News Links: Ron Paul And The Banks
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Ron Paul And The Banks « The Baseline Scenario
Mr. Paul also has a clearly articulated view on the American banking system, laid out forcefully in his 2009 book, End the Fed. This book and its bottom line recommendation that we should return to the gold standard – and abolish the Federal Reserve system – tends to be dismissed out of hand by many. That’s a mistake, because Mr. Paul makes many sensible and well-informed points.
But there is a curious disconnect between his diagnosis and his proposed cure. This disconnect tells us a great deal about why this version of populism from the right is unlikely to make much progress in its current form.
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The latest brazen scheme comes in a report from the Financial Times on the current state of play on the so-called multi-state mortgage settlement negotiations. Readers may recall that even though a nominal settlement total of $25 billionish has been bandied about for some time, comparatively little of that is to be in cash. The bulk of the amount is to come from credits for principal modifications.
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Spanish banks told to set aside €50bn for bad assets – European, Business – Independent.ie
Spain says it expects its banks to set aside up to €50bn in further provisions on their bad property assets as part of a new round of reforms for the country’s financial sector.
Luis de Guindos, economy minister, said it was essential that the banks clean up their balance sheets without imposing a burden on the treasury.
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UniCredit’s capital hike is first big test for European banks | Business | guardian.co.uk
As banks race to raise capital and plug their €106bn funding shortfall, will Stephen Hester be proved right?
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Time to get corporate cash out of Congress | Bill McKibben | Comment is free | guardian.co.uk
I’ve seen enough of how Big Oil operates in Washington to know that moneyed influence is poisoning American democracy
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House prices down by 1.3% in 2011 | Money | guardian.co.uk
Halifax index also shows a 0.9% decline in December 2011 and predicts a broadly stable 2012 … providing the UK can avoid recession
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ECB Steps in as Italian Yields Hit 7% – WSJ.com
The yield on 10-year Italian government bonds moved up to 7.12% as investors sought higher risk premiums, returning Italian borrowing costs to levels deemed unsustainable over the longer term. At that level, the Italian government must pay 5.24 percentage points more than German yields at that maturity.
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BBC News – Hungary’s forint falls to record euro low
The Hungarian forint has dropped to a new record low against the euro as the country scaled back a debt sale and continued talks over a bailout.
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Euro zone’s economy slumps at year-end | Reuters
The euro zone’s economy deepened its downturn at the end of 2011 as retail sales fell and sentiment soured, but the first improvement in the business climate in 10 months offered hope that an expected recession may be mild.
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FT Alphaville » Pawnbrokers of last resort: when a pound of flesh is not enough
In Shakespeare’s Merchant of Venice, an embittered money-lender, Shylock, famously forfeits interest on a loan he makes to merchant Antonio for a right to claim a pound of his flesh if the loan is defaulted upon.
Luckily for Antonio some mischievous Shakespearean plot twists ensure the distressed merchant gets off on a technicality in the end (hurrah!). But the moral of the story is as clear today as it was back in the sixteenth century. Never pledge collateral you can’t afford to deliver. Or for that matter overlook the chances of a black swan event.
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