By Satyajit Das, a former banker and author of Extreme Money and Traders Guns & Money
Richard Duncan (2012) The New Depression: The Breakdown of the Paper Money Economy; John Wiley, Singapore
Simon Lack (2012) The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to be True; John Wiley & Sons, Inc, Hoboken NJ
Read more...The New York Superintendent of banks dropped a bombshell today, filing an order against Britain’s Standard Chartered Bank. It charges the bank with having engaged in at least $250 billion of illegal transactions with Iranian banks, including its central bank, from 2001 to 2010, and of engaging in similar schemes with Libya, Myanmar and Sudan (those investigations are in progress). It threatens SCB with the loss of its New York banking license and termination of access to dollar clearing services. The latter alone is as huge deal. You are not a real international bank unless you have dollar clearing. Sumitomo Bank looked at giving up its US banking license in 1985 when it was examining deal structures for making an investment in Goldman, and ascertained that giving up access to Fedwire would cost it over $100 million a year and considerably weaken its position in Japan. SCB is certain to be a much more active dollar player than Sumitomo was and the volume of international transactions has grown hugely since then.
SCB squealed like a stuck pig, claiming that only $14 million of transactions were out of compliance. But the bank has nowhere to go.
Read more...No sooner had some astute Euro commentators noted that Draghi might have found a path through the Euro mess to keep it patched up long enough for to impose austerity on the periphery and drive all of Europe into a lovely depression, various elements of his plan look as if they were coming unglued.
Read more...The proposed Maryland Health Security Act has put the idea of single payer healthcare back on the table. The Maryland chapter of Physicians for a National Health Care Program has summarized its main features and provides a link to the bill. It proposes to lower health care costs by broadening the pool of the insured, lowering administrative costs, and negotiating for better prices on drugs and medical devices (anyone who has purchased pharmaceuticals outside the US will attest that this make a large difference).
Real News Network has run a series of interviews on this plan. You can view Part 1 for an overview. I thought the second and third segments, on the economics, would be of particular interest to readers.
Read more...While many citizens favor criminal prosecutions of bankers (I recently had a BSchool classmate of Jamie Dimon ask me when he was going to jail), it’s been remarkable how little mention of it there has been in the mainstream media in connection with the Libor scandal (yes, sports fans, price fixing is criminal per the Sherman Anti-Trust Act). This interview of Dennis Kelleher and Felix Salmon by Eliot Spitzer provides a badly-needed counterpoint.
Read more...Nothing like being reminded on a regular basis that you live in the best of all possible worlds.
The New York Times tells us a new study is being presented today at the American Accounting Association which defends the revolving door.
Read more...Ambrose Evans-Pritchard of the Telegraph, who correctly called that ECB would not take action last week, argues in his latest article that Mario Draghi and Italy’s Mario Monti have isolated the Bundesbank and are closing in on being able to buy bonds along side the Eurozone rescue facilities once the ESM presumably goes live (the assumption is that the German constitutional court will lift its injunction on September 11). Draghi hopes to keep Mr. Market at bay till then by a combination of happy talk and threats.
Read more...American officials admit that the U.S. Is a huge sponsor of terrorism
Read more...Yves here. Although this VoxEU is heavier on economese than may suit the tastes of most NC readers, it’s nevertheless worth your attention. It takes issue with a popular view among economists, that one of the ways to reduce systemic risk is to reduce cyclical swings in asset prices (or more accurately, to prevent banks from all following some great new lending fad and running off a cliff tout ensemble). The wee problem with that is economists were patting themselves on the back in 2007 that they had engineered a Great Moderation and the overwhelming majority were in denial about the existence of a global credit bubble. In fairness, many are thinking about how to create automatic counter-cyclical stabilizers, since as Ian MacFarlane, the former Governor of the Reserve Bank of Australia pointed out, an asset bubble looks like increased wealth to the community, so anyone who stands in its way is going to be extremely unpopular.
This VoxEU article offers an alternate line of thinking on how to to lower systemic risk.
Read more...In case you needed more proof of the utter incompetence of the SEC, two new items emerged late last week.
Read more...Will the Peasants Go Medieval On Bankers?
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