Monday, November 30, 2009
The financial crisis is being considered, by a vast majority of economists, over.
Nobody discuss anymore how and whether to create "good banks". The zombie banks are back to business as usual although problems are still there.
Some cynics could say about this crisis "Much ado about nothing".
I do not know how to interpret the appointment of Professor Willem Buiter as Chief Economist in Citigroup. He elaborated on my original idea of "good banks" and defended it strongly. To do that he criticized his new employer Citigroup, which he defined "a conglomeration of worst-practice from across the financial spectrum". Citigroup, a zombie bank in those days, was for him and me one of the best candidate to be broken up and replaced by a new "good bank".
It will be interesting to know what Prof. Buiter, in his new leading role of the economics research unit and member of the Global Investment Committee of the Citi Private Bank, thinks of plutonomy and related investment strategies.
Plutonomy was described by Michael Moore's "Capitalism: A Love Story" with reference to the in-famous, and leaked, internal Citigroup memo of October 2005 (revisited in March 2006).
The content and language of those memos are upsetting, appalling and dramatic, telling us how wonderful is a world where economic growth is powered by and largely consumed by the wealthy, happy few.
Now we know more how the financial crisis really came about and how Citigroup, producing such a kind of research and advice, had become a zombie bank.