Busted: Bankers and The Global Economy

September 16, 2009

Double Dip Recession or Recovery?

Filed under: corporatism, credit, economy — Tags: , , , , , , , , , , , , , — digitaleconomy @ 7:55 am

Global industrial production now shows clear signs of recovering at least when comparing the current ‘recession’ with the Great Depression. During that time, a decline in industrial production continued for a full three years. The question remains regarding final demand for this increased production. Will renewed demand actually materialize or did the U.S. government create a small bubble with $2 billion “Cash for Clunkers” program? Will consumer spending, especially in the US, remain weak, causing the increase in production to go into inventories? If production simply falls into inventories, this will result in sharp cut backs and result in a return to recession. The labor market combined with ailing business credit and finance in the U.S. does not hold out much promise for an end to the recession. Will the Obama administration jigger with credit markets to somehow expand credit markets?

Global stock markets and investment banking and profiteering have mounted a sharp recovery since the beginning of the year. Still, the decline in stock market wealth remains even greater than at a comparable stage of the Great Depression. The downward spiral in global trade volumes has abated. This may be due to the return of the old ways of doing business that President Obama has decried publicly in the last few days. Data exists for June that shows a modest uptick in trade, but  the collapse of global trade remains dramatic by the standards of the Great Depression.

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May 30, 2008

Bankers Creating New Stock Exchange

Filed under: banking, investment, money — Tags: , , , , , , , — digitaleconomy @ 12:04 am

Amidst concerns about rising trading costs in the London Stock Exchange and other European exchanges, investment banks are coming together to create a new system for trading in shares. The new system is to be owned by Citigroup, Morgan Stanley, Goldman Sachs, Merrill Lynch, UBS, Credit Suisse and Deutsche Bank.

Big investment banks are not one to rest on their laurels when it comes to formulating new ways to make money in today’s financial marketplace. The consortium of investment banks have joined hands to create a new European system for trading shares that they expect to rival Europe’s top stock exchanges. The bankers may bring the system online before a new European Union directive on trading in financial products comes into force next month. The new investment banking enterprise is expected to prosper in part because the cost of trading in the US is said to be 80 percent lower than in Europe.

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