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  • Mark 10:43 am on November 21, 2018 Permalink | Reply
    Tags: corruptions, , , finance, global capital, , shadow markets   

    Digital technology and facilitating corruption 

    I’ve been thinking a lot recently about the relationship between digital technology and contemporary finance, including the vast off-shore facets of its existence and the shadow markets which (as I understand them) traverse onshore and offshore, even breaking down the distinction between the two. An interesting example of this concerns the logistical challenge involved in creating the byzantine corporate structures upon which these mechanisms depend, with ever more sophisticated methods made available to ever less sophisticated companies as one of Oliver Bullough’s interviewees puts its on pg 87 of Moneyland. As Bullough goes on to write on pg 88, “the speed and cheapness of modern communications have made creating these companies ever easier, with devastating results for the law enforcement agencies trying to investigate them”. Only a couple of decades ago, “if a crook wanted a Pacific shell company, they had to go to the Pacific to get it. Now, they can get it online from their living room” (pg 87). It’s easy to pass over this quickly as a contingent detail but I think there’s something extremely significant to dwell on here.

  • Mark 2:53 pm on May 5, 2017 Permalink | Reply
    Tags: , , , finance, , , summers, , ,   

    The technocratic oath 

    In his political memoir, Adults In The Room, Yanis Varoufakis recounts a meeting with Larry Summer which took place in April 2015. Only months into his tenure as Finance Minister, he looked to this architect of the neoliberal world order for support as hostilities with European leaders over Greece’s fiscal future rapidly intensified. Coming straight from a meeting at the IMF in Washington, Varoufakis was met with an immediate warning from Summers that he had “made a big mistake”. This began a long conversation which ended with a fascinating warning. From loc 1050:

    Finally, after agreeing our next steps, and before the combined effects of fatigue and alcohol forced us to call it a night, Summers looked at me intensely and asked a question so well rehearsed that I suspected he had used it to test others before me. 

    ‘There are two kinds of politicians,’ he said: ‘insiders and outsiders. The outsiders prioritize their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders, who make the important decisions. The insiders, for their part, follow a sacrosanct rule: never turn against other insiders and never talk to outsiders about what insiders say or do. Their reward? Access to inside information and a chance, though no guarantee, of influencing powerful people and outcomes.’ With that Summers arrived at his question. ‘So, Yanis,’ he said, ‘which of the two are you?’

    When reading of this exchange in a review of the memoir, I immediately thought back to a story Elizabeth Warren had told about an encounter with Summers in a Washington curry restaurant early in her move from academia to politics. Upon purchasing Varoufakis’s book, I found that I wasn’t the only person to notice this parallel and be fascinated by it. As he recounts in an end note to the book:

    A few months after I had resigned the ministry, my good friend and academic colleague Tony Aspromourgos, upon hearing about my exchanges with Larry Summers, confirmed my suspicion when he sent me this quotation from Senator Elizabeth Warren, documented in 2014: 

    Late in the evening, Larry leaned back in his chair and offered me some advice … He teed it up this way: I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People –powerful people –listen to what they have to say. But insiders also understand one unbreakable rule: they don’t criticize other insiders. I had been warned. John Cassidy (2014), ‘Elizabeth Warren’s Moment’, New York Review of Books, Vol. 61 (no. 9), 22/ 5–4/ 6/ 14, pp. 4–8.

    Could this be seen as the professional socialisation of technocratic elites? Does Summers engage in a particularly practiced and performative example of something which takes a cruder form elsewhere? Does he particularly focus on those like Varoufakis and Warren who have moved from the academy to politics? As he reflects on loc 156, the technocratic oath is something which transcends agreements of strategy and analysis:

    We spoke the same economic language, despite different political ideologies, and had no difficulty reaching a quick agreement on what our aims and tactics ought to be. Nevertheless, my answer had clearly bothered him, even if he did not show it. He would have got into his taxi a much happier man, I felt, had I demonstrated some interest in becoming an insider. As this book’s publication confirms, that was never likely to happen.

  • Mark 10:48 pm on February 1, 2017 Permalink | Reply
    Tags: , , bankers, finance, , , ,   

    Cultural representations of finance  

    From One Market Under God, by Thomas Frank, loc 2230:

    For all the revulsion expressed by books like Liar’s Poker and Barbarians at the Gate, the dominant note was starstruck wonderment at these “masters of the universe,” at their millions and their manses, at their Gulfstream jets and Mercedes cars, at the high quality of the sex and luxuries they enjoyed. Occasional digressions to consider those shafted by the pros served only to heighten this sense, to establish just how satisfying it was to bring misfortune to some dope on the phone. The more monstrous the manipulation the merrier.

