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Innovation/Global Crisis Blog

Rebuild Your Brain, Rewire Your Brain:  How “Neuroplasticity” Can Change Your Life

By Shlomo Maital


 Paul Bach-y-Rita



    From Norman Doidge, M.D., The Brain That Changes Itself: Stories of Personal Triumph from the Frontiers of Brain Science.  (Penguin, U.S., 2007):

    …I met a scientist who enabled people who had been blind since birth to begin to see, another who enabled the deaf to hear; I spoke with people who had had strokes decades before and had been declared incurable, who were helped to recover with neuroplastic treatments; I met people whose learning disorders were cured and whose IQ’s were raised; I saw it is possible for 85-year-olds to function the way they did when they were 55; I saw people rewire their brains with their thoughts, to cure incurable obsessions and traumas….

    I teach innovation, and increasingly, personal creativity – how to build a personal creativity machine, a highly personal, individualized process, unique to each person, tailored to that person’s history and personality, that generates a torrent of world-changing ideas.  My “pitch” is that the brain is a muscle, a kind of bicep, and when you exercise it, when you constantly imagine new and different things, you greatly strengthen its abilities.  But I think I did not truly believe this until I read this book.

    Doidge recounts the story of Paul Bach-y-Rita, an American scholar of Catalon-Jewish background, who is a true scientist-practitioner – he does icon-smashing research as a scholar and at the same time applies what he learns as a rehabilitation physician.  His dogged persistence, against fierce opposition, stems in part from his youth.  He was temporarily dwarfed, when a rare form of chronic appendicitis halted his growth. In a tough Bronx high school, he was beaten and bullied daily.  (He was cured, after his appendix burst).  Later, when conventional brain scholars figuratively beat him up, he was immune.  They beat him up, because it was once “known” that certain parts of the brain controlled certain functions, and there was no ‘plasticity’ or flexibility.  Thanks in part to Bach-y-Rita, we know now this is false.  The brain is ‘neuroplastic’.  Here are several brief stories:

   *  Bach-y-Rita’s father had a stroke, had severe brain damage (as an autopsy showed after his death), yet was taught to crawl, then walk, speak, write….step by step, painfully, using exercises that simulated everyday actions.

  * Barbara Arrowsmith was severely learning-disabled.  She read a research paper by Mark Rosenzweig, U. of California (Berkeley), showing how rats living in stimulated environments had heavier brains with better blood supply than rats living in less stimulated environments.  A light bulb went on. She founded the famous Arrowsmith School in Toronto, where the learning disabled are taught to do strenuous mental exercises that greatly enhance their mental functioning.

   * Bach-y-Rita did a famous experiment, published in Nature in 1969, in which he enabled blind people blind from birth to see!  How?  A TV camera scanned the scene in front of the subject, as he/she turned a hand crank. The camera sent signals to a computer, which processed 400 vibrating stimulators arranged inside a chair back, resting against the subject’s skin.  The ‘stimulators’ were like pixels, vibrating for dark parts, still for light ones.  The six subjects in the experiment learned to recognize things like telephones, and even learned to recognize a picture of the supermodel Twiggy.

   * Rudiger Gamm is a young German of normal intelligence, who turned himself into an exceptional ‘calculating machine’, who can compute the ninth power or fifth root of numbers in seconds.  Starting at age 20, Gamm, who worked in a bank, began doing four hours of computational practice every day.  He now makes his living performing on TV.  A PET scan of his brain shows that when he calculates, he uses five more brain areas for calculating than “normal” people.  Specifically, his brain enlists ‘long term memory’ for calculations when you and I use only ‘short term memory’ brain space.

    I believe the evidence is beyond doubt.  With sufficient persistence and practice, you CAN greatly boost your brain’s abilities.  And indeed, your brain can preserve its own sanity.  When U.S.S.R. “refusenik” Nathan Sharansky was jailed for nine years, of which more than a year was spent in dark solitary confinement in a tiny cell, he preserved his sanity by playing chess against himself, remembering both black and white positions.  He claims this kept his sanity.  Later, he went to live in Israel, became a Minister, and invited Gary Kasparov to play chess against Cabinet members.  They all lost – except Sharansky, who managed a draw.      

