Yearly Archives: 2012

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him on twitter at http://www.twitter.com/matthewstoller

The Lehman Brothers bankruptcy is perceived of as the 9/11 of the financial crisis, the moment where liquidity problems that had been bubbling since late 2006 turned into a full-fledged panic and then economic collapse. The question American elites are pondering is, will a Eurozone break-up, or even Greece leaving the Euro, cause another such moment? Ben Bernanke has argued that Greece leaving wouldn’t, since domestic banks have reduced their exposure to problem countries. Paul Krugman agrees, and in a recent interview on Bloomberg, laid out his case.

By Greg McKenna, aka Deus Forex Machina. He is the CEO of Lighthouse Securities and has spent past two decades in financial markets in a number of senior roles including Head of Currency Strategy at the NAB and Westpac. Cross posted from MacroBusiness

Lambert here. This article skilfully integrates several recent threads related to JippyMo’s latest but surely not last debacle, and ties them to a 4-point proposal from one-time BoA President Sallie Krawcheck in HBR for addressing governance problems at big banks “to better align management’s incentives with those of the long term interests of the business.” I can’t help but feel that a fifth point should be added, viz: 5. Investigate big banks for accounting control fraud, and prosecute criminals where called for. A few C*Os in orange jump suits doing the perp walk on national television would do wonders pour encourager les autres, and would “reconstruct” banking’s “top echelons,” as well. And aren’t proposals that don’t restore the rule of law to our famously free markets just tinkering around the edges?

By J. D. Alt. The post is a a continuation of ideas first developed in Alt’s novel, The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally posted at New Economic Perspectives.

Why does it seem like there isn’t enough money to pay for the things we really need? The headlines are filled with stories about our nation’s “debt problem” and dire warnings about our impending “bankruptcy.” As an architect who fills his waking hours thinking up all kinds of wonderful things we could be building, I’m alarmed by the idea there isn’t enough money to pay for any of them. Before wasting more time dreaming, I had to find out: Is it really true? Are we really too poor to put America back to work making and building the things we need to maintain a prosperous nation?

RNN interview with Jeff Cohen, director of the Park Center for Independent Media at Ithaca College, and founder of the media watchdog FAIR. He is the co-founder of RootsAction.org.

By Sell on News, a macro equities analyst. Cross posted from MacroBusiness

Imagine two ways of framing a financial trading choice. The first way is in the pseudo scientific language of finance. “An optimal trading strategy will be to go short on Greek and Spanish government bonds to exploit a high likelihood of sell off and debt restructuring which will keep portfolio returns well above inflation going forward.” Or consider the same thing expressed this way: “If we sell off Greek and Spanish government bonds it will push Greek pensioners into poverty, cause deep harm to the social fabric, lead to destabilising political unrest and threaten the stability of the world financial system.” The first way of framing the choice is treating the financial strategy as a way of dealing with a machine; the language has nothing to do with people. The second way of framing it is moral: starting with the effects on people.