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Monetary System
The Fed exerts a dominant influence across the yield curve, not just on the short end
Long-term interest rates are a series of future short-term rates. That necessarily means that an interest-rate targetting central bank exerts the dominant influence not just on the short end in its currency area, but across the yield curve.…
“Pervasive” Fraud by our “Most Reputable” Banks
A recent study confirmed that control fraud was endemic among our most elite financial institutions.
US Banks showed accounting gains of $141.3 billion in 2012, highest since 2006
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $34.7 billion in the fourth quarter of 2012, a $9.3 billion (36.9 percent) improvement from the $25.3…
A brief history of the Chinese growth model
The lessons for China, if I am right, are that China should forego the idea of nurturing national champions and should instead encourage brutal domestic competition. Beijing should also eliminate subsidies to production, the most important…
Mercantalism: exports lower a nation’s living standards
In the U.S. and in euro countries, policies aimed at stimulating exports are considered an effective response to lagging growth and recession. Viewing a net export balance as an economic virtue and a growth engine is a relic of Mercantilism…
More evidence that the Germans have been marginalised at the ECB
It has been some time now since the ECB turned to monetisation to deal with its sovereign debt crisis. At the time, the Germans were out in full force attempting to stop the train of events and keep the ECB out of the political economy.…
European banking union looks weak
The much-touted European banking union, designed to separate country and banking risk seen as the nexus around which the sovereign debt crisis has moved, looks weak.
Jeremy Grantham on investing in US when long-term growth is lower
Jeremy Grantham's most recent quarterly report was released yesterday. Grantham expanded on his low-growth macro view with a number of additional insights based on both secular and political trends dominating the US economic picture. As…
The theory of social costs: Why markets cannot discipline financial institutions
The continuing attempts to rescue the financial sector (especially in the United States) have laid bare the tremendous social costs created by the way finance dominates the economy. If anything, the various bailouts have actually…
Full text: Moody’s downgrades Canadian banks
Moody's Investor Service released the following note in conjunction with a ratings action it took on Canadian banks today.