Innovation/Global Crisis Blog

Chimerica—The Latest ‘Twist”

By Shlomo Maital

   Chubby Checker, “The Twist”, 1960

 Harvard Business School Professor Niall Ferguson (“The Ascent of Money”) coined the phrase Chimerica, referring to the stressful symbiotic relationship between America and China, which at once have win-win (we invent things, you make them) and lose-lose (your strong currency zaps our exports) relationships.  Here is the latest Chimerica saga, a kind of ‘twist’ on the Fed’s Twist.

    As noted in this blog,  Ben Bernanke’s Fed is selling long Treasuries and buying short Treasures, for $400 b. each. Recall, demand raises the price, higher prices of bonds lower their yields. So the goal of this plan is to ‘twist’ the interest rates, lowering long term rates, and raising short term rates, to help demand for mortgages and corporate borrowing, which depend on the longer interest rates.   The ‘twist’  was tried, with little success, in the 1960’s.  (Chubby Checker’s 1960 dance version, The Twist,  was far more successful and still lives!).  It is probably a bad idea, because short term rates drive what banks pay for deposits and banks are already in trouble.  

    But again China may save the day, by ‘twisting’ back.  China may sell long-term Treasuries (remember they have billions of them), and buy short-term Treasuries, because China wants to avoid lower yields on their total Treasury holdings (recall that if China holds $3 trillion in Treasuries, a one percent drop in yield is $30 billion!  That is fully half of once per cent of its GDP. ) 

     So China may simply reverse what the Fed is doing, and thus neutralize it.  Did Ben Bernanke and the 10-person FOMC Federal Open Market Committee check with the Chinese before they made their highly-divisive move (the vote was 7-3, almost unprecedented to have 3 dissenters on an important policy shift!)?   Probably not.   So much for Chimerica.   

  •  See Tom Orlik’s piece in the on-line Financial News, “Will Chinese Twist Fight the Fed?”   

Innovation/Global Crisis Blog

To Fix America’s Busted Economy, We Need to Call an Electrician

By Shlomo Maital

     Woody Allen once commented,  “not only is there no G-d,  just try to get a plumber on the weekend!”   Or, he might have added, an electrician.

   Maybe America needs an electrician.  Yesterday the Fed announced its Operation Twist, with $400 b. in bond-buying of long-term bonds, to raise 20-year bond prices,  hence lower their yields and push down long-term interest rates that impact mortgage borrowing, corporate borrowing, etc.,  while selling an equal amount of short-term bonds, to keep its balance sheet balance. It’s called “twist”, because the interest rate term structure is twisted, with the short-term rates rising, and the long-term rates falling.   This was done in the 1960’s, but with minimal effect.  It is a sign of the Fed’s desperation.  The vote in the Federal Reserve Open Market Committee was far from unanimous, 7 in favor, 3 against.  This is also rare, usually the meetings end in consensus.  Not only is America’s politics a ‘house divided’, so is the Fed itself. 

     Here is why America needs an electrician.   Ohm’s law states that the current through a conductor between two points is directly proportional to the potential difference across the two points, and inversely proportional to the resistance between them.  Say that again?

                       I =   V/R , I = current, V = voltage,  R = resistance

     Let’s say, I is “power”, or “current” (economic momentum).  V is  voltage, or the Fed stimulus, zapping the economy with money.  Let’s say R is ‘resistance’ (desire of people to lower their debt, stop borrowing, save more, etc.).    If the Fed raises the voltage, it will do no good, if at the same time it does so by saying things are MUCH worse than anyone thinks, and ordinary people tighten their belts even more.  If V rises 10%, and R rises 10%, it’s a wash. Nothing happens to the economic “power”.

      We need an electrician.  How do we lower the “R”, resistance?  By offering ordinary people a clear simple strategic plan for rebuilding America’s economy, its schools, investment, infrastructure, manufacturing and society as a whole.  ANY plan will do,  a clear vision will lower “R” if people think there is such a vision and there is hope for the future.

      Obama is no electrician. Neither is Bernanke.  Is there an electrician out there?  And, will he/she be willing to work this weekend? 


Innovation/Global Crisis Blog

Plus ça change…

By Shlomo Maital

  The more things change, say the French, the more they stay the same.  Plus ça change.  

  Wall St. bank chicanery helped cause the 1929 Crash which led to the Great Depression.   U.S. banks both issued stock on behalf of client companies (as investment banks) and peddled that stock to depositors (as commercial banks).  Conflict of interest?  How dumb we were to buy into this scam.

