[lasseter]

The Australian government is discussing a one off wealth tax, a cyprus affair. I guess we are in a lot more trouble than most think.

[Graeme]

A Generation Of Old People Is About To Change The Global Economy

In the 20th century the planet’s population doubled twice. It will not double even once in the current century, because birth rates in much of the world have declined steeply.

But the number of people over 65 is set to double within just 25 years.

This shift in the structure of the population is not as momentous as the expansion that came before. But it is more than enough to reshape the world economy.

According to the UN’s population projections, the standard source for demographic estimates, there are around 600m people aged 65 or older alive today. That is in itself remarkable; the author Fred Pearce claims it is possible that half of all the humans who have ever been over 65 are alive today. But as a share of the total population, at 8%, it is not that different to what it was a few decades ago.

By 2035, however, more than 1.1 billion people–13% of the population–will be above the age of 65. This is a natural corollary of the dropping birth rates that are slowing overall population growth; they mean there are proportionally fewer young people around. The “old-age dependency ratio”–the ratio of old people to those of working age–will grow even faster. In 2010 the world had 16 people aged 65 and over for every 100 adults between the ages of 25 and 64, almost the same ratio it had in 1980. By 2035 the UN expects that number to have risen to 26.

businessinsider

[Graeme]

The Global Economy: A World Of Acronyms

The world of finance gave birth in 2001 to a new buzzword: BRIC. The word is an acronym for Brazil, Russia, India and China. Jim O'Neill, an economist with Goldman Sachs who's been credited with coining the term, saw those four countries as turbo-charged engines among emerging markets, ones that would give Western economies a run for their money.

O'Neill says when he dreamed up the acronym 13 years ago, people didn't really focus on the potential importance of some of these countries.

"It sort of transformed ... the way, I think, many people thought about the world," he says now.

For a stretch, the fast-growing BRIC economies lived up to the hype. The four countries formed their own economic and political alliance. In 2010, South Africa joined the group.

But O'Neill considered it an interloper, saying South Africa isn't at the same level as the others. The four original BRIC countries were his babies, but like many children, they can disappoint.

"China is the only one of the four that's growing by more than I ever assumed; the other three so far this decade have been disappointing," says O'Neill, particularly Brazil and Russia. "I have joked that if I had to dream the acronym up again today, I'd just call it 'C,' " he says.

While the BRIC engines may be misfiring, other economies have been gaining speed. O'Neill has now come up with a new group of promising emerging markets.

He's coined them M-I-N-T.

"It stands for Mexico, Indonesia, Nigeria and Turkey," he says.

npr

[Graeme]

World economy to strengthen as job growth remains ‘stubborn’ – UN report

The global economy is expected to strengthen over the next two years, despite a downgrade of growth prospects for some developing countries and transition economies, and “stubbornly slow” job growth, according to the United Nations World Economic Situation and Prospects 2014 mid-year update launched today in New York.

“More than five years after the financial crisis, the world continues to struggle with getting the global economic engine back to running at full capacity,” said Pingfan Hong, Chief of the Global Economic Monitoring Unit for the UN Department of Economic and Social Affairs (UNDESA).

“Compared to pre-crisis trends, we have not sufficiently boosted output, trade and employment to their potential levels,” he added.

Global growth has been revised slightly lower from the forecasts presented in the 2014 report. Growth of world gross product (WGP) is now projected at 2.8 per cent in 2014 and 3.2 per cent in 2015, up from 2.2 per cent in 2013. However, this pace of expansion is still low compared to the growth path before the 2008 global financial crisis.

The report warns that risks and uncertainties for the world economy include: international spill-overs from ongoing adjustment in monetary policies by developed economies; vulnerabilities of emerging economies; remaining fragilities in the euro area; long-term unsustainable public finance for many developed countries; and geopolitical tensions.

UN

Global economy hinges on how Fed unwinds QE: CEO

Indian economy to grow by 5% in 2014: UN

[Graeme]

America Is No Longer The World's Most Connected Economy

Openness to the global economy has gained many detractors as a result of the 2008 global financial crisis and subsequent recession. People are unnerved by the volatility of capital flows and worried that their jobs may be outsourced. Yet more countries than ever before are playing on a global stage--and benefiting economically as a result.

