Category : Credit Markets

(FT) Edward Luce–The middle class is frozen out of the Tepid US recovery

The bond markets have grasped something that continues to elude many economists. We live in a confused world. Yet the underlying story is simple. The US middle continues to hollow out, even as the economy continues to grow.

But the latter’s upside is limited by the crisis in the former. Unless the middle class starts to post healthy income gains, we will be stuck in what has been annoyingly named the “new normal”.

Neither the Democratic nor the Republican party ”“ nor most of their European counterparts ”“ appears to have an answer. President Barack Obama pushes for a higher minimum wage, which would certainly help the poorest sections of the US labour force. But it would do nothing to fix the central problem. And Republicans keep arguing for lower taxes on the wealth creators. Ditto. They have argued each other to a standstill.

Both parties might find it instructive to look north to Canada, which has endured its harshest winter in 20 years.

Read it all.

Posted in * Economics, Politics, Anthropology, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, Senate, Stock Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology

Church of England Commissioners announce annual results for 2013

The Church Commissioners’ total return on its investment in 2013 was 15.9 per cent. This means that the Church Commissioners fund has exceeded its target return of RPI + 5 percentage points over the past one year, three years, ten years and twenty years. It has also has performed better than similar funds over the same periods. Details have been published today in their full Annual Report and Account (link below) for 2013.

The Commissioners’ fund is a closed fund, taking in no new money, and has performed better than its target return of RPI +5.0% p.a. and its comparator group over the past, one, three, 10 and 20 years.* The results confirm the fund’s strong long term performance

Read it all.

Posted in * Anglican - Episcopal, * Christian Life / Church Life, * Economics, Politics, Anglican Provinces, Church of England (CoE), Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Parish Ministry, Stewardship, Stock Market, Theology

(WSJ) Euro-Zone Economy Shows Weaker-Than -Expected Expansion

The euro zone’s economy expanded at a weak pace last quarter despite a strong recovery in Germany, putting added pressure on the European Central Bank to enact fresh easing measures to prevent the region from sliding into a lengthy period of low inflation and economic stagnation.

Gross domestic product grew 0.2% in the euro zone during the first quarter compared with the final three months of 2013, the European Union’s statistics agency Eurostat said Thursday, well short of the 0.4% quarterly gain expected by economists.

Read it all.

Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Euro, Europe, European Central Bank, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Theology

(FT) Church of England defends plans to boost hedge fund investments

The man responsible for the Church of England’s £6bn endowment has defended plans to increase its investment in hedge funds, arguing that not all of the industry has “devil’s horns”.

Andreas Whittam Smith, First Church Estates Commissioner, told the Financial Times that the Church’s own ethical watchdog sanctioned short selling, providing it was done in a responsible way.

He added that the group “does not have ethical concerns about short selling per se as an investment practice,” and “did not make an ethical distinction between seeking to profit from a rise in the value of a security as against seeking to profit from a fall.”

Read it all.

Posted in * Anglican - Episcopal, * Economics, Politics, Anglican Provinces, Church of England (CoE), Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Housing/Real Estate Market, Stock Market

(FT) Faith, hope and hedge funds for Church of England

The Church of England is ramping up the exposure of its £6bn endowment to alternative investments such as hedge funds and private equity in a move that will cement its position as one of the UK’s largest single investors in these types of assets.

The Church Commissioners who manage the endowment will meet next month to decide on the fund’s allocations and are set to increase its exposure to alternative investments, which also include residential property and farm land, according to a Church spokesman. Alternatives already account for almost a third of the fund.

Read it all (if necessary another link may be found there).

Posted in * Anglican - Episcopal, * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, Anglican Provinces, Church of England (CoE), Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, England / UK, Ethics / Moral Theology, Parish Ministry, Religion & Culture, Stewardship, Stock Market, Theology

(Economist Leader) Argentina–There are lessons for many govts from its 100 years of decline

There are still many things to love about Argentina, from the glorious wilds of Patagonia to the world’s best footballer, Lionel Messi. The Argentines remain perhaps the best-looking people on the planet. But their country is a wreck. Harrods closed in 1998. Argentina is once again at the centre of an emerging-market crisis. This one can be blamed on the incompetence of the president, Cristina Fernández, but she is merely the latest in a succession of economically illiterate populists, stretching back to Juan and Eva (Evita) Perón, and before. Forget about competing with the Germans. The Chileans and Uruguayans, the locals Argentines used to look down on, are now richer. Children from both those countries””and Brazil and Mexico too””do better in international education tests.

