Daily Archive: August 5, 2017

Aug
05

A decade after the financial meltdown, its underlying problems haven’t been fixed

The banks have, to a certain extent, changed their ways: but cheap credit, low interest rates and mountains of debt are still with us

Ten years ago this week, the global financial crisis started with a small rumble in France. Local bank BNP Paribas announced it was freezing the assets of three hedge funds with heavy exposures to the US sub-prime mortgage market. A little more than a year later, after the run on Northern Rock and the bailout of Bear Stearns in the US, the full earthquake arrived in the form of the collapse of Lehman Brothers, one of Wall Street’s biggest banks.

We soon discovered the full horrors within the financial system. Banks had taken on risks they did not understand and called the process “innovation”. Credit rating agencies had fallen asleep. Weak or incompetent regulators, encouraged by politicians, had been idle. In the UK, RBS would be mostly nationalised and the ailing HBOS was shoved into the arms of Lloyds TSB with a state bailout to follow.

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Aug
05

Failure to reach Brexit deal ‘suicide’ for UK, says former EU chief

Romano Prodi, once Italian prime minister, says compromise on both sides is essential and that a second referendum would be almost impossible

Britain will be committing economic suicide unless it is prepared to compromise to reach a comprehensive Brexit deal, a former head of the European Commission has warned.

Romano Prodi, the economist and former Italian prime minister, said the Brexit negotiations had made little progress in the first year after the referendum and urged both sides to begin making concessions on trade and immigration to reach a deal.

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Aug
05

Tax wealth or lose election, ex-May aide warns Tories

Will Tanner, formerly a senior adviser to Theresa May, says support for ‘unbridled capitalism’ will cost Tories at the polls

The Tories will lose the next election if they back “unbridled capitalism” and refuse to tax wealth to help the “struggling many”, one of Theresa May’s former advisers has warned.

Higher tax on sales of expensive homes, more rights for workers and curbs on immigration should all be backed by the Tories if they are to reach the voters who feel abandoned by globalisation, according to Will Tanner, the former deputy head of May’s policy unit.

Related: I saw Theresa May at work. A new message is vital to avoid defeat | Will Tanner

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Aug
05

Only a big-spending budget can save us from years of low interest rates

As long as austerity continues to smother the economy it will be impossible to take the necessary steps to restore growth

One of the economy’s lingering tumours, one that needs the financial equivalent of radiation therapy, can be found inside the banking industry.

According to a report last week, the banks continue to harbour bad debts that eat away at their health and prevent them functioning properly.

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Aug
05

The president tweeted it – but is the US economy really great again?

Last Monday, at the start of a chaotic week for his presidency, a defiant Donald Trump claimed there had been an upswing in America’s fortunes. Was he right?

It was a boast that every political leader would be thrilled to make in a single tweet, especially when, like Donald Trump, they are in a hole and looking for a spade to dig themselves out. Trump tweeted: “Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!”, encouraging the world to put aside the unfolding Russia scandal, impotence over North Korean missile launches and the sacking of newly arrived press secretary Anthony “the Mooch” Scaramucci, and look instead at the economic boom apparently unfolding under the president’s administration.

Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!

“Corporations have NEVER made as much money as they are making now.” Thank you Stuart Varney @foxandfriends Jobs are starting to roar,watch!

Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!

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