Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Is Rogue Trader Taking a Fall for Corrupt UBS?

UBS sign featuring logo including three keys

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Swiss bank UBS trader Kweku Adoboli was arrested early Thursday morning and charged with two counts of false accounting and one count of “suspicion of fraud by abuse of position.”  His position was director of the Delta One trading desk at UBS in London, where he had worked as a trader for the past three years and as a technical advisor for two years before that.

The desk specializes in Exchange Traded Funds (ETFs) which allow investors to take a position in an index without having to purchase each stock represented by that index. Trades were profitable when positions were taken that move higher (long) and the index rises, or that move lower (short) and the index declines. Adoboli had learned the system well, and he lived well, paying

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Free Market Economist Cheers End of Borders Books

Borders Books at 1807 Fordham Boulevard in Cha...

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Dr. Mark Perry, economics professor at the University of Michigan and blogger at Carpe Diem joyously announced that the closing of Borders’ last bookstore on Sunday, September 18th “is a glorious, beautiful thing.” He said:

In the rearrangement of resources to serve customers we see the beautiful actions of the market economy reconfiguring the world to provide goods and services that are most wanted and needed in the most effective way.

It was those customers who built Borders into the world’s second largest bookseller from its first location—a humble second-floor used-book shop in Ann Arbor in 1971—into a world-wide operation with over 1,000 stores. It was those same customers who, 40 years later, humbled Borders into bankruptcy and liquidation.

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Competing Currencies Would Expand Freedom, Limit Government

Dollar

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One of the expert witnesses testifying before Ron Paul’s Domestic Monetary Policy and Technology Subcommittee on Tuesday was Dr. Lawrence H. White, professor of Economics at George Mason University. His testimony reinforced the case for Paul’s bill, HR 1098, the “Free Competition in Currency Act of 2011” by outlining its benefits in introducing freedom of choice into the realm of currencies.

White compared competition in currencies to competition in package delivery services among Federal Express, United Parcel Service, and the U.S. Postal Service. That competition has lowered

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Is Rick Perry Right? Is Social Security a Ponzi Scheme?

Rick Perry shows us around his office. He's Te...

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Presidential candidate Rick Perry opined in the first Republican debate that  Social Security is a “failure” and a “Ponzi scheme,” and then reiterated the charge in the second debate on Monday night. At the first debate, Perry said Social Security is a “Ponzi scheme for these young people. The idea…that the current program is going to be there for them is a lie.” When pressed by the moderator, Perry reiterated, saying Social Security is a “monstrous lie to our kids.”

On Monday night Perry refused to back down: “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there. Anybody that’s for the status quo with Social Security today is involved with a monstrous lie to our kids, and it’s not right.” But in his op-ed piece in USA Today on Sunday, Perry backed off, writing instead that

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Ron Paul Calls for Competing Currencies

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On March 15, Rep. Ron Paul (R-Texas) introduced H.R. 1098, better known as the “Free Competition in Currency Act of 2011,” which would repeal the legal tender laws in the United States Code (Section 5103 of Title 31). In its elegant simplicity (the bill is only three pages), it would be the first step to restoring a sound currency by allowing American citizens to choose which currency among competing currencies works best for them.

In his “Texas Straight Talk” for July 11, Paul presented the case for competing currencies and promised that

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Greek Prime Minister’s Promises Ring Hollow

George Papandreou, President of PASOK.

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Prime Minister George Papandreou’s speech on Saturday evening in Thessaloniki was designed to reassure not only his Greek citizens that all would be well but also that those holding Greek sovereign debt would be getting their money back. The government’s top priority, he said, is “to save the country from bankruptcy.”

Said Papandreou: “We have taken the decision to fight to avoid a catastrophe for our country and its citizens: bankruptcy. We will remain in the Euro. And this meant and means difficult decisions…. If this year

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Bernanke’s Last Two Economy-Boosting Tools

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In his talk on Thursday to the Economic Club of Minneapolis, Federal Reserve Chairman Ben Bernanke warned the Congressional Supercommittee not to cut government spending by too much, and that if the economy continues to slide into another recession, the Fed has tools to meet the challenge.

