Gillian Tett: Burgeoning Shadow Banking Sector dependent on Regulatory Arbitrage

In the FT today Gillian Tett points out that while the media glare falls on the big banks that are currently reporting their third quarter earnings, the real story is the Shadow Banking sector’s continued colonisation of those sections of the market that were once served by those very same big banks.

Rules that were originally brought in to make banks lend more responsibly and avoid another global financial crisis have created an opportunity for the Shadow Banking sector.

Despite low interest rates and quantitative easing ensuring that there’s plenty of money sloshing around the system, it’s taken innovation and financial engineering to bypass the new rules and kickstart lending to riskier borrowers i.e. small businesses.

Tett says “The real secret of of finance today is that the real credit growth in the US is happening in the world of private capital.”

She calls out the process whereby big banks lend to the Shadow Banking sector which in turn lends to small businesses as being nothing more than ‘regulatory arbitrage’.

As the journalist who warned of the imminent credit derivative fuelled credit crunch in her forensic piece The Dream Machine back in March 2006 – when it comes to regulatory arbitrage, this journalist really knows what she’s talking about.

 

Sir Oliver Letwin used Nobel Prize winner’s ideas to torture innocent Brits

Nudge

Richard Thaler has just been awarded the Nobel Prize for Economics.

He’s best known for co-authoring the bestseller Nudge with Cass Sunstein in 2007.

Sunstein went on to become President Obama’s Regulatory Czar while Thaler provided the ideas for Oliver Letwin’s Behavioural Insights or “Nudge” unit.

Here Letwin, a former Thatcher adviser who wrote Privatising the World while working for N.M.Rothschild, introduces his take on what he refers to as Social Market Economics.

Some call it the Third Way.

Letwin boasts that given that Marxism has been thoroughly debunked ( or so he thought ), it is now possible to be both Deregulatory and Interventionist.

What is interesting about this statement is that he doesn’t mean Interventionist in the economic sense which would involve some form of nationalisation or meddling with the market such as QE.

Here he is talking about PSYCHOLOGICAL INTERVENTIONS a.k.a. NUDGE.

Letwin’s wife Isabel was the head of Legal Services for the Department of Health during the passing of the Health and Social Care act of 2012.

The Act opened up the NHS to Private Health Insurance firm United Health — also known as Optum.

Mrs Letwin was also in charge of Legal Services for the Department of Work and Pensions.

This means she was responsible for overseeing the implementation of austerity in UK Job Centres and for the disabled which involved private firms such as ATOS claiming that people who were sick and disabled were fit for work and then cut their welfare benefits and made them work for free on the work programme.

Letwin and Thaler may claim to be enlightened individuals but the deregulatory interventionism they spearheaded caused much misery and cost many lives.

Kids

Mrs Letwin supported the oversight panel of the Jimmy Savile Inquiry into his activities at Broadmoor Hospital in West London. This in itself is a major conflict of interest given how close the Letwins were to Jimmy Savile’s good friend Mrs Thatcher.

Shirley Letwin, Oliver’s mother, wrote the Anatomy of Thatcherism and Jimmy Savile attended nearly all Mrs Thatcher’s New Year’s Eve parties when she was Prime Minister. It’s unlikely they wouldn’t have met.

On the subject of Tories and Paedophilia Lord Finkelstein has attacked the police for the way they have communicated the investigations into Edward Heath’s private life.

In this article Finkelstein defends Cyril Smith and even Jimmy Savile.

Finkelstein was friends with Greville Janner so he defended him too.

Having moved in Tory and high up Lib Dem circles in the eighties it is inconceivable he wouldn’t have ever heard about what went on.

I don’t believe the modern Labour Party are particularly good at listening to people at the moment or that their economic programme completely adds up.

But to celebrate another torture complicit nobel laureate feels so wrong. Interesting to see how ideologically close the Obama administration were to Cameron, Letwin and even May.

Just because Trump is in charge, I don’t think the bigger picture will really change.

Tory Confusion over Brexit

The Pound looks likely to collapse during the upcoming Tory Party conference

Financial Markets are looking for reassurance.

Instead they have been treated to David Davis.

Amber Rudd will remember her speech about companies having to report the amount of foreign staff on their books.

This policy was a disaster – but the Government don’t seem to have learnt a thing.

As a run on the pound is inevitable, it would be good to hear from Labour how they would react.

Social Cleansing Silicon Valley Style

Today’s FT has an excellent piece on Social Cleansing in Silicon Valley.

It made me think of Jamie Bartlett‘s BBC Show, The Secrets of Silicon Valley.

I’ve only seen episode one in which Bartlett interviews the young head of Y Combinator — a Silicon Valley venture capital company.

The conversation quickly moves from automation and disruption to universal basic income.

Old school socialists believe in economies that produce jobs.

This puts them at odds with Silicon Valley tech entrepreneurs.

But a read of the today’s FT’s Silicon Valley social cleansing report shows how little of its Dublin cash pile or attention span Apple spends on cleaning its footprint.

