as pro-financial reform.

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Simon Johnson and James Kwak on bank reform

In this television appearance, MIT Sloan Prof. Simon Johnson discusses 13 Bankers and the concept of oligarchy in America.

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Johnson: Timid response to Wall Street

This opinion piece includes an excerpt from MIT Sloan Prof. Simon Johnson's co-authored book, 13 Bankers.

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Johnson: Why not just limit the size of banks?

MIT Sloan Prof. Simon Johnson's 13 Bankers is included in a list of expert viewpoints about breaking up "too big to fail" banks.

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Johnson: Goldman finds resume a pariah with governments: Albert R. Hunt

"Clearly, they've become a toxic asset," says MIT Sloan Prof. Simon Johnson of the now tainted reputation of Goldman Sachs alumni hoping to work in government service.

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Johnson: Debate centers on 'bailouts' of failed banks

Simon Johnson, former chief economist at the International Monetary Fund and now at MIT, has insisted for months that large banks need to be downsized. Some of the largest U.S. banks have $2 trillion in assets, or 20 percent of the economy.

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Johnson: The eternal life of America's megabanks

"Responsible policymakers in other G-20 countries are very clear on this point: no one will agree ex ante to a specific way of handling the failure of any global bank," writes MIT Sloan Prof. Simon Johnson in this opinion piece

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Johnson: Sen. Lincoln unveils broad derivatives regulatory bill

"You start with a small exemption and later you will have big businesses built all around it. It's all just as dangerous as it sounds," says MIT Sloan Prof. Simon Johnson of end-user exemptions from proposed derivatives-trading rules.

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Johnson: Financial debate renews scrutiny on bank size

Simon Johnson, an MIT professor, has been leading the intellectual charge to break up banks. In his book 13 Bankers, he urges that no financial institution be permitted to control more than 4 percent of G.D.P. and no investment bank more than 2 percent. All six of the big financial institutions exceeds those limits.

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Johnson: What's missing in the financial rules bill?

"Why would anyone think that today's size of banks is the right place to stop? After all, it is the banks at their current size who brought us such disaster," writes MIT Sloan Prof. Simon Johnson in response to questions about financial reform proposals.

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Johnson: To battle Wall Street, Obama should channel Teddy Roosevelt

In this opinion piece, MIT Sloan Prof. Simon Johnson writes, "For Teddy Roosevelt, it did not matter how important you were, or claimed to be, to the economy. If you were too powerful, and if your actions were hurting other people in the economy, Roosevelt wanted to take you on -- and he instructed his lawyers accordingly."

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13 Bankers: Why Wall Street banks must be "small enough to fail"

"There is no evidence that anybody else in the economy benefits when banks are above $100 billion. So these banks are ten times too big, from a social point of view," says MIT Sloan Prof. Simon Johnson in this interview with Matt Lauer.

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Johnson: The next financial meltdown?

In order to prevent another financial meltdown, MIT Sloan Prof. Simon Johnson recommends setting a hard size cap of about $100B on the largest banks, enforcing capital requirements of 20% or more, and exchange-trading all derivatives.

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Johnson: Citi claims ignorance on risky investing

In this radio broadcast, MIT Sloan Prof. Simon Johnson questions how Citigroup's senior adviser was unaware of mortgage investment risks.

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Johnson: Daily Digest -- 'Thirteen Bankers'

"Big banks are dangerous in this country and in the financial scene right now, and the last thing we need is an even bigger JP Morgan Chase," says MIT Sloan Prof. Simon Johnson.

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Johnson: What's next for financial reform

"The tax will be far too small to make a difference. It will just institutionalize the too-big-to-fail dimension of our systems. You really need... to reduce the size of our biggest banks if you're going to make any progress at all," says MIT Sloan Prof. Simon Johnson on the prospects of a global bank levy.

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Johnson: Is it fair to call the financial bill a 'bailout'?

"'Dangerous and deliberately misleading' would be my headline...What this legislation tries to do -- and I think it should be tougher -- is more akin to an FDIC resolution structure. It doesn't protect management; it boots them out," says MIT Sloan Prof. Simon Johnson regarding characterization of new finance legislation.

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Johnson: As Greek epic drags on, Germany rises

MIT Sloan Prof. Simon Johnson says that aftershocks from the Greek financial crises are still causing problems throughout Europe.

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Johnson: Gensler takes aim at derivatives exemptions in bank bill

MIT Sloan Prof. Simon Johnson argues against end-user exemptions from derivatives-trading rules in proposed bank-reform legislation.

