Bank Prof­its a sign of eco­nomic sick­ness, not health

Flattr this!

The record $6 bil­lion profit that the Com­mon­wealth Bank is expected to announce today is a sign of an econ­omy that has been taken over by Ponzi finance. Fun­da­men­tally, banks make money by cre­at­ing debt, and the amount of debt we’ve been enticed into tak­ing on is the sign of a sick econ­omy rather than a healthy one. The level of pri­vate debt that is actu­ally needed to sup­port busi­ness and main­tain home own­er­ship at his­toric lev­els (own­er­ship lev­els have fallen over recent years!) is pos­si­bly as lit­tle as one sixth the cur­rent level.

IQ Squared debate on cap­i­tal­ism and the planet

Flattr this!

I’m tak­ing part in an Intel­li­gence Squared debate on Tues­day next week–August 10 2010–on the topic:

That only capitalism can save the planet”

I’m on the Oppo­si­tion side, along with the poet and nov­el­ist Kate Jen­nings, and for­mer Exec­u­tive Direc­tor of Green­peace Inter­na­tional Paul Gild­ing. The Gov­ern­ment side is Eco­nom­ics Edi­tor of The Syd­ney Morn­ing Her­ald Ross Git­tins,  busi­ness­woman and com­pany direc­tor Lucy Turn­bull, and busi­ness­man, activist and writer Geof­frey Cousins.

The full descrip­tion of the debate can be found here on the IQ Squared web­site.

We’ll be rang­ing across quite a few top­ics within that “That only cap­i­tal­ism can save the planet” rubric. To quote the IQ Squared header:

Thanks for the Manna

Flattr this!

Chris Joye com­ments in his release of the recent RP Data-Ris­mark index that the news of a 0.7% fall in one month will be “manna from heaven for the hous­ing mar­ket bears”. Far be it from me to dis­ap­point him, so thanks for the manna. But what adds spice to the manna is the way that Chris has attempted to ratio­nal­ize the out­come:

It’s sober­ing to remem­ber here that we have had 17 con­sec­u­tive monthly increases in Aus­tralian cap­i­tal city home val­ues. If the share­mar­ket rose for 17 months straight and then tapered, peo­ple would not think twice about. It might be wise to apply the same logic to our hous­ing mar­ket.

Aussie house prices fall 0.7% in June 2010

Flattr this!

The RPData-Ris­mark index has just been released, and it has fallen 0.7% in the month of June 2010.

I’ll have more to say on this shortly, but for now I can do no bet­ter than to direct you to the Busi­ness Spec­ta­tor news report of the fall:

House prices fall 0.7% in June, flat in quar­ter

and Christo­pher Joye’s press release on this topic:

House prices on ice – for now

I also rec­om­mend Rob Burgess’s elec­tion blog per­spec­tive here:

POLL POSITION: Will Labor fall with house prices?

Amer­i­can Mon­e­tary Insti­tute Con­fer­ence Chicago Sept 30–Oct 3

Flattr this!

The Amer­i­can Mon­e­tary Insti­tute has  invited me to speak at their 2010 Mon­e­tary Reform Con­fer­ence, at the Uni­ver­sity Cen­ter in down­town Chicago, between  Sep­tem­ber 30th and Octo­ber 3rd. I have agreed, though since this is in the mid­dle of a teach­ing period for me it will be a “light­ning trip” to the USA–leaving Syd­ney on Wednes­day 29th and leav­ing Chicago on Mon­day 4th.

I’ll give a pre­sen­ta­tion cov­er­ing the sta­tis­tics on the debt-dri­ven process that led to the eco­nomic cri­sis, an expla­na­tion of how money is cre­ated in a pure credit econ­omy (based on my “Rov­ing Cav­a­liers of Credit” post on this blog), and a model of debt-defla­tion as cov­ered in my recent talk in New York.

New York Debt­watch Talk: Mod­el­ling Debt Defla­tion

Flattr this!

The blog now has over 5000 mem­bers, and about 40 of them crowded into a small room in the Flat­Iron dis­trict of New York to hear me give a talk on debt-defla­tion. Since I had the lux­ury of more time than you get at an aca­d­e­mic con­fer­ence, and an engag­ing and intel­li­gent audi­ence, I gave a lot more detail on my mod­el­ling approach. The ques­tions were also superb, and would have con­tin­ued for much longer if I hadn’t called quits at an oppor­tune point (the whole caboo­dle of pre­sen­ta­tion and dis­cus­sion is almost 70 min­utes long). My answers come through loud and clear on this video; I just hope that the ques­tions them­selves can be heard by bet­ter ears than mine!

Are We It Yet posted

Flattr this!

This is a “reme­dial” post: I have just posted “Are We It Yet?” to this site, but for some rea­son it was posted after the “Naked Cap­i­tal­ism” post below.

If you’ve already read the paper I gave at the Min­sky con­fer­ence, then you’ve read what’s pub­lished there; the main rea­sons for putting it here in blog form were to make it more acces­si­ble, and to post a video of the talk I gave at the Levy. I’ve also repro­duced this below.

Steve Keen’s Debt­watch Pod­cast 

| Open Player in New Win­dow

Naked Cap­i­tal­ism and My Scary Min­sky Model

Flattr this!

I met with Yves Smith of Naked Cap­i­tal­ism on the week­end, at a superb Japan­ese restau­rant that only New York locals could find (and I’ll keep its loca­tion quiet for their benefit–too much pub­lic­ity could spoil a spec­tac­u­lar thing). Yves was kind enough to post details of my lat­est aca­d­e­mic paper at her site in a post she enti­tled “Steve Keen’s scary Min­sky model”.

Yves found the model scary, not because it revealed any­thing about the econ­omy that she didn’t already know, but because it so eas­ily repro­duced the Ponzi fea­tures of the econ­omy she knows so well.

Are We “It” Yet?

Flattr this!

If you’ve down­loaded and read the paper and pre­sen­ta­tion I posted in my pre­vi­ous entry, then there’s noth­ing new for you to read in the body of this post; the main addi­tion is the video below of my talk.

Steve Keen’s Debt­watch Pod­cast 

| Open Player in New Win­dow

That in part gives you rather too good a view of the back of the heads of Randy Wray and Dim­itry Papadim­itriou, both of whom sat down in front of the cam­era after my talk began, but the slides are still eas­ily vis­i­ble.