    This was written almost two decades ago but the trend has only intensified since then. As someone who has spent a lot of time reading these books, I’ve become curious as to what exactly the appeal is. They’re the kind of thing I inevitably buy  when bored in airport and train station bookshops, before devouring in a couple of journeys and feeling vaguely guilty afterwards.

    I wonder if these representations of financiers make finance itself more tractable. Narratives about individuals give shape to diffuse systems which influence all aspects of our lives in spite of their distance and abstraction. What has struck me as odd is the cultural prominence of the banker-hedonistic at precisely the time when such figures are in decline. Could there be something comforting about the wolf of Wall Street as we enter an era of algorithmic trading and flash crashes? 

  • Mark 12:35 pm on June 26, 2016 Permalink | Reply
    Tags: , , , , finance, , ,   

    The Janus-faced ideology of philanthropic elites 

    A fascinating observation in No Such Thing as a Free Gift, by Linsey McGoey, loc 785. I wonder if the digital elites who interest me see their wealth in similar terms?

    It was a Janus-faced ideology; one side of Carnegie was extraordinarily generous, expending time and vast financial sums on goals such as military disarmament and racial equality. On the other side, he adopted ever more draconian policies towards his workers the more convinced he became that his wealth would ultimately benefit the larger community.

  • Mark 10:03 am on March 25, 2016 Permalink
    Tags: , , defensiveness, , finance, ,   

    The defensiveness of contemporary elites  

    From The Deep State, by Mike Lofgren, pg 86-87. I’m beginning to try and catalogue public examples of this defensiveness because some of the over-reactions seem fascinatingly unbalanced:

    It is surprising how much fear his timid policies have generated among the big-money boys. There are no rational grounds for the hyperthyroid reactions of hedge fund bosses like Steven Schwarzman when Obama is largely a champion of the status quo who raises much of his money among Schwarzman’s colleagues. Nevertheless, the neoliberal mandarins at the venerable Economist say Obama has an image as one “who is hostile to business.” 36 It is one thing to shake our heads at the behavior of gun nuts who fear Obama will take away their firearms and send them to a FEMA concentration camp in Montana and quite another to consider that many canny Wall Street operatives, whose business model is based on a reptilian calculation of their own material interests, have succumbed to the irrational idea that totalitarian socialism is just around the corner and that Obama is going to usher it in, when he is only a more hesitant version of his predecessor. 

    That such a weak reed, who has acceded time and again to the entrenched interests of the permanent state, should incite so much negative passion among so many in the billionaire class suggests they are displacing their fears of the simmering discontent among the 99 percent onto a convenient political symbol. Their touchy defensiveness reveals the contradictions within the political system they dominate. President Obama, who appears to administer that system without enthusiasm or belief, has dissatisfied key constituencies of the Deep State even as he has alarmed the traditionalists who defend the remnants of the constitutional state.

  • Mark 8:52 am on March 19, 2016 Permalink
    Tags: finance, , , treasury   

    ‘Slow walking’ as a post-democratic tactic 

    From The Confidence Men, by Ron Suskind, pg 459:

    Geithner denied the charge, later made in internal White House documents, that “once a decision is made, implementation by the Department of the Treasury has at times been slow and uneven,” and that “these factors all adversely affect execution of the policy process.” The parlance for that is “slow walking.” “I don’t slow walk the president on anything,” he said. “People who wanted to do other things often accused me of slow walking, but I would never do that.” But Tim Geithner added, with some satisfaction, the battle over restructuring the financial industry “was resolved in the classic way, that plan beats no plan. “No one else had a plan.” Including Barack Obama.

  • Mark 8:44 pm on March 7, 2016 Permalink
    Tags: , digitalization, finance, , financialization, ,   

    Why Digitalization is Prior to Financialization 

    From Rise of the Robots, by Martin Ford, loc 1053-1069:

    Virtually all of the financial innovations that have arisen in recent decades—including, for example, collateralized debt obligations (CDOs) and exotic financial derivatives—would not have been possible without access to powerful computers. Likewise, automated trading algorithms are now responsible for nearly two-thirds of stock market trades, and Wall Street firms have built huge computing centers in close physical proximity to exchanges in order to gain trading advantages measured in tiny fractions of a second. Between 2005 and 2012, the average time to execute a trade dropped from about 10 seconds to just 0.0008 seconds, 64 and robotic, high-speed trading was heavily implicated in the May 2010 “flash crash” in which the Dow Jones Industrial Average plunged nearly a thousand points and then recovered for a net gain, all within the space of just a few minutes. Viewed from this perspective, financialization is not so much a competing explanation for our six economic trends; it is rather—at least to some extent—one of the ramifications of accelerating information technology.