  In 1933, two Democrats drafted the Glass-Steagall Act that effectively separated commercial and investment banking.  But under President Clinton, it was repealed;  the  provisions of Glass-Steagall that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act, named after its co-sponsors Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia).   Result:  Another Great Crash (it is three years exactly since Lehman Bros.’ bankruptcy).  This time, the worthless paper was mortgage-backed securities. 

   So, again, the U.S. has acted to force all big banks to become bank holding companies, subject to regulation as commercial banks, and has acted to limit “nostrum” (own-account) speculative trading.  Back to Glass-Steagall.   And Britain is following suit.  The British Vickers Commission has just reported, calling for ‘ring fencing’, which means separating British banks’ commercial lending and borrowing from its more risky operations, much like Glass-Steagall.   This proposal will be phased in very slowly, to avoid stressing British banks. 

    What are the odds that the next American President, likely a Republican, perhaps even conservative Texas Governor Rick Perry, again crushes the new version of Glass-Steagall, in 2012-3, when the moneyed interests retake the White House?  This is quite plausible. Obama’s approval ratings are as low as, or lower than, Bush’s.  His job-creation speech did not even cause the approval needle to quiver.  The Democrats lost a New York House seat to a Republican, first time in memory a Republican was chosen in this district. 

    As the global economy weakens and big banks plead poverty, what are the odds the Vickers Commission too will defer its recommendation – to, say, 2097? 

    Einstein said insanity is doing the same thing and expecting different results.  How can we ordinary folks be so dumb to allow this to go on, again and again, and elect the officials who let it happen? 

    Plus ca change….

Innovation/Global Crisis Blog

Three Brief, Simple Comments on the Euro: Europe picks lose-lose

By Shlomo Maital  

 Abe Lincoln


1.  In 1860-4, 151 years ago, America fought a bitter bloody Civil War.  During the war 625,000 persons died – more than all the U.S. deaths in World War I and II combined.  The Civil War was not about abolishing slavery. It was about whether the individual States had the right to do whatever they wished, against the Federal constitution.  The South lost, the North won. America remained one country with a clear set of rules.  Never again was America’s existence questioned.

   Europe is today undergoing the same crisis.  It is not a Civil War but a financial one.  Nobody is dying.  All that is at stake is money.  What Europe does today will determine its future for a century.  The difference is, America had Lincoln, a strong and visionary leader, tough in war and forgiving in peace.  Europe has no Lincoln.    That may be the difference.

2.  Here, in 144 words, is the euro problem.   Greece cannot pay back what it owes. The proof: The ‘insurance’ premium on Greece’s short term debt (known as credit default swaps, CDS) is 98 per cent (you have to pay 98 euros to insure 100 euros of debt!).  So it is clear that soon, Greece will be in default on its debt. It is paying 23 per cent interest to borrow, no country can afford to roll over debt at that rate.  Who will bear the cost of Greece’s default?   Not us, say many Germans.  Not us, say private holders of Greek bonds.  And each day that passes without a solution, the costs to everyone mount.  Europe is incapable of applying the American model (swallow the losses fast, clean up the mess and move on) and instead follows Japan (sweep the losses under the carpet and stagnate for 21 years as a result). 

3.  In the language of game theory, there are only two outcomes of the euro crisis.  Win-win. Or Lose-lose. 

     * Lose-Lose.  Greece is forced out of the euro zone, returns to the drachma, the drachma drops by half, and Greek banks and businesses are all bankrupt, because their old euro debt doubles overnight, in terms of drachma. (How many businesses, or governments, can have their liabilities double overnight and remain solvent?) This is what happened to Argentina in 2001.  Nor will anyone lend to Greece for years – and you cannot do business without credit.   Greek people lose all their savings. Greece’s  GDP falls by 40 per cent.  Greek unemployment soars from 16.6 per cent today to 45 percent.   There is bloody social protest.  Greece is a huge loser. But so is Europe.   Frightened by Greece’s default, lenders bail out of Italy, Spain and Portugal,  pushing those nations toward default as well.  Italy is the 800-pound gorilla – its sovereign debt is massive.     The Greek crisis raises interest rates in Europe, and hurts economies throughout the 27 EU (27 minus Greece) nations.  Everyone loses, including America.  Even China.  Italy thinks China will ride to its rescue.  Does anyone think it is more than ridiculous for an EU nation to ask China to bail it out? 

