Tag Archives: Regulations

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

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

Here Comes the Internet of Money


Bloomberg – Money and payment systems, the underpinnings of all financial activity, are still traditional in one respect: They rely on central third parties — banks — to record and vouch for transactions.

Digital currencies dispense with this. They create a decentralized record — a “distributed ledger” — which allows buyers and sellers to interact directly. more> http://tinyurl.com/mx4unrg

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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The Wonks Battle for the Fed


By Noah Smith – These days, essentially all of the pre-2008 models have fallen out of favor, replaced by models where finance is the key. Most people would agree that’s a good thing.

But those models are going to have just as hard a time getting conclusive support from the data, because there just isn’t much data.

So again, conclusions about whether the Fed should print money and buy bonds to fight recessions will come down to intuition. As Robert Waldmann says, “The models change but the policy proposals remain the same.” more> http://tinyurl.com/k2vkost

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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How Harvard Minted ‘Free Money’


By Stephen Mihm – In the mid-19th century, most Ivy League presidents hailed from the ranks of the Protestant clergy: affable theologians with considerable academic training and limited knowledge of financial matters.

Enter Charles W. Eliot [2], Harvard’s 21st president. When he took over in 1869, it was a sleepy little college. By the time he left in 1909, he had bequeathed an educational powerhouse that had established an almost insurmountable lead in the race to become the world’s richest university. more> http://tinyurl.com/q6o4k28