‘Australia’: somewhere over the rainbow

It seemed fitting to see Baz Luhrmann’s movie Australia on the Australia Day long weekend. The opening credits tell us that it’s about the stolen generations, an aboriginal story set against a backdrop of cattle empires, love and war. It has been promoted as an old style blockbuster and its sheer length and star cast put it in that territory. Continue reading

Top Five – Australians

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Image created by http://www.wordle.net

Happy Australia Day to all. Continue reading

Turnbull Stumbles On Free Market Philosophy

I may be wrong, but quite frankly I think Malcolm will have some real problems explaining his real views about financial and economic reform.

Lets face it, Malcolm Turnbull, a former investment banker and highflyer with Goldman Sachs is undeniably market fundamentalist.  Although both sides are yet to grasp the complexity of the problems we face and how to address the challenges,  Big Mal can’t hide his spots.

Turnbull: let market decide

MALCOLM Turnbull wants Kevin Rudd to allow the market to “run its course” on commercial property values despite government fears the global financial crisis could drive a collapse that would threaten 50,000 Australian jobs.

And the Opposition Leader has accused the Prime Minister of padding bank profits instead of helping small and medium-sized employers struggling to keep afloat in the face of the worsening credit squeeze.

As the global financial crisis continued to dominate politics yesterday, Mr Rudd savaged Mr Turnbull, saying he was “a market fundamentalist” unwilling to act to protect families.

The US problem in a nutshell, and the same one that exists here:

“The current crisis just as convincingly represents a failure of the Big Government/Neoconservative (or, outside the United States, what is called“neoliberal”) model that promotes deregulation, reduced supervision and oversight, privatization, and consolidation of market power in the hands of money manager capitalists.

In the United States, there has been a long-run trend that favors relatively unregulated “markets” over regulated banks that has also played into the hands of neoconservatives. The current financial crisis is a prime example of the damage that can be done by what has been called the “post-regulatory environment” (Thomas 2008).

“The swing toward markets and away from regulated banking greatly increased risk, while at the same time it necessarily extended government assurance to the unregulated institutions for the simple reason that the government cannot allow a financial crisis to threaten the economy.What Bernanke called “The Great Moderation” is also known as the “Greenspan put”—the belief that no activity is too risky because the Fed will intervene if things go bad. Unfortunately, it is Chairman Bernanke who is left to clean up the mess left by years of lax oversight and deregulation that operated to the advantage of Wall Street.”

I also find it interesting that a man who has been at the forefront of financial innovation for 30 years, Richard Bookstaber, would win praise for his forthrightness, honesty and insights about the perils that market fundamentalism (with its love of banking deregulation) has wrought on the global financial system and global economy, by a group of CEOs no less .  Great read by the way.

800 CEO Read.com – Demon of Our Own Design By Richard Bookstaber

Markets, Hedge Funds, and the Perils of Financial Innovation

By: Richard Bookstaber

We chose A Demon of Our Own Design as the best finance & economics book of the year in our first annual 800-CEO-READ Business Book Awards. To see the other winners and finalists, go to our awards website or pick up a copy of In The Books, a magazine devoted to the most notable books of 2007.

Book Description
Inside markets, innovation, and risk.

Why do markets keep crashing and why are financial crises greater than ever before? As the risk manager to some of the leading firms on Wall Street-from Morgan Stanley to Salomon and Citigroup-and a member of some of the world’s largest hedge funds, from Moore Capital to Ziff Brothers and FrontPoint Partners, Rick Bookstaber has seen the ghost inside the machine and vividly shows us a world that is even riskier than we think. The very things done to make markets safer, have, in fact, created a world that is far more dangerous. From the 1987 crash to Citigroup closing the Salomon Arb unit, from staggering losses at UBS to the demise of Long-Term Capital Management, Bookstaber gives readers a front row seat to the management decisions made by some of the most powerful financial figures in the world that led to catastrophe, and describes the impact of his own activities on markets and market crashes. Much of the innovation of the last 30 years has wreaked havoc on the markets and cost trillions of dollars. “A Demon of Our Own Design” tells the story of man’s attempt to manage market risk and what it has wrought. In the process of showing what we have done, Bookstaber shines a light on what the future holds for a world where capital and power have moved from Wall Street institutions to elite and highly leveraged hedge funds.

Over To You