|Declining Profits, Fines, and Regulatory Pressure Are Encouraging Big Banks to Forget Commodities
After the banking reforms of the Depression era, U.S. regulators spent much of the 20th century constraining banks from participating in activities that were perceived as being too dangerous to the financial system or that could distort markets. In the de-regulatory political atmosphere of the 1980s and 1990s, however, those barriers were eroded, famously leading to the Gramm-Leach-Bliley Act of 1999. Many observers, ourselves included, believe that its removal of the barrier between investment and commercial banking helped lead to the financial crisis of 2008…
Banks in the Commodities Business
Regulators Begin to Pay Attention
These activities have been under increasing scrutiny for at least a year. Metals warehousing has been a particularly sore point, with industrial users of aluminum (such as brewers and soft drink manufacturers) alleging that the banks have used their dominance in metal warehousing to delay supply and squeeze out extra storage costs, which then find their way into spot metal prices worldwide…
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Larry Summers: A Policy Game-Changer?
After President Obama gave public notice to Chairman Bernanke on the Charlie Rose Show that his days as Fed Chair are numbered, the emerging consensus about his potential replacement has shifted. The former frontrunner, Janet Yellen, who is not only a solid and competent monetary economist, but also the current Fed Vice Chairman, has lost status. Many observers believe that President Obama favors Larry Summers. The Financial Times quoted insiders as saying that a list of qualifications was being drawn up that only Mr. Summers can fulfill…
Few people have lukewarm opinions about Summers. He has a long shadow behind him which effectively curses him in the eyes of people across the political spectrum...
But what can his record tell us about his policy approach and its likely implications?
More News on China’s “Debt Bubble” — And Why it’s Not a Crisis in the Making
IA piece we read in Bloomberg reinforced the message we delivered in this letter last week: that China’s highly-leveraged corporate sector and local governments may eventually produce a bumper crop of nonperforming loans, but that this does not foreshadow a 2008-style financial collapse in China…
What are the negatives?
And what are the reasons not to worry?
Is China going to collapse?
Guild Basic Needs IndexTM
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