   *   Win-Win.  Europe wakes up.  On one sheet of paper, Merkel writes down the total financial and economic costs of Greek default and exit from the Euro, for each of the 27 EU nations (including the 10 not in the euro currency zone), and for all taken together.  This is , say,  X trillion euros.  She then writes down, on the same one sheet of paper, the total cost of PREVENTING this massive loss.  This is, say, Y trillion euros.  The exact numbers are imprecise, but it doesn’t matter.  Because X is massively bigger than Y.  The cost of dismantling the euro is massively bigger than the cost of saving it.  Then Merkel, Sarkozy and others take the “Y” number, and split it up reasonably among the stronger European nations; a big European Stabilization Fund is mounted, so big that it might not even be needed, because its very existence shows currency speculators that betting against the Euro might cost them heavily. 

    Merkel then asks the German people:  Do you want to invest  100 billion euros today? Or do you want to lose, say, 200 billion euros, in the coming years, because we failed to invest? 

  The current European rules of the game require unanimity of all 27 nations for a major decision.  This is absurd. Little Slovakia, with 5 million people, can  (and is) sabotaging key EU decisions for the benefit of over 500 million people.  One percent of Europe is calling the shot!  Suspend the rules, and move on!  In 1860, America would have fallen apart if it had allowed Mississippi to veto anti-slavery laws. 

    Lose-lose or win-win.  Which would you choose?  Only in the Mideast do leaders actively and continually pick lose-lose.  Europe seems about to join us. 

Innovation/Global Crisis Blog

Delta Force: But This One Kills Good Guys, Not Bad Guys

By Shlomo Maital  

    The arrest of Kweku Adoboli revealed the following practice done by leading global banks, not only by Adoboli’s employer UBS, and its Global Synthetic Trading group.  It is called Delta One.  That’s what Adoboli was doing that lost $2 b.  Here is how this “Delta Force”  works.

   1. Offer clients guaranteed return on their investment.

  2.  Take their money.

  3. Invest their money in higher-risk securities, that pay higher returns, and call it a “synthetic trade” (“Hey, we kind of like maybe bought you 10,000 shares of IBM, but actually we put the money into 100,000 shares of Fly-By-Night Inc., don’t worry, it’s all perfectly safe and legitimate, trust us!”). 

  4. Pay the client their guaranteed return (5%) and pocket the difference between what you actually earned with their investment and what you paid them (20%?  40%).   Except, when you bet wrong and lose the whole wad. 

   Legal?  Sure.  Ethical?  I don’t think so.  More of the same fol-de-rol that ruined the global banks in 2007-8?  Worrisome, on the 3rd anniversary of the collapse of Leyman Bros? 

   Delta Force.  The new version. Brought to you by the same great guys that created Global Crisis 2007 – ? .  The original Delta Force killed bad guys.  This one kills good guys – or at least, their money (OUR money).   Even the original Delta Force wouldn’t be able to overcome the new Delta Force.  It’s armour-plated. 

Innovation/Global Crisis Blog

There is still “BS” in UBS – and “U” and I Are Paying For It

By Shlomo Maital 

 Kweku Adoboli

   First the facts.  A 31-year-old equities trader named Kweku Adoboli, originally from Ghana, son of a former UN official, was arrested by London police on charges of fraud.  Adoboli headed Global Synthetic Equities Trading for Union Bank of Switzerland (UBS), a huge Swiss-based global bank, in its London office.  He engaged in “rogue trading”, i.e. took unhedged positions that led to quickly-mounting losses, eventually totaling $2 billion.  The losses are large enough to cause UBS to report a loss this quarter.   Adoboli didn’t steal the money, he just made bad bets and UBS’s risk management system failed to stop him. 

   Now, my opinion.

   Don’t blame Adoboli.  Of course he’s culpable, and he’ll go to jail (the maximum sentence for his alleged crime is 10 years in prison).  Blame the system, blame UBS and other global banks.  They still don’t get it.  UBS paid Adoboli an estimated half million dollars a year (yes, you got it, $500,000), to a 31-year-old just a few years out of college.  Why would they do this?  Because as a trader he made money for UBS in speculative risky markets.  And UBS likes money and needs money, because frankly, as a conventional bank it is not doing so well.  So instead of doing the hard patient work of rebuilding its conventional banking business (taking deposits and lending money), UBS and other banks like it are still taking the short-cut, seeking short-term speculative profits gained by trading for its own account in volatile global markets.   Blame UBS. 