A new report from the McKinsey Global Institute and the McKinsey High Tech Practice finds that five types of global flow--goods, services, finance, people, and data and communication--increase global GDP growth by between $250 billion and $450 billion a year or 15 percent to 25 percent of global GDP growth. And the most connected country will see 40 percent more of that benefit than the least connected country. For example, Thailand, which is highly connected to global flows, will disproportionately benefit compared with its neighbor Laos, which has a low level of connection.

After a pause in the aftermath of the financial crisis, global flows are once again expanding (with the notable exception of financial flows, which remain almost 70 percent below their pre-crisis peak) and accelerating as increasingly prosperous emerging economies become more engaged in cross-border commerce and exchange, enabled by the rapid spread of digital technologies. But the participation of countries varies enormously. To provide a snapshot of this evolving landscape of connections, we developed the McKinsey Global Institute Connectedness Index, which looks at 131 countries across the five main flows in 1995 and 2012.

By looking at connectedness to all the major flows--rather than just manufacturing exports--we obtain a truer picture. And, importantly, the MGI index differs from others because it corrects for the size of country. If we don't do this, a large diversified economy looks relatively closed because flows are a modest share of GDP, and smaller countries' connectedness is exaggerated because their flows are a higher share of GDP.


The index reveals some surprises. Who knew that South Korea and Japan, the two established Asian manufacturing export powerhouses, overall rank at only 20th and 21st respectively, lower than most of Europe and the United States and even Saudi Arabia, Malaysia and Poland. The reason is that both countries remain relatively closed to immigration and low on cross-border Internet traffic. China, for similar reasons, ranks only 25th on the index.

Perhaps surprisingly, the United States is no longer the world's most connected economy--those laurels go to Germany. Germany ranks first and the United States third with two smaller economies--Hong Kong and Singapore--coming in second and fourth. The index shows that the trade intensity of the United States--the value of flows relative to the size of its economy--is only one-third of the intensity of Germany, and one-half that of China.

huffingtonpost

[Graeme]

Stiglitz: Tax-Dodging, Corporate Welfare Destroying US Economy

The proven ability of the nation's wealthiest individuals and corporations to collude with the federal government in order to avoid paying massive amounts in federal taxes, says economist and Nobel laureate Joseph Stiglitz, is not simply unfair and unprecedented but is actually destroying the broader economy and the nation's once-heralded prosperity.

In an interview with journalist Bill Moyers that airs Friday in which they discuss his new white paper (pdf) on the same topic written for the Roosevelt Institute, Stiglitz describes how the current tax code actually encourages large multinational corporations to invest abroad, hire people abroad, and keep their earnings abroad.

And because these multinationals use their outsized political influence to literally write the tax code and bend financial regulations to fit their interests, says Stiglitz, it has created a nearly complete distortion of the nation's real economic possibilities. As he explains to Moyers:

commondreams

[Graeme]

GLOBAL ECONOMY-China, U.S. factory growth accelerates; euro zone stumbles

U.S. and China manufacturing activity expanded in May, putting the world's two largest economies on a seemingly firmer path to recovery, but a slowdown in euro zone factory growth boosted expectations of policy easing by the European Central Bank.

The Institute for Supply Management said its index of national factory activity rose to 55.4 in May from 54.9 in April, just shy of the 55.5 expected according to a Reuters poll of economists. ISM had initially said the reading came in at 53.2 for May, but that figure was corrected due to an error in applying seasonal adjustments.

A reading over 50 indicates expansion in manufacturing activity.

Financial data firm Markit said in a separate report its final U.S. Manufacturing Purchasing Mangers Index rose to 56.4 in May from 55.4 in April, following a preliminary reading of 56.2.

Data on manufacturing activity in China meanwhile raised hopes that Beijing's targeted measures to bolster growth are having an impact.

reuters

[Graeme]

UN: Sea-level rise could cost global economy trillions

The likely financial cost of rising sea levels and temperatures to the global economy could rise to trillions of dollars, a UN Environment Programme (UNEP) study has found.

Climate change-induced sea-level rise in the world's 52 small island nations is estimated to be up to four times the global average, threatening economic development and the environment through increased flooding, shoreline erosion, ocean acidification, and damage to infrastructure from extreme weather events.