  • Mark 8:41 am on November 21, 2015 Permalink
    Tags: , finance,   

    the old world of banking  

    From Other People’s Money, by John Kay, loc 244:

    I was a schoolboy in Edinburgh in the 1960s. The capital of Scotland is Britain’s second financial centre and was the headquarters of two major banks, the Bank of Scotland and the Royal Bank of Scotland. Banking was then a career for boys whose grades were not good enough to win them admission to a good university. The aspiration of many of my contemporaries was to join either ‘the Bank’ or ‘the Royal Bank’. With appropriate diligence, they might, after twenty years or so, become branch managers. The branch manager was a respected figure in the local community, and social interaction at the golf club or Rotary lunch was part of his job. He would know personally the local professionals – the accountant, the lawyer, the doctor, the minister and the more prosperous tradesmen. The bank manager would receive their savings and occasionally make loans. The regional office might review his figures, but would rely heavily on the manager’s assessment of character. He – there were no female managers – expected to spend his career with the bank, and to retire with a pension. It never crossed his mind, or the minds of his customers, that the institution he had joined at the age of seventeen would not continue for ever, in broadly its existing form.

  • Mark 6:28 pm on October 2, 2015 Permalink
    Tags: banks, finance, , too big to fail   

    the hostage taking capacity of banks  

    From Europe Entrapped by Claus Offe, pg 16-17. Recognition of this fact, as well as recognition of its recognition by non-financial agents, needs to underpin any adequate analysis of depoliticisation:

    Financial institutions are first and foremost debtors , owing assets to myriads of private and public claimants. Therefore, if big banks go under, many other businesses (including other banks), households, employees, and possibly states will go under, too, as an inescapable consequence. Banks are a structural equivalent of hostage takers: if you want to save the life of the hostage, you had better do what banks request – a plain power relation. In order to prevent the catastrophic consequences of a major bank’s bankruptcy for depositors (potentially triggered by their “run” on the bank) and the entire economy, national governments and supranational institutions had no choice but to step in to rescue (“systemic”) banks, the business of which many of these same governments had just deregulated and liberalized in the early years of the century, thus enhancing the “hostage- taking capacity” of banks.

  • Mark 7:30 am on August 30, 2015 Permalink
    Tags: , finance, ,   

    the disruption of finance  

    From The Big Short by Michael Lewis, pg 172. This is a part of the story of the financial crisis which has received too little attention: ‘innovations’ in finance were driven by the ‘disruption’ the established figures in the industry were subject to as a result of new online competitors:

    One of the reasons Wall Street had cooked up this new industry called structured finance was that its old- fashioned business was every day less profitable. The profits in stockbroking, along with those in the more conventional sorts of bond broking, had been squashed by Internet competition. The minute the market stopped buying subprime mortgage bonds and CDOs backed by subprime mortgage bonds, the investment banks were in trouble.

  • Mark 4:19 pm on August 26, 2015 Permalink
    Tags: , , , finance, ,   

    the threats of financial elites  

    From Liar’s Poker by Michael Lewis, pg 302-303

    One of the managing directors from London, who happened to be in New York, actually took me aside to practise an argument he planned to put to the Bank of England. He had calculated the sum of the losses of the banks underwriting BP to be 700 million dollars. He said that the world financial system might not withstand this drain of capital from the system. Another panic could ensue. Right? Amazing. He was so desperate to avoid the loss that I think he actually believed his lie. Sure, why not? I said; it’s worth a try. Basically, it was an old ploy. My boss wanted to threaten the British Government with another stock market crash if they didn’t take back their oil company. * (Note to members of all governments: be wary of Wall Streeters threatening crashes. They are tempted to do this whenever you encroach on their turf. But they can’t cause a crash any more than they can prevent one.)