   How did Adoboli get away with it?  Simple.  He first worked in UBS’s “back office”, where traders are monitored, managed and controlled.  He knew the system.  When he moved up to become a trader, he knew how to get around the system and make trades that were unhedged and illegal, without the Bank knowing.  By the time it realized what he was doing, $2 b. went down the drain.

      “I need a miracle”, Adoboli posted on his Facebook page.    We all need a miracle.  We need a miracle for these global banks to stop at once the behaviors that caused the continuing global crisis.  Adoboli’s favorite book is Jordan Belfort’s The Wolf of Wall Street, whose tagline is “I partied like a rock star and lived like a king”.  So did Adoboli.  Don’t blame them.  Blame those who employ them and turn them loose. 

       America has passed legislation banning “nostrum” accounts (speculative trading by banks for their own profit, rather than on behalf of their clients).  Let Switzerland now do the same, and the European Union.  Don’t blame the traders. Blame the fat bankers who turn them loose.  Let UBS’s CEO join Adoboli in the jail cell, where they can discuss, for a decade, the moral implications of using the money of depositors and shareholders to take rash, speculative risks. 

       Guys!  It’s not your money!  It’s ours.  Stop this at once!

       In the name UBS,  there is still a whole lot of BS.  And “U” and I are paying the price. 

* Based on: The Times, “I need a miracle”, Sept. 16, 2011, by Katherine Griffiths, David Brown, p. 1.

Innovation/Global Crisis Blog

Innovator: Can You Reinvent Any of These Businesses?   

By Shlomo Maital

Dear Innovator,

     As so often happens, while everyone’s attention is on the raging “fires” that consume the media – euro, capital markets, rugby’s All Blacks – the real crises lie elsewhere.  Six major industries all have business models that have become obsolete and need radical reinvention.  In my opinion, nobody in these industries has a clue how. 

* Publishing: The Economist writes:    Book publishing resembles the newspaper business in the late 1990s, or music in the early 2000s. Although revenues are fairly stable, and the traditional route is still the only way to launch a blockbuster, the climate is changing. Some of the publishers’ functions—packaging books and promoting them to shops—are becoming obsolete. The tide of self-published books threatens to swamp their products. As bookshops close, they lose a crucial showcase.  …

* Newspapers:  News and with it advertising are moving to the Web.  Newspapers everywhere are in deep trouble and have not yet found a way to replace print ad revenue. 

* Movies:  After DVD sales replaced box-office sales as a primary revenue source for movie makers, Internet downloads have now killed DVD sales.    

* Banks:   Since Jan. 1, 2011,  French bank share prices (BNP, SG, CA) have fallen by 44-58 %.  RBS shares have fallen by 44%.  Even Deutsche Bank and Barclay’s fell by 44%. Credit Suisse is down 46%, and UBS just announced it lost $2b. to a rogue trader.  The real problem: With their credit ratings downgraded, exposed to Greek, Italian, and Portuguese sovereign bond default, some banks now pay more for borrowing money than their clients.  Banks need a new business model, in the age of total mistrust and paranoia about risk.  None have yet found it.

*  Consulting:  Those fat multi-million-dollar contracts for ‘strategic renewal’ are really tough to get these days.  In an age of ‘value for money’, clients are re-thinking whether they really get value for these reports,  that mainly gather dust. 

* Business schools:  After selling over-priced MBA degrees that taught impressionable youngsters their sole goal was to maximize profits for shareholders, business schools are doing some soul-searching, as MBA grads find their traditional job sources (consulting, investment banking) have dried up.  

   The problem is especially acute in banking and finance.  Regulators are tightening the screws, demanding ever-higher capital ratios.  At a time when banks are already reluctant to lend, especially to other banks, higher capital requirements will squeeze credit even more, and squeeze bank profitability even more.  Yet, without this added capital, banks remain vulnerable to massive potential losses if and when sovereign bonds are in default. 

    The need to reinvent these industries occurs at a time when it is vital for nations to coordinate and collaborate, because no single nation can stimulate global demand enough on its own.  Yet there is no sign of such collaboration.  Even the 17 Eurozone countries cannot agree among themselves, not even when the euro itself is at stake – unanimity is required for key decisions, like issuing Euro bonds, and little Slovakia is casting a veto. 

