Economy

How Islamic Finance Can Save the Global Economy

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You can’t make money from money forever: The case for the Islamic financification of global markets. Ashby Monk Institutional Investor The market for financial derivatives is valued at a quadrillion dollars, give or take a few hundred trillion. I can’t contemplate how big that is or what it even means. Where is that money? I know you can’t physically touch it — just as you can’t touch a company’s market capitalization or an index. But is it real? The financial ... Read More »

World’s witnessing a new Gilded Age as billionaires’ wealth swells to $6tn

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Not since the time of the Carnegies, Rockefellers and Vanderbilts at the turn of the 20th century was so much owned by so few Rupert Neate The Guardian The world’s super-rich hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century, when families like the Carnegies, Rockefellers and Vanderbilts controlled vast fortunes. Billionaires increased their combined global wealth by almost a fifth last year to a record $6tn (£4.5tn) – more than ... Read More »

Michael Bloomberg: Brexit is stupidest thing any country has done besides Trump

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Exclusive: Billionaire media mogul says it is ‘hard to understand why a country doing so well wanted to ruin it’ Graham Ruddick  The Guardian Michael Bloomberg, the billionaire media mogul and former mayor of New York, has said Brexit is the “single stupidest thing any country has ever done” apart from the election of Donald Trump as US president. Bloomberg argued that “it is really hard to understand why a country that was doing so well wanted to ruin it” ... Read More »

Should central banks have a ‘representative of the poor’?

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The Reserve Bank of Australia should have a board member whose job it is to “represent the poor”, says Catholic Social Services Australia in a report released this week. Usman W. Chohan The Conversation  This hasn’t been tried before but it’s an interesting proposal and worth considering – particularly as recent central banking programs like quantitative easing have inflated the value of assets belonging to the very rich, exacerbating inequality and even threatening democracy. The report is part of a ... Read More »

Xi Jinping’s Message to the World: China is Back

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The hallmark of China’s foreign policy under Xi has been the abandonment of the “lay low” doctrine China’s 19th Party Congress, which opened this week in Beijing, is a landmark event for the world’s second-largest economy. Scott Moore The National Interest  In China’s one-party state, these congresses determine the country’s leadership, and are held every five years. But this one is special. It’s the first to be held since China’s current top leader, Xi Jinping, took power in 2012, and much ... Read More »

How Money Became the Measure of Everything

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Two centuries ago, America pioneered a way of thinking that puts human well-being in economic terms. Eli Cook The Atlantic Money and markets have been around for thousands of years. Yet as central as currency has been to so many civilizations, people in societies as different as ancient Greece, imperial China, medieval Europe, and colonial America did not measure residents’ well-being in terms of monetary earnings or economic output. In the mid-19th century, the United States—and to a lesser extent ... Read More »

Capitalism is ending because it has made itself obsolete, former Greek finance minister Yannis Varoufakis says

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Exclusive: Former economics professor says rise of artificial intelligence will spell end of neoliberal system Tom Embury-Dennis The Independent  Former Greek finance minister Yanis Varoufakis has claimed capitalism is coming to an end because it is making itself obsolete. The former economics professor told an audience at University College London that the rise of giant technology corporations and artificial intelligence will cause the current economic system to undermine itself. Mr Varoufakis, who took on EU institutions over Greek debt repayments in 2015, said companies ... Read More »

Fintan O’Toole: The lie that poverty is a moral failing was buried a century ago. Now it’s back

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George Bernard Shaw knew that the rich are no better than the poor. But though the argument seemed settled then, it now rages more fiercely than ever. Fintan O’Toole The Irish Times If you know Alfred Doolittle only from Stanley Holloway’s infinitely lovable portrayal of him in My Fair Lady, you might not realise that he’s a bit of a monster. In George Bernard Shaw’s original play, Pygmalion, he arrives in high dudgeon at the home of Henry Higgins, who ... Read More »

