Monthly Archives: June 2015

Greek debt crisis is the Iraq War of finance – Telegraph

Rarely in modern times have we witnessed such a display of petulance and bad judgment by those supposed to be in charge of global financial stability, and by those who set the tone for the Western world.

The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.

They want to see these rebel Klephts hanged from the columns of the Parthenon – or impaled as Ottoman forces preferred, deeming them bandits – even if they degrade their own institutions in the process.

via Greek debt crisis is the Iraq War of finance – Telegraph.


As late as 1960 in New Zealand, about 90% of commercial trading bank lending was to businesses and only 10% to households. In March 1976 when regulations limiting interest on deposits were revoked, Savings bank deposits totalled NZ$ 4.2 billion while Trading bank deposits totalled just NZ$ 2.6 billion. Trading bank lending was NZ$ 1.8 billion. In New Zealand in 1976 there was about NZ$ 0.3 billion of cash and coin in circulation.[21] As noted above, the figures show that bank lending was largely to supply working funds actually used for the physical production of goods and services. Working funds are not capital in the capitalist sense. They are the productive transaction account money (typically borrowed from banks) used in the productive cycle which is then cancelled when the product is sold. That money forms the dynamic balance of the productive part of M1 in the System for National Accounts (SNA system). Transaction account money is used to build a factory but capital (usually debt) is needed to buy it.

The subsequent period of deregulation in New Zealand amounted to a financial revolution.

By 2003, the debt situation in New Zealand had been reversed. By then, private banks were creating out of nothing more than 90% of household debt [22] compared to 20% in 1985 and 10% in 1960.[23] The fundamental change that resulted from financial deregulation in New Zealand and around the world was that savings based investment was switched to investment using private interest-bearing bank debt. This is shown in Figure 2.

In Figure 2 existing savings in the blue box are no longer being recycled primarily into new economic activity as they were in Figure 1. They are instead typically channelled either directly or through so-called institutional investors into the exchange of existing non-productive assets. In that sense they perform the same function as the Savings and Loan institutions previously described. To the extent the savings end up in institutional transaction and reserve balances secondary lending is on a one to one basis and there is no cascading effect from multiple secondary lending.


Browse statistics by theme – Eurostat

The table presents the stock of liabilities of debt securities (F.3) for the sectors Non-Financial corporations (S.11) and Households and Non-Profit institutions serving households (S.14_S.15). The debt securities are negotiable financial instruments serving as evidence of debt. D

via Browse statistics by theme – Eurostat.

Ερίκ Τουσέν: Τα 242 δις του χρέους δεν πρέπει να πληρωθούν | TVXS – TV Χωρίς Σύνορα

Ποσό περίπου 242 δισ. ευρώ από το ελληνικό χρέος θεωρείται παράνομο και απεχθές και δεν πρέπει να πληρωθεί, σύμφωνα με τον Επιστημονικό Συνεργάτη της Επιτροπής Αλήθειας Δημοσίου Χρέους Ερίκ Τουσέν. H προκαταρκτική έκθεσης της Επιτροπής Αλήθειας για το Δημόσιο Χρέος καταλήγει άλλωστε στο συμπέρασμα ότι «η Ελλάδα όχι μόνο δεν είναι σε θέση να πληρώσει το χρέος, αλλά και δεν πρέπει να το πληρώσει, διότι είναι παράνομο, αθέμιτο και επονείδιστο».

via Ερίκ Τουσέν: Τα 242 δις του χρέους δεν πρέπει να πληρωθούν | TVXS – TV Χωρίς Σύνορα.

Simon Thorpe’s Ideas on the Economy: Deleveraging? What Deleveraging? We need to fix the system…

Clearly, Ireland is in a particularly bad way – everyone seems to be heavily in debt. But a lot of that is due to Financial Sector debt. The Netherlands is also seriously compromised by its Banking sector, as is the UK. For some reason, Germany gets away well, despite having a very large banking sector, with major players like Deutch Bank.

There’s also some detailed analysis of debt structure in the US, illustrated in the following graph. You can see that if there has been a slight decrease in overall debt to the current value of 362% of GDP, that decrease is essentially due to decreased leverage in the financial sector, with a slight decrease in household debt. But that has been offset to a large extend by the increase in GSE debt – Government Sponsored Enterprises. I guess that is tax payer bailouts for things like Automobile manufacturers.

via Simon Thorpe’s Ideas on the Economy: Deleveraging? What Deleveraging? We need to fix the system….

