The ever more pressing need to prioritise financial stability will erode central bank independence. The fall-out from a ‘Hydra of bottlenecks’ is being felt throughout the US. Flaky methodology, still mostly driven by profit not planet, means that ESG funds are often more ‘greenwashed’ than genuinely green and good for society. Lifting the lid on the shady treasure ‘chest’ where global elites shield their riches. Not much can compete with the wealth of benefits offered by an ‘awe walk’.
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
Willem Buiter, Central Banks and the Looming Financial Reckoning
(Project Syndicate, 4 October 2021)
Until now, in all advanced economies, central banks have prioritized financial stability and the real economy over inflation. This was right, but with financial fragility rife and public and private leverage extremely high, their next big test (a hike in interest rates) is coming. Expect a lot of turbulence and pay attention to Buiter’s conclusion: “Since LLR (lender of last resort) and MMLR (market-maker of last resort) operations are conducted in the twilight zone between illiquidity and insolvency, these central-bank activities have marked quasi-fiscal characteristics. Thus, the crisis now waiting in the wings will inevitably diminish central bank independence” (metered paywall, 6-7 min read).
Click here to read the full article
Derek Thompson, America Is Running Out of Everything
(The Atlantic, 7 October 2021)
The “Everything Shortage” (a dearth of many different things like test kits, car parts, semiconductors, ships, shipping containers, workers) is not the result of one big bottleneck in, say, Vietnamese factories or the American trucking industry, but is caused by a veritable hydra of bottlenecks. This article is US-focused, but the entire global economy is currently running low on supplies of all kinds (metered paywall – reads in 7-8 min).
Click here to read the full article
Alen Pareene, Climate-Friendly Investment Funds Are a Scam
(The New Republic, 5 October 2021)
An increasing number of institutional and private investors are of the opinion that many ESG / green financial products are just trying to fool investors into thinking they can get rich and save the planet at the same time. The problem essentially boils down to conceptually and methodologically faulty ESG ratings, with the construction of climate or social indices still guided by purely financial considerations. As an example, a new research paper found that ETFs claiming to rate investments strictly on the basis of climate weren’t just ineffective but made the problem worse by directing more money to greenwashing than to actually effective sustainability directives (metered paywall – 8-9 min).
Click here to read the full article
Peter Whoriskey and Agustin Armendariz, Secret trove illuminates the lives of billionaires
(The Washington Post, 6 October 2021)
The recent revelations contained in the Pandora Papers provide great insights on how some of the world’s wealthiest people buy influence and avoid taxes. How do they do it? To a considerable extent by using offshore companies to conduct business (setting them up requires a lot of financial means and sophisticated legal help). These shell companies essentially hide money, giving those who benefit from them “a cloak of invisibility — they’re hidden from tax authorities. They’re hidden from law enforcement. They’re hidden from government authorities of all kinds” (metered paywall, reads in 15min+).
Click here to read the full article
Daniel Lavelle, The wonder stuff: what I learned about happiness from a month of ‘awe walks’
(The Guardian, 4 October 2021)
A new study shows that, by paying close attention to our surroundings as we walk, we can get our happy chemicals pumping and enhance overall wellbeing. As any Summit of Minds’ participant knows, an “awe walk” can indeed reduce stress, help inflammation, increase creativity and sociability, while also making us happy in to the bargain. (free access, reads in less than 10 min).
Click here to read the full article