Speaking over the heads of his audience directly to the Supercommittee, Bernanke warned that

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Steve Jobs’ Charitable Contributions: He Gave at the Office

Steve Jobs shows off iPhone 4 at the 2010 Worl...

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Writing for the New York TimesAndrew Sorkin was puzzled that he couldn’t find any evidence that Steve Jobs, Apple’s founder, had given away any part of his significant $8.3 billion personal wealth. What he did find is that when Jobs returned to his old company in 1997, he canceled Apple’s philanthropic programs and they have remained dormant ever since.

Sorkin explained:

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Small Italian Town Bids to Become Sovereign, Prints Its Own Currency

Currency Exchange

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Following the announcement by the Italian Cabinet of additional austerity measures to include plans to combine all 1,963 towns in Italy with populations of fewer than 1,000, some mayors protested by turning in their honorary keys to the city while others began developing marketing plans inviting immigrants to their towns in order to raise their town’s population above the 1,000 minimum and remain independent.

Luca Sellari, mayor of Filettino, had different ideas: he decided to create an independent monarchy with himself as prince, and a new currency, the fiorito (which means small flower) with an exchange rate of

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Legal Fallout From Housing Collapse Continues

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The announcement by the Federal Reserve of an “enforcement action” against Goldman Sachs for engaging in “a pattern of misconduct and negligence” in its handling of home mortgage loans was entirely predictable. Charges of such misconduct go back for months when it was first discovered that mortgages and other mortgage-related documents had been “robo-signed” and foreclosure documents hadn’t been properly reviewed and that Goldman’s Litton Loan Servicing unit took actions “without always confirming that documentation of ownership was in order.”

The ruling requires Goldman to

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Thanks to Hurricane Irene, Business Is Booming!

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According to Laura Chanthalath, manager at High’s Chimney Service, business is booming. Located in Gaithersburg, Maryland, her company might rebuild one chimney a day during the summer when business is slow. But now, thanks to Irene, “We’re completely booked. This has been a big boost to our business because the summer is extremely slow, especially in the chimney business. So it’s been good for us.”

Not counting lost man-hours and production, Irene is estimated to have cost at least $20 billion but, as the Washington Times wrote, 

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Krueger is Obama’s Economic Council Chairman Pick

WASHINGTON, DC - AUGUST 29:  U.S. President Ba...

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This week President Obama will roll out his strategic jobs growth plan in a major speech, and has announced that his new chairman of his Council of Economic Advisers, Alan Krueger, is just the man to help him with it. Krueger comes from the same mold as the man he is replacing, Austan Goolsbee. Goolsbee graduated from Yale, Krueger from Cornell. Goolsbee got his PhD from MIT, Krueger got his from Harvard. Goolsbee worked for the National Bureau of Economic Research, and so did Krueger. Goolsbee is returning to the University of Chicago, while Krueger is leaving Princeton to join Obama.

But the president insists that Krueger will bring him “unvarnished economic guidance…[which is] more important than ever right now. We need folks in Washington to 

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Canada’s Remarkable Economic Recovery

Happy Canada Day!

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In its annual Index of Economic Freedom, the joint effort by the Heritage Foundation and the Wall Street Journal, Canada ranks 6th among the 179 countries of the world, ahead of the United States (9th), the United Kingdom (16th), Japan (20th) and Germany (23rd). Considering ten components of economic freedom (among them: Business Freedom, Fiscal Freedom and Government Spending), the report ranks countries on the degree to which “individuals are free to work, produce, consume and invest in any way they please, with that freedom both protected by the state and unconstrained by the state.”

