Entries Tagged 'Banks' ↓

Evil Back Upon Itself Recoils

The eurozone is playing a dangerous game with Greece. Officials are treating the Greek crisis of payments as a liquidity problem. And that’s true as far as it goes. But Milton’s famous line from Paradise Lost in the title of this post may still be true for Europe

Greece nearly couldn’t pay its debt to the International Monetary Fund (IMF) last week. Greece was able to pay the IMF only by withdrawing its own emergency funds left on deposit at the IMF. Obviously the IMF gained nothing from having Greeks withdraw money they had deposited in the IMF in order to pay the IMF.

Nevertheless, eurozone officials and financial reporters keep referring to Greece’s problem as a payment-on-time problem. That kind of problem is indeed what set off the toppling of the US financial system at the start of the Financial Crisis of 2007.

But it isn’t the same with a sovereign nation like Greece. Continue reading →

What’s Really Wrong with Speculation?

The word “speculator” has often been conflated with “entrepreneur,” and both of them tarred with the brush of “con men”.

However, there is a good connotation for entrepreneurs. They are viewed as risk-takes who create new products and businesses. Speculators are seen as risk-takers solely out to make money. But is speculation really a bad thing?

How do economists view speculators? Here’s how one economist sees them. Continue reading →

The SEC and the Goldman Boys

Trying to keep up with corporate malfeasance, the SEC (Securities and Exchange Commission) is running around suing bankers and brokers like a homeowner during a typhoon putting out pails underneath a leaky roof. But the scandal at Goldman Sachs this week is one that the SEC itself created. Continue reading →