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Tag Archives: Banking industry

Michael Hudson Asks Our Readers: If Democracy Winds Up Creating Financial Dominance, What Do We Call China?

Yves here. I hope readers will take Michael Hudson’s query to heart. His work has demonstrated how the financial sector tends to gain power and increase inequality if unchecked via debt jubilees or other methods to keep it from acting as a rentier and creating debt peonage. He wonders what would be the most fitting label for countries that like China have adopted substantial elements of a modern market economy but are taking steps to restrict the influence of financiers. By Michael Hudson, a...

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QE During the “Everything Mania”: Fed’s Assets at $7.7 Trillion, Up $3.5 Trillion in 13 months

Yves here. Even though I did not agree with a lot of what the Fed did during and after the crisis (at a minimum, institutions that needed Fed assistance, like Citi, or did nasty stuff, like Citi and everyone else, should have had their boards replaced and execs in the units that did Bad Shit forced out), I did understand their reasoning. Like Wolf, I’m at a loss now. By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street The Fed has shut down or put on ice nearly the...

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The Bullshit Economy Part 2: Payday Loans 2.0, aka Early Paycheck Apps

Yves here. It’s disheartening to see an abuse like payday loans back in the form of a cute app with a misleading name, early paycheck, that finesses that the user owes the party who advanced the dough, including a hefty premium. But the need it fills is the same. IBy Jared Holst,  the author at Brands Mean a Lot, a weekly commentary on the ways branding impacts our lives. Each week, he explores contradictions within the way politics, products, and pop-culture are branded for us, offering...

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Another Blow to Tax Evasion and Money Laundering: UK Targets Art Market After US Goes After Anonymous Shell Companies

Governments in advanced economies are getting more serious about chipping away at hidden wealth. Admittedly, they have a long way to go. Gabriel Zucman, in his The Hidden Wealth of Nations, estimated that 8% of household wealth, which was $7.6 trillion when he published his book in 2013, was in tax havens. Sometimes people with lots of dough hidden in these lockboxes want to use it, hence the use of shell companies and other devices to make use of the funds without tipping off the tax man....

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Stock Market Leverage Spikes in Historic Manner: Another WTF Chart of a Zoo that Has Gone Nuts

Yves here. While the level of stock market leverage, in the form of margin borrowing, isn’t quite at the level of the eve of the financial crisis, it’s still getting to warning signal levels. Recall that the financial crisis was not even remotely a stock market crisis; it was a derivatives crisis. Even though the unwinding of the housing bubble by itself would have hit the economy hard, almost certainly worse than the nasty (but short) recession of the early 1990s, it was derivatives that...

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The Full Case Against Ultra Low and Negative Interest Rates

Yves here. This article by William White, famed for his days at the Bank of International Settlements, when along with Claudio Borio, he warned of housing bubbles forming in many economies in the early 2000s, is consistent with arguments we’ve been making against negative interest rates for many years (see our most recent example, Negative Interest Rates Are Coming, but There Is No Chance That They Will Work). Alan Greenspan forcefully rejected White’s and Borio’s data because markets, White...

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The Bullshit Economy: Homebuying “Help”

Yves here. Please welcome Jared Holst, who is graciously allowing us to syndicate some of the articles on his site. He’s started a new series on what he calls “The Bullshit Economy”: products and services that ought not exist because they are exploitative and in the end typically leave buyers worse off. His description is a tad more charitable than mine: The series is an ongoing look at companies whose existence is predicated on poor policy and bad economics and not on solving a market need....

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What Happens If Bitcoin Succeeds?

By Jon Danielsson, Director of the ESRC funded Systemic Risk Centre, London School of Economics. Originally published at VoxEU. As the price of bitcoin continues to rise, this column argues that most of us would not want to live in a society where bitcoin succeeds. Fortunately, the internal contradictions and perverse consequences of cryptocurrencies’ success mean that they are destined for failure. Until then, it might make sense for speculators to ride the cryptocurrency bubble, so long as...

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Italy’s Newly Unelected Prime Minister, Mario Draghi, Has Urgent Unfinished Business With the World’s Oldest Bank

In his former role as governor of the Bank of Italy, Draghi was partly responsible for Monte dei Paschi’s di Siena’s decline. Now he must reverse it.   Mario Draghi set a new precedent this week, becoming the first former ECB Chairman to head up a national government. And he did it without winning a single popular vote. The long-serving central banker and one-time managing director of Goldman Sachs International was handpicked by Italian president, Sergio Mattarella, to lead a so-called...

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The Bank of England Should Stop Broadcasting the Views of a Comfortable Financial Elite

Yves here. It really is too bad, what happened to Andy Haldane. I’d regularly post his speeches and articles when he was the Executive Director of Financial Stability at the Bank of England right after the crisis. He was widely seen as one of the most creative and insightful economists of his generation. But Haldane looks to have been promoted (or demoted) to his level of incompetence, where his job consists of forecasting (or overseeing forecasters) and talking to Mr. Market and Fleet...

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