By Lena Deros – The term “bankster” has become trendy recently due to the various financial problems governments and economies are facing. Problems arise and somehow get resolved, but only through financial ruses.
In the 1980s, I was working with one of the world top Investment Banks in Europe. At that time hedge funds, derivatives and all kind of paper products were traded through the capital markets and were the top theme for any sophisticated investor.
One of the most legendary traders in the bank at that time was recruiting the best minds in math and physics from the top schools in the UK to train them and create financial products (derivatives).
The profits that the boys were accumulating were out of proportion to what a normal business person or executive could earn in a normal business, especially as they were just coming out of the university.
Of course, they were all ecstatic. The simplified procedure was based on the real economy. They were creating products 3 or 4 levels over the real assets and these were bought and traded by hedge and pension funds. Since trading was done in big amounts, and on a daily basis, the profits were excellent, but the result when viewed from the perspective of the economy, was that strong minds were deprived from producing real services and products. Instead, profit was created through paper trading. This generated claims to real wealth without creating one potato.
This enhanced inflation and created bubbles. Of course, no banker, financial consultant, or investor wanted to use their logic at the time as they were all plunging into the flood of increased profits without thinking of the immediate future.
It took some years until the surprised sector began to see what it knew all-to-well to be wrong as it was going bankrupt. Everyone was looking for a scapegoat, and most of the solutions were, again, based on 2+2=5 logic. more>
By John H. Cochrane – Public attention in the United States during the first phase of the COVID-19 crisis has been largely on the disease itself, the massive social and economic shock of the shutdown, and how we can orchestrate a safe reopening. But we also need to pay some attention to the financial side of the current situation, and the Federal Reserve’s immense reaction to it. Whatever one thinks of that reaction, it’s important to understand what the bank did, what beneficial and adverse consequences there are, and how our financial and economic system and policies might be set up better in the future.
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By Jonathan Masters and Andrew Chatzky – Since its inception in July 1944, the International Monetary Fund (IMF) has undergone considerable change as chief steward of the world’s monetary system. Officially charged with managing the global regime of exchange rates and international payments that allows nations to do business with one another, the fund recast itself in a broader, more active role following the 1973 collapse of fixed exchange rates, intervening in developing countries from Asia to Latin America. In 2010, it gained renewed relevance as the 
By Haresh Sapra – The next financial crisis will not come from the traditional banking sector. So goes conventional thinking among financial policy makers. The world’s biggest banks are now safer, according to the narrative, thanks to stricter capital requirements and frequent stress tests that have curbed the appetite for extreme risk and tightened up lax regulatory standards.
