The banking and economic crisis of 2007 has touched many aspects of our lives and a now a clear trend and fallout, is the failure of politics.  I am biased but I look at Britain and believe there is still a hardy attempt there to keep things moving.  I watched David Miliband (Left) and Bronwen Maddox (Rightish journalist)  today being interviewed by Fareed Zakaria.  While they commented on the UK economy and the arguments for and against austerity and stimulus aspects to budgets, it was notable that they do not paint themselves into a corner that cannot be exited. Now … Continue reading A failure of politics

This Europol criminal threat assessment (pdf document – OCTA 2011: EU ORGANISED CRIME THREAT ASSESSMENT) is fascinating.  It covers everything including drugs, smuggling, human trafficking and weapons.  But the financial section is what caught my eye.  I have been vocal for years that it is time for banks to offer payment cards with only a chip and with no magnetic stripe.  The detainment of the stripe is a classic case of building a compromise product based on the needs of the minority. First the financial impact: The EU is the world’s largest market for payment card transactions. In 2009 organised … Continue reading Around 80 per cent of non-EU fraud against EU payment cards is committed in the United States | Europol

In a quite negative comment Fitch, a ratings agency note that US Banks will suffer from any additional deterioration in Euro sovereign debt circumstances.  This is a classic statement of the obvious.  It is hard to criticize further because it is behind a paywall. Eurozone Contagion Threatens Outlook for U.S. Banks   Though U.S. banks have manageable direct exposures to the stressed European markets (Greece, Ireland, Italy, Portugal and Spain), further contagion poses a serious risk, according toFitch Ratings in a new report. Fitch believes that unless the Eurozone debt crisis is resolved in a timely and orderly manner, the … Continue reading What is the effect on banks from a shift to technocrat government?

I have been reading ‘Civilization – the West and the Rest’ by Niall Ferguson.  He analyses that there are 6 core institutions or principles that account for the success of the West over the last 500 years, with the obvious implication that as the West falls, the answer lies in reduced advantage in those 6 institutions. Eurozone turmoil: Enter the technocrats | ft.com “If you look at the troubles which have happened in European societies, this is purely because of the accumulated troubles of the worn-out welfare society. The labour laws induce sloth and indolence rather than hard work.” One … Continue reading More signals of systemic shifts of influence from West to East

Once in a while Martin Wolf is on fire.  Economists can appear somewhat dissociated from real life.  This piece is one where he strikes home.  If you have any doubts about skepticism about banks then read this.  Bob Diamond’s unconvincing defence | ft.com Did the economy at least benefit from the run-up in leverage? Hardly. We saw huge rises in banks’ exposure to one another, which worsened systemic fragility, and in the prices of – and debt secured against – property. Who thinks these provided durable benefits? Mr Haldane also noted that “The purchaser of a portfolio of global banking … Continue reading Banks continue to fight the wrong fight

I am flabbergasted. Groupon Prices at $20 a Share; More Than 10x Oversubscribed Groupon has priced its public offering at $20 a share, several dollars above the expected price range of $16 to $18. That will garner $700 million for the start-up, which is only several years old, at a valuation of close to $13 billion. Also here http://www.ft.com/cms/s/0/a44264f4-0677-11e1-8a16-00144feabdc0.html#axzz1cOQ3SoMc Continue reading Groupon pulls off a $700 million launch / $13 Bn valuation

The situation in Europe is deteriorating fast.  Reminder;  this matters at this blog because of the sovereign risk impact to banks who are the largest holders of Euro debt including Greece.  A default would potentially mean the 50% write down goes to 100%.  At this point, today, its hard to argue against that.  Politicians in Greece are no less delusional than American ones when it comes to the power/ impact/ influence of financial markets. Government in Greece Teeters After Move on Referendum | NYT Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, apparently caught off guard by … Continue reading No-one is sleeping in Bank HQ’s tonight