Historically, Saudi Arabia has played a stabilizing role in world oil prices, by adjusting its output to ensure global supply is stable. The above graph show how Saudi output increased to lower prices when they were high, and vice versa. However, since July, the Saudis have not responded to newly low oil prices by decreasing output. In fact, the Kingdom have insisted that they would rather bear lower oil prices than decrease their market share (read: be squeezed out by shale).
Category: Economics
The IMF’s Big Greek Mistake
Ultimately, the authorities’ approach merely replaced one problem with another: IMF and official European loans were used to repay private creditors. Thus, despite a belated restructuring in 2012, Greece’s obligations remain unbearable — only now they are owed almost entirely to official creditors.
How a Mystery Trader With an Algorithm May Have Caused the Flash Crash
That same day, Sarao and his firm, Nav Sarao Futures Limited Plc, used “layering” and “spoofing” algorithms to trade thousands of futures S&P 500 E-mini contracts. The orders amounted to about $200 million worth of bets that the market would fall, a trade that represented between 20 percent and 29 percent of all sell orders at the time. The orders were then replaced or modified 19,000 times before being canceled in the afternoon.
About three weeks later, Sarao told his broker that he had just called the CME and told them to “kiss my ass,” the affidavit said.
Birdman : The Pigeon King and the Ponzi Scheme
In a typical Ponzi scheme, like Bernie Madoff’s, the scammer moves money between investors, to pay what he claims are dividends on an investment that doesn’t actually exist. But Galbraith didn’t have a fake investment as a front. He had birds — lots of birds, and those birds created more birds, which he, in turn, was obligated to buy, then house, feed, water and medicate at considerable cost until he could sell them off to someone else. He appeared to miss the whole point of a Ponzi: He took the hidden, fungible fictions that give the scam its power and turned them into tangible liabilities.
Negative Rates and Financial Intermediation
Now that negative and in almost all cases low short term rates are expected to persist, long term bonds and similar duration assets do not offer the ability to pay claims 5, 10, 30 years into the future.
