Ida Ince

Ida Ince is an independent researcher in critical legal finance and has previously worked for many years in international finance.

Regulatory exceptionalism: the EU short selling ban

dollar's flow in black hole

A much re­marked upon fea­ture of the Global Financial Crisis (‘GFC’) has been the re­course of gov­ern­ments to per­manent states of ex­cep­tion, pur­portedly jus­ti­fied by the need to pro­tect fin­an­cial sta­bility. We have seen everything from prime min­is­ters being heli­coptered in (Romano Prodi), to mon­et­arist central banks buying up bonds and even gilts, to the decision…

Euro Stability Mechanism proposes transfer of Greek assets to Luxembourg

Luxembourg

The European Commission has been forced to re­buff a pro­posal by the Eurozone’s new bailout fund, the ESM, that Greek as­sets be trans­ferred to a new Luxembourg-​based spe­cial pur­pose vehicle as a part of a wider privat­isa­tion scheme. The pro­posal, mooted by Finland in 2011, and on the radar of the IMF, was aimed at cut­ting through “Greek bureaucracy”…

Cypriots Discover the Debt Jubilee

ATM Out of Service

Come again? Cypriots dis­cover the debt ju­bilee? Well yes ac­tu­ally, that is ba­sic­ally how de­pos­itors at Cypriot banks have been treated by the Troika, even if the de­cision to grab up to 9.9% of cash de­posits to fin­ance a bail out of the fin­ance sector is being presented as a tax or levy. To un­der­stand this we…

The Amazon Archipelago

Amazon facility Bad Hersfeld

On Wed­nes­day night prime Ger­man tele­vi­sion chan­nel ARD broad­cast under­cover report­age con­cern­ing the treat­ment of for­eign work­ers at Amazon’s huge dis­tri­bu­tion ware­house near Bad Hersfeld in cent­ral Ger­many. State par­lia­ment­ari­ans called the re­port “unspeak­able”, “shock­ing”, “bey­ond the pale”, and the Left Party spokes­per­son stated:

“We call on the state gov­ern­ment to carry out promptly and with all at its dis­posal checks of the complainant’s so­cial secur­ity fraud, the use of an appar­ent neo-​Nazi secur­ity com­pany through Amazon and the inhu­mane place­ment in a so-​called ‘resort’”.

Bad Hersfeld backs up against the old bor­der with East Ger­many at the point, the Fulda Gap, which the US determ­ined was the prime stra­tegic entry point for Soviet forces in any inva­sion of Europe. As a con­sequence this wooded up-​country be­came a back­wa­ter of barbed wire and check­points after the war. It is here that Amazon has had built one of its massive dis­tri­bu­tion centres for Ger­many, and it is here that under­cover report­ers infiltrated.

The Wealth Clock

Wealth Clock

A group of German trades unions, aca­demics, and mil­it­ants have at­tempted to seize back the clock as a powerful mode of polit­ical ex­pres­sion with their “Wealth Clock”. It seems to be a direct re­sponse to the re­l­ative suc­cess of the US’s National Debt Clock, in­sti­tuted in the late 80s by prop­erty de­veloper Seymour Durst, in im­pressing into the public con­scious­ness the claimed ur­gency of dealing with the US na­tional debt, as a route to neo­lib­eral aus­terity measures. Leaving aside the many ar­gu­ments that can be lev­elled against Durst’s fears, the image of a con­stant up-​ticking of a na­tional debt has had its echoes in European states, not least Britain and Germany as flag-​bearers for austerity.

A Bailout of the People by the People – Will it Work?

You're not aloan

From 15 November 2012, a part of the Occupy Movement in the U.S. led by Strike Debt will be op­er­ating a “Rolling Jubilee” which their web­site de­scribes as:

“A bailout of the people by the people.

We buy debt for pen­nies on the dollar, but in­stead of col­lecting it, we ab­olish it. We cannot buy spe­cific in­di­viduals’ debt — in­stead, we help lib­erate debtors at random through a cam­paign of mu­tual sup­port, good will, and col­lective refusal.”

David Graeber, for ex­ample, has been tweeting about this en­thu­si­ast­ic­ally and the Rolling Jubilee Facebook page has a pic­ture of Slavoj Zizek holding the linked “Strike Debt” logo and a state­ment claiming that he too sup­ports the cam­paign. My ini­tial re­ac­tion to the plan was open-​minded be­muse­ment and a ques­tion which I see keeps re­cur­ring on the Rolling Jubilee FB page: “How does this work?.”

In Germany insolvency law becomes financialised

insolvency

The Amendment of the German Bankruptcy Act,1 which came into ef­fect six months ago, has opened the door to wide­spread abuse al­leges the in­dustry as­so­ci­ation VID, which claims to rep­resent more than half of li­quid­ators. “A few in­flu­en­tial and wealthy cred­itors now threaten to dom­inate pro­ceed­ings”, the VID chairman Christoph Niering said in Berlin. “In addition,…

LIBOR (and other mythical beasts)

Chimaera

Martin Wheatley, British fin­an­cial reg­u­lator charged with solving the LIBOR crisis, has re­turned from his Crusade car­rying, we are told, a splinter of the True Cross which he as­sures us is cap­able of pro­curing mir­acles. Not common or garden mir­acles in­volving the lame, Galilean fish stocks, or talking asses, no. Something really im­pressive: an­noun­cing the actual…

Finance’s contribution to GDP — another sleight of hand?

