Postal Savings Banks

Postal savings banks are a venerable form of public banks. They were traditionally aimed at providing payment and savings options for the broad public — they were not banks providing a full range of lending services. Instead, they recycled deposits into the bond and money markets, mainly investing in central government bonds. The “neoliberal” trends since the early 1980s resulted in these institutions being weakened or even privatised. In addition to the political shifts, the rise of digital computing raised the level of expected services in most countries.

This is an unedited draft section of my banking primer. My inflation manuscript is looking at Brent Crude price charts and sobbing.

Inflation Debate Post On My Substack

Due to time constraints, I am not copying over my recent article to this blog. I apologise for this, but I might bring it here later.

Bond And Loan Financing

In an earlier article, I did an over-simplified discussion of how a local public bank would interact with municipal bond issuance. There was some ambiguities that I skipped over in order to keep things brief. This drew a variety of questions, and so it is clear that I need to expand on what I wrote.

Since these articles are expected to be bound into a banking primer manuscript, I was going to need to cover some of these basics long before I got to a section on public banks. But I will cover the basics herein, and not worry about the manuscript logic. There are also some assertions about technical issues which I would have to reconsider and dig into if they stay in the manuscript.

No War Plan Still

The main reason to be pessimistic about the war between Iran versus the United States and Israel is the lack of path towards peace. The United States does not have a plan that is remotely viable, since there is little sign that the Iranian regime will collapse. On the Iranian side, the plan appears straightforward: strangle traffic through the Strait of Hormuz until the damage forces third countries to move in directions favourable to Iran (e.g., expel American bases).

Public Banks And Municipal Bonds

Tyler Suksawat and Scott Ferguson recently published “Reclaiming the Public Interest: Cities Should Sell Municipal Bonds to Their Own Public Banks.” The lengthy title sums up the argument well. In this article, I want to offer my comments on this topic. My feeling is that the scope for such purchases are necessarily limited, and so one cannot expect an immediate revolutionary change. To the extent that sub-nationals can boost their finances, I think the model of la Caisse de dépôt et placement du Québec (“la Caisse,” disclaimer: my old employer) is more viable (at the state level in American terms).

Victory Declared — Did Not Go Home

I am about to write another article for publication tomorrow (I hope), but just wanted to express my dismay about the situation in the Gulf.

We appear to be on a worst case trajectory — American and Israeli leaders unable to find a meaningful way to end the conflict, and Iran closing the gulf to shipping traffic for an extended period. There is no sign of the American leadership having any plans for containing the economic fallout, and they are scrambling for ways of posting their way to victory.

Declare Victory And Go Home

The last 24 hours were chaotic in the oil futures and equity markets. From the perspective of an East Coast North American time zone, oil futures (both West Texas Intermediate and Brent) had record intraday upward movements, and equity indices tanked Sunday night. The carnage slowed down until a press release on 3:30 PM Monday that suggested the war was over, which caused a reversal in North American equities and oil futures markets to around Friday’s levels. President Trump gave an erratic press conference after the North American market close which both had claims of victory and statements that the war would be continued.