Why dwell on a single national tragedy? When people consider the worst that could happen to their country, they think of totalitarianism. Given communism’s failure, that fate no longer seems likely. If Indonesia were to boil over, its citizens would hardly turn to North Korea as a model; the governments in Madrid or Athens are not citing Lenin as the answer to their euro travails. The real danger is inadvertently becoming the Argentina of the 21st century. Slipping casually into steady decline would not be hard. Extremism is not a necessary ingredient, at least not much of it: weak institutions, nativist politicians, lazy dependence on a few assets and a persistent refusal to confront reality will do the trick.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Foreign Relations, History, Politics in General, Stock Market, Theology

(Indpndt) C of E appoints new specialist to review assets portfolio after Wonga embarrassment

The Church of England has appointed a New York-based specialist to screen its portfolio of assets in the wake of its embarrassing Wonga debacle last year.

Read it all.

Posted in * Anglican - Episcopal, * Culture-Watch, * Economics, Politics, --Justin Welby, Anglican Provinces, Archbishop of Canterbury, Church of England (CoE), Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Globalization, Religion & Culture, Stock Market, Theology

(FT) Prominent Money Manager Leaves his Post because of Grueling Hours and Need for more Family Time

The gruelling hours were even more important, however. In his valedictory emails, perhaps wary of the cliché, Mr El-Erian avoided saying he wanted to spend more time with his family. But that is, in fact, his main reason for leaving, according to people close to him.

One tells me that on an average day Mr El-Erian’s alarm clock goes off at 2.45am. He usually gets to the office by 4.15am, gets home to his family about 7pm, eats, goes to bed by about 8.45pm and does it again.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Globalization, Labor/Labor Unions/Labor Market, Personal Finance, Stock Market

(WSJ) Federal Reserve Dials Back Bond Buying, Keeps a Wary Eye on Growth

Although the Fed expects to keep reducing the program “in measured steps” next year, the timing and the course isn’t preset. “Continued progress [in the economy] is by no means certain,” Mr. [Ben] Bernanke said. “The steps that we take will be data-dependent.”

If the Fed proceeds at the pace he set out, it would complete the bond-buying program toward the end of 2014 with holdings of nearly $4.5 trillion in bonds, loans and other assets, nearly six times as large as the Fed’s total holdings when the financial crisis started in 2008.

Still, officials””worried that investors would quake at the thought of less Fed support””went to lengths to demonstrate that they would keep interest rates low for years to come, even after the bond-buying program ends.
Read it all.

Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Federal Reserve, History, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Personal Finance, Politics in General, Stock Market, The Banking System/Sector, The National Deficit, The U.S. Government, Theology

(Bloomberg) Wall Street faces more scrutiny as the era of the Volcker rule begins

Wall Street faces more intensive government scrutiny of trading after U.S. regulators issued what they billed as a strict Volcker rule today, imposing new curbs designed to prevent financial blowups while leaving many details to be worked out later.

The Federal Reserve, Federal Deposit Insurance Corp. and three other agencies formally adopted the proprietary trading ban. The rule has been contested by JPMorgan Chase & Co., Goldman Sachs Group Inc. and their industry allies for more than three years.

Wall Street’s lobbying efforts paid off in easing some provisions of the rule. Regulators granted a broader exemption for banks’ market-making desks, on the condition that traders aren’t paid in a way that rewards proprietary trading. The regulation also exempts some securities tied to foreign sovereign debt.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Law & Legal Issues, Politics in General, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology

(Reuters) Pope attacks "tyranny" of markets, urges renewal in key document

Pope Francis called for renewal of the Roman Catholic Church and attacked unfettered capitalism as “a new tyranny”, urging global leaders to fight poverty and growing inequality in the first major work he has authored alone as pontiff.

