There are many paradoxes in economics. To an outsider it is full of contradictions and inconsistencies. Not least of which is its utter failure to predict the current financial crisis. If the great and the good didn’t spot this crisis coming then perhaps they don’t qualify to be called the great and the good. Economics …
1) Whither Growth Never has a society spoken so much about growth, yet achieved so little. Time and time again predictions of recovery and a return to normal levels of economic growth have proven premature. The phrase “triple dip recession” has now entered the lexicon in the UK as GDP figures look like turning south …
The Slippery Grip of Growth – Guest Post by Hawkeye Read More »
There is a particular scene in the film “It’s a wonderful life” in which the hero of the story is trying to prevent a run on the Bailey Savings and Loan. In an effort to calm the anxious savers wanting to withdraw their money George Bailey cries out “you’ve got it all wrong, the money’s …
Money makes our heads go round – Guest Post by Hawkeye Read More »
There is much talk of a plan emerging for addressing the Eurozone’s current economic problems. The broad terms of the plan are that Greece may be permitted a partial default on its debts. But given the consequent impact this “haircut” would have on major banks in other European countries (such as France), plus the risk …
A short piece in Alphaville that I just came across caught my eye today: “[Beware] the rise of the collateral swap. Also known as a long-dated repo. The premise was simple. Prudent institutions flush with top quality government bonds (or even cash) wanted to secure a better rate of return — on a still relatively …
Guest Post – Hawkeye – Who will be holding the bag next time? Read More »
On this morning’s Today Programme (Radio 4) there was a spokesperson for one of the UK banks (Stephen Hester of RBS), discussing the current economic turmoil in Europe and the US. Essentially the message from the contributor was that the banks are just innocent victims in all this! The gist of the claim is that …
Guest Post by Hawkeye – Banks: victims or perpetrators? Read More »
Tensions in Greece are reaching melting point. And the debate is a clear and straightforward one. What we are witnessing is a propaganda battle between the forces calling for Austerity and those (perhaps indirectly) proposing Default. Those calling for Austerity claim lazy workers, socialism and corrupt politicians created a dire fiscal problem that Greece must …
Guest Post by Hawkeye – Irresponsible borrowing and irresponsible lending Read More »
In today’s news we are hearing that George Osborne is endorsing the UK’s Independent Commission on Banking (ICB) interim recommendations for ring-fencing Retail & Investment Banking. This is being couched as a tentative step towards the re-instatement of Glass-Steagal type separation of banking practices. On Radio 4’s Today programme Robert Peston declared the move one …
Things are hotting up in the precious metals markets. Something is definitely brewing. The bilking continues unabated, yet far from emerging from crisis the Western economies are stagnating (at best). A few weeks back Max Keiser wrote a piece about how a “complete disregard for the rule of law is at the heart of the …
Guest post by Hawkeye – Wall Street fiddles whilst the US burns Read More »
In three weeks time, mass demonstrations are being planned in the UK against public sector cuts. The organisers of the 26th March protests have called themselves the Coalition of Resistance, with the aim of consolidating a variety of unions and groups most at risk. What they are resisting are the cuts and austerity measures which …
Guest Post by Hawkeye – Crime and Collective Punishment Read More »
