World’s freest economies managed to avoid banking crisis November 1, 2012 IT is usually claimed that the financial crisis was caused by excessively free markets. Those of us who disagree – and emphasise governments’s role in distorting markets, including by subsidising risk via the moral hazard caused by insane taxpayer guarantees and by fuelling credit and property bubbles via excessively loose monetary policy – are in [...]
US mortgage applications slump despite more relaxed loan terms October 31, 2012 US CREDIT conditions on bank loans eased in the three months to October, data showed yesterday, but this improvement was not enough to boost demand for mortgages, according to separate statistics. Banks are dropping both standards and terms, the Federal Reserve said, driven by fierce competition from other banks as well as non-bank lenders. US [...]
Financial regulation is worsening Europe’s demographic time bomb October 31, 2012 THERE is more to Europe’s current challenges than debt, stagnation and unemployment. There is an elephant in the room that could become the biggest issue of all: an ageing population. Europe’s baby boom started in the 1950s and the proportion of retirees relative to the working population, therefore, is beginning to rise. This will inevitably [...]
Lending jumps as government scheme helps October 29, 2012 LENDING to individuals bounced back in September, data out yesterday showed, as the full impact of the Funding for Lending scheme (FLS) began to be felt. Consumer credit climbed £1.2bn in the month, the Bank of England said, in the second month of the government and Bank of England’s plan to boost lending. Analysts said [...]
Federal Prosecutors sue BoA for $1bn in mortgage fraud lawsuit October 24, 2012 BANK of America defrauded the US government in a scheme called “the Hustle”, US federal prosecutors, which are seeking $1bn (£624m) in compensation, alleged yesterday. In the civil lawsuit Countrywide Financial, which Bank of America bought in 2008, is accused of selling thousands of toxic home loans to US government agencies Fannie Mae and Freddie [...]
Greenback eases after Federal Reserve sticks with stimulus October 24, 2012 THE DOLLAR drifted off a two-week peak against a basket of major currencies last night after the Federal Reserve stuck to its stimulus programme known as QE3. Following a two-day meeting, the Fed repeated its vow to maintain rates near zero until mid-2015 and to support growth even as some parts of the economy looked [...]
Weak results sour views of US economy October 24, 2012 US stocks ended lower for a second day yesterday as investors soured on another round of underwhelming corporate results and the Federal Reserve said it would stick to its stimulus plan until the job market improves. The S&P 500 has lost 3.6 per cent over the past five sessions, hurt by weak earnings outlooks and [...]
The Fed has created golden opportunities October 23, 2012 MONETARY expansion has inadvertently given commodity prices a huge boost – but should traders focus on the spot commodity or gold mining equities? With the creation of QE Infinity – the open-ended quantitative easing programme unveiled last month by the US Federal Reserve – traditional monetary policy is now nothing but a speck on the [...]
Making Mr Nice: Don’t cry all the way to the bank October 21, 2012 THE girl was clearly nervous as her job interview got underway. I asked her why Australia had such a high inflation rate and I was incredulous at her answer: “I believe it is mostly ‘imported inflation’”. I pulled a face. “Imported inflation? How could that be possible when our biggest trading partner, Japan, has a [...]
Bank of Scotland fined £4.2m for mortgage errors October 19, 2012 Bank of Scotland (BOS) has been fined £4.2m by the Financial Services Authority (FSA) for errors in its mortgage systems, which led to inaccurate mortgage records for 250,000 customers. During 2004 and 2011, the FSA said BOS kept customer mortgage information in two unaligned accounts, meaning the bank was relying on inaccurate information for “considerable” [...]