Sympathy and concern for Japan
Children of Adam all come from the same source,When one is wounded, all share the pain,He who cannot feel the pain of others,Cannot call himself Son of Man.- Saadi
View ArticleInflation and Deflation revisited
In December 2008 I came off the fence and plumped for deflation as inevitable. Mostly I reasoned that debasement of accounting practice, mismanagement of financial intermediaries, captured regulators...
View Article"You can't build a car with 97% of the parts"
The title statement summarises the challenge for the global manufacturing sector with Japan's industry and logistics disrupted for an unknown span of time. Power shortages threaten global supply...
View ArticleQuote of the Day: Greenspan's reputation dead as a parrot
“Greenspan is an ex-Maestro; his reputation is pushing up the daisies, it’s gone to meet its maker, it’s joined the choir invisible. He’s no longer the Man Who Knows; he’s the man who presided over an...
View ArticleConcentration, Manipulation and Margin Calls
Over the past 25 years the financial markets of the world have become highly concentrated in the intermediation of a handful of firms, and regulation has been harmonised in the interests of these few...
View ArticleAnomie
I came across a new word today playing Scrabble: Anomie: a collapse of the social structures governing a given society.Now that is one very useful word! It could usefully describe the slow motion...
View ArticleProtect the Bondholders?
The latest twists and turns in the Greek bailout fiasco have combined with a disturbing insight into FSA attitudes here in the UK to make me concerned that the system may now be distorted beyond...
View ArticleBasel Accords: "Tissue paper over a mountain range"
In 1987 I used the title of this post to describe the brand new Basel Capital Accords. I was a young and novice central banker, but as soon as I looked at the proposed accords, I knew they were sowing...
View ArticleLiquidity, Bank Capital and Market Reform
A friend forwarded some thoughts on liquidity that are worth sharing here, as liquidity is central to the utility of assets as bank capital and to stabilising markets under stress. My friend's points...
View Article"Deficit Attention Disorder"
I must admit to being delighted that the EU finance ministers have found unity on one point: dismissal of Tim Geithner as officious, ignorant and unaccountable. He is an example, right up there with...
View ArticleTestimony of Marriner Eccles to the Committee on the Investigation of...
Below are excerpts from the testimony of Marriner Eccles to the Senate Committee on the Investigation of Economic Problems in 1933. It is an historic document – laying out the future terms of the...
View ArticleTransaction Taxes and Transparency
The City of London is in a stir over the EU proposal of a financial transactions tax. The great and the good are uniformly arrayed against such a tax. I am not so sure that it wouldn't be a good...
View ArticleClik here to view.
Dexia, Mafia and Revolution
I knew I had seen the script we're living somewhere:What I am saying is, we have now what we have always needed, real partnership with the government.And this is what follows: Revolution!What does that...
View ArticleAnomie Watch: EFSF and bailout lawlessness
Anomie literally means lawlessness. Although banks are burdened with many, many rules, they are seldom obeyed and largely unenforceable against the most powerful. Central banks are even more likely to...
View ArticleWhy I oppose Financial Stability
Financial Stability became a topic in the late 1990s, at a time of peak laxity in international financial supervision. The same minds which promoted the Financial Stability Forum (now the Financial...
View ArticleBanks are lawless dictators? Whose side are the police on?
First, hat tip to Barry Ritholtz for the articles linked here. I read two of the articles, written on opposite sides of the planet, one after another, and suddenly the dangers confronting us in...
View ArticleSurvivor Bias and TBTF Tyranny
It's time to write again about insolvency, as the MF Global failure and the Greek debacle raise new troubling concerns.As I wrote in Ring Fences and Rustlers before Lehman failed in 2008:The key to...
View ArticleHell, Handbaskets and Hellenic Default
Regardless of what the IIF and the Greek government may announce, Greece is heading inevitably for a destabilising default to some or all of its bond creditors. The most articulate and comprehensive...
View ArticleGreece - Cutting out the Middle Man
It seems that central bankers and politicians are endlessly resourceful when it comes to innovating ways to profit themselves and bankers at everyone else's expense. Where I had thought Greek default...
View ArticleComplexity Costs
I have had to deal with the idiocy of modern financial regulation rather more than I would like lately. The issue involves FSA regulations which create a bias in favour of the TBTF banks. (As almost...
View ArticleYour Bank: Fiduciary or Predator?
In the old days when banks were local, and owned either as partnerships or mutuals, bankers had a stake in promoting the prosperity of their clients. They wanted to see their clients do well so that...
View Article"Heads I win, tails you lose."
I was at a private lunch in the City some 15 years ago discussing whether hedge fund investments should be considered a new and distinct asset class. A very prominent hedge fund trader was asked his...
View ArticleLies, Damn Lies and LIBOR
I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of...
View ArticleFor Want of a Nail, the Ship Was Lost
Imagine a great ship dominating the skyline on a distant sea. Imagine the complexity of that ship: keel, ribs, planks, masts, spars, and an infinite number of less readily named components. Each...
View ArticleChop Off Their Hands . . .
President Truman famously called for a one handed economist. The Carolingian kings of France would have accommodated him. They realised that a kingdom required a common currency under the control of...
View Article
