The truth at any cost lowers all other costs — curated by former US spy Robert David Steele.
A film by Helena Norberg-Hodge, Steven Gorelick & John Page
‘Going local' is a powerful strategy to help repair our fractured world – our ecosystems, our societies and our selves. Far from the old institutions of power, people are starting to forge a very different future…
FeaturingVandana Shiva, Bill McKibben, David Korten, Michael Shuman, Juliet Schor, Richard Heinberg, Rob Hopkins, Andrew Simms, Zac Goldsmith, Samdhong Rinpoche
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When reform becomes impossible, revolution becomes inevitable.
Phi Beta Iota: This guy is amazing. Visit his website.
Preconditions of Revolution in the USA Today
Gerald Celente: Forecasted Panic in Dec 2007; EIN PDB forecasted crash in Oct 2007
Comment: In October 2007, Earth Intelligence Network's Public Daily Brief (PDB) stated “Economy: Nothing significant, US continues to be bankrupt. Real estate crash in January 2009.” See it for yourself (pdf)
A new study released today by America 2050 identifies the high-speed rail corridors with the greatest potential to attract ridership in each of the nation's megaregions. Corridors connecting populous regions with large job centers, rail transit networks, and existing air markets scored best. The study also recommends that the federal government adopt a quantitative approach to evaluating future investment in high-speed rail.
The 56-page study, entitled, “High-Speed Rail in America,” cites ridership potential as the number one factor in determining if a corridor is suitable for investment, identifies the specific conditions that generate ridership demand, and scores each corridor according to strength in those areas. The top performing corridors in each region determined to have the greatest potential demand for high-speed rail ridership include corridors such as: New York-Washington, DC; Chicago-Milwaukee; Los Angeles-San Diego; Tampa (via Orlando) to Miami; Dallas-Houston; Atlanta-Birmingham; Portland-Seattle; and Denver-Pueblo.
Much More Bank Equity Is Needed
and Is Not Socially Costly
Text of Letter Published in Financial Times
November 9, 2010
The Basel III bank-regulation proposals that G20 leaders will discuss fail to eliminate key structural flaws in the current system. Banks’ high leverage, and the resulting fragility and systemic risk, contributed to the near collapse of the financial system. Basel III is far from sufficient to protect the system from recurring crises. If a much larger fraction, at least 15%, of banks’ total, non-risk-weighted, assets were funded by equity, the social benefits would be substantial. And the social costs would be minimal, if any.
Some claim that requiring more equity lowers the banks’ return on equity and increases their overall funding costs. This claim reflects a basic fallacy. Using more equity changes how risk and reward are divided between equity holders and debt holders, but does not by itself affect funding costs.
Tax codes that provide advantages to debt financing over equity encourage banks to borrow too much. It is paradoxical to subsidize debt that generates systemic risk and then regulate to try to limit debt. Debt and equity should at least compete on even terms.
Proposals to impose a bank tax to pay for guarantees are problematic. High leverage encourages excessive risk taking and any guarantees exacerbate this problem. If banks use significantly more equity funding, there will be less risk taking at the expense of creditors or governments.
Debt that converts to equity, so-called “contingent capital,” is complex to design and tricky to implement. Increasing equity requirements is simpler and more effective.
Continue reading “More Bank Equity Is Needed and Not Socially Costly”
The author is a former chief economist of the IMF and is now a professor at MIT. Chuck
By Simon Johnson, co-author of 13 Bankers (out in paperback on Monday)
Baseline Scenario, 9 January 2011
Highlighted extracts:
The Bill Daley Problem is completely bipartisan – it shows us the White House fails to understand that, at the heart of our economy, we have a huge time bomb.
…largest U.S. banks – have far too little equity and far too much debt relative to that thin level of equity…
Today’s most dangerous government sponsored enterprises are the largest six bank holding companies: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley.
No one can show significant social benefits from the increase in bank size, leverage, and overall riskiness over the past 15 years. The social costs of these banks – and their complete capture of the regulatory apparatus – are apparent in the worst recession and slowest recovery since the 1930s.
Paul Volcker gets it; no wonder he has resigned. Mervyn King, governor of the Bank of England, gets it. Tom Hoenig, president of the Kansas City Fed, gets it. Elizabeth Warren, the tireless champion of consumer rights, gets it. Gene Fama, father of the efficient financial markets view, gets it better than anyone.
This is not a left-right issue – again, look at the list of people who co-signed Professor Admati’s recent letter to the Financial Times. This is a question of technical competence. Do the people running the country – including both the executive branch and the legislature – understand economics and finance or not?
Top bankers, including Bill Daley, have pulled off a complete snow job – including since the crisis broke in fall 2008. They have put forward their special interests while claiming to represent the general interest.
Bill Daley now controls how information is presented to and decisions are made by the president. Daley’s former boss, Jamie Dimon, is the most dangerous banker in America – presumably he now gets even greater access to the Oval Office. Daley is on the record as opposing strong consumer protection for financial products;… [Emphasis added.]
Phi Beta Iota: Our generous and well-intentioned philanthropists appear to be unaware that the Federal Reserve, Morgan Chase, and Citi-Bank have pulled a Bernie Maddoff on them–they think they are being “taken care of” at the very moment when everything they have worked so hard for is most vulnerable to a massive melt-down. The control of the President's mind and time is the ultimate victory for anyone seeking to control the White House. It is “checkmate” against We the People. None of the bureaucracies in the Executive–and certainly not the so-called “intelligence community”– are capable of rescuing the President–he is a happy captive.
First they ignore you, then they laugh at you,
then they fight you, then it appears in the Harvard Business Review,
and then you win while Harvard claims it was their idea…
Mohandas Karamchand Gandhi (apocryphal)
The capitalist system is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community.
Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society’s failures. The legitimacy of business has fallen to levels not seen in recent history. This diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. [Emphasis added.]
Phi Beta Iota: Legitimacy is the foundation of good order and commerce. That Harvard is beginning to get this is a very good sign. The authors also skirt the most interesting point, which is that “who does what” is changing, and we (this they do not address) are moving toward HYBRID networks that accomplish things together, on the basis of SHARED INFORMATION and consensus sense-making. When Alvin Toffler introduced in detail the concept of PowerShift, the most powerful concept he brought forward was that of information being a substitute for time, space, capital, and labor–and violence over the same–he was setting the stage for moving beyond the age of date or information, and into the age of cyber-collaboration to create shared value–what one author calls Non-Zero. NOW we are finally starting to get somewhere…toward what Tom Altee calls Evolutionary Activism driven by advanced cyber-information operations: creating shared value begins with creating shared information.
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Continue reading “Reference: Harvard Discovers “Shared Value””
