Social Democracy for the 21st Century: A Post Keynesian Perspective Thu 2010-07-22 16:00 EDT

Fractional Reserve Banking: An Evil?

Lord Keynes

Hostility to fractional reserve banking is ubiquitous. The Austrians hate it and regard it as a type of fraud. There are even a good many people on the left who despise fractional reserve banking as an evil institution. However, a careful look at fractional reserve banking suggests that it is not necessarily a problem with modern fiat money, a well-regulated financial system, deposit insurance and a central bank ready as the lender of last resort. Fractional reserve banking without these safeguards can be extremely destabilizing and has often led to disastrous bank collapses and depressions...

21st century; evil; fractional reserve banking; Post Keynesian Perspective; social democracy.

Thu 2009-11-19 10:12 EST

Business & Technology | Part one | Reckless strategies doomed WaMu | Seattle Times Newspaper

Drew DeSilver

In its headlong pursuit of growth, WaMu systematically dismantled or weakened the internal controls meant to prevent the bank from taking on too much risk -- the very standards and practices that had helped it grow in the first place. WaMu's riskiest loans raked in money from high fees, but because the bank skimped on making sure borrowers could repay them, they eventually failed at disastrously high rates. As loans went bad, they sucked massive amounts of cash that WaMu needed to stay in business. WaMu's subprime home loans failed at the highest rates in nation. Foreclosure rates for subprime loans made from 2005 to 2007 -- the peak of the boom -- were calamitous. In the 10 hardest-hit cities, more than a third of WaMu subprime loans went into foreclosure.

business; part; Reckless Strategies Doomed WaMu; Seattle Times Newspaper; Technology.

Wed 2009-09-16 19:21 EDT

Corrosive, stinking Chinese drywall may be radioactive - Los Angeles Times

The final years of the U.S. housing boom and a disastrous series of Gulf Coast hurricanes created a golden opportunity for Chinese drywall manufacturers. With domestic suppliers unable to keep up with demand, imports of Chinese drywall to the U.S. jumped 17-fold in 2006 from the year before. That imported drywall is now at the center of complaints of foul odors seeping from walls. Hundreds of homeowners, most in Florida, have also reported corrosion to their air conditioners, mirrors, electrical outlets and even jewelry. State and federal authorities have traced the problems to Chinese-made drywall but haven't yet fully determined the causes. Some Chinese experts, however, suspect that the culprit is a radioactive phosphorus substance -- phosphogypsum -- that is banned for construction use in the U.S. but has been used by Chinese manufacturers for almost a decade.(china, building materials, defective products, health hazards)

corrosive; Los Angeles Times; Radioactive; stinking Chinese drywall.

Tue 2009-06-16 00:00 EDT

China's ``dollar trap'': Lessons from France's 1920s ``sterling trap'' | vox - Research-based policy analysis and commentary from leading economists

China's "dollar trap": Lessons from France's 1920s "sterling trap" | vox - Research-based policy analysis and commentary from leading economists; ``Frances sterling trap ended disastrously. Sterling suffered a major currency crisis, French authorities lost a lot of money, and subsequent policy reactions deepened the Great Depression.''

China's; commentary; Dollar Trap; France's 1920s; leading economists; Lessons; research-based policy analysis; sterling trap; Vox.