Simon Mohun: Money, Finance and Crisis

Simon Mohun

  • affiliated with Queen Mary’s University, London.
  • Focus on income inequality and profitability

 

Money and banking

  • Traditional money theory is a progression from barter to money to credit.
  • But incorrect theory: in C19 France used all three
    • Rural economy= barter
    • National economy = silver (eg trade on roadside etc)
    • International economy = bill of exchange
  • Medieval tally sticks were used as a way of recording debts. Wooden sticks inscribed and split in half so debtor would hold the “foil” and the creditor would hold the “stock.” The tally was worth the agreed money in it’s own right so that soon it became circulating until it was utterly separate from the original transaction.
  • The development of central banking followed the challenges between private/ monarch and state money
    • UK 97% “broad money”
  • Lending creates deposits to lend

Bernanke 2008/2015

  • testified to US Senate FCIC “worst since Great Depression but actually privately thought it was the  “worst crisis in human history” due to the number of insitutions involved and the broad effects it had

 

Explanations of the financial crisis

  • misaligned incentives,
  • deregulation leading to excessive leverage
  • In the whole sale money markets,
    • bondholders wanted cash (liquidity)
    • cash holders wanted bonds (security)

At the end of the Great Depression, the banking industry was heavily regulated. The 3-6-3 rule dominated, leading to monopoly profits.

At end of 70s the deposit and loan sides of banking became under pressure:

  • on the corporate loans side, junk bonds (JB) and commercial bonds (CB) got issued because…(?)
    • jb- short term
    • cb- long term
  •  deposit side, deposit rate ceilings meant that banks lost profits to the money market mutual fund MMMF,  due to JB and CB.
  • there was a demand for bank liquidity due to falling bank profitability.

therefore in 80s the markets became deregulated.

Securitisation

  •  debt generating a flow of payments can be securitised and transformed into an asset to be traded as a bond.
  • bonds depend on the underlying source of payments (eg mortgage payments)
  • is a large and growing market:
    • 1985= $1.2 bn
    • 2005= $1 949.9bn

Restructuring of banks 80s

  • originate to hold models became orginate to distribute models

In financial crisis, Deuche bank securitised the purchase of credit default swaps. Ie they bet against those who bet against deuche bank.

Link to inequality:

  • 1% income earners as a proportion of GDP increased from 1987 to 2008 worldwide, and so became large holders of cash
    • Cash could be spent on
      • commercial papers,
      • commeical bank deposits
      • US treasury (China and SE Asia held stocks too high)
  • Increase in cash pools due to inequality

Neoliberalism financial system

  • origins 70s-79
  • ascension: 79-89
  • decline 89-07
  • collapse: 07-16

US house bubble caused the crisis via repo

  • repo= repurchase agreement of a sale with securities with the agreement that the same security will be bought back at an agreed higher price in the short term future.
  • 1 borrowers could not refinance
  • 2 cash flows were under complex securities and dried up
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52 books to read

  1.  Pride and Prejudice
  2. Lord of the rings
  3. Jane Eyre- C Bronte
  4. Harry Potter
  5. To Kill a Mocking Bird
  6. The Bible
  7. Wuthering Heights
  8. 1984- G Orwell
  9. Animal Farm – Orwell
  10. His Dark Materials P Pulman
  11. Great Expectations C Dickens
  12. Little Women- Lousia May Alcott
  13. Tess of the D’ubervilles- Thomas  Hardy
  14. Catch 22- J Heller
  15. Complete works of Shakespeare
  16. Rebecca- Daphne du Maurier
  17. The Hobbit
  18. Birdsong- Faulks
  19. The catcher in the Rye
  20. The hitchhikers guide to the galaxy
  21. The time traveller’s wife
  22. Middle match
  23. gone with the wind
  24. the great gatsby 
  25. Bleak House- Dickens
  26. Wart Peace- Tolstoy
  27. Brideshead revisited Waugh
  28. Crime and punishment0 Dostoyevky
  29. Grapes of wrath
  30. Alice in wonderland
  31. The wind in the willows
  32. David copperfield
  33. Anna Karemina
  34. The Chronical of Narnia
  35. Emma- Austen
  36. Persuasion – Austen
  37. Lion Witch and the Wardrobe
  38. The Kite runner
  39. Captain Corelins Mandolin – Berniere
  40. Memories of Geishen – Golden (A)
  41. Winnie the Pooh
  42. The Da Vinci Code- D Brown
  43. 100 years of Solitude G G Marquez
  44. A prayer for Owen meany
  45. The woman in white- W Collins
  46. Anee of Green Gables- LM Montanery
  47. Far from the Maddening Crowd- T Hardy
  48. The Handmaid’s tale- M Atwood
  49. Lord of the Flies- W Golding
  50. Attonement L McEwan
  51. Life of Pi
  52. Dune- F Herbert

Week 7

There is so much that I need to say but I don’t even know how to go about it. I feel like an inadequate person; not genuine, not trustworthy; nothing.

I feel like I have no strengths, no identity. No morals. No values. How do I go about making values? I feel like I have become a massively changed person. With a solid friendship group I didn’t have to try making friends. I already had enough of a social life to satisfy myself. On reflection I’ve realised that the only thing I did was not make enough of an effort.