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Johnson: MIT's Johnson says would like pre-emptive support for Portugal

MIT Sloan Prof. Simon Johnson says that Euro region governments should consider "pre-emptive" economic aid for Portugal.

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Johson: Greek aid terms may be 'red herring' amid recession

"This is not fixing the issue. The Greeks could seize the opportunity. You have taken away their incentive to solve the problem," says MIT Sloan Prof. Simon Johnson on the EU's economic rescue package for Greece.

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Simon Johnson: A second financial shock is inevitable

MIT Sloan Prof. Simon Johnson hopes that 13 Bankers will lead to further discussions about financial policy. "The broad, mainstream consensus on what is good finance and bad finance is shifting," he says.

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Johnson: Break up big banks, MIT economist says

In a post on the newly released 13 Bankers, a blogger cites MIT Sloan Prof. Simon Johnson's online faculty profile.

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Johnson: Ending 'too big to fail'

"There remains sharp disagreement on what exactly would end 'too big to fail'," blogs MIT Sloan Prof. Simon Johnson in an outline of the three camps of financial reform strategy.

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Johnson: Top fed official wants to break up megabanks, stop the fed from guaranteeing Wall Street's profits

A blogger cites MIT Sloan Prof. Simon Johnson's Baseline Scenario post recommending Tom Hoenig as a candidate to succeed Treasury Secretary Timothy Geithner if he steps down.

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Johnson: Extreme makeover, Wall Street edition

A quote from MIT Sloan Prof. Simon Johnson's blog appeared in a Times blog entry comparing banks' reputations in Washington and the media. "The public relations machines of today's bankers may be even more effective than those of Morgan and Rockefeller," he wrote.

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The Colbert Report, Simon Johnson

Prof. Johnson thwarts Stephen Colbert's notoriously contrary interviewing style to explain the tie between "too-big-to-fail" banks and the ongoing boom-bust cycle.

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Johnson: Will the Dodd bill do the job?

"There is almost nothing here that will address the central problem, which is that we built large banks that are too big to fail, and well on their way to becoming too big to save," says MIT Sloan Prof. Simon Johnson.

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Johnson: Three to see -- Take them to the bank

The Boston Globe announced the release of MIT Sloan Prof. Simon Johnson's co-authored 13 Bankers, and his appearance at the Harvard Book Store on April 2.

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Johnson: Cantillon

"A strong lobby of real-estate developers, the investors who bought the bank bonds, and politicians with links to the failed developments (and their bankers) have managed to ensure that taxpayers rather than creditors will pay," says MIT Sloan Prof. Simon Johnson.

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Johnson: Creating a healthier Eurozone by teaching creditors a lesson

MIT Sloan Prof. Simon Johnson co-authored this opinion piece on potential solutions to the European debt crisis.

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Johnson: Dems might pass financial reform that does nothing to protect from big threats to our economy

"When a major bank fails, in the years after the Dodd bill passes, we will face the exact same potential chaos as after the collapse of Lehman," writes MIT Sloan Prof. Simon Johnson in this blog post.

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Johnson: Senator calls for aggressive financial reform, deplores current 'incremental' steps

"It's the speech for which we have been waiting," says MIT Sloan Prof. Simon Johnson of Sen. Ted Kaufman's address to the Senate regarding financial reform.

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Johnson: China's mercantilist strategy creates imbalances

The U.S. Treasury data almost certainly understate Chinese holdings of our government debt because they do not reveal the ultimate country of ownership when instruments are held through an intermediary in another jurisdiction," according to testimony by Simon Johnson at the February U.S.-China Economic and Security Review Commission hearing.

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Johnson: Greece announces new $6.5 billion austerity plan

"Sarkozy absolutely does not want Strauss-Kahn to do anything that can be presented as a statesman-like contribution to the world," says MIT Sloan Prof. Simon Johnson of IMF head Strauss-Kahn's potential candidacy in the 2012 French presidential election.

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Johnson: Why, exactly, are big banks bad?

"It is not the power of big finance to control everything that has us worried — except maybe in some movies. Rather it's the ability of major banks to generate the conditions that make major international financial crises possible," blogs MIT Sloan Prof. Simon Johnson.

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The Greek tragedy that changed Europe

MIT Sloan Prof. Simon Johnson co-authored an essay on Greece's economic crisis, and the European Central Bank's deliberations to continue providing financial support across the European Union. "If these problems are not addressed quickly and effectively, Europe's economy will be derailed -- with serious, if hard to quantify, implications for the rest of the world," he writes.

