Tag Archives: CronyCapitalism

Weekly Spotted

Due to other personal obligations, I am finding way too little time to write on TES. However, I am collecting noteworthy stuff everyday by myself and referrals. I will begin to simply put some of the links in a weekly or fortnightly format.  The idea is to provide some dots to connect (or argue against) – and every now and then some own piece. Of course you’ll get all of this served with occasional sarcasm:

FED basically confirms that it was front-run until June 2013

On 13th of May the Businessweek referred to an academic study that strongly suggests (’empirically robust’) that information about what next decision the FED would take, have been consistently leaked at least from 1997 to 2013.  Soon thereafter Businessweek updated their article adding the FED statement. It says that the FED took measures last October (2013) to avoid this in the future. Of course, using the following contemporanous approach, nobody could expect that to happen. How could cow-bell-ringing possibly not be appropriate anymore in 2013 to make sure nobody leaks it before?

In response, Federal Reserve spokesman Joe Pavel said that the Fed “enhanced its media release security procedures” last October “to better protect the information against premature release.” The Fed used to ring a cowbell to announce when news media could send out reports over open lines. Now it seals reporters off from the outside world during the “lockup” and flips a switch to open the communications circuit when the news embargo is lifted.

Inflation starts with the Economists sentiments towards it

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Labor Day Food for Thought: For who are we working for?

For a lot of people worldwide the labor day means a day off work. The perfect moment to reflect, for who we are actually working. Who is harvesting the value added of your work? Welcome to Neofeudalism.



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Rajan & Zingales about populism & (central) banking

Mark Roe quoted in Rajan & Zingales (2003). Presented without comment:

“The U.S. financial system on the eve of World War I was primarily a much fragmented banking system. As Roe (1994) argues, this fragmentation has historically been the result of a populist fear of large financial institutions. In part, this fear was motivated by political rivalry between states and the fear that, if unchecked, New York would control the rest of the country through its strong banks” (p. 3).

Rajan, R. G. & Zingales, L., (2003). Banks and Markets. The Changing Character of European Finance. Cambridge, Mass (NBER working paper series).

Roe, M. J., (1994). Strong Managers, Weak Owners: The Political Roots of American Corporate
Finance. Princeton University Press, Princeton.

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The Venezuelan Crisis Correctly Understood

Today, I’m presenting an essay about Venezuela. I’m going to introduce readers into what the actual (political-economical) drivers of the Venezuelan misery in the very recent years are. The reasons for the massive devaluation of the country’s local currency which resulted in puzzling consumer good scarcity.

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’08 Bank Culture Insights…

Get entertained and dive into bank “culture” with some tapes of 2008’s Anglo-Irish Bank managers: via independent.ie

After that it should be easy to see: The systemical Moral Hazard of banking is truth – it was already truth then, and I’d say even way before that. No need to search for it in academical studies. Even more so, the Moral Hazard in banking is constantly being fed (pun intended): Just like expected Anglo-Irish was finally bailed out by somebody. If the cyclical stimulus of the central banks isn’t enough, the government will step in like it did in this case. Good times ahead? – JAS

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