Category: Economy

Economy

Was it China, or Alan Greenspan?

Colin Henderson

This  article is incredible in its insinuation by the head of Bernanke, Head of the Federal Reserve in the US. Chinese Savings Helped Inflate American Bubble | NY Times The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption. Lets think about that statement – consumers buy things, that are often manufactured abroad – those items contribute to imports that must be paid for and even though much of that … Continue reading Was it China, or Alan Greenspan?

Economy, Uncategorized

Significant shift in world trade settlements coming as China frees up Yuan

Colin Henderson

Another signal of changing times in world trade. implications of this shift will be far-reaching. China to allow freer yuan trades | BBC It means if the two parties to a trade have yuan available, they need not enter world exchange markets to pay. Most of China’s foreign trade is settled in US dollars or the euro, leaving exporters vulnerable to exchange rate fluctuations. Continue reading Significant shift in world trade settlements coming as China frees up Yuan

Business Models, Canada, Economy1 Comment

A new future based on a different revenue model is needed for banks

Colin Henderson

Something has been bothering me for some time, and now the planets are beginning to align.  One of the promises of Internet is a future which is more efficient.  This literally means less money changing hands to get things done.  hohoto.ca can occur with zero overt marketing costs, based on personal contribution of willing advocates.  Costs do not go to zero – it is not that simple – but costs are less than before by a considerable margin. The Spider and the Starfish touched on this point in 2006. “as industries become decentralised, overall profits decrease” My summary at that … Continue reading A new future based on a different revenue model is needed for banks

Economy, Uncategorized

Bank capital, economy, debt, and the true meaning of Jubilee

Colin Henderson

On the topic of Bank capital this chart embedded in Greenspans article shows just how much banks business model has evolved.  In economic terms this is the corollary to extreme business and personal debt. In the years following 1840 when bank capital was approaching 60%, as banks made loans, the borrower bought things that resulted in bank deposits which can then be lent again, and again.  The velocity of capital as it is know increased dramatically until 1940 and largely remained there – till now.  As banks re-capitalise the preachings of government to lend more is the ultimate paradox. Banks … Continue reading Bank capital, economy, debt, and the true meaning of Jubilee

Economy

Energy and commodity demand is rising or falling, and prices will rise or fall. Brilliant!

Colin Henderson

Economists have the best job in the world.  They are constantly predicting the long term future based on the recent past.  The result is that the contradictions in what they predict leaves the common person to wonder. Global Economic Prospects 2009: Commodities at the Crossroads | World Bank Commodity markets have seen spectacular swings over the past 24 months as enormous tensions first built up and were then released. The extended and sharp rise in commodity prices prompted concerns that the world was transitioning into a new phase of commodity scarcity—a concern that the recent dramatic drop in commodity prices … Continue reading Energy and commodity demand is rising or falling, and prices will rise or fall. Brilliant!

Economy

G20 five-page communiqué | 15th Nov 2008

Colin Henderson

Decleration: Summit on financial markets and the world economy Published: November 16 2008 02:14 | Last updated: November 16 2008 02:14 November 15, 2008, The White House, Office of the Press Secretary 1. We, the Leaders of the Group of Twenty, held an initial meeting in Washington on November 15, 2008, amid serious challenges to the world economy and financial markets. We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems. 2. Over the past months our countries have taken urgent and exceptional measures to support the … Continue reading G20 five-page communiqué | 15th Nov 2008

Economy

Japan looked to by G20 for support

Colin Henderson

Japan is sitting with a tidy current account surplus that the others in the G20 are eyeing jealously.  Japan has to put itself first however. Japan’s $1 trillion to the rescue? | CS Monitor TOKYO – Can Japan, the world’s second largest economy, save the global financial system? As world leaders prepare to meet in Washington Saturday to seek a way out of the financial crisis, some are casting covetous eyes in the direction of Japan’s $1 trillion worth of foreign reserves as a source of salvation for troubled nations and banks. Continue reading Japan looked to by G20 for support

Economy6 Comments

Google – can I count on you ?

Colin Henderson

I have always been skeptical about online advertising.  I avoid it like the plague, and while I recognise I may not be the average, I also know I may be the view of things to come.  Google Analyst: “Worst Economic Environment In Our Collective Lifetimes” | Techcrunch Google’s stock price closed yesterday at $291, the first time it has dropped below $300 since 2005. It’s 44% off of its 52-week high of $725. Most analysts think its cheap and getting cheaper – the average price target is still over $500. Former analyst Henry Blodget, however, thinks it could fall to … Continue reading Google – can I count on you ?

Economy, Innovation8 Comments

Policies aimed at undermining innovation hinder an industry’s ability to compete globally | the case against new regulation

Colin Henderson

Nobel laureates Myron Scholes and Joe Stiglitz have been debating the question of regulation for financial services on Economist.com.  Its fascinating, and not as clear as one would think. For example, Scholes writing against additional regulation, notes And, in particular, since successful innovations are hard to predict, the infrastructure necessary to support innovation needs to lag the innovations themselves, which increases the probability that controls will be insufficient at times to prevent breakdowns in governance mechanisms. His point being that additional regulation will only deal with what we have already recognised as a problem.  In the case of sub-prime mortgages, … Continue reading Policies aimed at undermining innovation hinder an industry’s ability to compete globally | the case against new regulation

Economy, subprime

World economy 2013 | what should we expect?

Colin Henderson

A remarkable forward looking piece from Andrew at the ft.  Some of the implications: Russia extends influence through economic investment Stock values are one half of today’s value Interest rates are close to zero Dividends are at zero Central Banks are in complete control of regulation and of banks Banks are almost completely owned by the government A man from Fife is in charge of the world [scary] October 2013: that was the week that will be | ft.com By Andrew Hill What a week! The utility-dominated FTSE 100 celebrated the fifth anniversary of the crash of 2008 with a … Continue reading World economy 2013 | what should we expect?