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Archive for the ‘Financial crisis’ Category

The financial system established in England after 1688, based on usurious lending to the state by private bankers, is reaching its final blowout in the form of a series of devastating bubbles and a massive bailout of the financiers with public money. But the issuance of money doesn’t have to be in the hands of a private consortium: another credit system is possible.

Cameron’s UK and EU economic governance agreement

Posted by seumasach on March 5, 2016

At the heart of negotiations between Cameron and the EU was the issue of the single rulebook on banking regulation and , more particularly, the rules on bank recovery and resolution, the power of the European Banking Authority to

“apply bail-in measures: i.e. convert debt to shares or write it down – in this way, losses are imposed, according to an established order, on bank shareholders and creditors, not on taxpayers”.

These rules are applicable from 1st January, 2016 and are apply throughout the EU. As this article argues, the concession of “some flexibility” in the application of these rules  gained by Cameron is unlikely to amount to much. So it looks like continued membership of the EU makes a further bail-out of British banks inconceivable. This would explain, perhaps, why so many within British elites are up in arms against the Cameron deal and now support Brexit. It also provides strong motive to support a “Yes” vote.

The UK in a changing Europe

23rd February, 2016

Within the rules of the club, Prime Minister Cameron achieved as much as could be expected on economic governance from the European council negotiations. But the gain in flexibility he obtained may turn out to be rather less significant in practice.

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Decision Time: New Politics, New Economy, New Britain?

Posted by seumasach on March 3, 2016

 

Decision Time: New Politics, New Economy, New Britain?

A speech by Jeremy Corbyn to  the British Chambers of Commerce conference

Labour Press

3rd March, 2016

 

This speech sets out a major policy framework including some notable quotes (with my own comments):

And we cannot outsource economic policy to the City of London. That has not served our economy well, and it has not served business well.

The subordination of the UK economy to City interests is, indeed, at the heart of the matter

The banking sector has to be reformed. Finance must support the economy and not be an extractive industry that treats consumers, entrepreneurs and businesses as cash cows.

Rather than simply going on about capitalism Corbyn clearly distinguishes between predatory finance capital and productive capital in the real economy. Robert Owen the 19th century socialist and entrepreneur who wanted an alliance between the working class and the industrial capitalists against City interests would be very happy with this speech. It is significant that he is addressing the Chamber of Commerce.

We need a national investment bank at the heart of economic policy to target investment on key public and economic priorities, not just for quick returns.

As Den Xao Ping used to say: “whatever you do never lose control of financial system.” We never had control of it but perhaps that’s about to change

For some politicians, the state is only a burden, to be reduced or removed.

But we see a crucial role for the strategic state to create the conditions for people and businesses to thrive and deliver prosperity that is stable and shared.

The term “strategic state” is an absolute taboo in British politics. Are we becoming French dirigistes? If there is one word(or two words) to sound the death knell of the thatcherite consensus, it is this.

Regarding crisis in NHS

First, there is the legacy of PFI debt – an inefficient way of delivering necessary investment.

The last Labour government lacked the confidence to make the argument to borrow to invest, and so it did what banks thought they could get away with before the crash, an off-the-books accountancy wheeze.

In both cases, putting debt off the books did not work it came right back onto the books and helped trigger crisis.

Corby takes  the Blairite legacy head on! Blair put dodgyPFI deals at the heart of his programme

Then there is the problem of infrastructure. Think about the creaking, underfunded infrastructure our country relies on.

Enterprise and innovation cannot flourish when our roads and railways, ports and airports are lagging behind our competitors.

To do this , of course, requires long term investment and planning another no-no in Thatcherite Britain

…we are campaigning to remain in the EU because we believe, like 60 per cent of businesses the BCC surveyed, that the EU is the best framework for trade and cooperation in the 21st century.

None of the above can be accomplished without incoming investment, several hundred billion of which have already been promised by China. He knows that they are awaiting the “yes” vote before committing themselves to this but it is not very politically correct to point this out since the British people are still largely unaware of the fact that we have been living off incoming investment for decades. The difference now is that investment will not be going into UK government bonds but will be direct investment in finance, manufacturing and infrastructure.

Read speech in full

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Brexit!? France and Germany cannot wait

Posted by seumasach on March 1, 2016

This is essential background for understanding the EU referendum and particularly the rather surprising decision by Cameron to support a “Yes” vote despite having no opt-out on European banking regulations. But a “No” vote would be even worse from a City point of view as this article makes clear. Still, there will be winners and losers and clear and bitter divisions are emerging in the British  ruling class which we haven’t seen since the period following the “loss” of the USA in the American Civil War by way of the defeat of the Confederacy. That period of internecine warfare in the British elite was eventually resolved by the expedient of outsourcing the empire via a truly massive flow of capital into the USA. Similarly, today we face a historic transformation of the City of London although, this time,  based on massive capital inflows through our Comprehensive Strategic Partnership with China and the new relationship with Europe which corresponds to it. The strong support for a “Yes” vote by Goldman Sachs and JPMorgan suggests the possibility that London could also serve as a conduit to Wall Street for Chinese investment via those chosen vehicles.

