As I expressed in my piece ” For Civilization, It Is Mises Or Bust ,” it seems that central banks, and the interventionist state in general, are inducing the squandering of capital at a rate that may prove fatal to civilization. We are plummeting fast into what Ludwig von Mises called the “Crisis of Interventionism” , and the only way out of it is through a widespread rediscovery of sound economics among the educated public. In particular, it is imperative that as many people as possible gain as firm an understanding as possible of how central banks induce capital consumption.

View original post here:
Of Time and Marshmallows

[This excerpt from Literature and the Economics of Liberty: Spontaneous Order in Culture discloses some plot details of Willa Cather's novels, especially O Pioneers! ] “Economics and art are strangers.” [1] So said Willa Cather in an essay written deep in her last period of authorship. For once in her life, Cather was wrong — though she was wrong for sufficient reason. Leftist critics had been hounding her about her novels’ alleged lack of relevance to current industrial and social problems.

View original here:
Willa Cather’s Capitalism

January 14, 2010 Center for Economic and Policy Research Co- Director Dean Baker released the following statement on the Obama Administration’s proposal to impose a fee on the financial institutions that received TARP funds. Today, the White House announced a proposal to impose a Financial Crisis Responsibility Fee (FCRF) on the Wall Street firms that have benefited most from the TARP program. Now that executives of the too-big-to-fail banks are again enjoying huge bonuses while the rest of the nation suffers through double-digit unemployment, the Obama Administration is taking action against the banks whose reckless actions wreaked havoc on the U.S

Read more from the original source:
CEPR Statement on President Obama’s Financial Crisis Responsibility Fee

The first public hearings by the Financial Crisis Inquiry Commission were notable for what did not happen. The well-prepared Wall Street bankers faced the cameras with apparent humility, parried Commission clunkers with their own platitudes, and left pretty much unperturbed

Read more:
The Reason Real Change is Needed – Wall Street Maintains a Business as Usual Stance as Public Hearing Begin on the Financial Crisis

One by one, Western political leaders are coming to the conclusion that taxes on the banks need to rise. Last month , the UK proposed a 50% ‘super-tax’ on bonuses, on the grounds that ” investment banks are making exceptional profits as a result of the intervention of government “

Continued here:
Obama proposes $90bn US bank tax

As everyone knows, the economy cannot permanently recover and truly stabilize until the giant banks are broken up. The top independent experts agree that the “too big to fails” are a drain on the economy and put the entire system at risk. The giant banks aren’t lending much to the people who need it

Continue reading here:
If Government Won’t Break Up the Giant Banks, Let’s Do It Ourselves

The troubles of developer Bernard McNamara are receiving a lot of coverage: Stories about it in today’s Irish Times are here , here and here , while McNamara’s interview on RTE yesterday is available here (starts 40 minutes in – hearing him blame professional valuers for him paying too much for the Glass Bottle site was priceless). It is worth noting that, as with Liam Carroll, the fact that Bernard McNamara borrowed some money from outside the network of NAMA-bound banks (in this case, €62.5 million from clients of Davy’s clients) is the only reason that we are able to see the true state of his finances. And, of course, these stories raise the following question: Since Carroll and McNamara are hopelessly insolvent, who exactly is going to account for the eighty percent of NAMA’s loans that its business plan tells us will be paying back in full

Excerpt from: 
Bernard McNamara

This week we look at a topic we’ve been following closely of late—the deterioration of sovereign balance sheets in several advanced economies and the looming threat of debt downgrades. Later this week, RGE will release to our clients a paper examining this issue in greater depth.

Continue reading here:
RGE’s Wednesday Note – Sovereign Debt: The Developed World’s Next Big Problem?

Les Leopold is calling today’s Financial Crisis Inquiry Commission hearing a perp walk , which is as good a description as any.  Digby , still more from Digby , an upbraiding of Digby by a disgruntled Wall Street God, and an SEC suit for Bank of America . All of which has led Juan Cole to make this suggestion: “It’s reported that Goldman Sachs, Morgan Stanley and JPMorgan Chase combined have set aside $47 billion for bonuses,” says an NPR account,according to Cole

Visit link:
Have I mentioned Nasser Kazeminy lately?

January 13, 2010 (Housing Market Monitor) By Dean Baker January 13, 2010 Modifications that involve payments to banks are giving money to banks, not homeowners. It’s been two and a half years since the mortgage crisis became a national issue. In this time, more than 3 million homeowners have lost their homes through foreclosure.

Read this article:
Mortgage Modifications: What Is the Point?

The blog has been worrying for some time about what will happen when governments end their stimulus programmes. It does not share the optimism of financial markets, that these will provide to be the ” escape velocity ” for a quick return to 2003-7 Boom conditions. Today’s data from Germany seems to support its concerns.

See the article here:
Germany sees 5% GDP fall in 2009

I have long pointed out that the too big to fails make very little of their money off of traditional depository functions. For example, last October, I argued : Some very smart people say that the big banks aren’t really focusing as much on the lending business as smaller banks.

