Today's happy links all come in fro Pleiades. They're doozies today.
What happens when you "print money"? you start inflation. So the theory goes. So now that the economy is headed for a deflationary spiral, the Bank of England is considering printing that stuff.
Mervyn King indicated that the Bank is poised to move beyond relying on further interest rate cuts to combat recession. It will give a green light within weeks to a strategy of “quantitative easing”, the modern equivalent of printing money, he made clear.
The Governor’s strong hints that the Bank will shortly embark on this radical action to breathe life into the stalled economy came as he unveiled its bleakest assessment yet of Britain’s prospects.
The Bank ripped up already grim forecasts issued only last November to predict that the economy will shrink at an annual rate of as much as 4 per cent during this summer — more than twice as fast as it had expected just three months ago.
Mr King warned that the odds are now heavily tilted towards an even more brutal decline in the economy than the Bank is now factoring on. On the Bank’s new worst-case scenarios, the pace of the slump could accelerate to see GDP shrinking at an annual pace of up to a staggering 6 per cent.
“The economy is in a deep recession,” the Governor said. “But the length and depth of the recession will depend to a significant extent on developments in the rest of the world, where a severe economic downturn has taken hold.”
You sort of wonder if it's better to have crappy paper assets right now than cash in England. Interest rates are next to zero and if they print money, the cash you have in hand i going to be less valuable. You have a better chance of retaining value if you go and buy some crappy stocks or bonds. It's kind of unfair, but King says it would be worse if they didn't do this. So much for the virtues of saving.
Testosterone Is To Blame?
I find this incredibly sexist, but if it's women putting men down, it's okay.
Iceland, which suffered a humiliating economic collapse, has turned over key levers of finance to women. It now has a female prime minister, and women lead two of its major banks. The Prime Minister, Johanna Sigurdardottir, 66, has vowed to exercise "prudence and responsibility" as she cleans up the male-dominated system that sank the national economy.
"Men, especially young men, made a mess of things," said Kristjan Kristjansson, the Prime Minister's spokesman. "There is a strong discussion that women would have taken a more cautious approach in the financial sector. You could call the financial sector almost like a men's club."
Einar Mar Gudmundsson, an influential Icelandic writer, said: "These financial vikings who made the country bankrupt were in a way like little boys playing with toys." He said he would like both men and women to be involved in reconstructing the nation's financial sector.
In France, Michel Ferrary, a professor at the business school Ceram, recently conducted a study that concluded that French companies with the greatest percentage of women in management have performed the best during the crisis.
For example, he said, BNP Paribas bank, whose management team is nearly 39 per cent female, has weathered the crisis far better than Credit Agricole, where women make up just 16 per cent of managers.
John Coates, a researcher at Cambridge University who once ran a trading desk on Wall Street, recently conducted a novel survey that analysed saliva from 17 male traders in London's financial district. Coates concluded that traders made the highest profits when they had the highest levels of testosterone in their spit. The downside, he said, was that elevated testosterone also led to riskier behaviour, a formula for disaster as well as profit. "If you had more women on the trading floors, you would probably eliminate some of this instability," Coates said.
And at that point I thought this is nuts. It's sort of a post factum argument that just because there were all these men at the helm, it must have been their masculinity that cause the Global Fried Chicken to run amok. I mean, if somebody argued that 17 years of economic growth in Australia correlated with lots of men running the economy and their testosterone levels, there'd be an outcry at the inherent sexism in such a claim - and they'd be right. Post factum, you coul argue that there were't enough Koalas in charge of investment firms, or too many white people who are taller than 5 foot.
Something To Look Forward To
Michael Moore is going to take on Wall Street in his next doco.
Michael Moore, whose documentaries skewered General Motors and the US health-care industry, is searching for current and former bankers to spill the beans on Wall Street for a new film.
An e-mail from Moore today asked for volunteers to "step up as an American'' and shed light on the financial collapse that has resulted in almost $US1.1 trillion ($1.6 trillion) in losses and writedowns globally.
"Wall Street better gird itself,'' said Howard Rubenstein, president of Rubenstein Associates Inc. a New York-based public- relations firms that advises hedge funds, private-equity firms and banks. "The Huns are invading.''
I imagine the dice will be loaded from the start and his leftie sympathies will sit weirdly with his Americanism as he grapples with one of the essential cultural insitutions that define 'America' as we know it. Still, it's a topic worthy of dissection - much more so than A-Rod and steroids or what have you.
Fairly or unfairly, I hope he skewers them all. I doubt those bankers will get much sympathy from anybody.
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