Higher marine temperatures have already severely affected protective coral reef cover and the expected loss of around 34 million hectares of coral in the next two decades is predicted to cost the international economy just under $12tr, with small island developing states (SIDS) facing the brunt of the bill - despite accounting for less than one per cent of global emissions.

Climate change is expected to negatively impact fishing, which accounts for up to 12 per cent of GDP in some SIDs nations and 90 per cent of animal protein in diets, as well as tourism, and the financial cost of adapting to climate change. Under business-as-usual models, the capital cost of sea-level rise in the Caribbean Community Countries alone is estimated at $187bn by 2080.

UNEP says more than 90 per cent of energy used by SIDS comes from oil imports, pushing up electricity prices and that tapping into the bountiful supply of renewable energy resources can help nations tackle the problem.

But it adds that the rest of the world also needs an immediate shift in policies and investment towards renewable energy and green economic growth is required to avoid exacerbating the impact of climate change.

"SIDS have unique vulnerabilities and require special attention during the evolution of the sustainable development agenda in order to achieve the gains required to lift people out of poverty, create green jobs and provide sustainable energy for all," said UN under-secretary-general and UNEP executive director Achim Steiner.

businessgreen

[Graeme]

World Bank: Climate policies could lift global GDP by trillions every year

Global economic output could rise by as much as an additional $2.6 trillion (€1.9tn) a year, or 2.2%, by 2030 if government policies improve energy efficiency, waste management and public transport, according to a World Bank report released on Tuesday (24 June).

The report, produced with philanthropic group ClimateWorks Foundation, analysed the benefits of ambitious policies to cut emissions from transport, industrial and building sectors as well as from waste and cooking fuels in Brazil, China, India, Mexico, the United States and the European Union.

It found a shift to low-carbon transport and improved energy efficiency in factories, buildings and appliances could increase global growth in gross domestic product (GDP) by an extra $1.8 trillion (€1.3tn), or 1.5%, a year by 2030.

euractiv

[Graeme]

Global Workforce Crisis Puts $10 Trillion at Risk in World Economy, Study Says

Workforce shortages and surpluses worldwide are becoming so acute that they threaten $10 trillion of world GDP over the next one to two decades, according to a new report being released today by The Boston Consulting Group (BCG).

This projected value loss stems from acute shortages and unrelenting surpluses that are being exacerbated by a range of factors, from anemic economic growth and aging populations to low birth rates and restrictive immigration policies.

BCG examined workforce supply-and-demand dynamics in 25 major economies -- including the G20 -- to forecast the extent of labor shortages and surpluses for 2020 and 2030. Overall, by 2020, many countries will still be experiencing a surplus. But by 2030, this surplus will for most have turned into a massive shortfall, according to the report, The Global Workforce Crisis: $10 Trillion at Risk.

"The consequences for many nations' growth and competitiveness are serious," says Rainer Strack, a BCG senior partner and a coauthor of the study. "Governments, companies, and other institutions must begin to take action now if they hope to avert the potentially long-lasting damage to national and regional economies, as well as to the global economy."

The impact of the labor imbalances worldwide will be neither simultaneous nor uniform. Here are some of the crippling shortages and chronic surpluses that the world will face:

yahoo

[Graeme]

IMF may slash global growth forecast, says global economic recovery to accelerate 2015

The International Monetary Fund (IMF) may slash its global growth forecasts on the back of persisting weak investments.

The IMF is preparing to update its economic forecasts this month after predicting April 8 that the global economy will expand 3.6 percent this year and 3.9 percent in 2015.

Christine Lagarde, IMF’s Managing Director hinted at this at the Cercle des Economistes conference in Aix-en-Provence, France, noting that global economic activity should accelerate in 2015 after being gloomy at the start of 2014.

She said, “The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment”

Lagarde’s statement highlights the threats to global economic growth at a time when the European Central Bank is fighting inflation and the American Federal Reserve is decreasing stimulus.

As spending remain dreary, risks remain in the United States amidst an accelerated rebound.

Growth in the U.S. is set to accelerate in coming months and the European recovery is still not as strong as it should be, Lagarde said, adding, that risks to U.S. growth include the ability of the Federal Reserve to taper in an “orderly” manner and that of the Treasury to put in place a medium-term budget framework.