Read the original here:
Less Than a Tenth of Bank Of America’s Assets Comes From Traditional Banking Deposits

Joseph Stiglitz says that Wall Street is hyping up the economy to sell more stock. Has it worked? Well, the stock market certainly has rocketed up from its March lows

Continued here:
"We’ve Never Seen this Before – Such a Huge Rally, and the Little Guy Is Out"

Ambrose-Evans Pritchard notes : Fitch expects the combined state and federal debt to reach 94pc of GDP next year, up from 57pc at the end of 2007. Federal interest costs will reach 13pc of revenues, meaning that an eighth of all taxes will go to service debt

Follow this link:
US Will Hit 94% Debt to GDP Ratio Next Year, Surpassing the Level Where Debt Starts Reducing Economic Growth

Last May, I wrote about the rumor that the Obama administration might seize funds from American’s 401k and IRA accounts. Last week, Bloomberg pointed out : The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.

Read the original post:
Converting 401k and IRA Funds Into "Steady Payment Streams"

In due course Ireland needs to have a functioning banking system which is adequately capitalised, does not impose excess costs on the productive economy, and does not enjoy any free insurance on its liabilities. The exit strategy from the guarantee is critical. The banking problem for countries like Ireland is not addressed by the separation of commercial from investment banking – the Irish banks did’nt collapse through casino losses, but through explosive balance sheet growth and huge loan write-offs, a very old-fashioned commercial banking failure.

Read more: 
Punching Below Your Weight and the Exit Strategy

Dean Baker The Guardian Unlimited , January 11, 2009 See article on original website The conventional wisdom (CW) is that Ben Bernanke deserves a second term as Fed chairman because of the extraordinary measures he took to prevent the economy from collapsing into another Great Depression. Bernanke is one of the country’s leading experts on the causes of the Great Depression and therefore was especially well prepared for dealing with the downturn. The promulgators of the CW argue that we were fortunate to have the right person in the job when we faced this crisis.

See more here:
The Case for Bernanke: A Really Bad Joke

One of the themes stressed by the BarCap research is that the funding problems of weak banks are likely to see stronger, better-funded, European banks growing bigger at their expense, thus exacerbating the Too Big to Fail problem. This isn’t a theoretical issue

Here is the original:
Too Big to Fail: A Worsening Problem?

There’s been some discussion   in comments here of some recent Barclay’s Capital research on the European banking sector and it raises a number of issues worth putting on the front page. (The Sunday Tribune also had a couple of nice articles using the Barcap research; one by Ian Guider and one by our old friend Jon Ihle .) The BarCap research is not publicly available but FT’s Alphaville column dedicated three articles to it.

Read more: 
Barclay’s Capital on European Banks

Wall Street banks like Goldman Sachs, Deutsche Bank, Morgan Stanley, as well as smaller firms like Tricadia Inc., and certain of favored hedge fund clients that were tipped off by the banks, reaped huge profits by shorting (betting against) “synthetic” collateralized debt obligations (CDOs) linked to residential mortgages, which the banks created and sold to other clients, according to Gretchen Morgenson and Louise Story in their recent New Times article, “Banks Bundled Bad Debt, Bet Against It and Won.”

View original post here:
Wall Street Firms Bet Against Toxic Subprime Investments that they were Recommending to Unsuspecting Investors

Iceland, ” the first country to be run like a hedge fund “, was the original warning sign of the current financial crisis. Today’s chaos in the country, following its rejection of the €4bn bank compensation deal agreed with the UK and The Netherlands, may similarly prove to be the fore-runner of the next stage in the crisis.

Read more here:
Anger takes centre stage at bankers’ $65bn bonuses

Dean Baker Boston Review , January/February 2010 See article on original website Wall Street bankers, along with the rest of the players in the financial industry, like to think of themselves as swashbuckling capitalists. They battle cutthroat competition with one hand and oppressive government bureaucracy with the other.

The rest is here:
The Big Bank Theory: How Government Helps Financial Giants Get Richer

Today’s Daily Angle comes from  Wikinvest Wire member  Yves Smith of Naked Capitalism . You can read  the full article on NakedCapitalism.com Flash Player 9 or higher is required to view the chart Click here to download Flash Player now View the full NYSE:GS chart at Wikinvest Wow, has someone declared “Forced Out CEO Tries to Salvage His Reputation Month” when I wasn’t paying attention?

Excerpt from:
Hank Greenberg’s Self-Serving, Largely Off-Base Salvo at Goldman

As I pointed out in May 2008: The U.S. has imprisoned 2,500 children since 9/11 as “enemy combatants”, in violation of the Geneva Convention against classifying children as POWs … Pulitzer-prize winning reporter Seymour Hersh says that the U.S.

See the original post:
Torture Is Continuing Under the Obama Administration, Creating More Terrorists and Further Destabilizing the Economy

Pity your poor Purchasing Director this week. They know the West is having a cold winter, but they have done their analysis and can show you slides, such as the one above from Petromatrix , that indicate the US has the highest stocks of distillates since 1999. In addition, the world has 75mb of distillate in floating storage.

Link:
Chemical company CEOs need to act on high oil prices