Monetary System

Bill Moyers talks to former Citicorp and Citigroup head John Reed about what's wrong in the banking sector. John Reed readily acknowledges his role in bringing down the Glass-Steagall Act (Hat tip finance Addict).

I was thinking about that last post I wrote on the euro zone and regulatory forbearance. They say a picture is worth a thousand words. So here's a picture that captures my thinking pretty well.

Clearly, economic policy is now far more complex than it appeared to be before the GFC. As we enter this Age of Deleveraging, the worst thing we can do is apply policies that appeared to work during the preceding Age of Leverage—but were in…

This is me thinking out loud about how regulatory forbearance in the S&L crisis mirrors today's policy path.

So here’s the deal. What happened is that the financial sector taken as a whole moved into extremely short-term finance of positions in assets. This is a huge topic and is related to the transformation of investment banking partnerships…

Banking sectors in both countries are highly concentrated. The top four banks in Australia account for about three quarters of the banking assets. The top six Canadian banks account for upwards of 90% of the Canadian banking assets.…

In conclusion, while there are links between the “twin deficits”, they are not the links usually imagined. US trade and budget deficits are linked, but they do not put the US in an unsustainable position vis a vis the Chinese. If the…

the banks now browbeat governments – not by having ready cash but by threatening to go bust and drag the economy down with them if they are not given control of public tax policy, spending and planning. The process has gone furthest in the…

Last week we examined Milton Friedman’s version of Functional Finance, which we found to be remarkably similar to Abba Lerner’s. The only problem with Friedman’s analysis is that he did not account for the external sector: he wanted a…

You have probably heard a lot of noise about what was said about the housing bubble at Federal Reserve meetings in 2006. There is a quote from Timothy Geithner, then the NY Fed chief, that I think is quite revealing.