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STREAM / STRAND / STRING
BANKING AND FINANCE
BIG PART OF THE MODERN ECONOMY, AND A ROOT CAUSE OF SYSTEMIC DYSFUNCTION
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Over time, a bigger and bigger Banking and Finance sector
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Central Bank assets
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Total CB Assets -v- GDP
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CB Assets -v- GDP
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stock markets up
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money supply up
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GDP up / Profits up
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Over time, more and more issues with Society and the Environment
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wages flat
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STOCK MARKETS
A key part of the financial ecosystem required for modern capitalism
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Open L0700-SS-BF-Stock-Markets
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CENTRAL BANKS
A essential part of the modern money system
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Open L0700-SS-BF-Central-Banks
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PERSONAL FINANCE
Not always good for the individual and the family
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Open L0700-SS-BF-Personal-Finance
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INVESTMENT MANAGERS
Playing a key role in guiding where investments get made
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Open L0700-SS-BF-Investment-Managers
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IMPACT INVESTORS
Investors interested in the impact of their investments
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VENTURE CAPITAL
Source of capital for start ups and high risk high reward opportunities
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GOVERNMENT FUNDING OF RESEARCH AND DEVELOPMENT
Has had incredibly important role in cutting edge science and technology
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HIGH FREQUENCY TRADING
Computer enabled decision making that enables the markets to be gamed for profit
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FINTECH
Computer technology being used to enhance the performance of the banking and financial systems
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CRYPTOCURRENCY ECOSYSTEM
Some potential to change the way the global economy works
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Deloitte-smart-cities-economies
A 2017 paper by Deloitte about smart-cities-economies
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Open PDF ...
Deloitte-smart-cities-economies
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Wharton-2018-Sunac-Property-Co-in-China
A 2018 paper ... TPB note: Reminds me of the late 1960s in the USA when leverage enabled rapid growth and then even more rapid collapse!
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Open PDF ...
Wharton-2018-Sunac-Property-Co-in-China
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New York Stock Exchange (NYSE)
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GO TOP
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Dow from 1998 to 2016
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An impressive increase in the index ... but what does it really mean?
In large part the profits of business increased while the wealth of society as a whole was diminishing.
This is the behavior that one must expect when the only management measure that is used everywhere is money profit performance for organizations, and money income and financial wealth for individuals.
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'http://www.investmenttools.com/equities/djia__dow_jones_industrial_average.htm'
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Open exernal link
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Dow from 1927 to 2017 adjusted for consumer prices (CPI)
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The Dow index has increased by an impressive amount over the long term ... but it hardly represents any significant reality. There are only a very few large cap stocks and these are changed from time to time in a way that eliminates the failing companies. The S&P 500 is a significantly more representative index.
The Dow is already at 30000, You Just Don’t Know It
The blue-chip index is a poor measure of what investors are doing ... by JAMES MACKINTOSH Jan. 25, 2017
It’s time to ditch the Dow. After 120 years, the venerable Dow Jones Industrial Average is an embarrassing anachronism, abandoned by professionals and beloved only by a media ...
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Article in the WSJ (paywall)
'https://www.wsj.com/articles/were-already-at-dow-30000-you-just-dont-know-it-1485362316'
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Open exernal link
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The S&P Index from 1956 to 2017
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Interest Rates
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CENTRAL BANKS
The banking sector is underwritten by the unusual arrangements that are Central Banks
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GO TOP
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Central Bank asset growth from 2006 to 2016
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The total was $5 trillion in 2006, rising to almost $17 trillion 10 years later. There is more 'money' in the world today than ever before, and hardly anyone in policy making leadership positions with any idea of what this really means.
The US Federal Reserve has increased the most on a percentage basis ... in large part because its financial sector had failed in the most dramatic way.
The People's Bank of China has increased the most on an absolute basis reflecting the massive size of the modern Chinese economy on top of a massive population.
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Financial Economy / Unwarranted Trust
Mid 2016 ... Central Bank Balance Sheet Assets Hit Record High!
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Open file 13065
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'http://inflation.us/central-bank-balance-sheet-assets-hit-record-high/'
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Open exernal link
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Individual Central Bank assets as a % of GDP
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The Swiss National Bank has the largest balance sheet as a percentage of GDP, with it currently up to 88.42% of GDP vs. 19.82% of GDP in May 2006.
The Bank of Japan’s balance sheet is equal to 70% of GDP vs. 24.27% of GDP in May 2006.
The PBOC’s balance sheet is equal to 52.92% of GDP vs. 56.31% of GDP in May 2006.
The US Federal Reserve’s balance sheet is equal to 25.41% of GDP vs. 6.17% of GDP in May 2006.
The European Central Bank’s balance sheet is equal to 24.99% of GDP vs. 12.52% of GDP in May 2006.
The Bank of England’s balance sheet is equal to 22.38% of GDP vs. 6.37% of GDP in May 2006.
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Total of Central Bank assets versus combined GDP
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The total assets of the world’s six major central banks is equal to 35.98% of their combined GDP, a new all-time record high vs. only 14.29% of their combined GDP in May 2006, and well above the nine year median of 26.08%!
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BANK LENDING BY SECTOR
The financing of international development assistance has been both rather modest and also quite ineffective. More and better are both needed.
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UK Bank Lending by Sector
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The Valuation of 'Unicorns'
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Valuation-of-Unicorns-SSRN-id2955455-13577
... Instead, investors in these companies are given convertible preferred shares that have both downside protection (via seniority) and upside potential (via an option to convert into common shares). Second, shares issued to investors differ substantially not just between companies but between the different financing rounds of a single company, with different share classes generally having different cash flow and control rights. ...
'http://truevaluemetrics.org/Investment/Valuation-of-Unicorns-SSRN-id2955455-13577.pdf'>
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Open PDF ...
Valuation-of-Unicorns-SSRN-id2955455-13577
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OFFICIAL DEVELOPMENT ASSISTANCE
Financing international development assistance has been both inadequate and ineffective. More and better are both needed.
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GO TOP
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FOREIGN DIRECT INVESTMENT (FDI)
Gives access to investment funds ... but too often it is corporate colonialism
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GO TOP
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Segmentation of FDI fund flows
The financing of international development assistance has been both rather modest and also quite ineffective. More and better are both needed.
Remittances are one of the most important area of growth and likely one of the most efficient in terms of delivering poverty reduction at a low cost. It can also be noted that the banking sector and financial services industry charges very high prices for a service that is vital but low cost for the banks!
TPB note: My experience with FDI over a period of more than 30 years has been that much needed foreign investment crowds out local investment and skims off the most lucrative projects. Worse many foreigners have been very comfortable paying bribes in a variety of forms to local officials at all levels, including very substantial amounts to those at the very top. Bribery and corruption are one of the lowest risk behaviors for international companies because they are most unlikely ever to be caught and it reduces conventioanl commercial risks considerably!
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MOVE THIS TO METRICS / ECONOMIC
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MONEY
MONEY is an inadequate metric ... it changes in size over time.
GDP
MEASURING THE PERFORMANCE OF THE NATIONAL ECONOMY
GDP measures consumption more than anything else. There is a weak correlation between quality of life and GDP ... better measures are possible.
MEASURING THE PERFORMANCE OF A CORPORATE ORGANIZATION
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Open MAIN-NAV-#5
Open L0700-PBS-FC-Finance-Investment
Open L0700-PBS-FC-FINANCIAL-CAPITAL
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