Tag: niall ferguson

Geopolitics, sociology

The Dwindling Strategic Flame: Reviving Creative Defense Planning

Colin Henderson

Phillip Dolitsky August 14, 2024 “Strategy is the future of present decisions”- Garry Kasparov “Tactics is knowing what to do when there is something to do. Strategy is knowing what to do when there is nothing to do.”- Savielly Tartakower Strategy and defense planning belong to the realm of the unknown. There is nothing as certain as the uncertainty of the future and yet all polities depend on their safety and survival by striving to meet the challenge of uncertainty. All nations must attempt, in the words of the late British strategist Colin Gray, “to get the biggest issues right enough” … Continue reading The Dwindling Strategic Flame: Reviving Creative Defense Planning

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Limited Purpose Banking using Mutual Funds to replace banks

Colin Henderson

I recently covered Mervyn Kings proposal for Utility Banking; a banking business model that separates banking banking services from high risk investments. For example utility banking as I see it, would cover day to day chequing, savings, loans and mortgages, ATM’s, and online banking. It would have traditional FDIC type deposit insurance, and utility banks would be subject to capital requirements and would not be permitted to participate in off balance sheet banking, nor securitisation. Think James Stewart and ‘Its a Wonderful Life’. In this piece Niall Ferguson takes it further suggesting that the Utility Banking approach still leaves the … Continue reading Limited Purpose Banking using Mutual Funds to replace banks

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US deficit reaches world record levels, and rising

Colin Henderson

US deficit is now in Botswana and Russia territory in terms of record levels relative to GDP. The argument that this is not inflationary sounds to me like pushing water uphill. $1.4 Trillion Deficit Complicates Stimulus Plans WASHINGTON — The Obama administration said Friday that the federal budget deficit for the fiscal year that just ended was $1.4 trillion, nearly a trillion dollars greater than the year before and the largest shortfall relative to the size of the economy since 1945. http://www.nytimes.com/2009/10/17/us/17deficit.html?_r=1&th&emc=th Continue reading US deficit reaches world record levels, and rising

Economy, US3 Comments

China and America economic future – Ferguson/ Fallows debate

Colin Henderson

A summary in NYT of the fascinating Ferguson/ Fallows debate at Aspen on the economic relationship between China and US. Ferguson: US and China are divorcing economically.  China will focus on internal consumption, not exports.  “Depreciation (of US $) is inevitable and the Chinese are working to end the dollar’s role as the world’s reserve currency.” Fallows: “…  doesn’t know what the future will hold, but he believes that Chinese officials still see the dollar as their least risky investment. Domestically, China will not turn democratic, but individual liberties will expand. He agreed that China and the U.S. will dominate … Continue reading China and America economic future – Ferguson/ Fallows debate

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The Rosenkranz Foundation debate | Blame Washington more than Wall Street for the financial crisis

Colin Henderson

This is just plain fun.  Some of my own economist hero’s (Roubini, Ferguson) and others debating the blame for the crisis.  The result was a vote in favour of for the motion, that Washington is to blame, but the humour and the threads are fascinating for those interested – particularly the Ferguson / Minow, (Government is corrupt / Government are victims) bits.  I highlighted summary points, and full transcript is here.  financial-crisis-031709 Debate: BLAME WASHINGTON MORE THAN WALL STREET FOR THE FINANCIAL CRISIS | For the motion: Niall Ferguson, John Steele Gordon, Nouriel Roubini Against the motion: Alex Berenson, Jim … Continue reading The Rosenkranz Foundation debate | Blame Washington more than Wall Street for the financial crisis

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Enter the Zombie banks: Liquidity fixes for banks will not solve their solvency problem

Colin Henderson

James Baker of all people sums up precisely why the current government approaches to fixing banks’ problems is flawed.  As you will have gathered I fall in the Niall Ferguson/ Martin Wolf camp that says this situation is not just worse than we think but more importantly it is different than the prevailing wisdom.   We risk fixing the wrong problem in other words. ‘How Washington can prevent ‘zombie banks’ | Financial Times Beginning in 1990, Japan suffered a collapse in real estate and stock market prices that pushed major banks into insolvency. Rather than follow America’s tough recommendation – and … Continue reading Enter the Zombie banks: Liquidity fixes for banks will not solve their solvency problem

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Some perspective on GDP, and America’s ability to “come back”

Colin Henderson

This is much talk these days of the decline of the United States and a fundamental reshaping of relative world economic clout. It is worthwhile to reflect on the current size of economies before such claims are made. This rambling piece from Richard Florida that I thought was going to deal with the decline of America, actually ends up making the case that the impacts on US cities will be significant.  Of that there is little doubt, but the example of Detroit may not be the best to make the point (the Phoenix example is a better one). Detroit has … Continue reading Some perspective on GDP, and America’s ability to “come back”

Business Models, Open Finance, Open Source Banking, P2P Lending, Social Lending4 Comments

Comment on “Beyond the age of leverage: new banks must arise” | Niall Ferguson

Colin Henderson

Niall Ferguson nails the ultimate irony in the world today.  Every government is set on increasing debt as a means to solve the current crisis, however the reality is that they are potentially sending good money after bad, and not addressing the core issue. (emphasis mine) Beyond the age of leverage: new banks must arise | ft.com Call it the Great Repression. The reality being repressed is that the western world is suffering a crisis of excessive indebtedness. Many governments are too highly leveraged, as are many corporations. More importantly, households are groaning under unprecedented debt burdens. Worst of all … Continue reading Comment on “Beyond the age of leverage: new banks must arise” | Niall Ferguson

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