Goldman, Barclays marketing “insurance” products to cut banks capital requirements (FT) The financial innovators who develop these products are just trying to find ways for client’s to dodge regulatory capital requirements in order to boost leverage. Great idea guys. Brilliant. Comment from a source: “Credit rating agencies and banks are collaborating to hide risk, using the same broken diversification models that got us into this mess. And nobody will do anything about it anytime soon.”
U.S. lurching toward debt explosion with long-term interest rates on course to double (Telegraph) Another take on the “stimulus won’t stimulate” argument made here. Exploding deficits should, eventually, lead to much higher interest rates. This will more than offset any positive impact from stimulus spending. (ht Aaron Krowne)
Wells Fargo to beef up securities business (WSJ) Now that trading profits are up for Wall Street, another bank wants to set up as a dealer in the casino.
Get ready for 14% unemployment (RealClearMarkets) Extrapolating from stats for private business investment, the author argues the unemployment rate is going much higher.
India says world economy too reliant on dollar (Reuters) Previously India had avoided Chinese/Russian calls to move away from the dollar. Can you blame them for chaning their mind, especially now that we’re talking about a third debt-financed stimulus package?
Court ruling clears path for GM to restructure (NYT) Chrysler was in and out of bankruptcy in 42 days. GM may be able to keep to just as tight a schedule.
Ryanair wants to make passengers stand (Telegraph) Imagine riding a plane while strapped to a bar stool. That’s what the Irish airline is considering…
Why incompetence spreads through big organizations (MIT Tech Review) “All new members in a hierarchical organization climb the hierarchy until they reach their level of maximum incompetence.” (Did I already link to this? Apologies to readers if so)