Signs of Life in Financial Reform

September 30, 2009, NYT

Editorial

Financial regulatory reform, which seemed to be lagging one year after the collapse of Lehman Brothers, has gotten a new boost of energy. Unfortunately, Americans still cannot be sure it will produce real reform.

On the plus side, Representative Barney Frank, the chairman of the House Financial Services Committee, recently issued proposed legislation for a new Consumer Financial Protection Agency, a step forward for one of the Obama administration’s main reform initiatives.

»Moralappelle sind ein Alibi«

Finanzkrise, Bankerboni, Dumpinglöhne: Fehlt dem Kapitalismus das sittliche Fundament? Ein Streitgespräch in Zeiten des Wahlkampfs zwischen dem linken Jesuitenpater Friedhelm Hengsbach und dem ordoliberalen Ethiker Karl Homann

• Von Anna Marohn | Christian Tenbrock , aus der Zeit „Online“
• Datum 26.9.2009 – 18:27 Uhr

 

siehe den ganzen Artikel: zeit Moralappelle sind ein Alibi Hengsbach

In Bad Times for Capitalism, Socialists in Europe Suffer

September 29, 2009, NYT

By STEVEN ERLANGER

PARIS — A specter is haunting Europe — the specter of Socialism’s slow collapse.

Even in the midst of one of the greatest challenges to capitalism in 75 years, involving a breakdown of the financial system due to “irrational exuberance,” greed and the weakness of regulatory systems, European Socialist parties and their left-wing cousins have not found a compelling response, let alone taken advantage of the right’s failures.

Hungary Monetary Policy: Central Bank Cuts Key Rate to 7.5% in September

Hungary’s central bank (MNB) cut its benchmark interest rate 50 basis points (bp) to 7.5% in September 2009 amid slowing inflation. This was the third straight cut after the MNB slashed the key rate 100 bp in July 2009, although Hungary still has one of the highest benchmark interest rates in the EU. Recent rate cuts have been spurred by an improvement in investor sentiment.

How Significant are Chinese Steps Towards Internationalization of the Renminbi?

• The government started selling government bonds of 6 billion yuan (US$879 million) on September 28, 2009 in Hong Kong. In order to guarantee the success of the bond issue, the government is offering a higher coupon than available on mainland bonds. The Ministry of Finance suggests that the sale will boost the currency’s „international status, [help] develop the yuan bond market in Hong Kong, and help provide a pricing benchmark for mainland institutions’ bond sales in Hong Kong.“ (Bloomberg)

Into the Fourth Turning

This week for your Outside the Box reading pleasure I am pleased to offer you the beginning of a very intriguing interview with Neil Howe he did with my friend David Galland at Casey Research. I think Neil is one of the premier forward looking thinkers of our time. His book The Fourth Turning is one of the more important books of the last two decades. 12 years ago, he and the late Richard Strauss basically outlined the psycho-social dynamics of our current time and his predictions have been uncannily accurate.

The IMF Should Move To Europe

Freitag, 25. September 2009, 14:25:19 | Simon Johnson, Baseline

The headline news from the G20 summit in Pittsburgh is that progress has been made on “IMF reform,” meaning increased voting power for emerging markets relative to rich countries – remember that West Europeans are greatly overrepresented at the IMF for historical reasons.  But further change in a sensible direction is being blocked by the UK and France – because they have figured out that this logic implies they would lose their individual seats on the IMF’s executive board.

The way to break this impasse is (1) for the European Union to consolidate into a single seat or membership, and (2) for the Union to assert its right to be the headquarters of the IMF (under the Articles of Agreement: “The principal office of the Fund shall be located in the territory of the member having the largest quota…”). 

Was The G20 Summit Actually Dangerous?

Samstag, 26. September 2009, 15:07:47 | Simon Johnson – Baseline

It is easy to dismiss the G20 communique and all the associated spin as empty waffle.  Ask people in a month what was accomplished in Pittsburgh and you’ll get the same blank stare that follows when you now ask: What was achieved at the G8 summit in Italy this year?

Perhaps just having emerging markets at the table will bring the world closer to stability and more inclined towards inclusive growth, but that seems unlikely.  Should we just move on – back to our respective domestic policy struggles?

That’s tempting, but consider for a moment the key way in which the G20 summit has worsened our predicament. 

Paul Krugman’s Identity Crisis

Mises Daily by Benjamin Lee | Posted on 9/25/2009 12:00:00 AM

Anyone who reads Paul Krugman, our latest „Nobel Prize-winning economist,“ knows that Krugman believes inflation is not a threat to the economy at all. He is a regular defender of large fiscal deficits and expansionary monetary policy, claiming that they are the road to salvation from our so-called deflationary spiral. (We’ll ignore the fact that this „deflationary spiral“ involves six straight months of price increases and regular complaints from Mr. Krugman himself about skyrocketing costs in health care.)

In 2009, Krugman stated that „deficits saved the world.“ However, in 2003, when Alan Greenspan and the Bush administration were destroying this country’s balance sheet, Krugman was scared to death about inflation. The rest of this article references several paragraphs from Mr. Krugman’s March 11th, 2003, article, „A Fiscal Train Wreck.“

The Volatility of Sovereign Wealth Funds

 

This paper evaluates sovereign wealth funds in light of the extreme volatility of energy prices and the severe global recession that began in 2008. A recent paper by Das characterized the assets of funds as showing steady growth in the past and likely increased importance in the future. However, recent developments have reduced the relative importance of funds and have demonstrated the sensitivity of the funds to energy prices and world business cycles. Investments by sovereign wealth funds have the potential to introduce political influence into corporate governance, but this potential is much smaller than the interventions into corporate governance by governments of the United States and elsewhere connected to corporate bail-outs during the recession. Lack of transparency remains a problem for certain sovereign wealth funds, but anti-recession interventions by governments have been characterized by extreme lack of transparency.

See the Article from the Berkeley Electronic Press: volatility SWF _ BEP