Thursday , June 22 2017
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Economy

Science ‘v’ Economics criticisms work both ways

Fish counter

These days it is almost a given that economics is not grounded in reality.  As the old joke has it: Q: What do you call an economist who makes a prediction? A: Wrong. The failure of thousands of extremely well-paid economists to see the 2008 crash coming did irrevocable harm …

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How the Tories’ magic money tree works

Tory #magicmoneytree

As the British general election enters its final week social media users have been bombarded by Tory trolls using #magicmoneytree to imply that Labour cannot be trusted on the economy.  The irony here is that the majority of Tory MPs and almost all of their non-banking supporters are entirely ignorant …

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Car finance – the next sub-prime crisis?

Car PCP

Most people think of the 2008 crash as a subprime mortgage crisis.  This is only partially true – and misleadingly so.  The real crisis was in the unregulated “shadow banking” sector where “securitised investment vehicles” (SIVs) are traded.  A SIV is created by repackaging the income from loans (including mortgages) …

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Is the UK economy plunging into recession?

UK recession 2017

The problem with recessions is that you don’t know you’re in one until it is too late.  That is because nobody actually knows what the economy is doing right now.  We have to wait until government and corporate statisticians compile and analyse the data – a process that can take …

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The choice you won’t be offered on 8 June

Democratic Money

Between now and June 8th, the most common question posed by politicians, journalists and drunk men down the pub will be some variant of “how are you going to pay for it?”  From defence spending to international aid and from energy price caps to social care, every electoral promise will …

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British banking collapse predates Brexit

City of London

Forget Brexit, it’s much worse than that according to Paul J. Davies at the Wall Street Journal: “Banks in Britain are still languishing in the doldrums brought on by the financial crisis of 2008. Weak banking activity and low investment returns have caused revenue to shrink, leading to widespread cost-cutting …

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The gig economy is eating Britain from the inside

Gig economy

Believe it or not, the UK is currently experiencing ‘full-employment.’  That is, while 4.7 percent of working age people are officially unemployed, most are what economists used to call ‘frictional’ – they are moving between jobs or moving between work and education. At face value, this is good news.  Indeed, …

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The last act of a dying industry

Dying industry

Within any country’s economy are several critical industries that are considered “strategic.”  In 19th century Britain, for example, coal, steel and shipbuilding were deemed to be essential.  Even today, the ability to construct military vessels is, at least to a limited extent, considered strategic.  Steel has a less obvious position.  …

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The dark shadow that still haunts banking

Shadow Banking

The digital economy has largely been welcomed as a “disruptive force,” obliging old fashioned businesses to compete for custom with new lean internet companies like Uber and Google.  But disruptive businesses in banking may not be the positive development intended.  As Leonid Bershidsky at Bloomberg points out: “In a rivalry …

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