The 84-page document, known as an apostolic exhortation, amounted to an official platform for his papacy, building on views he has aired in sermons and remarks since he became the first non-European pontiff in 1,300 years in March.

In it, Francis went further than previous comments criticizing the global economic system, attacking the “idolatry of money” and beseeching politicians to guarantee all citizens “dignified work, education and healthcare”.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, * Religion News & Commentary, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Europe, Globalization, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Other Churches, Pope Francis, Roman Catholic, Stock Market, The Banking System/Sector, Theology

(FT) Gillian Tett–Danger: US mortgage market whiplash risk

..before realtors get too confident about the future, it is worth looking at some sobering research from the International Monetary Fund, buried deep inside this autumn’s Global Financial Stability Report. This analysis, which looks at mortgage real estate investment trusts (M-Reits) ”“ which invest in packages of mortgage bonds ”“ did not make headlines when the IMF met last month, because M-Reits are a fairly specialist sector. That is a pity, given that the IMF says the rapidly expanding world of M-Reits has the potential to deliver nasty surprises if, or when, US interest rates rise.

Most notably, even a modest increase in rates could spark fire sales of mortgage-backed bonds, which would raise mortgage interest rates sharply for consumers. And that could not just hurt housing markets but produce knock-on waves of instability in other areas of finance.

“Rapid M-Reit deleveraging has important spillover implications,” the IMF report warns.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, Federal Reserve, Globalization, History, Housing/Real Estate Market, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Theology

France's credit rating cut by S&P to AA

Standard and Poor’s (S&P) has cut France’s credit rating to AA from AA+.

The moves comes almost two years after the country lost its top-rated AAA status….

S&P said in its statement: “We believe the French government’s reforms to taxation, as well as to product, services and labour markets, will not substantially raise France’s medium-term growth prospects and that ongoing high unemployment is weakening support for further significant fiscal and structural policy measures.”

Read it all.

Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Euro, Europe, European Central Bank, Foreign Relations, France, Politics in General, The Banking System/Sector, Theology

(WSJ) Elite Grads in Business Schools Flock to Technology Opportunities

Elite business-school graduates are increasingly heading to work in technology over finance as the lingering aftereffects of the financial crisis””along with Wall Street’s long hours and scaled-back pay””sends newly minted M.B.A.s elsewhere.

At Harvard Business School, 18% of job-seeking students landed tech-sector spots this year, up from 12% in 2012. A similar shift is under way at the business schools at Yale University and Cornell University, where the share of graduates going into tech more than doubled over the past two years.

Meanwhile, just 27% of Harvard Business School graduates took jobs in finance this year, down from 35% last year. That figure dropped to 16% from 27% at the MIT Sloan School of Management.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Economy, Education, Ethics / Moral Theology, Labor/Labor Unions/Labor Market, Science & Technology, Stock Market, The Banking System/Sector, Theology, Young Adults

([London] Times) The City must take religion seriously, says the Archbishop of Canterbury

Religious faith is a “powerful and increasingly influential global reality” which must be taken seriously, especially in the City of London, according to the Archbishop of Canterbury.

The Most Rev Justin Welby said God and mammon ”“ material wealth or greed ”“ are not mixable, but this did not mean there was no place for faith in the City.

“That’s on the authority of Jesus Christ who said you can’t serve God and mammon. God and the City, by contrast I think, are eminently mixable.”

He was speaking at a Mansion House dinner hosted by Roger Gifford, a senior banker and Lord…

Read it all (subscription required).

Posted in * Anglican - Episcopal, * Culture-Watch, * Economics, Politics, * International News & Commentary, --Justin Welby, Archbishop of Canterbury, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, England / UK, Ethics / Moral Theology, Religion & Culture, Stock Market, The Banking System/Sector, Theology, Urban/City Life and Issues

(WSJ) Nicholas Hahn: Is Tax Policy really the Purview of Preachers?