  • Mark 4:19 pm on August 26, 2015 Permalink
    Tags: , , , finance, ,   

    the threats of financial elites  

    From Liar’s Poker by Michael Lewis, pg 302-303

    One of the managing directors from London, who happened to be in New York, actually took me aside to practise an argument he planned to put to the Bank of England. He had calculated the sum of the losses of the banks underwriting BP to be 700 million dollars. He said that the world financial system might not withstand this drain of capital from the system. Another panic could ensue. Right? Amazing. He was so desperate to avoid the loss that I think he actually believed his lie. Sure, why not? I said; it’s worth a try. Basically, it was an old ploy. My boss wanted to threaten the British Government with another stock market crash if they didn’t take back their oil company. * (Note to members of all governments: be wary of Wall Streeters threatening crashes. They are tempted to do this whenever you encroach on their turf. But they can’t cause a crash any more than they can prevent one.)

  • Mark 4:15 pm on August 26, 2015 Permalink
    Tags: , finance,   

    the totally weird subculture of 1980s mortgage traders  

    From Liar’s Poker by Michael Lewis, pg 149:

    Their culture was based on food, and as strange as that sounds, it was stranger still to those who watched mortgage traders eat. “You don’t diet on Christmas Day,” says a former trader, “and you didn’t diet in the mortgage department. Every day was a holiday. We made money no matter what we looked like.” They began with a round of onion cheeseburgers, fetched by a trainee from the Trinity Deli at eight a.m. “I mean you didn’t really want to eat them,” recalls trader Gary Kilberg who joined the trading desk in 1985. “You were hung over. You were sipping coffee. But you’d get wind of that smell. Everyone else was eating them. So you grabbed one of the suckers.” The traders performed astonishing feats of gluttony never before seen at Salomon. Mortara made enormous cartons of malted milk balls disappear in two gulps. D’Antona sent trainees to buy twenty dollars worth of candy for him every afternoon. Haupt, Jesselson and Arnold swallowed small pizzas whole. Each Friday was “Food Frenzy” day, during which all trading ceased, and eating commenced. “We’d order four hundred dollars of Mexican food,” says a former trader. “ You can’t buy four hundred dollars of Mexican food . But we’d try – guacamole in five- gallon drums, for a start. A customer would call in and ask us to bid or offer bonds and you’d have to say, ‘I’m sorry but we’re in the middle of the feeding frenzy, I’ll have to call you back.’” And the fatter they became, the more they seemed to loathe skinny people. No hypocrisy here! We are proud to look precisely as we are! They joked how the thin government traders who ran triathlons on weekends still couldn’t make any more money during the week, which wasn’t entirely accurate.

  • Mark 4:14 pm on August 26, 2015 Permalink
    Tags: , finance, hubris   

    the masters of the universe and their delusions 

    From Liar’s Poker by Michael Lewis, pg 301:

    It was striking how little control we had of events, particularly in view of how assiduously we cultivated the appearance of being in charge by smoking big cigars and saying fuck all the time.

  • Mark 9:16 am on August 13, 2014 Permalink | Reply
    Tags: finance, , , , , , wall street   

    Self-tracking, social control and cognitive triage: the trials and tribulations of aspiring financiers 

    What’s it like to be a junior analyst on Wall Street making $70,000 a year in your early 20s? What sort of people are drawn towards this career path? Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits attempts to answer these questions by tracking a handful of millennial recruits to Wall Street as they navigate a post-crash environment that has changed in some ways yet stubbornly remains the same in others. This immensely readable book is something akin to longitudinal quantitative research, albeit in an obviously journalistic mode, recurrently interviewing these recent graduates as they attempt to cope with the 18 hour working days considered the norm for new analysts. It’s a fascinating read in many respects, not least of all because of its counter-intuitive insights into how graduates are drawn to Wall Street and how they come to remain there:

    As strange as it sounds, a big paycheck may not in fact be central to Wall Street’s allure for a certain cohort of young people. This possibility was explained to me several weeks before my Penn trip by a second-year Goldman Sachs analyst, who stopped me short when I posited that college students flock to Wall Street in order to cash in. “Money is part of it,” he said. “But mostly, they do it because it’s easy.” He proceeded to explain that by coming onto campus to recruit, by blitzing students with information and making the application process as simple as dropping a résumé into a box, by following up relentlessly and promising to inform applicants about job offers in the fall of their senior year—months before firms in most other industries—Wall Street banks had made themselves the obvious destinations for students at top-tier colleges who are confused about their careers, don’t want to lock themselves in to a narrow preprofessional track by going to law or medical school, and are looking to put off the big decisions for two years while they figure things out. Banks, in other words, have become extremely skilled at appealing to the anxieties of overachieving young people and inserting themselves as the solution to those worries. And the irony is that although we think of Wall Street as a risk-loving business, the recruiting process often appeals most to the terrified and insecure.

