From the category archives:

finance

Junk Charts #3 – US Business Lending

23 February 2010
Thumbnail image for Junk Charts #3 – US Business Lending

Clusterstock’s “Chart of the Day” has a chart showing business lending “falling like a knife”. But closer examination of the chart reveals that it is in fact quite misleading.

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Blame Greece’s Debt Crisis on the Euro

Thumbnail image for Blame Greece’s Debt Crisis on the Euro 18 February 2010

Ever since they joined the European monetary union and adopted the Euro as their currency, they lost the power to create their own money. The Euro is the real reason Greece finds itself facing a debt crisis.

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Banks, Central Banks and Money

18 December 2009

One misconception about the mechanics of money that I mentioned in my last post is the idea that banks can hoard their reserves at the central bank* rather than lending them out.
Here I will explain why this idea simply does not make sense, but no more casinos and gaming chips. No more senior croupiers and [...]

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Cash on the Sidelines?

12 October 2009

Last week, the Australian Financial Review was doing its best to spruik the ongoing prospects for the Australian share market in their front page article “Cashed-up funds have $70bn to invest”. The article is only available online to subscribers, but this quotation sums it up:
analysts cite the volume of cash stockpiled as a reason for [...]

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Curb Bonuses: They Don’t Work Anyway

28 September 2009

As the G20 starts to get serious about curbing executive bonuses, we can expect banking lobbyists to get more strident in their attempts to resist these incursions into their cosy remuneration practices. This has, in fact, already begun. In a recent example, Deutsche Bank Chief Executive Josef Ackermann was resorting to cliché, claiming that “the [...]

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Pinching Debt Data

22 May 2009

Regular readers of the Mule will know that I am a bit of a data-mining junkie. Whenever I come across an interesting chart I start Googling for the underlying data. But, even with well-honed Google skills, it’s not always possible to find the data. Sometimes it is simply not publically available. I ran into just [...]

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Who is to Blame for BrisConnections?

17 April 2009

In the latest instalment of the ongoing debacle that is BrisConnections, Nicholas Bolton shrugged off the mantle of hero to mum and dad shareholders in exchange for a secretly arranged $4.5 million dollars. I have to admit I would have enjoyed the Schadenfreude of seeing Bolton continue to stick it to Macquarie Bank, but whatever [...]

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AIG and DZ Bank: Dumb and Dumber

16 March 2009

To date, in their efforts to make the Global Financial Crisis (GFC) even more disastrous than it already is, the US Government has pumped an extraordinary $170 billion into the American International Group (AIG), the humbled and humiliated insurance giant. AIG’s biggest problems arose from entering into enormous credit default swap (CDS) transactions. The reason [...]

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How Big Are Australian Banks?

4 March 2009

There is no doubt that the big four Australian banks have navigated the global financial crisis better than many banks around the world, particularly in the US and UK. However, there seems to be a pervasive tendency in Australia to overstate the success of the Australian banks.
A couple of weeks ago, Michael Duffy wrote in [...]

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Time for States to Give Up Borrowing?

24 February 2009

It hasn’t been a very good few months for the Australian State Treasury Corporations. While the ongoing global financial crisis (GFC) has been challenging for everyone dealing in the financial markets, conditions really got difficult for the States when banks began issuing bonds with Commonwealth Government guarantees back in December 2008. Things got worse last [...]

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