Spiegel: Ψευδής η εικόνα του «Έλληνα συνταξιούχου πολυτελείας» | TVXS – TV Χωρίς Σύνορα

Η εικόνα του «Έλληνα συνταξιούχου πολυτελείας» δεν ανταποκρίνεται στην αλήθεια, υπογραμμίζει γερμανικό περιοδικό Spiegel, επισημαίνοντας στο δημοσίευμα του τη σημασία του συνταξιοδοτικού συστήματος σε μια χώρα όπου τα φτωχά κοινωνικά στρώματα «δεν λαμβάνουν ούτε ένα σεντ κοινωνικού βοηθήματος».

Στο δημοσίευμά του το Spiegel γράφει πως «οι στατιστικές συγκρίσεις που πραγματοποιούν έντυπα όπως η Bild για να σκιαγραφήσουν τον μύθο του «Έλληνα συνταξιούχου πολυτελείας» συσκοτίζουν την πραγματικότητα.

via Spiegel: Ψευδής η εικόνα του «Έλληνα συνταξιούχου πολυτελείας» | TVXS – TV Χωρίς Σύνορα.

Austerity (and inequality) in corrupt countries – a conference with Joe Stiglitz

Stiglitz made an excellent point that according to the efficient market hypothesis money should always flow to where it’s most productive. However because of asymmetric information this doesn’t always happen. Conclusion: markets are imperfect. This effect is even more profound when governments push money into the system. When the Croatian government increases public spending to build infrastructure projects, to subsidize public or private sector firms, or to boost investments, there is an immense adverse selection effect. Money flows to politically connected firms and individuals. This is something I prove empirically for Croatia: public procurement is highly subject to corruption, and the higher the corruption in public procurement, the greater the reelection chances of local politicians (up until a certain cut-off level). The interlink between corrupt politicians and quasi-entrepreneurs is just too big, and is creating a substantial drag on domestic growth. The same thing can be observed in Greece, Italy, or Spain. There is no substantial difference. Corruption is systemic. Conclusion: governments are imperfect.


Debt and (not much) deleveraging | McKinsey & Company

Seven years after the bursting of a global credit bubble resulted in the worst financial crisis since the Great Depression, debt continues to grow. In fact, rather than reducing indebtedness, or deleveraging, all major economies today have higher levels of borrowing relative to GDP than they did in 2007. Global debt in these years has grown by $57 trillion, raising the ratio of debt to GDP by 17 percentage points (Exhibit 1). That poses new risks to financial stability and may undermine global economic growth.

via Debt and (not much) deleveraging | McKinsey & Company.

The Financial Services Club’s Blog

Welcome to The Finanser, the portal to the knowledge base of the Financial Services Club, chaired by Chris Skinner.

To make an enquiry about a speaking engagement, just contact us and, if you are interested in Chris Skinner as a speaker, here’s an illustration of his keynote presentations …

via The Financial Services Club’s Blog.

Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb? | Zero Hedge

Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb?



The latest quarterly report from the Office Of the Currency Comptroller is out and as usual it presents in a crisp, clear and very much glaring format the fact that the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system. Specifically, of the $250 trillion in gross notional amount of derivative contracts outstanding (consisting of Interest Rate, FX, Equity Contracts, Commodity and CDS) among the Top 25 commercial banks (a number that swells to $333 trillion when looking at the Top 25 Bank Holding Companies), a mere 5 banks (and really 4) account for 95.9% of all derivative exposure (HSBC replaced Wells as the Top 5th bank, which at $3.9 trillion in derivative exposure is a distant place from #4 Goldman with $47.7 trillion). The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure. As historically has been the case, the bulk of consolidated exposure is in Interest Rate swaps ($204.6 trillion), followed by FX ($26.5TR), CDS ($15.2 trillion), and Equity and Commodity with $1.6 and $1.4 trillion, respectively. And that’s your definition of Too Big To Fail right there: the biggest banks are not only getting bigger, but their risk exposure is now at a new all time high and up $5.3 trillion from Q1 as they have to risk ever more in the derivatives market to generate that incremental penny of return

via Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb? | Zero Hedge.

