Salo News Day
Regular readers will know I am a cynic. Try writing a Daily for over two decades and not be – and events over the last 24 hours underline that fact. Indeed, you could call it a “Salo News Day” in reference to the controversial Italian film “Salò, or the 120 Days of Sodom”, a loose adaptation of the 1785 novel by the Marquis de Sade. As Wikipedia puts it: “The film explores themes of political corruption, consumerism, authoritarianism, nihilism, morality, capitalism, totalitarianism, sadism, sexuality, and fascism.” In other words, a typical day at work in the markets of 2021.
After all, the Wall Street Journal reports “World Bank Cancels Flagship ‘Doing Business’ Report After Investigation”, frustrating to economists who rely on it. The rub is: “Chinese officials in 2018 were eager to see their ranking improve, and so Mr. Kim and Ms. Georgieva and their staff held a series of meetings to discuss ways that the report’s methodology could be altered to improve China’s rankings.” So untrustworthy World Bank data – and no consequences; a World Bank boss with a stained reputation – and no consequences; and an IMF boss with a stained reputation – and no consequences. That makes it two in a row for the IMF, with the previous one now running the ECB.
At the Fed, “Powell orders ethics review after Fed presidents disclosed multimillion-dollar investments”. Somehow this ethical violation on the part of the people running the global financial system passed them by until now. Yet is this really rare? How about if a rate-setter at a central bank told you over lunch about the land their company was snapping up for development? That happens – just not at the Fed. (As far as I know.)
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