The bishops might have been promoting a strictly Democratic line, but U.S. Senate Chaplain Barry Black was more ecumenical. Amid the shutdown, Rev. Black offered a daily prayer in the Senate chamber asking God to “save us from the madness. We acknowledge our transgressions, our shortcomings, our smugness, our selfishness, and our pride.” Later he condemned the “hypocrisy of attempting to sound reasonable while being unreasonable.” His listeners in one party no doubt assumed he was talking about the other side.

It is one thing to spiritually shame politicians, as Rev. Black did. Trying to do their jobs is another. The bishops and other clergy in the Circle of Protection go well beyond their competencies when they make such policy prescriptions. Speaking about the moral issues of the day is certainly within their pastoral purview, but the bishops’ calls to raise revenues (aka taxes), for instance, or eliminate “unnecessary” military spending are not.

Bishops routinely assert their authority as “pastors and teachers,” as Bishops Blaire, Gomez and Pates did, but according to the tradition of their own church, they have no teaching authority when it comes to politics.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Religion & Culture, Senate, Social Security, Taxes, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, Theology

(Pew Research) As Debt Limit Deadline Nears, Concern Ticks Up But Skepticism Persists

With just two days to go before an Oct. 17 deadline to raise the nation’s debt limit, 51% of the public views a rise in the nation’s debt limit as “absolutely essential” in order to avoid an Half View Debt Limit Increase as Essential, More than a Third Say it is Noteconomic crisis, while 36% think the country can go past the deadline without major problems.

Public concern over breaching the debt limit deadline has risen only slightly from a week ago, when 47% said a rise in the debt limit was essential and 39% said it was not.

Those who see no dire economic consequences resulting from going past Thursday’s deadline are not only skeptical about the timing ”“ most say there is no need to raise the debt limit at all. Nearly a quarter of all Americans (23%) ”“ including 37% of Republicans and 52% of Tea Party Republicans ”“ believe the debt limit does not need to be raised at all.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Globalization, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, Senate, Stock Market, The National Deficit, The U.S. Government, Theology

(WSJ) Senate Leaders Are in Striking Distance of a Deal

Top Senate leaders on Monday said they were within striking distance of a deal to sidestep a looming debt crisis and reopen the federal government two weeks after a partisan deadlock forced it to close.

Fourteen days after a partial government shutdown began, senators signaled a bipartisan resolution could come soon.

“I’m very optimistic we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills and begin long-term negotiations to put our country on sound fiscal footing,” Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Globalization, House of Representatives, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The Banking System/Sector, The National Deficit, The U.S. Government, Theology

(Independent) Danielle Levy–If it says 'ethical' on the label, that doesn't mean company is clean

When the Archbishop of Canterbury was embarrassed by the revelation earlier this year that the Church had invested indirectly in Wonga ”“ after he had announced plans to take on the payday lender ”“ it served as a bleak reminder that even the best-intentioned investor can be let down by their so-called ethical investments.

If you are looking to put your spare cash to good use by investing “ethically”, be warned that you could face similar nasty surprises unless you keep a keen eye on the investment criteria. A close examination of the ethical fund sector shows investments in some unexpected areas. They include oil companies operating in tar sand fields, deemed harmful by some environmentalists; arms manufacturers; and businesses that have exposure to fur and animal testing.

Read it all.

Posted in * Anglican - Episcopal, * Culture-Watch, * Economics, Politics, --Justin Welby, Archbishop of Canterbury, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, Globalization, Law & Legal Issues, Stock Market, Theology

(Wash. Post) Senate leaders’ talks on shutdown, debt limit stall as sides await Mkt reaction

What started as a mad dash to strike a deal to lift the federal debt limit slowed to a crawl over the weekend as stalemated Senate leaders waited nervously to see whether financial markets would plunge Monday morning and drive the other side toward compromise.

Republicans seemed to think they had more to lose. After talks broke down between President Obama and House leaders, GOP senators quickly cobbled together a plan to end the government shutdown ”” now entering its third week ”” and raise the $16.7 trillion debt limit. Senate Minority Leader Mitch McConnell (R-Ky.) then asked Majority Leader Harry M. Reid (D-Nev.) to elevate negotiations to the highest level.

