The dark side of automated financial regimes

Read the rest of Brett Scott's post here from Long + Short magazine. 
Follow him on Twitter: @Suitpossum 

How negative can you go?

The spectre of negative interest rate policy (NIRP) in the Eurozone (at least) was floated at least six years ago. What monetary theorists need to understand is that bank systems weren't (at that time) and in some cases still aren't set up to accommodate such policy ad inifnitum. Not all bank systems are created equal. Even if NIRP for overnight deposits makes loans to businesses and mortgages more attractive (in theory), in practice wholesale funding costs may make it untenable in practice due to a potential liquidity crunch. There are of course a multitude of other factors at work --no amount of monetary massaging will solve the serious distributional issues exacerbating inequality-- but we are loathe to think outside the bounds of what is expressible to the orthodoxy.

Unicorns without bite

For a bite one needs fangs, or more accurately "FANG"s which investors will know refers to the stock darlings Facebook, Amazon, Netflix, and Google which collectively have been a performance outlier amid the equity market sell off since the beginning of 2016. Here is JP Morgan strategist Michael Cembalest's chart on how poorly Unicorns have fared over the past 980 days (to February 16, 2016).

The state of global banking in 10 tweets

Read from bottom to top. 

Hat tip to Robert Went. 

You can follow him on Twitter (@went1955) and follow Paul Mason (@paulmasonnews).

Varoufakis interview with Bastani of Novara Media