News Links: The two halves of the eurozone are locked in a broken marriage
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The two halves of the eurozone are locked in a broken marriage – Telegraph
One by one, the democracies of Southern Europe are being broken on the wheel of monetary union.
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Daniel Kahneman: How cognitive illusions blind us to reason | Science | The Observer
Why do Wall Street traders have such faith in their powers of prediction, when their success is largely down to chance? Daniel Kahneman explains how cognitive illusions skew our thinking
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Is there a credit channel? | afoe | A Fistful of Euros | European Opinion
there is a criticism of the credit channel that works like this: as banks actually create credit, they are only loosely constrained by its supply. Instead, they supply just as much as their customers demand. If the customers are businesses, they are more likely to worry whether their new venture is a good one or not. If it’s a winner, whether it’s a winner with a carrying cost of 4% or 6% isn’t a primary consideration. If it’s a loser, it’s a loser no matter what the interest rate. The bank operates in one of two states – essentially, risk-loving or risk-averse. In the risk-loving state, it expands its balance sheet as fast as its customers demand credit. In the risk-averse state, it digs in and hoards cash. Therefore, there is no credit channel, and the transition between the two states is something like the Minsky model of financial crisis.
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New Economic Perspectives: RIP Shareholder Value Meme: Make Way for A New World
The funny thing is, the looters inside the banks used the phrase "shareholder maximization" to con the shareholders into believing they too would be taken along for the ride to mega riches. In the case of Lehman, AIG, etc. the true nature of the con was revealed. The insider managers operating both simple and elaborate control fraud schemes often walked away quite wealthy, the shareholders got little more than an invitation to the back row of the bankruptcy court.
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Analysis: ECB doomed to bigger crisis role despite itself | Reuters
Ask senior European Union policymakers in private what can stop the euro zone’s festering sovereign debt crisis and the answer is "the European Central Bank."
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Schäuble calls for EU lead on Tobin tax – FT.com
Wolfgang Schäuble, Germany’s finance minister, wants the European Union to take the global lead in introducing a financial transaction tax to curb speculative trading, along with tougher regulation of big banks and the "shadow" banking sector, such as hedge funds. If the UK blocked agreement on such a tax in the full EU, he said in an interview with the Financial Times, the eurozone should press ahead on its own.
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La economía española se estanca y no crece en el tercer trimestre – ABC.es
La economía española se estancó en el tercer trimestre al no registrar crecimiento alguno entre julio y septiembre (0,0 %), lo que supone dos décimas menos que el trimestre anterior, mientras que la tasa de crecimiento interanual se mantuvo en el 0,7 %, según el último boletín económico del Banco de España.
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During Herman Cain’s tenure as the head of the National Restaurant Association in the 1990s, at least two female employees complained to colleagues and senior association officials about inappropriate behavior by Cain, ultimately leaving their jobs at the trade group, multiple sources confirm to POLITICO.
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Why America is embracing protest – FT.com
When the Tea Party erupted in the spring of 2009, both US political parties were quick to define it. Democrats depicted the anti-tax agitation as “AstroTurf” – faux populism staged by conservative millionaires. Republicans saw it as an authentic backlash against Washington’s bail-outs. Both were partly right. Neither could have forecast the damage the “take America back” crowd would inflict on Barack Obama – in last year’s midterm elections and since. The differences between Tea Partiers and the Occupy Wall Street protesters are greater than their similarities.
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Inflation in Eurozone bleibt hoch – Inflation – derStandard.at › Wirtschaft
Die Teuerung in den 17 Ländern der Eurozone wird nach einer ersten Schätzung des EU-Statistikamtes Eurostat weiter hoch bleiben. Für Oktober prognostizierten die EU-Statistiker am Montag eine Inflationsrate von 3,0 Prozent – unverändert gegenüber September.
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Warnung vor sozialen Unruhen in Eurozone – Finanzmarktkrise – derStandard.at › Wirtschaft
Gestiegen sei das Risiko sozialer Unruhen vor allem in Griechenland, Portugal, Spanien, Estland, Frankreich, Slowenien und Irland. Rund 60 Prozent der Griechen und Portugiesen gäben an, ihr Lebensstandard sei gesunken. In Spanien und Slowenien liege diese Zahl bei etwa 50 Prozent. In Deutschland hingegen seien wegen anhaltend starker Nachfrage nach Arbeitskräften seien Lohnerhöhungen vor allem angeraten, um den Konsum zu stärken.
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Bonds Beating U.S. Stocks Over 30 Years for First Time Since 19th Century – Bloomberg
The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that’s happened since before the Civil War. Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago.
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Gene Frieda: Europe’s Dying Bank Model « naked capitalism
The good news for Europe is that it will not reenact the dramatic collapse of Lehman Brothers. The European Central Bank’s unlimited ability to provide liquidity ensures that. But European leaders have yet to recognize that old bank business models are obsolete, and that reliance on private-sector leverage for balance-sheet repair of both sovereigns and banks is doomed to failure.
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Corzine Races to Save MF Global – WSJ.com
Jon S. Corzine, the former New Jersey governor, raced over the weekend to find a buyer for MF Global Holdings Ltd. in an attempt to rescue the securities firm he now runs from a crisis partially of his own making. MF Global was nearing a deal late Sunday night to file for Chapter 11 bankruptcy protection as soon as Monday and sell assets to Interactive Brokers Group, said a person familiar with the matter.
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BBC News – Japan intervenes in currency markets to weaken the yen
The Japanese government has intervened in the currency market to weaken the yen after it hit a post-war high.
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MF Global seeks sale, hires restructuring advisers | Reuters
MF Global Holdings Ltd was in talks on Sunday with possible buyers with the goal "squarely" of doing a deal, though all options remained on the table as the firm hired restructuring and bankruptcy advisers, sources familiar with the situation said.
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Occupy protesters should target governments not City, LSE chairman says | UK news | guardian.co.uk
Chris Gibson-Smith insists irresponsible politicians rather than City institutions to blame for global financial crisis
“What’s all this Financial Transaction Tax fuss about?” https://re-define.org/blog/2011/10/31/whats-all-financial-transaction-tax-fuss-about
“The major difference between the Swedish and the UK FTT regime was that the Swedish tax was a domestic tax on international capital whereas the UK tax is an internationally applied tax on domestically registered companies.”