On Sunday ”” with the Treasury Department due to exhaust its borrowing power in just four days ”” Reid was wielding that leverage to maximum advantage. Rather than making concessions that would undermine Obama’s signature health-care initiative, as Republicans first demanded, Democrats are now on the offensive and seeking to undo what has become a cherished prize for the GOP: deep agency spending cuts known as the sequester.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Federal Reserve, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The Banking System/Sector, The National Deficit, The U.S. Government

(BBC) China tells US to avoid debt crisis for sake of global economy

A senior Chinese official has warned that the “clock is ticking” to avoid a US default that could hurt China’s interests and the global economy.

China, the US’s largest creditor, is “naturally concerned about developments in the US fiscal cliff”, vice finance minister Zhu Guangyao said.

Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Asia, Budget, China, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Euro, European Central Bank, Foreign Relations, G20, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The National Deficit, The U.S. Government

(Reuters) Angela Merkel romps to victory but faces tough coalition choices

Angela Merkel won a landslide personal victory in Germany’s general election on Sunday, but her conservatives appeared just short of the votes needed to rule on their own and may have to convince leftist rivals to join a coalition government.

Read it all.

Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Euro, Europe, European Central Bank, Germany, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology

(WSJ) The Federal Reserve Stays the Course on Easy Money

Seeing a more uneven economic climate than they expected and the potential for fiscal discord in Washington, Federal Reserve officials got cold feet Wednesday and decided to keep their signature easy-money program in place for the time being.

The move, coming after Fed officials spent months alerting the public that they might begin to pare their $85 billion-a-month bond-buying program at the September policy meeting, marks the latest in a string of striking turnabouts from Washington policy makers that have whipsawed markets in recent days.

Read it all

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Federal Reserve, Globalization, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Stock Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Barry Ritholtz–Translated into Truth: On Larry Summers Withdrawing from Fed Chair Consideration

Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.

Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Federal Reserve, History, Office of the President, Politics in General, President Barack Obama, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Theology

The Economist on the German Election–One woman to rule them all

Ever since the euro crisis broke in late 2009 this newspaper has criticised the world’s most powerful woman. We disagreed with Angela Merkel’s needlessly austere medicine: the continent’s recession has been unnecessarily long and brutal as a result. We wanted the chancellor to shrug off her cautious incrementalism and the mantle of her country’s history””and to lead Europe more forcefully. She is largely to blame for the failure to create a full banking union for the euro zone, the first of many institutional changes it still needs. She has refused to lead public opinion, never spelling out to her voters how much Germany is to blame for the euro mess (nor how much its banks have been rescued by its bail-outs). We also worry that she has not done enough at home: in recent years no country in the European Union has made fewer structural reforms, and her energy policies have landed Germany with high subsidies for renewables and high electricity prices.

And yet we believe Mrs Merkel is the right person to lead her country and thus Europe. That is partly because of what she is: the world’s most politically gifted democrat and a far safer bet than her leftist opponents. It is also partly because of what we believe she could still become””the great leader Germany and Europe so desperately needs.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Foreign Relations, Germany, Globalization, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

(Religion and Liberty) The Moral Crisis of Crony Capitalism–An interview with Peter Schweizer

R&L: Why did you want to write this book? Tell us what crony capitalism means to you and give us a sense of its greatest threat.

Peter Schweizer: I wanted to write the book because for years I’ve been involved in policy and the philosophical debate in D.C. concerning the growth and size of government. I’ve come to the conclusion that while that debate is important and needs to continue to take place, the bottom line is that whether conservatives or liberals are in charge, the government continues to expand.

We’ve got to change the incentive structure that exists in Washington, and that incentive structure is driven by cronyism, where the state and private sector intersect. If I were to define crony-capitalism, I really use the term cronyism because I don’t think that it speaks of capitalism per se, but cronyism is essentially where economic decisions in terms of who accumulates wealth and who doesn’t, is not based on merit, it’s not based on economic prowess or success or meeting needs in the marketplace. It’s based on political connections and relationships whereby you are able to either manipulate the state to your advantage, and to the disadvantage of your competitors.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, History, Law & Legal Issues, Politics in General, Religion & Culture, Stock Market, The Banking System/Sector, The U.S. Government, Theology

(Der Spiegel) Almut M̦llerРMerkel 3.0: Stasis You Can Believe In

Since the euro crisis began, many governments across Europe have been swept from power. France last year saw a presidential campaign heavily focused on Europe, and calls for alternatives to austerity have grown ever louder. So why is it that Germany, the country key to solving the euro crisis, seems immune to this polarization of views on the future of economic and monetary union?