Austerity benefit freezes and Brexit inflation to cost lower-income households £300 next year

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The benefit freeze ‘risks ushering in a period of rising inequality on a scale not seen since Margaret Thatcher’s final term,’ says think tank The Independent  Charlotte Beale  Poorer households could be £300 worse off next year, due to benefit freezes and a predicted rise in inflation. Half of all families with children will be affected, warns think tank the Resolution Foundation, meaning seven million children in total. 800,000 people looking for work and 2.4 million disabled people will also be hit. ... Read More »

How the oligarchy wins: lessons from ancient Greece

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Ganesh Sitaraman looks at what two recent books – Classical Greek Oligarchy by Matthew Simonton and Oligarchy by Jeffrey Winters – can teach us about defending democracy from oligarchs Ganesh Sitaraman The Guardian A few years ago, as I was doing research for a book on how economic inequality threatens democracy, a colleague of mine asked if America was really at risk of becoming an oligarchy. Our political system, he said, is a democracy. If the people don’t want to ... Read More »

Romania shrugs off label of Europe’s poor man as economy booms

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Since it joined the EU in 2007, government economic measures and communist-era educational excellence have spurred rapid growth Kit Gillet The Guardian  At a sleek new office in the heart of Bucharest, Fitbit co-founder and chief executive James Park explains why the smartwear giant is rapidly expanding its operations in Romania – and following the lead of a host of multinationals. “The tech talent here is amazing. Romania and other countries in central and eastern Europe have great existing talent, ... Read More »

Costello wants govt to run workers’ super

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The Turnbull government won’t say if it backs a call for it to assume control of billions of dollars in workers’ compulsory superannuation contributions now being managed by banks and industry funds Australian Associated Press Herald Sun Former treasurer Peter Costello is critical of the way default funds are being run and wants a new government agency to instead invest the money About $2.3 trillion in workers’ super is sitting in private accounts as part of the former Keating government’s ... Read More »

Energy independence: is Lithuania getting away with state aid?

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The EU says Lithuania can levy funds from gas consumers to finance its own energy companies. Achema, Lithuania’s largest consumer, disagrees. Ramunas Miliauskas, chief executive officer, Achema Politico The European Commission and the European Court of Justice are currently considering state aid complaints against Lithuania. The outcome could have repercussions for every gas consumer in the country and massive ramifications for one company in particular. Achema is the largest fertilizer producer in the Baltic states, and part of a group ... Read More »

Mexico warns that abandoning Nafta could end broader cooperation with US

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Mexico’s foreign minister has warned that terminating Nafta could bring relations with the US to a breaking point, raising the prospect that bilateral cooperation against drug trafficking and illegal migration could be adversely affected by Donald Trump’s bellicose trade rhetoric. David Agren in Mexico City The Guardian The threat from the foreign minister, Luis Videgaray, came as Donald Trump once again threatened to tear up the three-country trade treaty between the US, Canada and Mexico ahead of a fourth round ... Read More »

IMF raises growth forecast for all advanced economies except UK

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The pound has made gains despite a flurry of gloomy economic reports, while advances among bank stocks helped the wider market push higher Holly Williams The Scotsman Official figures showing disappointing trade data, but a stronger-than-expected performance from the manufacturing sector, saw the pound make strong gains against the US dollar and hold firm against the euro. Sterling lifted 0.6% to 1.32 US dollars and was flat at 1.12 euros. The FTSE 100 Index closed the session 30.4 points higher ... Read More »

Explainer: how our understanding of risk is changing

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Under the traditional notion of risk, people react predictably based on how risk-tolerant they are. Here, risk is calculated by combining the probability of something occurring (such as rolling a six with a pair of dice) with the value of the outcome (how much you have wagered). Robert Hoffmann  Adrian R. Camilleri  But our understanding of risk is changing. The Conversation We now know that a whole host of factors, from your personal history to your mood and age, all ... Read More »