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Simon Johnson: Obama on CEO bonuses: He doesn't 'begrudge' wealth

"I don't begrudge success and wealth, but I would like for it to be socially productive and socially constructive, not massively damaging," MIT Sloan Prof. Simon Johnson says in response to Obama's recent, more moderate comments about executives' bonus pay, with the administration's stated intent to curb big banks.

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Simon Johnson: Opinion: Bank CEO's won't police themselves

In this opinion piece, the author cites MIT Sloan Prof. Simon Johnson as having said, "Unless and until we break the political power of our largest banks, the middle class will be hammered down."

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Simon Johnson: The debtor the world still bets on

"They have no easy option," says MIT Sloan Prof. Simon Johnson of Europe's debt dilemma against a backdrop of the changing credit ratings of global superpowers. "They can cut spending or raise taxes."

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Simon Johnson: After the tape: U.S. losing edge on export-led growth

MIT Sloan Prof. Simon Johnson is quoted in an article about the strength of the U.S. dollar's effect on efforts to double U.S. exports. If the dollar continues to increase in strength, rather than weaken, "it would wipe out all the other bits and pieces [the president] is putting together to encourage exports," Johnson says.

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Simon Johnson: Obama's plan to be judged by a Goldman breakup

In this opinion piece, MIT Sloan Prof. Simon Johnson writes, "After more than a year of tough argument, Paul Volcker has finally persuaded top aides to President Barack Obama that the unconditional bailouts of 2008-09 planted the seeds for another major economic crisis. Unfortunately, in their scramble to announce this major policy shift ahead of Wall Street's bonus season, the administration didn't line up all relevant details."

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Simon Johnson: Obama's right to tame the big banks

In this opinion piece on next steps for the Obama Administration on curbing financial risk, MIT Sloan Prof. Simon Johnson recommends two key elements of successful regulation: tripling capital requirements and shrinking big banks.

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Simon Johnson: A bank levy will not stop the doomsday cycle

MIT Sloan Prof. Simon Johnson co-authored an opinion piece on the latest developments in regulating the American-European financial system. "Rather than recognising the dangerous systemic failures in our financial system, their leaders are proposing bandages that can - at best - only postpone another, possibly much larger, meltdown," he writes.

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Simon Johnson: Making the move to community banks

Simon Johnson, MIT professor and economist, spoke with host Guy Raz about the Move Your Money campaign.

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Simon Johnson: Axeman Barack Obama cometh again

In a report on reactions to Obama's strict financial policy announcement from Wall Street, bankers, the United Kingdom, international media, and expert economists, MIT Sloan Prof. Simon Johnson says, "they think the big banks should just carry on as usual."

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Simon Johnson: Obama's 'Volcker Rule' shifts power away from Geithner

"It's a fundamental shift," says MIT Sloan Prof. Simon Johnson on Obama's policy move in favor of stronger financial regulations. "This is coming from the political side. There are classic signs of major policy changes under pressure...but in a new and much more sensible direction."

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Simon Johnson: Will the 'Volcker Rule' do anything?

In this blog post, MIT Sloan's Simon Johnson analyzes President Obama's new, tough demeanor in confronting big banks. "If the Obama proposal is the start of a serious debate on these issues, we are at last moving in the right direction," he writes.

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Simon Johnson: Witnessing Obama's first step off Wall Street

This blog entry on Obama's shift to more controlled banking highlights comments made by MIT Sloan Prof. Simon Johnson, which appeared in The Washington Post's 1/22/10 story.

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Simon Johnson: Economists' reactions to Bernanke re-nomination

"Bernanke is an airline pilot who pulled off a miraculous landing, but didn't do his preflight checks and doesn't show any sign of being more careful in the future -- thank him if you want, but why would you fly with him again?" asks MIT Sloan Prof. Simon Johnson.

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Simon Johnson: Bernanke on the hot seat

"Now that the administration and the president himself have recognized the danger inherent in big banks and defined a new reality, what is Ben Bernanke's view?" asks MIT Sloan Prof. Simon Johnson.

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Simon Johnson: An antitrust investigation of the banks?

In this blog posting, MIT Sloan Prof. Simon Johnson authors looks at the political backdrop of the Obama Administration's proposed limits for big banks, exploring the implications for bank regulation after the Republican Senate victory in Massachusetts, application of antitrust theory, and how politicians might play the issue in upcoming elections.

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Simon Johnson: China to fuel huge catastrophe

The author quotes MIT Sloan Prof. Simon Johnson's latest assessments that have appeared in the media: "The market is very clearly saying that they think there is going to be another bailout... And those expectations of course are self-fulfilling," Johnson says.