Partly it has to do with the Greens and the Social Democrats, two opposition parties struggling to differentiate their euro policies from Merkel’s government, a coalition of her conservatives and the business friendly Free Democrats (FDP). Both the Greens and the SPD have supported all major euro rescue measures thus far. Even the Left Party, a stronger critic of the government, recently confirmed its overall commitment to the common currency. There is currently no anti-euro party in Germany parliament, with newcomers such as the euro-skeptic Alternative for Germany, media attention notwithstanding, yet to demonstrate their potential at the ballot box.

One reason is that Germans are still not feeling the pinch of the crisis. On the contrary, they continue to hear good news about strong exports, lower unemployment and economic growth. With the election looming, it is no surprise that the Merkel administration is wary of spoiling this mood of complacency by addressing the downsides of the “German model” for fellow euro-zone member states.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Foreign Relations, Germany, Globalization, Politics in General

(WSJ) FBI Finds Holes in System Protecting Economic Data

The Federal Bureau of Investigation has discovered vulnerabilities in the government’s system for preventing market-moving economic reports from leaking to traders before public release.

Law-enforcement officials found “a number of operational vulnerabilities” involving “black boxes” used by several departments to control the release of sensitive economic data such as the monthly unemployment rate, according to a report by the inspector general at the Commerce Department.

The report said it was possible to subvert the system, which was designed to prevent media companies from sending economic data to traders early.

Read it all(or if necessary another link is there).

Posted in * Culture-Watch, * Economics, Politics, Blogging & the Internet, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Law & Legal Issues, Science & Technology, Stock Market, The U.S. Government, Theology

(Reuters) Anglican leader admits gaffe on "payday" lenders, renews attack

The head of the Church of England said on Friday he was embarrassed to find out that his organisation had invested indirectly in a short-term loan company which he had vowed only days earlier to drive out of business.

The discovery of the relatively small investment was a major setback for Archbishop of Canterbury Justin Welby, after he launched a scathing attack on “payday” lenders who charge high interest rates on short-term loans that are typically repaid when borrowers receive their wages.

But the former oil executive and a member of Britain’s Banking Standards Commission said he would push ahead with his campaign to compete with, and eventually render obsolete, a business he labels “morally wrong”.

Read it all.

Posted in * Anglican - Episcopal, * Culture-Watch, * Economics, Politics, --Justin Welby, Archbishop of Canterbury, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, Personal Finance, Religion & Culture, Stock Market, Theology

(Economist) America’s public finances–The Unsteady States of America

When Greece ran into financial trouble three years ago, the problem soon spread. Many observers were mystified. How could such a little country set off a continental crisis? The Greeks were stereotyped as a nation of tax-dodgers who had been living high on borrowed money for years. The Portuguese, Italians and Spanish insisted that their finances were fundamentally sound. The Germans wondered what it had to do with them at all. But the contagion was powerful, and Europe’s economy has yet to recover.

America seems in a similar state of denial about Detroit filing for bankruptcy…. Many people think Motown is such an exceptional case that it holds few lessons for other places. What was once the country’s fourth-most-populous city grew rich thanks largely to a single industry. General Motors, Ford and Chrysler once made nearly all the cars sold in America; now, thanks to competition from foreign brands built in non-union states, they sell less than half. Detroit’s population has fallen by 60% since 1950. The murder rate is 11 times the national average. The previous mayor is in prison. Shrubs, weeds and raccoons have reclaimed empty neighbourhoods. The debts racked up when Detroit was big and rich are unpayable now that it is smaller and poor.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., City Government, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Economy, Ethics / Moral Theology, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Personal Finance, Politics in General, Taxes, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology, Urban/City Life and Issues