January 14th, 2015
in Op Ed
by William K. Black, New Economic Perspectives
George Akerlof and Paul Romer's famous 1993 article "Looting: The Economic Underworld of Bankruptcy for Profit" introduced what criminologists call "accounting control fraud" to the economics literature. The people who control the firm (typically the CEOs) use its seeming legitimacy as a "weapon" to loot shareholders, creditors, and, if the resultant losses are large enough, the U.S. Treasury. Their article discussed several examples of such fraud epidemics, including the savings and loan debacle. Criminologists, the S&L regulators, and over 1,000 successful felony prosecutions of the S&L looters confirmed Akerlof & Romer's insights.
by Dean Baker, Center for Economic Policy Research
The Washington Post article on the December jobs numbers told readers:
"Though there were nascent signs of wage growth in November, the data from December showed average hourly earnings slid backward by five cents, to $24.57.
"That wage decrease over the past month, a surprise to economists, indicates that the nation has not yet reached 'full employment' - a condition in which demand from employers is broad enough that workers have a degree of leverage and a chance to see pay raises."
by James Rickards, Daily Reckoning
Oil below $50 is more than low enough to do an enormous amount of damage in financial markets. Losses are all over the place. We don't know necessarily where they are right now. But I guarantee there are major losers out there and they're going to start to merge and crop up in unexpected places.
The large Queensland liquefied natural gas (LNG) projects currently under construction will begin production over the next two years. Exploiting previously unused reserves of coal seam gas, the LNG produced will be sold at an international price which far exceeds the current price of natural gas being paid by industries and households in Eastern Australia.