Lagarde said the impact of central banks’ accomodative policies on demand had its limits and countries should also act to help growth – in particular with investment on infrastructure, education and health – as long as their debt would still be sustainable.

businessdayonline

[Keith_McClary]

OECD Economic Policy Papers
Policy Challenges for the Next 50 Years

Table of contents
Key messages .................................................................................................................................................. 6
1. Introduction..................................................................................................................................... 9
2. Key developments in a central scenario: 2010-60 ...................................................................... 11
2.1 2.2 Trade integration is set to grow, implying changes in specialisation even in the
absence of further major trade deals ................................................................................ 17
2.3 Earning inequalities are likely to continue to rise, reflecting skill-biased
technological change and a slower growth in educational attainment ......................... 18
2.4 Fiscal consolidation will require major efforts in several countries .............................. 21
2.5 Fiscal consolidation and structural reforms are needed to rein in global imbalances
in the medium term ........................................................................................................... 22
2.6
3.
Global growth is set to slow over the coming fifty years................................................. 13
Tensions and risks for the global outlook until 2060 ....................................................... 23
Policies to face the growth challenge ........................................................................................... 33
3.1 3.2 Supporting knowledge-based growth................................................................................ 36
3.3 Labour and education policies have to adjust to changing demographics and rising
skill requirements ............................................................................................................... 41
3.3.
4.
A more integrated global trading system can boost growth but would increase
interdependence and pressures to adjust structural policies ......................................... 34
A changing structure of labour demand combined with an ageing labour force will
require emphasis on flexibility and matching issues ...................................................... 42
Policies to deal with rising inequality and pressures on social institutions ............................. 47
4.1 Policy instruments that can lower earning inequality sometimes harm growth .......... 47
4.2 Trade-offs between the distribution of household disposable income and growth
are often less severe but may grow as international integration proceeds ................... 49
5. Policies to address climate change ............................................................................................... 53
6. Policies to deal with the fiscal challenge ..................................................................................... 55
6.1 6.2 Structural reforms can mitigate fiscal pressures and help managing risks .................. 56
6.3
7.
Fiscal challenges could force countries to consolidate through increasingly bad
instruments ......................................................................................................................... 55
Rising global integration may reorder the ranking of fiscal instruments over the
coming fifty years ............................................................................................................... 57
Policies for greater macroeconomic stability over the coming fifty years ................................ 57
7.1 7.2
8.
Rising trade integration will increase interdependence and could require stronger
international coordination on fiscal and structural policies ........................................... 58
Polices to handle current account imbalances and mitigate their impact ..................... 60
Economic policies for a shifting world ......................................................................................... 60

[Graeme]

Is the world economy booming until it hurts?

In recent months, concern has intensified among the world's financial experts and news media that overheated asset markets – real estate, equities, and long-term bonds – could lead to a major correction and another economic crisis. The general public seems unbothered: Google Trends shows some pickup in the search term "stock market bubble", but it is not at its peak 2007 levels, and "housing bubble" searches are relatively infrequent.

But the experts' concern is notable and healthy, because the belief that markets are always efficient can survive only when some people do not completely believe it and think that they can profit by timing the markets. At the same time, this heightened concern carries dangers, too, because we do not know whether it will lead to a public overreaction on the downside.

International agencies recently issued warnings about speculative excesses in asset markets, suggesting that we should be worried about a possible crisis. In a speech in June, International Monetary Fund deputy managing director, Min Zhu, argued that housing markets in several countries, including in Europe, Asia, and the Americas, "show signs of overheating". The same month, the Bank for International Settlements said in its Annual Report that such "signs are worrying".

Newspapers are sounding alarms as well. On 8 July, the New York Times led its front page with a somewhat hyperbolic headline: "From Stocks to Farmland, All's Booming, or Bubbling: Prices for Nearly All Assets around World Are High, Bringing Economic Risks." The words "nearly all" are too strong, though the headline evinces the newfound concern.

theguardian

[Keith_McClary]

Black Rock and PIMCO Sue Banks for $250 Billion
Did the Other Shoe Just Drop?
by ELLEN BROWN

Beyond the legal issues are the implications for the solvency of the banking system itself. Can even the largest banks withstand a $250 billion iceberg? The sum is more than 40 times the $6 billion “London Whale” that shook JPMorganChase to its foundations.

Who Will Pay – the Banks or the Depositors?

