I was on Bloomberg today briefly discussing inequality the link is here LINK1

I was on Russia TV today on their flagship Crosstalk programme talking about the top 1%. LINK 1  Interestingly, they called them the "Greedy 1%" which is a bit of an exaggeration as many of the top 1% do make very substantial donations to charities, universities, NGOs and the like or set up foundations in their name. But no doubt some are also very greedy as well more worried about their position on the Forbes list LINK 2, which is rather sad in many ways. My basic concern is not just about the amount of wealth but also the power such wealth gives them in influencing policy and lives for the rest of us. I am even more concerned about the long term consequences for society as the billionaires and their descendants may retain significant influence and power for generations to come. This would undermine and even endanger democracy. It also makes it harder for merit to be the main determinant of success, which is corrosive to the capitalist system. 

The Wall Street Journal has published a nice graphic interface to analyse the LIBOR scandal which to date involves 17 financial institutions and 22 individuals.
So far there has been over $5 billion in penalties including RBS $610 million plus a further €391 million,  Barclays $450 million, UBS $1.5 billion, Deutsche Bank €725 million ($984 billion), Societe Generale €446 ($606 million) and Rabobank $1,000 million with more to come. Of course, so far no one has gone to jail. Such fines should come directly from any bonus pools set aside for bankers and traders and not from shareholders and criminal prosecutions should be pursued wherever possible. This is the only way to clear up the banking mess and ensure conduct in the future is more ethical. The link to the Wall Street Journal graphics is here LINK 1

Well the great and the good are gathering at Davos for their 4 days of mixing with each other...and yet again I was not invited :-( Still they seem to be a lot more focussed this year on both the pluses and minuses of globalization. As an international economist I generally tell my students that trade, free movement of capital and labour are good things most of the time and for most of the people. However, not everyone gains and I have become increasingly concerned about the effects that globalization may play in increasing income inequality within nations. Of course, growing inequality of incomes within nations can be caused by many factors such as quantitative easing policies, technological progress, lobbying by powerful vested interests, the "winner takes all" reward structure whereby a few winners at the top get a disproportionate gain and many other factors. There is an post on the world economic form about 10 of the biggest risks facing the global economy LINK 1. Even though I was not invited you can still see some of the "thought leaders" and issues being discussed for free! LINK 2. Also lots of free reports are issued by the Werld Economic Forum via this LINK 3.

Nice article today on bloomberg LINK1 on how much computing power is being devoted to mining bitcoins. Seems you need to spend quite a bit of cash these days to successfully mine them. It seems that if the price of bitcoins falls below approximately $700 then for many miners they would not be profitable to mine. Anyhow, it seems to me that the currency will never become mainstream and I still predict a big crash in the market because ultimately it will become profitable to spend time mining alternatives such as Litecoin etc. You can even create your own alternative bitcoin at www.coingen.io takes only a few minutes ! The cost of mining gold is an important thing that will ultimately impact upon its price as well - a year or so ago gold peaked at around $1920 well since it costs only about $700 an ounce to mine that made it a hugely profitable industry to be in. But gold has now fallen back to $1240 area at the time of posting....but seems to me gold too needs to fall in price even further as the gap between its current price and mining cost is too high a fall to around $850 area would seem appropriate.

Looks like JP Morgan coughing up $1.7 billion for failing to do their job in the Madoff scandal. I mean all they had to do was report their suspicions to the US authorities and instead seems they may have turned a "blind eye" to what was going on. Seems Madoff had a lot of accounts with them and they managed to pull $250 million of their own cash away from Madoff weeks before the collapse. This fine is in addition to the $15.7 billion of other settlements made in 2013 in relation to the subprime crisis and regulatory issues. Here is a LINK1 to the Bloomberg story and LINK2 New York Times dealbook version. Video of damning indictment of JP Morgan below.

Happy 2014 to everyone who reads this blog or visits BusinessEconomics.com
lots of exciting plans for the site for the New Year. Great to see the site is listed on first page of google for terms like "best economics website", "best economics blog"  "best business blog" "best finance blog" and many other search terms. Traffic is continually on the rise and we should hopefully have close to 2000 visitors a day by mid 2014.

Jim O'Neill who invented the BRIC acronymn in 2001 standing for Brazil, Russia, India and China s now talking about the MINT economies as the best bet for the next decade, that is, Mexico, Indonesia, Nigeria and Turkey. He points out the MINT economies have favourable demographics, locations and the fact that there is scope for their GDP per capita to rise rapidly. He might well be on to something , He is doing a series for the BBC radio on all 4 economies. I listened to the first one on Mexico today and it is well worth listening to. Here a link to his thoughts and the radio show LINK1.