Αντιπρόεδρος ΕΛΣΤΑΤ: Με αλχημείες η διόγκωση του ελλείμματος το 2009 | TVXS – TV Χωρίς Σύνορα

Αλχημείες που έγιναν προκειμένου να διογκωθεί το έλλειμμα του 2009 κατήγγειλε ενώπιον της επιτροπής για τα Μνημόνια ο πρώην αντιπρόεδρος της ΕΛΣΤΑΤ, Νίκος Λογοθέτης. Επέρριψε δε προσωπικές ευθύνες στον πρόεδρος της ΕΛΣΤΑΤ, Ανδρέα Γεωργίου. Επιπλέον επισήμανε ότι παράγραφος του πρώτου Μνημονίου φέρεται να λέει ότι τα μέτρα που θα λαμβάνονταν θα προσαρμόζονταν στα στοιχεία που προέκυψαν, δηλαδή στο έλλειμμα του 2009.

Σύμφωνα με τον Νίκο Λογοθέτη, που όπως σημείωσε και ο ίδιος είναι η τρίτη φορά που καταθέτει για το θέμα καθώς είχαν προηγηθεί η Επιτροπή Οικονομικών της Βουλής το 2011 και η Εξεταστική Επιτροπή, «η διόγκωση του ελλείμματος το 2009 ήταν ένας τουλάχιστον λόγος που οδηγηθήκαμε στα μνημόνια».

via Αντιπρόεδρος ΕΛΣΤΑΤ: Με αλχημείες η διόγκωση του ελλείμματος το 2009 | TVXS – TV Χωρίς Σύνορα.

How boosting the income of the poor spurs growth – Agenda – The World Economic Forum

Put simply, boosting the incomes of the poor and the middle class can help raise growth prospects for all.

150616-growth income inequality IMF chart

One possible explanation is that the poor and the middle class tend to consume a higher fraction of their income than the rich. If more money flows to these segments of society, they will consume rather than save, raising demand and spurring aggregate growth in the short run. What this means is that the poor and the middle class are key engines of growth. But with inequality on the rise, those engines are stalling.

via How boosting the income of the poor spurs growth – Agenda – The World Economic Forum.

The Debt Of Nations | Zero Hedge

Following on from our annual update on the wealth (re)distribution of nations, we thought it important to look at the other side of the household balance sheet – that of ‘debt’ to see just how much ‘progress’ has been made in the world. In the aftermath of the credit crisis (and the ongoing crisis in Europe), government debt levels continue to rise but combining trends in household debt highlights countries that have sustainable (and unsustainable) overall debt levels  – and thus the greatest sovereign debt problems. Whether the ‘number’ is from Reinhart & Rogoff or not, the reality is that moar debt is not better and the nations with the highest debt-per-capita may surprise many. Critically, despite the rise in ‘wealth’ from 2000-2008, the ratio of debt-to-net-worth rose on average by about 50% (and in many nations continues to rise).

With the regular occurrence of sovereign debt crises, relatively little attention has been given to the parallel issue of personal debt. Yet household debt has transformed over the past 30 years from low level borrowing mostly securitized on housing assets into wholesale credit seemingly available to anyone for any purpose.

As a consequence, household debt as a proportion of income has doubled almost everywhere, and has on occasion exploded by a factor of ten or more.

Our analysis of household debt highlights a number of facts that may come as a surprise. For example:

  • Canada now has the highest debt to income ratio among G7 countries, and Italy has the lowest.
  • The countries with the highest levels of household debt per adult – Denmark, Norway and Switzerland – are among the wealthiest and most successful;
  • Debt has risen significantly in developed countries over the past decade, but it is nowhere near the scale of the developing world, where almost every country has surpassed the global average of 45% growth during 2000–12.
  • While a high ratio of debt to net worth does not itself signify a problem for a country, it does appear to send a warning signal when combined with rapid growth in household debt. Greece, Hungary and the United Arab Emirates fall within this category and all have had problems with debt in recent years. These problems were not directly related to household debt, but rapid growth in personal debt in a highly indebted country is perhaps indicative of a relaxed credit environment that may have wider implications.
  • Contagion in the Eurozone links Ireland, Italy, Portugal and Spain with the problems in Greece. Our estimates of household assets and debts suggest that Greece is an outlier among Eurozone countries, and that the other countries are better placed to absorb the rise in government debt. However, the deterioration in Ireland’s position since 2008 remains a source of serious concern. Beyond the Eurozone, Hungary and Romania are the countries that need to be most carefully monitored.