The world’s largest banks are considered “too big to fail” for a reason. The fractional reserve banking scheme is a form of shell game, which depends on “liquidity” borrowed at very low interest from other banks or the money market. When Lehman Brothers went bankrupt in 2008, triggering a run on the money market, the whole interconnected shadow banking system nearly went down with it.

Congress then came to the rescue with a taxpayer bailout, and the Federal Reserve followed with its quantitative easing fire hose. But in 2010, the Dodd Frank Act said there would be no more government bailouts. Instead, the banks were to save themselves with “bail ins,” meaning they were to recapitalize themselves by confiscating a portion of the funds of their creditors – including not only their shareholders and bondholders but the largest class of creditor of any bank, their depositors.

Theoretically, deposits under $250,000 are protected by FDIC deposit insurance. But the FDIC fund contains only about $47 billion – a mere 20% of the Black Rock/PIMCO damage claims. Before 2010, the FDIC could borrow from the Treasury if it ran short of money. But since the Dodd Frank Act eliminates government bailouts, the availability of Treasury funds for that purpose is now in doubt.

When depositors open their online accounts and see that their balances have shrunk or disappeared, a run on the banks is likely. And since banks rely on each other for liquidity, the banking system as we know it could collapse. The result could be drastic deleveraging, erasing trillions of dollars in national wealth.

[Graeme]

Global economy one shock away from another crisis

The world is sliding towards another debt-ridden disaster, with the eurozone and China one shock away from a fresh crisis, according to a leading economics consultancy.
Fathom Consulting, which is run by former Bank of England economists, said current levels of low volatility masked systemic risks in the global financial system.

Danny Gabay, director of Fathom, said an oil price shock would be enough to trigger a "hard landing" in China as growth slowed, house prices plummeted and the country's already huge amount of non-performing loans soared.

Mr Gabay drew parallels between China today and America in 2006, when a number of households began to default on their sub-prime mortgages but authorities played down the potential impact on the rest of the global economy.

telegraph

[Graeme]

Destruction of the Dollar Threatens the Global Economy

Forbes Editor-in-Chief and longtime friend Steve Forbes leads off this week’s Outside the Box with a sweeping historical summary – and damning indictment – of the “cheap money” policies of the US executive branch and Federal Reserve. Four decades of fiat money (since Richard Nixon and his Treasury Secretary, John Connally, axed the gold standard in 1971) and six years of Fed funny business have led us, in Steve’s words, to an era of “declining mobility, great inequality, and the destruction of personal wealth.”

And of course the damage has not been limited to the US; it is global. Steve reminds us that “The bursting of the subprime bubble put in motion a collapse of dominoes that started with the U.S. financial sector and European banks and led to the sovereign debt crisis in Europe, the Greek bankruptcy crisis, and the banking disasters in Iceland and Cyprus.” To make matters worse, the fundamentally weak dollar (and fiat currencies worldwide) have contributed a great deal to record-high food and energy prices that are spurring serious social instability.

As I showed in Code Red and as Steve notes here, we now face the looming specter of a global currency war. Steve reminds us that the real bottom line is that

Money is simply a tool that measures value, like a ruler measures length and a clock measures time. Just as changing the number of inches in a foot will not increase the building of houses or anything else, lowering the value of money will not create more wealth. The only way we will ever get a real recovery is through a return to trustworthy, sound money. And the best way to achieve that is with a gold standard: a dollar linked to gold.

Today’s Outside the Box is from Steve’s latest book, which is simply called Money.

I think it’s Steve’s best book in years. Get it for your summer reading. While there is more than one solution to reining in the current abuses by the major global central banks, Steve highlights the problems as well as anyone. This situation really has the potential to end badly. Just this morning the Wall Street Journal noted that “Reserve Bank of India Governor Raghuram Rajan warned Wednesday that the global economy bears an increasing resemblance to its condition in the 1930s, with advanced economies trying to pull out of the Great Recession at each other’s expense.” Rajan is one of the more highly respected economists in the world.

valuewalk

[Graeme]

Ashoka Mody: "Global Economy's Groundhog Day"

While all too many market prognosticators, political pundits, central bankers, and Wall Street economists work overtime at creating and promoting a narrative to fit an improving global growth story, I have not seen the underlying fundamentals here at home or abroad to support that case.

So while I will quickly peruse the views and opinions of the aforementioned lackeys spinning their yarns, I prefer to look elsewhere to find those pursuing the truth.