Forget the filter bubble, the FANGS are only after your blood and your eyeballs so you can share your status and press like while they geographically displace you on a basic income ready for your new role as fresh faced contributor to the Organ Trafficking Market.

Meanwhile the Vampire Squid gets ready for its ‘alumnus’ Gary Cohn’s imminent contribution to Public Service as the likely next head of the Fed where he will run interest rates and QE so as to take getting high off your own supply Zombie Economics to a whole new level.

Have financial cannibalism, nepotism, necrophilia & incest become so normalised that we barely register – let alone resist?

Do Boiling Frogs dream of Red Tape?

Meanwhile Amazon and Whole Foods are slashing food prices in the organic food space while Google team up with Wal Mart.

So now the unemployed can eat organic food with their Basic Income. Of course.

I don’t mean to sound alarmist or anything but in the history of financial and non-financial regulation, has any institution existed that has been able to stand up to these all-powerful conglomerates and actually create anything that remotely protects human beings and the planet from the self destructive logic of pure financialisation?

Would the Kurdish resistance movement in Syria (currently US backed) count?

They’re fighting ISIS who also seem to be US-backed so I see some problems with this simplistic analogy – but good effort.

The UN and the EU seem to be far too captured to put anything forward that will question the logic or values of the Transnational, US and Corporate lobby.

The EU illegal state-aid case against the Apple and Ireland arrangement that allows Apple to avoid paying any tax anywhere is going nowhere.

And all the media is bought up by very stock market players they are supposed to be reporting on.

Bezos bought the Washington Post and Mrs Jobs just bought the Atlantic.

If it’s Breitbart Vs the New York Times, Economist & FT then we will never find a solution.

Bannon isn’t anti-tech. He’s just pro-White People dominating global politics and Economics.

How different is that to the people at Facebook, Apple, Amazon and even Google and Microsoft (the last two firms are run by Indians)?

Hillary was supposed to be the Shareholder / Wall Street candidate.

But Trump is about to appoint a Goldman banker to run the Fed, so what difference does it make?

(Spaking of California, in the UK we seem destined for our very own Snoop Moggy Mogg)

It looks like the Vampire Squid has launched a counter-coup within the White House.

May I suggest revisiting Matt Taibbi’s permanently relevant Great American Bubble Machine.

The existence of tools such as language and numbers ultimately haven’t been used to liberate us from this wanton destruction.

I wonder why.

Perhaps this is how it is all supposed to be – we ought know our place and only ever articulate the unchanging desire to continue conspiring to keep everything moving on its current path..

German Hip Hop, Serial Killers, Jesse Owens, Hitler, und Hardfloor

BSMG

German Hip Hop band BSMG have just done a tune called Jesse Owens.

I don’t speak the language. But the name Owens reminds me of:

Robert Owens

I recall seeing Robert Owens out and about in London 10 years ago – and of course hearing this on old mixtapes:

Jesse Owens

So what did actually happen when Jesse Owens went to the 1936 Berlin Olympics?

It appears the Germans loved him and Hitler didn’t really snub him.

 

But why let the truth get in the way of a good story?

Hans Zimmer

Nice music here – not sure about the content.

Unantastbar

This is a German Public Radio drama about a Neo-Nazi.

I don’t understand German but the production, sound especially, is fiendishly tight.

Haarmann

Production seems to be by Haarmann.

Butcher of Hanover

No relation to the butcher of Hanover I assume — Fritz Haarmann.

en.wikipedia.org en.wikipedia.org

As immortalised by Fritz Lang in M:

A friend and I went to see Normal by Anthony Nielsen earlier this year — about the Dusseldorf Ripper.

Nielsen did a play called The Wonderful of Dissocia. Barnaby Power told me about it. Sounds good. Possibly of therapeutic value to  those of us who wonder if we might be somewhere on ze spectrum.

Hardfloor

All this talk of Deutsch-ness, kaos und order, stumbled me upon this.

 

 

 

 

 

 

 

 

Trump to address opioid crisis


According to the Wall Street Journal Donald Trump plans to combat the US opioid crisis. 

It was only the other day that Janet Yellen, Chairman of the Federal Reserve, mentioned that the opioid crisis was undermining the US labor market. 

How funny that a hundred years after the British imposed the opium war on China that the latest round of opioids are undermining the United States while China is still growing.

Germany’s Fossil Fueled Decarbonisation

German car firms have been hit by recent emission fraud scandals

and the appearance of the electric car:

But where are these new cars going to get their electricity?

Britain’s relying on China and France to deliver the Hinkley Point Nuclear power station as no British firm has put itself forward.

And UK gas prices are going up despite global oil and gas prices being extremely low.

So seeing as Chancellor Merkel has banned the generation of Nuclear power following Fukushima,

Germans could soon find themselves in decarbonised driverless Teslas that run on fossil fuel and French nuclear generated power.

 

 

 

 

God Save our Unforgettable Mall

Here we are crawling the cracks between walls of church state school & factory, all the paranoid monoliths. Cut off from the tribe by feral nostalgia we tunnel after lost words, imaginary bombs.

 

If Socrates was against writing – what would he have made of Amazon?