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Questions for the big bankers

The New York Times opinion page editors asked MIT Sloan Prof. Simon Johnson and other experts what questions they would ask the CEOs of the four big banks under review by the Financial Crisis Inquiry Commission.

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Obama to push tax on being 'too big to fail'

MIT Sloan's Simon Johnson argues that the administration's $120 billion tally for TARP losses is 'low ball.' TARP is a direct cost, he says. But the country needed a fiscal stimulus to restart the economy, which "was only needed because of what the banks did. They should pay for that also. There is no logic that says: reimburse us for TARP but the rest is on the house."

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Why Citigroup's going to take the fall

Simon Johnson, MIT Sloan professor and economist, blogs about Citi's conspicuous absence from the first day of hearings for the Financial Crisis Inquiry Commission. "The bank CEOs interviewed Wednesday may reasonably be considered the current kings of Wall Street. But Weill and Rubin are the titans who built the modern Citi," Johnson writes.

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Kill Wall Street's bonuses or tax them to death, says Simon Johnson

In this video broadcast and online news piece, MIT Sloan's Simon Johnson addresses anticipated bonuses for big bank employees. "People working at our largest banks - say over $100 billion in total assets - should get zero bonus for 2009," Johnson says.

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The bonus boomerang

In an opinion piece on the Financial Crisis Inquiry Commission, MIT Sloan's Simon Johnson asks, "Did the extraordinary size and irresponsible structure of bonuses in 2007 help lead the financial system into trouble? Don't today's stunning bonuses point in the same direction?"

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Crisis just beginning: Economist

In this live television interview, MIT Sloan Prof. Simon Johnson says, "All of the big banks left standing believe that they are immune from any future failure...crazy things happen when you have a financial system like that".

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Our uncertain economy

In this radio interview, MIT Sloan's Simon Johnson talks about the risks of re-nominating Federal Reserve Chairman Ben Bernanke. Despite Bernanke's assertion that he plans to avoid future bailout scenarios, "The market is very clearly saying that they think there is going to be another bailout, more bailouts, unlimited bailouts, as necessary. And those expectations of course are self-fulfilling," Johnson says.

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Investing in independent financial regulators

MIT Sloan Prof. Simon Johnson blogs about the risks of employing finance sector experts, who often also work for major broker-dealers, as government advisors on financial derivatives. "It would be great if people from hedge funds or other financial institutions were willing to step forward and play this role...but while these independent people eloquently criticize the major broker-dealers in private, very few of them are willing to step forward in public," he says.

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Global boom builds for epic bust: Peter Boone and Simon Johnson

In this opinion piece, MIT Sloan's Simon Johnson and London School of Economics' Peter Boone warn about the "dangerous financial system in Europe and the U.S." resulting from bank bailouts, excessive risk-taking, and the dynamics of global lending practices.

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Crisis from 'super-sized finance' looms

MIT Sloan Prof. Simon Johnson's recent presentation on economic recovery is featured in this story. His "conclusion is that we may be entering a period of great instability, with more frequent crises and more serious ones," writes the author.

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Why the pessimists are worth listening to

MIT Sloan Prof. Simon Johnson is quoted in this opinion piece weighing economists' varying predictions about the recession. Says Johnson, "The crisis is just beginning. Have bankers won? In the short term, absolutely. The immediate opportunity for change has already been missed".

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Simon Johnson: Business Outlook will appeal to a wide audience

MIT Sloan Prof. Simon Johnson will provide the keynote address at the annual Cayman Business Outlook conference in January 2010. This year's theme, "Prospering in a Grave New World," and attendees can expect a big--picture view of the latest economic and social issues impacting Cayman.

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Simon Johnson: Making sense of 2010: The next crisis

Simon Johnson, MIT Sloan professor, shares his thoughts on potential economic crises for the year 2010.

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Video

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Dec. 3: In the last session in a series of special seminars, Prof. Simon Johnson provides an update on the crisis worldwide, including the recent bailout of Citigroup.
Larger window and previous sessions >>

Podcast

Simon Johnson on the global financial crisis
In this podcast, MIT Sloan economics expert Professor Simon Johnson provides studied insights on the global financial crisis and what the government and financial institutions need to do to turn things around.

  Podcast part 1: Oct. 9
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  Podcast part 2: Oct. 21
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  Podcast part 3: Nov. 13
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  Podcast part 4: Feb. 9
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For more information on the crisis, visit Professor Johnson's Web site, BaselineScenario.com.

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