By Marshall Auerback, a portfolio strategist and fund manager Wolfgang Munchnau is right. Only a closer union can save the euro. In the longer term, it will be necessary to put in place a permanent fiscal arrangement through which the central euro zone authorities distribute funds to be used by member nations. Ideally this should […]
Read more...The Financial Crisis Inquiry Commission grilled Goldman chief operating officer Jonathan Cohn and CFO David Viniar this week, with today’s session focusing on AIG, and in particular, whether Goldman’s collateral calls were abusive and damaged the insurer. Readers know that I have perilous little sympathy for Goldman. However, it is important that investigations focus on […]
Read more...When a CEO has a major foot in mouth episode, it’s usually the result of uncontrolled candor. And today’s outburst by GE CEO Jeffrey Immelt appears to be true to form. According to the Financial Times, the GE cheiftan said some less that politic things about China and Obama at a private gathering which his […]
Read more...This is a wonderful short video by RSAnimate based on a talk by radical, as in Marxist, sociologist David Walker. For those who recoil, Marx was the first to take note of the propensity of capitalism towards instability. By contrast, neoclassical economics, which has dominated policymaking in advanced economies, posits that economies have a propensity […]
Read more...In an interesting bit of reporting disparity, news of planned EU legislation on bank pay is a top story on the front page of the Financial Times, yet is buried in the Wall Street Journal and didn’t make the cut at the New York Times. Admittedly, that is no doubt in part due to that […]
Read more...We and other cynics were very skeptical of the pre-G20 announcement by China that it was moving to a more market-oriented currency regime at some unspecified point in the future (particularly since China had said pretty much the same thing in 2005, and actually had committed to some baby steps then). Now that it is […]
Read more...The New York Times has unearthed a damning tidbit about the bailout of AIG: When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill […]
Read more...So it looks to be semi-official. The “stress test” label, in Europe as in the US, signifies an exercise that is designed to produce attractive report cards, as opposed to provide a valid measure of the sturdiness of a bank’s balance sheet in difficult conditions. So what is the biggest concern investors and counterparties have […]
Read more...By Richard Smith, a London-based capital markets IT consultant In my last post, “Tracking the Rabbit through the Anaconda” , I mocked Geithner a bit and promised you all a spot of moaning about what’s missing from the financial reform bill. Well, the anaconda has now had the time it needed to produce its offering. […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute Richard Alford has correctly identified the need to address global imbalances – rather than simply slouch our way back to some milder version of status quo before the pre- Lehman meltdown arrangement, […]
Read more...We noted a bit more than a week ago that we expect the European banks stress tests to backfire. The US version was a successful con game because the officialdom provided adequate disclosure about the process and stayed firmly on message, the banks were allowed to “manufacture” as analyst Meredith Whitney put it, impressive earnings, […]
Read more...The Financial Times highlights a concern we had raised early on about the effort by BP to drill a relief well to stop the flow of oil into the Gulf. While many analysts have acted as if the BP forecast, that the well would be completed by August, there is no reason to assume the […]
Read more...This blog warned a few weeks ago of a coming campaign by the officialdom against so-called “strategic defaulters”. It has arrived even sooner than we expected. We warned that this development was the inevitable result of financial firms, taking an increasingly predatory posture toward their customers. Borrowers are responding in kind, by taking a cold-blooded […]
Read more...The first section of this post is by Warren Mosler, the President of Valance Co. who writes for New Deal 2.0 Deficit doves are doing more harm than the hawks — here’s what they need to know. The deficit hawks are prevailing. The economy remains an economic and social disaster. Medicare has already been cut […]
Read more...By Gonzalo Lira, a novelist and filmmaker (and economist) currently living in Chile and writing at Gonzalo Lira A whole bunch of American ships are headed to Iran, including one aircraft carrier. Some claim this deployment is “normal”, while others think it might be the first move in a U.S. offensive against Iran, either actual […]
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