For Want of a Nail, the Ship Was Lost

Imagine a great ship dominating the skyline on a distant sea. Imagine the complexity of that ship: keel, ribs, planks, masts, spars, and an infinite number of less readily named components. Each component was hand-crafted by a craftsman skilled in his trade, to precise requirements, and secured in position to take the stress and strain […]

Lies, Damn Lies and LIBOR

I’ve been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not […]

‘Heads I Win, Tails You Lose.’

I was at a private lunch in the City some 15 years ago discussing whether hedge fund investments should be considered a new and distinct asset class. A very prominent hedge fund trader was asked his opinion. Surprisingly, he said that hedge funds were less a new method for investment, than a new method for […]

Your Bank: Fiduciary or Predator?

In the old days when banks were local, and owned either as partnerships or mutuals, bankers had a stake in promoting the prosperity of their clients. They wanted to see their clients do well so that savings in the bank would increase, and then the banker could lend more and do better too. Bankers were […]

FSA Regulation: Complexity Costs

I have had to deal with the idiocy of modern financial regulation rather more than I would like lately. The issue involves FSA regulations which create a bias in favour of the TBTF banks. (As almost all FSA regulation is biased in favour of TBTF banks, this isn’t much of a clue.) The FSA acknowledges […]

Greece – Cutting Out the Middle Man

It seems that central bankers and politicians are endlessly resourceful when it comes to innovating ways to profit themselves and bankers at everyone else’s expense. Where I had thought Greek default inevitable just two weeks ago, I no longer think so today. It appears that Sarkozy, Merkel and the Troika have decided to prevent a […]

Survivor Bias and TBTF Tyranny

It’s time to write again about insolvency, as the MF Global failure and the Greek debacle raise new troubling concerns. As I wrote in Ring Fences and Rustlers before Lehman failed in 2008: The key to having a happy insolvency, if such a thing exists, lies in ensuring that when a globalised bank goes bust, […]

Why I Oppose Financial Stability

Financial Stability became a topic in the late 1990s, at a time of peak laxity in international financial supervision. The same minds which promoted the Financial Stability Forum (now the Financial Stability Board) also crafted the deeply flawed and destructive Basel II. I have never understood why Financial Stability should be an objective of public […]

Dexia, Mafia and Revolution

I knew I had seen the script we’re living somewhere: What I am saying is, we have now what we have always needed, real partnership with the government. And this is what follows: Revolution! What does that tell you? It tells me that when predatory bankers and their complicit government cronies cannibalise the real economy […]

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