    I think this argument coheres with many of the insights that can be found within the emerging adulthoods literature. Immediate material rewards in a climate of endemic insecurity and the promise of postponing difficult decisions by a number of years would inevitably seem tempting to many who might have been profoundly unlikely to be drawn into the orbit of finance in the 1980s or 1990s (not least of all because of the radically different climate greeting new graduates in those decades). However this isn’t true of all, with the author recognising the likelihood that those young financiers willing to risk their jobs by sharing their anxieties with him are likely to be atypical. What I found particularly compelling though was his insight into what it is like day-to-day to live with the demands placed upon the young analysts:

    Today, as before the financial crisis, it’s not uncommon for a first-year IBD analyst to work one hundred hours a week—the equivalent of sixteen hours a day during the week, then a mere ten hours on each weekend day. Which is not to say that these twenty-two-year-olds are actively doing one hundred hours’ worth of work every week. In fact, many sit around idly for hours a day, listening to music or reading their favorite blogs while they wait for a more senior banker to assign them work. (These drop-offs are never pleasant, but they’re worst when they happen at 6:30 or 7:00 p.m. as the senior banker is leaving for the day, giving the analyst a graveyard shift’s worth of work before he or she can go home and sleep.)

    In an important sense they forego personal responsibility to choose how to spend their time, with the challenges this poses for synchronising everyday routine with longer term plans and aspirations. They are cut off from the non-financial world, with social media blocked within the offices where they spend 18 hours each day and on site services designed to minimise the need for errands and their attendant human contact outside the firm. They are encouraged to socialise together, within specific venues that graduate in cost and prestige as the analysts work their way through the clearly delineated hierarchy. Rigid sartorial norms are enforced aggressively: don’t over-dress but don’t under-dress. Certainly don’t out-dress the boss. The whole thing generates something the author describes as cognitive triage, with everyday demands blotting out reflexivity about the medium and the long term:

    The compartmentalization phenomenon turned out to be bigger than Jeremy and Samson, and bigger even than Goldman Sachs. As I interviewed dozens of young analysts at firms across the financial sector, I heard the same kinds of answers to my questions about morality and ethics: “I don’t know, I never really think about it.” “I’m just trying not to fuck up.” “Dude, I’m so far away from anything like that…” Entry-level analysts, it seemed, were so routinely exhausted, and so minutely focused on their day-to-day tasks—on pleasing their bosses, nailing every page of their pitch books, and avoiding getting in trouble—that they often avoided thinking about the big picture. It was a sort of cognitive triage, and daily concerns always took priority over long-term, large-scale worries. Still, there was no doubt that these worries existe

    I love this phrase. I think ‘cognitive triage’ is something by no means restricted to those working in finance. However what the author skilfully demonstrates is how cognitive triage can work to render these frantic actors uniquely susceptible to professional socialisation, accumulating habits of manner and outlook because the intensity of daily precludes the time for withdrawal and consideration, making it impossible to reflect in a consistent way upon whether this is really what they want to do and who they want to be.

    Now take this case study and consider the potential implications of self-tracking for these young analysts whose attentional resources are consumed by cognitive triage. Deborah Lupton has suggested five modes of self-tracking and I think three of them are particularly relevant here:

    • Private self-tracking relates to self-tracking practices that are taken up voluntarily as part of the quest for self-knowledge and self-optimisation and as an often pleasurable and playful mode of selfhood. Private self-tracking, as espoused in the Quantified Self’s goal of ‘self  knowledge through numbers’, is undertaken for purely personal reasons and the data are kept private or shared only with limited and selected others. This is perhaps the most public and well-known face of self-tracking.
    • Pushed self-tracking represents a mode that departs from the private self-tracking mode in that the initial incentive for engaging in self-tracking comes from another actor or agency. Self-monitoring may be taken up voluntarily, but in response to external encouragement or advocating rather than as a personal and wholly private initiative. Examples include the move in preventive medicine, health promotion and patient self-care to encourage people to monitor their biometrics to achieve targeted health goals. The workplace has become a key site of pushed self-tracking, particularly in relation to corporate wellness programs where workers are encourage to take up self-tracking and share their data with their employer.
    • Imposed self-tracking involves the imposition of self-tracking practices upon individuals by others primarily for these others’ benefit. These include the use of tracking devices as part of worker productivity monitoring and efficiency programs. There is a fine line between pushed self-tracking and imposed self-tracking. While some elements of self-interest may still operate, people may not always have full choice over whether or not they engage in self-tracking. In the case of self-tracking in corporate wellness programs, employees must give their consent to wearing the devices and allowing employers to view their activity data. However failure to comply may lead to higher health insurance premiums enforced by an employer, as is happening in some workplaces in the United States. At its most coercive, imposed self-tracking is used in programs involving monitoring of location and drug use for probation and parole surveillance, drug addiction programs and family law and child custody monitoring.http://simplysociology.wordpress.com/2014/08/07/the-five-modes-of-self-tracking/