A current trend is that I don’t make an effort with people. I make promises and then don’t follow through with them. I make plans and then cancel. Why is this? Am I scared about making the wrong impression? I need to stop worrying about life but live it without the fear of other people judging me.

I feel like people are talking about me, don’t trust me and genuinely want to avoid me because I lack a social circle at the moment. I don’t know what to say to people.

 

Another thing I have realised I need to work on is my typing pace. I simply do not type fast enough to keep up with what is being said. I have a wonderful laptop but I cannot make the best use of it. I also lack the language required to write anything coherent let alone speak. Alas my communication verbal and written is shoddy quality. It’s a real shame that I have not managed to sort this out before university. I really don’t understand how this all happened. Things were so good and now so bad.

  • signed up to touch typing classes
  • asked to volunteer at the food bank on Saturdays _WHY??
  •  Need to start recording who I talk to and what I say!

I have so many formatives to do.

 

Also, major issue, people keep saying I look very beautiful and look gorgeous. How can I stop listening to them. It’s not healthy at all.

I’m eating more Marylands.

 

Ankita wants to take a gap year, do international business at masters level and go travelling.

Kaira also wants to take a year out to travel to

Aurelie is into environmental charities, played diplomacy, has done a lot of experimental things with guys in the past and as a result is much more mature than most.

went for a walk with ed and Ankita, I feel like I am not at their level. Boarding school or no?

Miller’s Crossing 24 Sept 2017

..A big screen classic.

Went to Japanese festival with old primary school friend T in Trafalger Square.

Tried my hand at Japanese Calligraphy. Jelly seems to be a popular dessert choice: Jelly and red kidney bean paste (Yokan) was delicious, a savory flavour for persons with a less than sweet tooth.

Went to the BFI to see Miller’s Crossing, after trying to see El Cercle. Latter was fully booked but we ended up eating out at Wagas and touring the Tate.

FullSizeRenderThis means SHINE! SHINE BRIGHT LIKE A DIAMOND!

 

IMG_8350.JPGIMG_8351.JPG

10km Surrey Hills 24 Sept 2017

For the first time in my life I signed up to an organised 10km run.

I signed up because I was influenced by a *stranger*, who will be going to Dhm, said he was doing the North Run (21km/13.1miles). I replied I was doing a 10km and immediately began looking for one.

On reflection, being so vulnerable to other people’s activities concerns me. I need to be my own individual.

Who LEARNS from others, but does not copy.

I need to start directing my own life. I’m 18.

I need to start adult.

I need to share my activities with my friends and family more widely.

 

As I ran, I noticed I was going at my own pace. Fast enough to feel the burn but slow enough to finish the race. I only trained the night before. 9.6km at 10.30pm on 23-09-2017. Not because I didn’t want to train, but because the arch of my right foot feels painful. As a result I am going to a podiatrist on tuesday to figure something out.

It felt amazing to run again.

Through the forest, the confer trunks blocking all but rays of sunlight that fell onto the path, creating a golden carpet. Silence.

Time was 1:10:11 for 10km. There’s only one way forward. UP!

I want to run 20km this time next year. LET’S do this!!

 

Running Plan:

Sept 2017- 10km Surrey Hills – 1:10:11 (Target 1:15:00)

5 November – 10km MoRun  —https://www.mo-running.com/newcastle– registration closes 31 October !!

Dec 2017- 15km

March 2018-15km

June 2018- 21km (11 June) – 10km (19 June) HALF MARATHON Continue reading “10km Surrey Hills 24 Sept 2017”

No change please.

People are always going to say no.

Not to you but to change.

Humans naturally want to stay in stasis.

We want to feel safe.

Unless we are motivated from some other factor, they don’t want change.

 

When you suggest something spontaneously

a small thing. Something fun.

They might say no, labelling it as ridiculous, stupid or a waste of time.

 

Live.

 

Don’t live the lie that life is perfect.

 

They might be right. Maybe it is a waste of time.

Listen to them if your suggestion is a serious plan.

 

But an 18 year old building a poor sandcastle in London Southbank?

“Oh my that’s so stupid.”

Secretly it makes them laugh.

It forms stories, memories.

 

People like to be around people who are not afraid to try new things.

Who make them laugh.

 

No-one is living your life for you.

Make it a story. Build a plot. Build character.

 

Make life worth it.

My Mom

I don’t want to tell my parents how I am feeling because I don’t want to make my mom anymore anxious than she already does. I worry about her. She doesn’t go out in fear of the house being burgled or a fatal event happening in london or our town. She goes to pilates twice a week and lipreading once a week. Struggles with her hearing,  with comprehension and articulating her thoughts. When I talk to her, our conversation concerns our immediate situation.  Food. Weather. What she’s cooking for dinner. What she used to do when she was a kid. Empty topics. I don’t know what to talk about with her because whenever I begin a story, it soon turns to what she has experienced. One sided. Our conversation usually contains her anecdotes that I have heard before, or phrases beginning with”that’s why.” It’s an explanatory discussion. Tries to justify her actions. It feels like I don’t “get” her, or even worse, she doesn’t “get” me

As a daughter I fear I am learning from her. I feel less able to talk about extrapolated topics. Have fun chats. Humorous. Light hearted. She doesn’t understand banter so this simply doesn’t happen in my life unless I’m with friends.

What friends?

I cut them all off.

It’s true. I don’t tell her what happens in my life.