Monday, 1 October 2012

Daily Reading Material Compilation 1.0

Here's a compilation of a bunch of articles that I've read over the last few days. This isn't everything I've read - but I've commented/written blog posts on most of the other things I've read already, and the rest seems somewhat unimportant for me to share.

Enjoy the links!

UBS Co-Workers Knew of Fake Trades, Adoboli Told Lawyer 

A trader at the ETF desk with UBS was caught taking abnormal amounts of risk with client funds - upwards of $10 billion, which resulted in a loss of $2.3 billion. The trades were all unauthorized (ring a bell? Seems to be a common theme among traders these days), and Adoboli's (the trader in question) coworkers were well aware of his fraudulent activity.

The real kicker here is that even though it was the trader who committed the crimes (let's call a criminal a criminal, to hijack and alter a common euphemism), the bank's senior management was explicitly pressuring employees to make riskier trades, "including proprietary trading."

This is why more and more fraud is being committed - because the upper management of the banks are pressuring employees to make riskier and riskier bets, and essentially are encouraging unethical and even criminal behaviour in favour of greater profit margins. Fraud and unethical business practices are now basically built in to the business models of the world's biggest banks - and any time they are caught with their hands in the proverbial cookie jar they simply take a fine (a slap on the wrist) that amounts to a fraction of the ill-gotten gains.

Greece, Tell Brussels “To Take A Hike” And Let The Troika Bail Out The ECB Instead  

Greece's new round of austerity is being cemented into place, but the people of Greece are already at their breaking point. This article outlines some of the ongoing troubles in Greece (among the many) and gives some pretty interesting statistics in regards to car sales and small and mid-sized businesses.

Definitely worth checking out! I'm 100% in the boat of people saying that Greece should tell the Troika to shove it - they should pull out of the Eurozone, go back to the Drachma, take some short-term pain in order to recoup long-term gain. The rate they're going right now they're simply taking short term pain with no sign of improvement in the long-term. What do they really have to lose? 

BRIC Hallucination: China Won’t Be Engine of New World Order, nor Russia, nor India  

As I touched on in a previous blog post, China's economic growth is slowing. In recent years they have seen 10+% annual economic growth - in fact, it's been that way for a few decades. However, as the global economy spirals further downward in a hyperinflationary-deflationary whirlwind, it's catching up to the world's fastest-growing economy.

Projected growth for China is forecast to be about 7% annually for the next few years. This is common amongst the rest of the BRIC nations, as well - with the exception of Brazil, who's economy will probably keep up it's current growth rates for a few years to come.

For a bit more on the situation in China as inventories pile up and merchants worry about moving the goods, see the article "End of the Chimerican Dream" from the same website.

There's Only One Way Forward For Europe, And This Isn’t It  

I'll let this one speak for itself. Theautomaticearth is starting to be one of my favourite sources of information for issues riddling Europe. Check this out, you won't regret it.

I'll do another post soon with more reading material. Anything I find interesting but don't have time to do a lengthier commentary on I will post into one of these compilation formats so that you can peruse at your leisure if you so desire.

Stay tuned!

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