This comes to you from the Pontignano conference which brings together British and Italian politicians, business, media, and the rest to debate the issues of the day.

We are gathered in the amazing British Embassy residence – a positively palace like establishment with palm strewn lawns, a first century aqua duct, English roses, a butler, staff, large cars and the rest. Recession, what recession? read more

Permalink||(1) Comment

So in the battle for the soul of economics, Nobel prize-winner Paul Krugman declares victory for the New Keynesians.

In a 6,700 word article for the New York Times magazine, Krugman uses the experience of the last two crisis-ridden years not just to pin some of the blame on the Chicago school of free market mathematical economics. He seems to be heralding a new era.

read more

Permalink||(3) Comments

Lehman’s bankruptcy changed the world.

It sent world economy into a precipitous decline that’s matched the Great Depression. It arguably changed the course of the US election. It was a violent economic event that will be debated for decades.

Much of the mystery surrounds the events of the weekend of the 13th/ 14th September 2008, when as one Lehman trader puts it ‘Lehman was put to sleep’.

There have been some excellent accounts of what went on at the offices of the Federal Reserve Bank of New York, the US central bank’s embassy on Wall Street. The US Frontline documentaries are superb.

Yet there is something missing from these accounts: the British angle.

read more

Permalink||(7) Comments

Forget the voices suggesting interest rates might creep up in the near future.

This morning revealed the reality that the Bank of England nearly voted for even more creation of its funny money.

read more

Permalink||(2) Comments

The film on the backlash against Goldman Sachs is top of our most-viewed charts.

To catch-up on the backstory read here, and it’s well worth seeing the film here, if only to see lightning burst out of the sky above Goldman’s new HQ in Manhattan.

But the plot has thickened over the connections between the former US Treasury Secretary Hank Paulson and his former company Goldman Sachs. It centres on the decision made to bailout AIG, which saw some $13 billion of US taxpayers money go to Goldman, its biggest counterparty. On this blog last week I wrote:

‘Fascinatingly, Mr Paulson was aware of the potential for a conflict of interest in those decisions so he went to the lawyers. “It would have been wrong to rescue myself, so I got a waiver from the ethics agreement from the Government ethics office,” he recently told Congress, in little-reported remarks.

That waiver has now been published here after sterling investigative work from the New York Times. It can be viewed here

It was granted by a White House counsel on the day of the decision about AIG, which is not the normal course of events according to the New York Times. The newspaper also found out through freedom of information about the disproportionate number of telephone calls being made by Paulson to Lloyd Blankfein, Goldman’s CEO at the time of the bailout.

Two things I would draw from this. First, why don’t we have similar disclosures about the UK bailouts? Second, Hank Paulson’s forthcoming book should make for rather interesting reading.

Permalink||(2) Comments

A crisis of the motor industry; a crisis of the home industry; a credit crisis; and high petrol prices. Every expressway of the American Great Recession passes through Elkhart Indiana, capital of RV manufacturing (recreational vehicle: basically motorhomes and trailers).

It’s totally devastating for places like Elkhart that we have just visited at the same time as President Obama. And in Elkhart you can see that even as high-level recession indicators ease, the real unemployment crisis is only just beginning.

read more

Permalink||(2) Comments

Rising out of the carnage of the credit storm is the new gleaming headquarters of the titan of post crisis American banking. Goldman Sachs has emerged richer and more powerful than ever, but the Goldman glow is being replaced by a Goldman glare.

It has without doubt been the most significant shift I have noticed in my month in the US. The vitriol piled on Wall Street’s elite financial institute was strong, even before it announced remarkable second quarter results. read more

Permalink||(4) Comments

I awaken to find a note in my inbox declaring that the government is to lay out plans for dealing with Britain’s credit card disaster.

It is in many ways the least mentioned and most unaddressed financial cancer at the heart of the present financial crisis. UK resident currently owe over £230bn on their credit cards, overdrafts and credit loans. read more

Permalink||(12) Comments