Man Ray - Hands

Yesterday’s pub­lic­a­tion of fur­ther dismal GDP data for the UK is an op­por­tunity to re­con­sider its basis as the jus­ti­fic­a­tion for many as­pects of the cur­rent neo­lib­eral order. Bracketing out the ques­tion of whether eco­nomic growth is a valid lode­star for any just so­ciety, there comes the old but under-​frequented ques­tion1 about what con­sti­tutes growth and…

Securitisation outfit fined USD125m for obtaining false credit ratings

Mizuho Bank Head Office in Tokyp

In my pre­vious post I asked some­what rhet­or­ic­ally what else banks had felt able to do during the credit crunch if the be­lief had arisen that “market sta­bility” (sc. bank sur­vival”) trumped crim­inal law. The U.S. Securities and Exchnage Commission (“SEC”) has ob­li­gingly provided an ex­ample. Yesterday (19 July 2012) the Securities and Exchange Commission charged…

LIBOR: City absolutism and raison de marché

Peter the Great shaves his courtiers

What’s the dif­fer­ence between Monaco and the City of London? One is a micro-​territory gov­erned by ab­so­lute fiat, hol­lowed out by prop­erty spec­u­la­tion, gambling, and the con­ceal­ment of great crimes of wealth, and the other is Monaco. In case your won­dering, Monaco does have branches of HSBC and Barclays, and, if you need any­thing tricky sorting out,…

The legal market has its Lehman Bros. moment

A lawyer leaving Dewey & LeBoeuf's New York offices for the last time

As part­ners and as­so­ci­ates of 190 equity partner US law firm Dewey & LeBoeuf filed out of their 6th Ave. New York of­fice, card­board boxes of desk clutter in hand, one could not help no­ti­cing the sim­il­ar­ities with the im­ages of the col­lapse of Lehman Bros. The su­per­fi­cial sim­il­arity is not merely os­tens­ible, how­ever; the…

What follows farce?

george-osborne-bullingdon

At this week’s UK Treasury Select Committee hearing on the Budget of 2012, at­tendees were in­vited to draw par­al­lels between George Osborne’s view of eco­nomics and the mil­itary stratagems of Field Marshall Haig. It seems that the British Chancellor of the Exchequer has fol­lowed Haig in be­lieving that the best way to con­found one’s enemies…

The Muppet Show

A Goldman Sachs client (apparently)

Greg Smith’s resig­na­tion letter in the New York Times yes­terday, an­noun­cing a bridge-​burning de­par­ture from his po­s­i­tion as Executive Director of Goldman Sachs’ Equity Derivatives Division (Europe, Asia, Africa) cer­tainly brought Wall St. to a re­l­ative halt. GS can­celled con­fer­ence calls and the Goldman Flacks (PR goons) were rounded up to pour scorn on Mr. Smiths al­leg­a­tions as “unrecognisable”.

The im­port­ance of the letter was not so much it’s rev­el­a­tion of a eat-​what-​you-​kill cul­ture in which cli­ents are the main course, not even the con­ten­tion that somehow GS had changed cul­ture — it hadn’t any more than any other in­vest­ment bank since the Big Bang. The letter was im­portant be­cause it ef­fect­ively took GS cli­ents’ faces and slammed them against the res­taurant window, through which they could now see their GS con­tact en­gaged in an­thro­po­phagia between raucous tales of how the cur­rent dish had of its own vo­li­tion signed up to sit on the plate […]

GFC2?

Devouring Self

The in­ev­it­ab­ility with which global mar­kets would fall off their to-​date un­real­istic levels did nothing to mol­lify the depth and panic of the spasms. It has be­come a truism that nothing in the struc­ture of in­ter­na­tional fin­ance has changed, save that the losses of private banks had been so­cial­ised, leading to the great weight of legal…

A Short Legal History of the Credit Crunch — Part 4 of 4

Luzern totentanz Ritterscherpalast

The suf­fering spreads Our no­tional executive’s as­sump­tion about how in­dustry would help the banks and the eco­nomy out of the Credit Crunch was in one ele­ment cor­rect. Borrowers had bailed out the banks, but it was only by means of workers’ re­dund­an­cies, the strip­ping of the products of their la­bour, and in not a few cases an…

A Short Legal History of the Credit Crunch — Part 3 of 4

Matsijs, Quentin, The Moneylender and his Wife

At whatever time our in­dus­trial bor­rower first took on the credit agree­ment with which it found it­self, in 2009, chained and broken be­fore its fin­an­cial mas­ters, it is likely it only had a vague ink­ling that anyone beyond its re­la­tion­ship bank was, or was to be, in­volved. It is an issue that de­pends on the size of…

A Short Legal History of the Credit Crunch — Part 2 of 4

Quentin Metsys - The Moneylenders

With the Credit Crunch in the fin­ance sector now causing de­le­ter­ious ef­fects in the ‘real’ eco­nomy (see Part 1), con­cerned Finance Directors (“FDs”) turned to their re­la­tion­ship banks with a view to agreeing how best to muddle through what ap­peared to be a tem­porary dip caused by a problem in the ar­cane world of credit de­riv­at­ives. Initial conversations…

A Short Legal History of the Credit Crunch — Part 1 of 4

Quentin Metsys - The moneylenders

In this series of four art­icles this week I ex­amine the course of the Credit Crunch from the per­spective of the in­ter­face between the hyper-​financialised world of col­lat­eral debt ob­lig­a­tions and se­cur­it­isa­tion, and the more fa­miliar world of in­dus­trial cor­porate debt. It is at this nexus that many of the sub­sequent de­vel­op­ments in the world eco­nomy can…