Via Credit Suisse:

Rising household debt has been one of the most enduring and widespread economic trends of the past 30 years. Evidence for G7 countries suggests that this phenomenon began around 1975. Before this date, the ratio of household debt to annual disposable income within countries remained fairly stable over time and rarely rose above 75%. By the year 2000, household debt in Canada, Germany, the UK and the USA was equivalent to at least 12 months’ income, and in Japan it equated to 15 months’ income (see Figure 1 below). Household debt in France and Italy started from a much lower base, but the gap narrowed considerably between 1980 and 2000, with the debt to income ratio approximately doubling in France and rising even faster in Italy. In most G7 countries, these trends continued until the financial crisis, and then moderated or reversed.

via The Debt Of Nations | Zero Hedge.

Τα ονόματα των δημοσιογράφων που «εκπαίδευε» το ΔΝΤ θα ζητήσει η Βουλή | TVXS – TV Χωρίς Σύνορα

Τα ονόματα των δημοσιογράφων που «εκπαίδευε» το ΔΝΤ προκειμένου να προωθούν τις θέσεις του καταλλήλως θα ζητήσει η Βουλή. Την σχετική καταγγελία έκανε χθες ο πρώην εκπρόσωπος της Ελλάδας στο ΔΝΤ, Παναγιώτης Ρουμελιώτης καταθέτοντας στην επιτροπή αλήθειας για το χρέος.

Σύμφωνα με τον Παναγιώτη Ρουμελιώτη οι δημοσιογράφοι αυτοί παρακολουθούσαν «σεμινάρια» στην Ουάσιγκτον για να προβάλλουν τις απόψεις του ΔΝΤ αλλά και της Κομισιόν. Αντίστοιχα «μαθήματα» γινόντουσαν και στην Ελλάδα, όπως απάντησε, ο κ. Ρουμελιώτης σε σχετική ερώτηση του μέλους της επιτροπής, Λεωνίδα Βατικιώτη.

Ο Ρουμελιώτης ανέφερε ακόμη ότι δημοσιογράφοι τους οποίους συναντούσε στην Ουάσιγκτον του είχαν αποκαλύψει ότι είχαν κληθεί για να παρακολουθήσουν αυτά τα σεμινάρια.

Επισήμανε δε ότι θα μπορούσε η Επιτροπή της Βουλής να ζητήσει επισήμως να της δοθούν τα ονόματα από τον υπεύθυνο επικοινωνίας του ΔΝΤ, Τζέρυ Ρέϊς.

via Τα ονόματα των δημοσιογράφων που «εκπαίδευε» το ΔΝΤ θα ζητήσει η Βουλή | TVXS – TV Χωρίς Σύνορα.

Karl Polanyi, The Great Transformation and a new political economy

hose leafing through books on political economy, studying the theory and history of economics, 1944 is a pivotal year. Friedrich Hayek published his book The Road to Serfdom and John Maynard Keynes was in the midst of helping to establish the Bretton Woods system. Between the two of them, their economic theories and books helped shape the political and economic policies of the post-war period. However, in the wake of the 2008 financial crisis, there has been a call to find an alternative approach as neither Keynesian nor Hayekian solutions feel suitable for the post-crisis situation we find ourselves in.

There is another political economist whose work might offer a solution, or at least a different perspective. His name is Karl Polanyi (pictured below right) and his most famous work, The Great Transformation, was also published in 1944. The University of Warwick’s Professor Ben Clift, Professor Matthew Watson and Dr Christopher Holmes make the case for why George Osborne, Ed Balls, the members of the European Commission and you might all want to add the book to your reading lists.

via Karl Polanyi, The Great Transformation and a new political economy.

Η γερμανική Bayer δωροδόκησε 800 Έλληνες γιατρούς | TVXS – TV Χωρίς Σύνορα

Μια μεγάλη υπόθεση δωροδοκίας 800 γιατρών αποκάλυψε η εισαγγελία διαφθοράς και ειδικότερα οι εισαγγελείς Αγγελική Τριανταφύλλου και Ιωάννη Σέβη, οι οποίοι διενήργησαν και την έρευνα. Πρωταγωνίστρια και σε αυτήν την υπόθεση διαφθοράς είναι μια γερμανική εταιρεία και ειδικότερα, σύμφωνα με τα Νέα, είναι η Bayer.

Όπως αναφέρει το δημοσίευμα, η δίωξη ασκήθηκε μετά από προκαταρκτική εξέταση που διενεργήθηκε με εντολή της εισαγγελέως κατά της Διαφθοράς Ελένης Ράϊκου μετά από καταγγελίες σύμφωνα με τις οποίες η Bayer Ελλάς με υπάλληλους της αλλά και με τη συνδρομή άλλων εταιριών δωροδοκούσε Έλληνες γιατρούς του ΕΣΥ προκειμένου να συνταγογραφούν τα δικά της σκευάσματα με αντάλλαγμα είτε χρηματικά ποσά είτε άλλου είδους δώρα, όπως ταξίδια κλπ.

via Η γερμανική Bayer δωροδόκησε 800 Έλληνες γιατρούς | TVXS – TV Χωρίς Σύνορα.

