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As European Banks Retreat from the World Stage, China Is Stepping Up

Harvard Business

Since 2007, gross cross-border capital flows have fallen by 65%, and half of that is due to a sharp reduction in cross-border lending and other banking activities, a new McKinsey Global Institute report finds. According to Dealogic, banks have divested more than $2 trillion in assets since 2007. trillion, or 45%. And it is not alone.

Banking 71
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How the Great Recession Changed Banking

Harvard Business

The Great Recession of 2007 to 2009 was under way. That strengthened investment banks’ balance sheets by forcing them to scale back and to change the nature of the risks they take. Investment bank Bear Stearns collapsed. Lehman Brothers toppled. Investment banks used to trade using their own capital.

Banking 71
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The Globalization Backlash Is Reverberating Through Boardrooms

Harvard Business

According to the World Trade Organization, international trade this year will grow at its slowest pace since 2007. Meanwhile the Institute of International Finance forecasted net capital flows for emerging markets in 2015 would be negative for the first time since 1988. at the forefront.

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BIS Slams the Fed; Ridiculous Question of the Day: "Is The Fed Going To Attempt A Controlled Collapse?"

MishTalk

This share was higher than during the pre-crisis period from 2005 to mid-2007. Historical evidence shows that this rarely happens following a balance sheet recession. Financing problems of non-financial corporations in EMEs can also feed into the banking system. Financial cycles differ from business cycles.

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Inequality Isn’t Just Due to Market Forces — It’s Caused by Decisions the Boss Makes, Too

Harvard Business

Scholars from a number of fields have offered explanations for this transition, including globalization, technological change, declining unionization, heightened product market competition, and the rise of finance. What if we changed some of those incentives?

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Pettis Proposes Savings Glut and Income Inequality are Source of Global Imbalances; Mish vs. Pettis: I Respectfully Disagree

MishTalk

This model rests on an understanding of how distortions in the savings rates of different countries have driven the great trade and balance-sheet distortions with which we are wrestling today, just as they have in most previous global crises, including those of the 1870s, the 1930s, and the 1970s. Pettis concludes.

Banking 60
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Shockingly Bad Fiscal Health of Chicago (and the Financial Engineering Chicago Uses to Hide that Fact)

MishTalk

Chicago finances are even worse than I thought which is saying quite a bit because I have written about the sorry state of Chicago finances on numerous occasion. Many of these uses of bond proceeds are not eligible for tax-exempt financing under the federal tax code." Not just financed, but financed with long-term debt.