Wealthy investors love to talk about the sanctity of contracts until little guys assert their rights. Then the idea that they might have to fork over a lot of dough to get the other side to give up its right is presented as an offense against nature.
Read more...Peculiarly, despite the importance of tax havens, a pathbreaking paper published in 2013 by Gabriel Zucman of the Paris School of Economics, The Missing Wealth of Nations: Are Europe and the U.S. Net Debtors or Net Creditors? (hat tip Dikaios Logos) has received perilous little attention. Perhaps that’s because, among other things, it undercuts the Bernanke-flattering claim that “global imbalances” were a major driver of the financial crisis.
Read more...Whenever a scandal of sufficient magnitude arises at a bank, it’s standard practice to hire an “independent” third party to conduct an investigation and give a report to senior management and the board. But now even bank friendly regulators are starting to suspect that banks are hiring attorneys do to this work, not to come clean, but to facilitate a cover-up.
Read more...Yves here. Although Keen’s use of the Godzilla metaphor is fun, the unvarnished facts he presents are plenty alarming. Bank of England Governor Mark Carney is actually gleeful at the prospect that England’s banking sector might grow to be as large relative to its economy as Iceland’s and Cyprus’ on the eve of their busts. But even worse, Carney’s enthusiasm for a banking sector that continues with its cancerous (or as Keen would have it, monstrous) growth gives license to bank lobbyists in the US and Europe to press for high rates of growth in their finance sectors so as to defend their national champions.
Read more...One thing we’ve discussed repeatedly is that the activities of large banks, as presently constituted, are purely extractive. And to add insult to injury, GDP calculations exaggerate what in the way of value they arguably do add.
Read more...In late February, Bloomberg stated that the SEC is “considering” forgiving decades of private equity firms acting as unregistered broker-dealers and possibly legalizing the practice going forward. In case you think this is not a big deal, as we explain later in the post, the SEC is in fact vigilant about enforcing these regulations, so this would be an unprecedented waiver of liability. But richer-than-Croesus private equity firms are special, right?
Read more...Yves here. Another entry in the “What could go wrong?” category.
Read more...[Yves asked me to sticky this — lambert]
Although it’s probably sensible to expect a public agency to resist providing information in response to a Freedom of Information Act filing, the lengths to which CalPERS has gone to mislead and obfuscate in trying to thwart my efforts is quite remarkable, particularly since some of the moves CalPERS staff took are in violation of CalPERS’ own procedures.
Read more...Martha R wrote to tell me that a serious effort is underway in Vermont to launch a state bank.
Read more...Bloomberg has an intriguing story about a bit of lobbying the big dealer banks are engaged in via a group called the Treasury Borrowing Advisory Committee, which represents 15 out of the total of 22 primary dealers (a primary dealer, among other things, gets to bid for its own account at Treasury bond auctions). Of course, the object of their efforts is to improve their profitability, here by putting parties they regard as competitors at more of a disadvantage.
Read more...Yves here. This Real News Network segment discusses what many readers know all too well, that even a $10 minimum wage fails to provide an adequate standard of living, particularly for parents.
Read more...Yves here. I hope those of you who are in countries being browbeaten to sign the Trans-Pacific Partnership or the TransAtlantic Trade and Investment Partnership will circulate this post widely.
Read more...ves here. Having lived through some of these developments, I concur with Krippner’s observation that financial deregulation was well underway prior to the Reagan era and the most important driver was interest rate volatility, which wreaked havoc with interest rate caps and other policies that made sense only if inflation stayed within a limited and not all that high range. But similar deregulatory forces were underway in the securities industry side as well.
Read more...The fact that the world’s biggest banks drove themselves off a cliff yet managed to save their hides and even profit from the exercise while leaving ordinary citizens to pick up the tab is ample reason for citizens and the small cohort of non-captured regulators and politicians focused on their continuing misdeeds.
But as a result, an even more powerful set of financial players, namely, private equity firms, is continuing to expand the scope of their activities with little scrutiny and pushback by the press and public interest groups.
Read more...Funny what a difference a few days makes.
Read more...