Taxpayer support for UK banks: FAQs – National Audit Office (NAO)

There were two types of support provided:

Provision of guarantees and other non-cash support. The main items under this heading are the Credit Guarantee Scheme, Special Liquidity Scheme and Asset Protection Scheme, as well as various other guarantees and indemnities provided to UK banks.

Provision of cash in the form of loans to the Financial Services Compensation Scheme and insolvent banks to support deposits, and the purchase of share capital in Royal Bank of Scotland and Lloyds Banking Group.

Peak support (£bn)

Guarantee commitments 1,029

Cash outlay 133

Total peak support 1,162

These figures set out our calculation of the total peak support provided to banks, including support that was made available but not used by a specific institution. They are calculated by adding all the support schemes together and removing overlaps.

The peak values have been taken from HM Treasury Annual Report and Accounts, Parliamentary supply estimates and NAO reports to Parliament. As each scheme and support facility was available at different times, the total peak support was not all available at a single point in time.

via Taxpayer support for UK banks: FAQs – National Audit Office (NAO).

▶ Greece: Varoufakis and Tsipras celebrate re-opening of state media – YouTube

▶ Greece: Varoufakis and Tsipras celebrate re-opening of state media – YouTube.

Μελανσόν: Ο Σόιμπλε ήθελε να ταπεινώσει τον Τσίπρα στο λαό [ΒΙΝΤΕΟ] | TVXS – TV Χωρίς Σύνορα

Με αφορμή το νέο του βιβλίο, «Το γερμανικό Δηλητήριο», ο ευρωβουλευτής και υποψήφιος για την προεδρία της Γαλλίας Ζαν-Λυκ Μελανσόν συζητά εφ’ όλης της ύλης με τον Στέλιο Κούλογλου. Αναφέρεται στις συνέπειες που έχουν οι παράλογες αξιώσεις μιας χώρας, όπως η Γερμανία απέναντι σε μια χώρα που υποφέρει από τα δεινά της κρίσης χρέους και της κοινωνικής εξαθλίωσης. Ταυτόχρονα, δεν κρύβει το θυμό του για την τακτική του Βερολίνου και ιδίως για τη συμπεριφορά του Βόλφγκανγκ Σόιμπλε απέναντι στην κυβέρνηση του Αλέξη Τσίπρα.

via Μελανσόν: Ο Σόιμπλε ήθελε να ταπεινώσει τον Τσίπρα στο λαό [ΒΙΝΤΕΟ] | TVXS – TV Χωρίς Σύνορα.

Διοικητής Ελπίς: «10.000 αυτοκτονίες σε 5 χρόνια. Η τελευταία ήταν του γιου μου» [ΒΙΝΤΕΟ] | TVXS – TV Χωρίς Σύνορα

«Από την αρχή της κρίσης, το 2011, έχασαν την ζωή τους περίπου 10.000 άτομα, αυτοκτόνησαν. Είναι μια μεγάλη πόλη, όχι ένα χωριουδάκι. Μια μεγάλη πόλη εξαφανίσθηκε από τον χάρτη. Η τελευταία ήταν του γιου μου», δηλώνει σε συνέντευξη του στην ιταλική «Κορριέρε Ντέλλα Σέρα» οι διοικητής του νοσοκομείου Ελπίς, Θεόδωρος Γιάνναρος.

«Δεν ξέρω με ποιον τρόπο κάποιος μπορεί να εξηγήσει αυτό που συνέβη. Πολλά άτομα προσπάθησαν να αυτοκτονήσουν, αλλά τους έσωσαν, ενώ δέκα χιλιάδες έχουν ήδη πεθάνει», σημειώνει ο διοικητής του Ελπίς που πρόσφατα έχασε τον γιο του όταν εκείνος αποφάσισε να βάλει τέλος στη ζωή του πέφτοντας στις γραμμές του μετρό.

via Διοικητής Ελπίς: «10.000 αυτοκτονίες σε 5 χρόνια. Η τελευταία ήταν του γιου μου» [ΒΙΝΤΕΟ] | TVXS – TV Χωρίς Σύνορα.