Joseph E. Stiglitz :
The euro was supposed to bring growth, prosperity, and a sense of unity to Europe. Instead, it has brought stagnation, instability, and divisiveness.
Category: Politics
UBS Saved €2.5 Billion by Sending a Fax to Brussels
The process for alerting the commission of cartel activity may surprise you: Companies send a fax to Brussels. A dedicated “leniency fax”—the number is +32 2 299 4585, should you be needing it—is the only way, apparently, for the commission to record the official time and date of first contact with whistleblowers in cartel cases. Thus, UBS’s well-timed fax saved it the equivalent of $3.4 billion in fines.
Shutdown Raises a Stink
The whole thing reeks of irony, Dr. Leskey suggests in her diplomatic way. Before the federal government went into its own hibernation, the bugs were at their busiest, “just walking down the hall,” of her laboratory station. Now, she said, “they’re in suspended animation.”
The Default Has Already Begun
The vaseline, in other words, already has sand in it. The global faith in US institutions has already been undermined. The mechanism by which catastrophe would arise has already been set into motion. And as a result, economic growth in both the US and the rest of the world will be lower than it should be. Unemployment will be higher. Social unrest will be more destructive. These things aren’t as bad now as they would be if we actually got to a point of payment default. But even a payment default wouldn’t cause mass overnight failures: the catastrophe would be slower and nastier than that, less visible, less spectacular. We’re not talking the final scene of Fight Club, we’re talking more about another global credit crisis — where “credit” means “trust”, and “trust” means “trust in the US government as the one institution which cannot fail”.
The Fed’s Surprise and Yellen’s Challenge
To ask what Janet L. Yellen, the nominee to succeed Ben Bernanke as Chair of the Federal Reserve, has in store for US monetary policy is to pose the wrong question. The real issue is the decline of the Fed’s policy effectiveness.
Abnormal Capitalist 