Gefira

19th February, 2016

If London decides to leave the European Union nobody in Europe will even notice. Great Britain is an entirely separate country, isolated from the European Union and does not participate in the Euro or Schengen Agreement. The European Union as a political platform is disintegrating and becoming more and more irrelevant and will be displaced by the European Monetary Union (EMU).
The center of power in Europe has shifted from the EU to the EMU and London politicians are fully aware of it. A Brexit will accelerate the process of political integration of the EMU members and make the EU politically less significant.

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Who are the real culprits behind UK’s collapsing public services?

Posted by seumasach on February 29, 2016

Dan Glazebrook

RT

27th February, 2016

Anyone following David Cameron’s negotiations with the EU, or the subsequent ‘in-out’ referendum debate in Britain, would perhaps forgiven for believing that migration is the cause of all Britain’s woes.

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Johnson adviser: protections for City “unimpressive

Posted by seumasach on February 22, 2016

Boris Pensions Tsar: EU Deal ‘Unimpressive’

Sky News

Protections for the City of London secured by David Cameron as part of his deal to reform Britain’s membership of the European Union (EU) are “unimpressive” and amount to “no more than a whingers’ charter”, one of Boris Johnson’s key advisers has said.

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Cameron spins the City’s demise

Posted by seumasach on February 21, 2016

 

Cailean Bochanan

21st February, 2016

It is unusual for the British establishment to risk a consultation with the people unless major changes are underway- changes which are sufficient to provoke divisions in the establishment itself. It goes without saying that the negotiations with the EU are not essentially about child benefit for Polish families living in the UK. They are about “sovereignty” although in a very limited sense: the “sovereignty” of the City of London. The deal struck triumphantly by Cameron is revelatory. It shows that conflict within the establishment  concerns the least bad option for the City: whether to face exclusion from the EU market and displacement by Paris or Frankfurt as Europe’s leading financial centre or to remain inside Europe and to take up arms against a sea of Eurozone banking regulations and by opposing end them. That is the question!

Read the rest of this entry »

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UK-EU deal preserves Britain’s leeway on market regulations

Posted by seumasach on February 20, 2016

Cameron has not achieved a deal that will guarantee immunity for the City of London from EU regulation. In general, we can suppose that this is the least bad option for the City which fears its demise even more outside of the EU altogether. That is why Britain won’t be leaving the EU- the scare stories have already begun, falling house prices, run on the pound etc. and they will only gain in intensity over the coming weeks.

Reuters

19th February, 2016

European Union leaders reached a deal late on Friday that offers leeway to Britain in applying banking and markets’ regulations, but maintains that there will be a single set of rules for the financial sector within the EU.

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Petro-Euro, money-debt, banking crisis, real economy: ten years to seal the fate of an economic-financial system

Posted by seumasach on February 18, 2016

GEAB

16th February, 2016

Precisely ten years ago (to the day), in its second bulletin of February 2006[1], warning about the imminent explosion of a «global systemic crisis”, the GEAB based its opinion on the identification of two strong signs: the end of the publication of the M3 money supply indicator[2] (suggesting a start to unusual degrees of the famous “money printing” which everyone has spoken about ever since); and the Iranian oil bourse launch – a country not yet constrained by international sanctions at the time – but a stock market based on the Euro[3]. These two strong signs enabled the GEAB team of that time to say that something big was about to happen, something which was going to bring into question the foundations of the system in which the economic-financial world was living at the time: the petrodollar and money-debt system.

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OECD calls for less austerity and more public investment

Posted by seumasach on February 18, 2016

The key word here is “collectively”. Whereas unilateral “people’s quantitative easing” would destabilize currencies and aggravate trade deficits, it is possible if orchestrated internationally. This implies a global currency “reset” – a new global financial architecture which would enable a rebalancing of capital flows, specifically the reversal of outsourcing and the recapitalization of the USA and Britain. It also implies the end of the Anglo-American financial model and its replacement with one which serves the real economy.Rather than the Washington consensus it would be, if you like, the Shanghai consensus, the globalization of the  highly successful Chinese economic model. The Eurasian economic space, from Vladivostok to London, would be the driving force behind all this.

Guardian

18th February, 2016

The OECD has called for its rich-country members to ease up on austerity and collectively agree to spend more on infrastructure projects to boost flagging growth.

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“Blunter approach” for too-big-to-fail banks

Posted by seumasach on February 18, 2016

“We cannot tolerate a financial system in which some firms are too big to fail—at least not ones that operate in any form other than that of a very tightly regulated utility.”

 

Reuters

19th November, 2012

It was kind of a big deal coming from the Federal Reserve Bank of New York’s influential president William Dudley. The former Goldman Sachs partner and chief economist has offered a fig leaf to those who say the problem of banks considered too-big-to-fail must be dealt with more aggressively. Some regional Fed presidents have advocated breaking up these institutions. But Dudley and other powerful figures at the central bank have maintained recent financial reforms have already laid the groundwork for resolving the issue.

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US banks still pose ‘nuclear’ threat to economy

Posted by seumasach on February 17, 2016

Another solution, he said, was to turn the big banks into public utilities by “forcing them to hold so much capital that they virtually can’t fail”.

Architect of 2008 bailout says US banks still pose ‘nuclear’ threat to economy

Guardian

16th February, 2016

America’s biggest banks present a “nuclear” threat to the US economy and should be broken up, a Federal Reserve policymaker and architect of the 2008 banking bailout said Tuesday.

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