The latest report from the Canadian Labour Force Survey illustrates the degree to which Canadians have benefited from

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The Postmaster General’s Challenges

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In his report to a Senate subcommittee Postmaster General Patrick Donahoe spelled out clearly why the U.S. Postal Service can’t make any money: too many cooks in the kitchen. Hamstrung and limited by rules and “stakeholders” with differing and often competing agendas, what’s remarkable is that the postal service isn’t deeper in the hole.

Heaven knows, he’s trying. Through agreements finally reached with the letter carrier unions, he has been able, over the past two years, to eliminate 12,000 carrier routes and to consolidate others, saving

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White House to NY: Accept Bank Foreclosure Deal

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New York’s Eric Schneiderman (right) is the only Attorney General who doesn’t like the foreclosure settlement agreed to by the major banks behind the mortgage-backed-securities (MBS) and foreclosure (robo-signing and faked-documents) frauds that helped bring on the economic crisis in 2008. And he is feeling the heat. In exchange for a small fine, the settlement agreement would end the years-long investigations by New York and other states into the frauds, and would prevent them or any of the investors hurt by the frauds from ever bringing additional charges in the future.

But Schneiderman’s investigation into the shady practices behind the development and sale of MBSs isn’t complete, and signing off on such an agreement now would end his efforts and forever protect the banks from further public exposure to their back office practices.

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Bank of America Blames Stock Price Decline on Analyst

The Emperor's New Clothes, by Hans Christian A...

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When Henry Blodgett explained that the reason for the decline in the price of Bank of America’s stock was because Wall Street thinks that Bank of America is worth less—much less—than what the bank itself thinks, bank spokesman Larry DiRita responded, “Mr. Blodgett is making exaggerated and unwarranted claims…[and that] as of June 30th, our tangible book value per share was $12.65.” At the time, BofA stock was selling for $6.42 a share.

The bank’s sharp retort caught Blodgett by surprise:

I was eating a tuna sandwich when I saw the news clip across Bloomberg TV. I almost choked.

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Bernanke’s Invisible QE3 and the Austrian School

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Wall Street professionals’ expectations are modest over Federal Reserve Chairman Ben Bernanke’s highly anticipated remarks at the Jackson Hole symposium this Friday. Unlike last year when the chairman announced the start of his program to purchase government securities in order to keep the economy from slipping into a recession and possibly deflation, known as Quantitative Easing II (QE2), his options now are much more limited. The anticipated bounce in the economy has fizzled, inflation is increasing, the banks are stuffed full of reserves but few are borrowing, and interest rates

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SuperCommittee Member Rep. Fred Upton Is Flexible

Rep. Fred Upton (R-Mich.) made his position on cutting entitlement spending as part of the SuperCommittee’s attempt to reduce the deficit perfectly clear, sort of: “It’s awfully hard to tell someone…who might be 82, that they’ve gotta go back to work, because their benefits are gonna be chopped. That’s not going to happen. We’re not gonna allow that to happen.” Of course, no one is suggesting any such thing.

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Some Unintended Consequences of Raising CAFE Again

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With the President’s announcement of higher mileage requirements—to 54.5 mpg on new cars and trucks sold in the United States by the year 2025—came the usual promises of less dependence upon foreign oil and reduced “greenhouse gas” emissions. Said the White House blog, “Taken together, the standards established under this Administration span Model Years 2011-2015. They will save consumers money, reduce our

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Private Contractors Feeding at the Public Trough

The latest ranking of contractors providing services to the federal government reveals that at least nine of the top 10 are tied to the Department of Defense and took in nearly $70 billion of the government’s money in 2010. Leading the pack as it has for the past 17 years is Lockheed Martin, with $17 billion, followed by Northrop Grumman, Boeing, Raytheon, and General Dynamics.

The top 27 contractors each received at least $1 billion in contracts from the government last year, with Number 100 on the list, Teledyne, getting $170 million. This reflects the enormous growth of government spending in general, and on outside vendors in particular, growing from $207 billion in 2000 to

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.