    Given the concern to maximise one’s performance in an intensely competitive environment, it’s easy to see the appeal of personal self-tracking. This could relate to the conservation of finite resources that are perpetually being depleted by 18 hour days. It could take a more positive form of seeking to maximise efficiency but it largely amounts to the same thing. Are pushed self-tracking and imposed self-tracking equally congruent with this workplace? I suspect so but I’d like to do some more research before I attempt to draw a firm conclusion.

    However assume for the sake of argument that all three forms of self-tracking above seem likely to proliferate on Wall Street. My question is this: what will be the implications of this for the ‘cognitive triage’ that Rouse describes amongst these junior analysts? I think there are good reasons to assume it will contribute to its intensification – increasing the number of day-to-day variables in relation to which each actor is required to calibrate their behaviour over the course of the day, further precluding the possibility of sustained deliberation that reaches beyond the temporal boundaries of the present day or the coming week. If this is the case then I think this concept, which is a lovely phrase for something that Margaret Archer has written about more expansively as ‘expressive reflexivity’, helps illuminate an important vector through which power is likely to be exercised in workplaces. Not as something that ‘creates’ new quantified subjects but as something that operates through the reflexivity of people within the workplace but that will (tend to) lead to a diminution in the scope of their reflexivity.

  • Mark 8:52 am on July 14, 2013 Permalink | Reply
    Tags: finance, , London Review of Books, Quantitative Easing,   

    So what the hell is ‘quantitative easing’? 

    For a long time John Lanchester’s coverage of the financial crisis has been the best thing about the London Review of Books. Yet even by his own high standards, his most recent essay is spectacularly good:

     It’s done so through quantitative easing, which involves buying back its own bonds using money that doesn’t actually exist. It’s like borrowing money from somebody and then paying them back with a piece of paper on which you’ve written the word ‘Money’ – and then, magically, it turns out that the piece of paper with ‘Money’ on it is real money. (Note: don’t try this.) Another way of describing quantitative easing would be that it is as if, when you look up your bank balance online, you had the additional ability to add to it just by typing numbers on your keyboard. Ordinary punters can’t do this, obviously, but governments can; then they use this newly created magic money to buy back their own debt. That’s what quantitative easing is.

    The idea is that since interest rates are so low, it’s in no one’s interest to sit on this newly created money. If you are one of the bond-holders who has sold your government debt back to the government, you will now go and spend your new cash on something that yields a higher rate of return. You’ll buy shares with it, or invest it in your business, or something – anything – else. In the UK, the government has spent magic money on QE to the tune of £375 billion, 23.8 per cent of our GDP. An amount equal to a quarter of our entire annual economic activity has therefore been willed into being in an attempt to stimulate the economy. If they’d just given the money directly to the public, perhaps in the form of time-limited, UK-only spending vouchers, it would have amounted to just under £6,000 for everyone, man, woman or child, in the country. Can anyone doubt that the stimulus effect of that would have been much bigger?


    The new head of the bank is ‘St’ Anthony Jenkins, who has been sanctified by City wags in honour of his many homilies on the subject of the new ethical Barclays. He said on 28 June that the new rules ‘could restrict our ability to extend balance sheet availability to customers, including – potentially – lending to the UK and other economies, which’ (at this point it is helpful, if you want the full impact of Jenkins’s remarks, to imagine him leaning back in a black leather chair, stroking a white cat) ‘is something of course we want to avoid’. In other words, if you try to make us safe, we’ll stop lending. But this is a non sequitur. Why should the need for more equity restrict lending to UK customers? Look where the equity sits on the balance sheet. Why does needing more of it necessitate lending less to the real economy, on the other side of the balance sheet? If you want to shrink your balance sheet, as banks do, why target the minority of your assets which is represented by customer loans? As I pointed out earlier, only 28.6 per cent of Barclays’ assets are real, economy-helping loans. Gee, by being so quick to focus on the way the new rules could hurt the rest of us, it’s almost as if St Anthony were making a threat. Hang on, what’s he got in his hand, right next to the cute little pussycat? He can’t be holding a gun to its head, can he?


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