Posts

Is Gaza starving?

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“Over one million people in Gaza are starving,” proclaims a dramatic headline in the Wall Street Journal. Citing a new report from the International Food Security Phase Classification (IPC), a partnership of 15 international agencies and non-government organisations, the Journal goes on to say:  More than a million people in the Gaza Strip, around half of the enclave’s population, are experiencing famine-like conditions, according to new estimates by food-insecurity experts who found evidence of widespread starvation and a sharp increase in child mortality in the war-ravaged enclave.  I expected this figure to be disputed. Both sides in this conflict inflate (or deflate) statistics when it suits them, and each side accuses the other of manipulating the numbers. So Israel’s supporters would probably insist that the number was much smaller and Palestinian supporters would claim it was twice as large. But I didn’t expect an argument about what “starvation” meant... To read on, click here

We need to talk about the state pension

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My post-Budget article for the Radix thinktank considers the future of the State Pension in the light of the Chancellor's changes to National Insurance.  The headline news in the Budget was a 2p cut in the main rate of National Insurance contributions for employed and self-employed people. This was the second such cut, the first being in the Autumn statement. And the Chancellor expressed an intention to go much further. He trailed the idea of abolishing personal National Insurance completely.  These changes will have far-reaching implications for the state pension...  To read the rest of the post, click here .  Related reading: The Fund that isn't a fund

The tragedy of Gaza

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Dear friends, I said I wouldn't post any more on this site. But Elon Musk doesn't like me posting Substack links on Twitter. And Substack itself is a mess. The home page looks amateurish, and new posts don't even appear on it until they've amassed enough views to push down previous posts. It's an absurd way of organising a site.  So I have decided in future to post links to my Substack posts here. Hopefully this will mean you can find them more easily, both on Google and Twitter. Some of my Substack posts have paywalls, but you will have the option to subscribe or opt for a free trial.  Here's the introduction to my latest Substack post, The Tragedy of Gaza . Click the link to read all of it. It is free to read. The Palestinian economy is enduring a fiscal crisis and the economic outlook is dire.” - IMF, 26th April 2022. I’m sure everyone realises by now that Gaza’s economy has fallen off a cliff. There is almost no productive activity, so GDP has collapsed an

Sunset

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Dear friends, this is my last post on this site. Coppola Comment has moved to Substack. You can find the new site here .  Why the move? Well, Blogger has become increasingly difficult to use. The code generator is buggy and I constantly have to mess around with the HTML to make posts look half decent. I don't have the time for this nonsense. I just need a nice straightforward CMS that doesn't make my life difficult.  Also, those of you who subscribed by email will know that for some time now you have not been receiving email notifications. This is because Google turned off Feedburner. Google helpfully said I could download the email list and do notifications myself using something like mailchimp, but I don't have the time for this, either. I want a platform that manages my subscribers and notifications for me.  I did consider moving to Wordpress, but I've never really got on with that (it's why I used Blogger). And I also considered Patreon for the subscriber side.

A fractional reserve crisis

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This is a slightly amended version of a keynote speech I gave on 14th April 2023 at the University of Ghent, for the Workshop on Fintech 2023.  The crisis that has engulfed crypto in the last year is a crisis of fractional reserve banking. Silvergate Bank and Signature Bank NY were fractional reserve banks. So too were Celsius Network, Voyager, BlockFi, Babel Finance and FTX. And still standing are the crypto fractional reserve banks Coinbase, Gemini, Binance, Nexo, MakerDAO, Tether, Circle, and, I would argue, every one of the DeFi staking pools. All of these are doing some variety of fractional reserve banking. Custodia Bank and Kraken Finance claim to be full-reserve banks – but 100% reserve backing for deposits is both hard to prove and not a guarantee of safety. What do I mean by “fractional reserve banking”? My definition might surprise you. For me, fractional reserve banking simply means that the composition of a bank’s assets is less liquid than that of its liabilities. Fra

What really happened to Signature Bank NY?

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  As the world reeled in shock at the sudden collapse of Silicon Valley Bank (SVB), another bank quietly went under. On Sunday 12th March, the U.S. Treasury, Federal Reserve and FDIC announced that all SVB depositors, whether insured or not, would have access to their funds from Monday. And then they added:  We are also announcing a similar systemic risk exception for Signature Bank, New York, which was closed today by its state chartering authority. Signature Bank NY's state chartering authority was the New York State Department of Financial Services (NY DFS). It posted this on its website :  On Sunday, March 12, 2023, the New York State Department of Financial Services (DFS) took possession of Signature Bank in order to protect depositors. All depositors will be made whole.  DFS has appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, and the FDIC has transferred all of the deposits and substantially all of the assets of Signature Bank to Signature Bridge B

The Peston effect

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The last week or so has seen some of the worst bank communications since 2007, when the Bank of England started a bank run by leaking news of Northern Rock's emergency liquidity request to the journalist Robert Peston. Then as now, awful communications have frightened the horses, triggered stampedes and caused banks to fail. Three banks in particular have shown an extraordinary insensitivity to popular fears: Silicon Valley Bank, Credit Suisse, and Wells Fargo. Two of these have paid a heavy price for their management's inept handling of vital communications. But the third seems to have got away with it - this time. Next time, it might not be so lucky.  Exhibit 1: Silicon Valley Bank (SVB) In the wake of Silvergate Bank's failure, Silicon Valley Bank decided to restructure its balance sheet.  SVB's full-year accounts released in February revealed that it was backing highly volatile uninsured deposits with long-dated government securities that were falling in value and,