Economics @ ITT

Depositors’ Money May Be Seized as Banking Crisis Unfolds

Posted in economics by ittecon on March 17, 2013

Saturday morning we learned that after hours of tense negotiation, Europe has hammered out a 10bn euro “bailout” of Cyprus. I put the term bailout in quotes because the key feature of this deal is the bail-in of Cypriot depositors to the tune of 5.8bn euros, about a third of Cyprus’ GDP. This means that depositors went to sleep on Friday night and woke up Saturday to find that their money, deposited safely in Cypriot banks, had been seized and used to “bail out” the country.

via Hell Breaks Loose in Europe as Banking Crisis Unfolds: Depositors Money May Be Seized | Alternet.

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Big Banks Are Too Big to Jail

Posted in economics by ittecon on March 12, 2013

Pardon my vernacular, but Eric Holder is a pussy, and  the US government is staffed with wimps, excepting a small handful in the company of Bernie Sanders and Elizabeth Warren. It’s such a short list, I should just name all of the allies of the People who stand up to the majority of Corporate puppets, but I’ll leave that for another time.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy,” Mr. Holder told the Senate Judiciary Committee. “I think that is a function of the fact that some of these institutions have become too large.”

via Realities Behind Prosecuting Big Banks – NYTimes.com.

Is Bitcoin Ready for Prime Time?

Posted in economics by ittecon on March 11, 2013

This video doesn’t discuss the Bitcoin hack last year. Is Bitcoin a viable form of money?

Also see these other Bitcoin exploits.

The birth of a new global currency?

Posted in economics, macroeconomics, Trade by ittecon on February 22, 2013

The internationalization of the RMB, as engineered by the Chinese government, is happening at warp speed. At the start of 2012, the RMB ranked 20th among international currencies, according to SWIFT (Society for Worldwide Interbank Financial Telecommunication). It leaped six spots in nine months.

via Business without Borders | The birth of a global currency.

Why Should Taxpayers Give Big Banks $83 Billion a Year?

Posted in economics, Income Redistribution, macroeconomics, Moral Hazard, Policy Issues, Regulation by ittecon on February 22, 2013

On television, in interviews and inmeetings with investors, executives of the biggest U.S. banks—notably JPMorgan Chase & Co. Chief Executive Jamie Dimon—makethe case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?

via Why Should Taxpayers Give Big Banks $83 Billion a Year? – Bloomberg.

The Geithner Doctrine

Posted in economics, Moral Hazard by ittecon on February 7, 2013

Now that Tim Geithner has resigned as US Treasury secretary, it is time to survey the damage wrought from four years of his approach to the financial crisis. The “Geithner doctrine” made the preservation of the largest banks, no matter the consequences, a top priority of the US government. Aside from moral hazard, it has also meant the perversion of the US criminal justice system. The US faces a two-tiered system of justice that, if left unchecked by the incoming Treasury and regulatory teams, all but assures more excessive risk-taking, more crime and more crises.

via The Geithner Doctrine | LinkedIn.

The Unloved Dollar Standard

Posted in economics, International Economics, macroeconomics by ittecon on January 24, 2013

Since World War II’s end, the US dollar has been used to invoice most global trade, serving as the intermediary currency for clearing international payments among banks and dominating official foreign-exchange reserves. This arrangement has often been criticized, but is there any viable alternative?

via The Unloved Dollar Standard by Ronald McKinnon – Project Syndicate.

Collapse of the American Dream

Posted in economics, Policy Issues, Taxation by ittecon on January 19, 2013

Not entirely accurate depiction of the money and banking system, but still interesting.

Money and Banking Quote

Posted in economics by ittecon on January 9, 2013
Henry Ford Quote, 1922

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Why Our Elites Dont Care About Mass Unemployment

Posted in economics, employment, macroeconomics, Policy Issues, Taxation by ittecon on August 3, 2012

The Fed is tasked with reducing unemployment and keeping inflation from running amok, and we’re in a situation with too much joblessness and too little inflation. In more concrete terms, this means that millions of people are in the worst situation of their lives—they’ve lost their jobs, their homes, and maybe even their families. Generating inflation, and encouraging people and businesses to spend money would seem like the rational response to this situation, especially since the Fed has a policy responsibility to its dual mandate, and a moral responsibility to help alleviate the tragedy of mass unemployment.

via Why Our Elites Dont Care About Mass Unemployment | The Nation.