This morning, I welcome reading the global perspective provided by Ashoka Mody, “visiting Professor of International Economic Policy at the Woodrow Wilson School of Public and International Affairs at Princeton University and a visiting fellow at Bruegel, the Brussels-based economic think tank. He is a former mission chief for Germany and Ireland at the International Monetary Fund.”

Mody pens a fabulous commentary at Project Syndicate as to what I believe is really transpiring along our global economic landscape. Let's navigate.

benzinga

[Graeme]

Paul Krugman: It’s time for “trickle-up” economics!

In his most recent piece for the New York Times, liberal columnist and celebrated economist Paul Krugman argues that the trade-off traditionally understood to exist in a modern economy between fighting inequality and promoting growth is, at least in the American context, no longer relevant.

That’s right, U.S. liberals — you can have your cake, eat it and redistribute the leftovers, too!

“It’s true that market economies need a certain amount of inequality to function,” Krugman grants. “But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.”

To buttress his point, Krugman cites a new report from the ratings agency Standard & Poor’s (hardly a hotbed of socialist radicalism) that finds the U.S. economy’s level of inequality is a drag on economic growth. The report is a summary of other research rather than original work, but Krugman says it’s still important because S&P’s willingness to endorse the view shows “how mainstream the new view of inequality has become.”

Krugman then explains why it is that taxing the rich and redistributing wealth to the poor is no longer a killer for economic growth, noting that “incentives aren’t the only thing that matters for economic growth” and that “[o]pportunity is also crucial.” Without a more level playing field, Krugman explains, the result is “a waste of human resources,” as millions of poor or simply working-class people are denied a chance to flourish.

salon

Why is the Economy Still Weak? Blame Lending Policy that Ignores Efficiency

Bill Irwin of the New York Times asks “Why is the economy still weak?” and blames five underperforming sectors. Housing is not only his leading culprit, but he claims that it exacerbates the weakness of the second-worst sector—durable goods consumption (stuff like furniture and appliances).

So why is housing still weak? Irwin does suggest the beginning of a reason, but does not carry it through in his piece this week. So I will do this next.

Irwin hypothesizes that “It may be that a broader shift is underway in the desire and ability of young adults to get homes of their own.”

But what is that broader shift and can we do anything about it? (The answer to the latter and more interesting question is “Yes.”)

As I pointed out most recently here, young adults tend to prefer location efficient neighborhoods—areas that are walkable and have good transit service, which leads to homeowners paying less out of their budgets for transportation costs. And ALL homebuyers want energy efficiency in their homes, which reduces their energy bills.

These transportation and energy costs are not trivial. The savings from moving to higher efficiency over the course of a 30-year mortgage are larger than the average mortgage itself.

theenergycollective

[Graeme]

When She Talks, Banks Shudder

Bankers are nearly unanimous on the subject of Anat R. Admati, the Stanford finance professor and persistent industry gadfly: Her ideas are wildly impractical, bad for the American economy and not to be taken seriously.

But after years of quixotic advocacy, Ms. Admati is reaching some very prominent ears. Last month, President Obama invited her and five other economists to a private lunch to discuss their ideas. She left him with a copy of “The Bankers’ New Clothes: What’s Wrong With Banking and What to Do About It,” a 2013 book she co-authored. A few weeks later, she testified for the first time before the Senate Banking Committee. And, in a recent speech, Stanley Fischer, vice chairman of the Federal Reserve, praised her “vigorous campaign.”

Dennis Kelleher, chief executive of Better Markets, a nonprofit that advocates stronger financial regulation, said Ms. Admati has emerged as one of the most effective advocates of the view that regulatory changes since the 2008 crisis remain insufficient. “She has been, as one must be,” Mr. Kelleher said, “dogged from the West Coast to the East Coast to Europe and back again and over again.”

Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.

Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.

nytimes

[Graeme]

Watch 23 years of global economic change in 30 seconds

Every year since 1991, the International Labour Organization has published a map of global employment trends, which allows us to see what has actually being going on in the global job market over the past 23 years.

We’ve compiled their annual maps into a handy animated gif, one which shows pretty clearly just how truly global the 2009 recession turned out to be and the slow, uneven recovery that has followed. The darker the country, the higher its unemployment rate that year:

macleans