Gordon Brown moves further down the slippery slope towards a very different view on the value of money, and the personal motivations that underpin the economics of all civilized non-state managed economies and countries. Homeowners granted mortgage holiday | ft.com Gordon Brown is to grant homeowners in financial difficulty the right to demand a two-year mortgage holiday, guaranteed by taxpayers, in a dramatic bid to underpin the housing market. The scheme would offer protection to households that are falling behind on mortgage payments when one earner losses their job, falls ill, or suffers a big fall in income. Relevance to … Continue reading UK mortgage holiday plan has serious flaws

This extract from an interview with Robert Rubin in the WSJ really makes one wonder just how much some senior bankers have lost all touch with reality. These kind of abstract comments on the topic of risk and particularly following recommendations from a consultant who has zero stake in the matter, offer perfect examples of the loss of transparency in interbank investments. It also highlights precisely why banks will not lend to each other any more, and why there is such panic in the financial markets. [hat tip Ron] CITI’S RUBIN: THE CONSULTANTS MADE US DO IT Mr. Rubin said … Continue reading It was the consultants who made us do it | Citi

Just listened to Francois Gossieaux deliver this presentation at #cdninst. Fascinating and insightful – research based analysis on the attitudes and behaviours of people relative to communities. Good examples too. 2008-tribalization-of-business Continue reading The Tribalization of Business | Beeline Labs

Micro-finance – small loans without any banks involved, are steadily appearing at a more rapid pace than even I appreciated. Social lenders go where banks fear to tread | ft.com Belu is unusual not only because raising environmental awareness is just as important to its founders as producing bottled water, but because of its sources of funding. About £100,000 ($148,620) of the money behind Belu was lent not by a bank or venture capital firm, but by London Rebuilding Society, one of about 100 UK non-profit lenders known as community development finance institutions Continue reading Community Development Finance Institutions are making their mark – UK

Interesting perspective from Dr. Pomerleano which refers to the Auto sector in the US. I am increasingly seeing that auto sector and the banking sector as parallels. He argues that fixing the banking sector is not enough – the ‘fix’ requires that the corporate sector is also fixed. There is a risk that the recent recapitalization of the banking sector will fail to achieve its intended objectives, because none of the measures addresses the corporate side of the picture. … … For instance, Detroit seem to have forgotten that before asking Congress to allocate tax dollars, efforts should be made … Continue reading Can governments ever fix the right thing?

This is a fascinating post at ASI that is intriguing. The concept is that the benefit of innovation lies with the consumer, and NOT with the innovator. This actually resonates (in a bad way) and would support banks’ sticking with the status quo. Have to study this more – there is a paper in the links. Missing the point on innovation | Adam Smith Institute It’s actually only 2.2 % of the value that goes to the innovators. The rest goes to the users of the products. Continue reading Who actually benefits from innovation?

Lex sums up the difficulties when government ownership in banks is involved. State-owned banks The trouble when state and private interests collide is that banks suffer crises of purpose. It is not enough to say both sets of shareholders want to maximise total returns. Even private investors disagree on the best deployment of capital. But a government’s holding has to be consistent with wider policy objectives. For example, the new US administration hopes to add 2.5m new jobs. Yet rolling heads at Citigroup, in which Uncle Sam could one day own an almost 10 per cent stake, are fast approaching … Continue reading The trouble when state and private interests collide