    Innovator, now is your chance.  Can you come up with an innovative business design for any of these troubled industries?  I believe the top priority is the banking and finance industry.  Banking is becoming like politics – an adverse selection model drove capable young people away from politics, and now the same is happening with finance, for the same reason,  as the two endeavors are tainted by corruption, greed and unethical behavior.      

Innovation/Global Crisis Blog

The Man Who Paid $5 m. for Lunch – and It Was Worth Every Penny!

By Shlomo Maital   

   Ted Weschler, Warren Buffett



This is a true story.  A little-known hedge fund manager paid $5 m. for lunch – and it paid off in spades.   Of  course, we all know there is no free lunch.  But a $5 m. lunch? 

    The hedge fund manager is named Ted Weschler, manager of Peninsula Capital Advisors, a Virginia-based hedge fund with $2 bn. in assets.   In 2012 Weschler will join Berkshire Hathaway, Warren Buffett’s company, to manage a $1 b. – $3 b. slice of Berkshire’s $66 b. portfolio of equities. 

    How did he get this great job?

    Weschler spent over $5 m. in a charity auction, in which the prize was …lunch with the Oracle of Omaha, Warren Buffett.   

    What was said? What was discussed? We don’t know. But clearly it was enough to impress Buffett sufficiently for him to hire the impetuous Ted Weschler.    Along with the announcement of Weschler’s appointment at Berkshire, came an announcement liquidating Peninsula and distributing the proceeds to its owners and shareholders. 

   Has Buffett lost his touch?  Last month he bought $5 b. worth of Bank of America shares, which have since dropped sharply.   Can Weschler restore Buffett’s Midas touch?  Stay tuned. 

  •  Source: Telis Demos, Financial Times, p. 1, Sept. 13, 2011.

Innovation/Global Crisis Blog

The Real Reason Behind the Euro Crisis

By Shlomo Maital  

  In a speech last week, the powerful CEO of Deutsche Bank, Josef Ackermann, let the ‘risk’ cat out of the ‘euro’ bag.   It turns out that European banks, in Germany, UK and France, hold huge amounts of bonds whose value has plummeted because the PIIGS (Portugal, Ireland, Italy, Greece, Spain) governments may be unable to redeem them.  But unlike in the U.S., where commercial banks have ‘marked to market’ similar assets (bonds backed by sub-prime mortgages),  European banks have been slow to recognize these losses and regulators have been super-delicate in requiring them to do so.   European bank balance sheets do not reveal even a fraction of these losses. 

    “Many European banks would not be able to handle writing down the sovereign bonds they hold on their banking books to market levels”, Ackermann said.   What he means is that Europe has been playing a game of deception,  trying hard to ignore bank losses and hoping somehow they will go away.  But they won’t. 

     Of course, capital market insiders know this and have known it for years.  Deutsche Bank shares lost a third of their value this year, and less than half of their price before the Lehman failure in Sept. 2008.  Some 29 of 30 leading European banks, according to NYT reporter Floyd Norris, have share prices lower today than on the eve of the Lehman Bros. collapse.  Credit Suisse, Lloyds, Societe Generale, and UniCredit have lost 40 per cent of their share value since Jan. 1.   These losses, in turn, act as dominos, threatening financial institutions in other countries, including in Israel, where a leading tycoon invested heavily in Credit Suisse shares and has now suffered massive losses. 

     And here is the weird irony.  Governments everywhere bailed banks out in 2008.  To do this they incurred debt.  This debt now has become burdensome and some governments cannot pay it.  But many of the banks governments bailed out hold this debt, and now, again, the banks are threatened by the very governments who tried to save them. 

     There is no obvious solution.  IMF Head Christiane Lagarde wants banks to raise more capital.  Ackermann says this will cause bank shares to fall even further, because it will threaten to dilute the holdings of existing shareholders. 

      Europe must learn from America. The U.S. is unparalleled at creating financial crises, but is also terrific in how it cleans up the mess by writing off losses quickly and starting fresh.  Europe does the opposite, sweeping losses under the carpet and then moving a sofa to hide them.  It won’t work.  Look for continued euro crises, which impact the whole world, until Europe wakes up and tells the truth.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital