Archive for May 22nd, 2015

A political party in Barcelona pledges to print local currency for the region..

May 22, 2015

Interesting article on money something Austrian school might be happy seeing.

In local Barcelona elections, one of the party has said it will print local currency on winning:


JP Morgan is trying to get consumer and economy insights from big data

May 22, 2015

This is an interesting development.

JP Morgan has mined tons of data on its customers and now trying to get insights from various patterns:

What if banks could tap into their vast network of consumer and business accounts to ferret out signals about where the economy is headed? 

J.P. Morgan Chase is doing just that with the launch of a new institute that uses “big data”in analyzing hundreds of thousands of accounts for clues about income and spending patterns. The institute’s first report, released Wednesday, offers a deep dive into consumer finances and shows that income and spending remains volatile for the broad middle class, not just the poor.

Researchers tracked the spending and income patterns of 100,000 randomly selected individuals from a sample of 2.5 million accounts at the bank over a 27-month period ended last December. Among its findings: While two in five individuals saw their income vary by at least 30% from one month to another, three out of five individuals saw their spending vary by at least 30%.

The potential dividends from building this data asset aren’t lost on Diana Farrell, the institute’s chief executive. She learned first-hand about the need for real-time information about household financial behavior as a top economic adviser to President Barack Obama in 2009 and 2010.

“I can’t tell you how frightening it was to be in the middle of the debacle of the recession and not have a good understanding of what was happening in the household sector,” she said. “We were just starving for real-time information.”

J.P. Morgan plans to build out its dataset so that it can look back historically, she said. The analyses of account data, which are stripped of any identifying information for bank customers, could help give insight into what Americans did last fall with their gasoline savings, for example.

Other findings from the institute’s first run through its data lab:

Monday is the top spending day of the week and Sunday is the lowest. Americans spend three times as much on a Monday as they do on Sunday.

Excluding Tax Day, the single biggest day for consumer spending last year fell on March 3, the Monday that followed the single highest earning day of the year, Feb. 28.

The top 12 days for spending at restaurants and bars fell between Feb. 14 and May 11.

Ms. Farrell said it isn’t yet clear how to explain some of those statistics, so stay tuned.

Monday the highest spending day and Sunday the lowest. That is strange. One would imagine max spending on Sat and Sun. Monday is a sad day for most and may be people spend the most to get rid of sadness on that day..

The Fed Takes a Beating on Amazon’s Best-Sellers List

May 22, 2015

Interesting point by  of Mises.

He shows that books on Federal Reserve and its revered chair have taken a beating in rankings:

Interestingly, Amazon’s list of best sellers in the “monetary policy” category is a veritable parade of anti-Fed and anti-central bank books. Having not read all of them, I certainly can’t endorse all of them, and many of them surely contain questionable economics and fanciful claims about central banks. (Jim Grant’s great new book is in there, though.)

On the other hand, the fact that such books dominate the book sales in this category tells us a thing or two about how the near consensus of approval once enjoyed by the Fed (and other Western central banks) is long gone — thanks largely to Ron Paul’s 2008 campaign. Had we a list like this from 10 or 15 years ago, it probably would have been dominated by books like Bob Woodward’sMaestro, which basically made the case that Alan Greenspan was an inimitable genius. (You can pick up a hardback copy of Maestro for one cent, by the way.



Swiss monetary policy facts… and fiction

May 22, 2015

Trying times for SNB. Jean-Pierre Danthine of the central bank defends its policies.

In one if the myths it says central bank does not have unlimited powers as it is imagined:


Behavioural development economics: A new approach to policy interventions

May 22, 2015

WB scholars explain the key findings of the 2015 World Development Report which focused on behavioral insights.

Economists typically assume people behave in a rational and self-interested way, making standard models limited in their explanatory power. This column argues that psychological and sociological factors – though usually ignored in economic models – affect decision-making. The findings, drawn from the World Development Report, further suggest that better behavioural understanding could subsequently aid development efforts.

They look at three insights:


ATM usage declines in India..

May 22, 2015

The overall numbers have risen but averages are falling as suggested in this article.


How IDFC is transitioning to a bank and what to expect?

May 22, 2015

Personally, I think IDFC was made into a bank a wee bit too early. Given how China and even India is pushing new development financial institutions to fund infra, we might have to soon look at domestic front too. We actually might need a few more IDFCs in future.  Anyways, nothing can be done now. In finance, we have to go in circles and keep pulling out old wine in new bottle.

In this interview, IDFC chief Rajiv Lall explains how the transition is happening. Interestingly, the bank starts big from MP of all places:


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