Tag Archives: Financial crisis

Is China’s Bubble the Next Financial Crisis?


By Mark Whitehouse – The Chinese credit boom has rapidly turned the country into one of the developing world’s most indebted, according to a new report (pdf) from London’s Centre for Economic Policy Research.

Such credit-fueled growth can’t be sustained for long without causing major distortions and setting the country up for a fall.

The stimulus is already running into diminishing returns. Over the five years through 2013, government and private debt grew by about 3 yuan for each added yuan of economic activity, a level of credit intensity that the U.S. exceeded only in the years leading up to the 2008 crisis. more> http://tinyurl.com/k5985du

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Big Banks Face Another Round of U.S. Charges


By Ben Protess and Jessica Silver-Greenberg – With evidence mounting that a number of foreign and American banks colluded to alter the price of foreign currencies, the largest and least regulated financial market, prosecutors are aiming to file charges against at least one bank by the end of the year.

Yet the breadth of the suspected wrongdoing in the currency inquiry — Deutsche Bank, Citigroup, JPMorgan Chase, Barclays and UBS are among the dozen or so banks under investigation — might distinguish it from the piecemeal nature of the crisis-era investigations. more> http://tinyurl.com/msouwc6

The Rise And Fall And Rise And Fall Of King Dollar, Part 2


BOOK REVIEW

Wealth of Nations, Author: Adam Smith.

Money, Gold, and History, Author: Lewis E. Lehrman.

The Economic Consequences of the Peace, Author: John Maynard Keynes.


By Ralph Benko – The mechanics of the reserve currency system preempt these funds’ ready availability for “the maintenance of industry.”

The mechanics of the dollar as a reserve asset, therefore, finance bigger government while insidiously preempting productivity, jobs, and equitable prosperity.

As Steve Forbes pithily puts it, “You’ve got to get the money right.” 

Time to lift the reserve currency curse. Time to fix the dollar. more> http://tinyurl.com/men5vk7

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Your Debt, Our Nation’s Headache


By Barry Ritholtz – Assets purchased with cheap and widely available credit become worth significantly less once the bubble bursts. But the debt remains.

All of that leverage used to purchase all of those assets — regardless of whether it’s subprime mortgages or dot-com stocks — sticks around.

Hence, a post-credit-crisis recovery is dominated not by the release of pent-up demand, but by massive corporate, household and government deleveraging. more> http://tinyurl.com/pryw54s

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The Rise And Fall And Rise And Fall Of King Dollar


BOOK REVIEW

Money: How the Destruction of the Dollar Threatens the Global Economy and What We Can Do About It, Authors: Steve Forbes and Elizabeth Ames.

The Money Trap, Author: Robert Pringle.

By Ralph Benko – We live in a world monetary system that makes the U.S. dollar its official reserve currency.

About 60%  of international central bank reserves are Yankee dollars. Some, both right and left, in America and abroad, consider the reserve currency status of the dollar a bug in the software of our world monetary system.

Getting this fixed is, in the opinion of some consequential thinkers, of capital importance for the generation of quality jobs, and equitable prosperity, in America and the world. more> http://tinyurl.com/kgmlxya

Occupational Hazards of Working on Wall Street


By Michael Lewis – “I’m going to Goldman,” is still about as close as it gets in the real world to “I’m going to Harvard,” at least for the fiercely ambitious young person who is ambitious to do nothing in particular.

One moment this herd of graduates of the nation’s best universities are young people — ambitious yes, but still young people — with young people’s ideals and hopes to live a meaningful life.

The next they are essentially old people, at work gaming ratings companies, and designing securities to fail so they might make a killing off the investors they dupe into buying them, and rigging various markets at the expense of the wider society, and encouraging all sorts of people to do stuff with their capital and their companies that they never should do. more> http://tinyurl.com/mrv2zxm

Secret Fed Tapes Recorded Goldman’s Capital Game


By Matt Levine – Do read/listen to the story though! It’s fascinating …

… wait. Is that not how it’s supposed to go?

One conclusion you might draw from the tapes is that the regulators and the banks had a very different conception of what social practice they were engaged in.

Goldman was helping Santander play a game against its regulators, while the New York Fed just wanted to be friends with Goldman and not make too much trouble.

It certainly makes it easier to win a game if the other side doesn’t know it’s playing. more> http://tinyurl.com/lq9l238

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