Blog posts by John Fullerton

John Fullerton is the Founder and President of Capital Institute, a collaborative space working to transform finance to serve a more just, regenerative, and sustainable economic system. Through the work of Capital Institute, regular public speaking engagements, and university lectures, John has become a recognized thought leader in the New Economy space generally, and the financial system transformation challenge in particular. John is also a recognized leading practitioner in the “impact investment” space as the Principal of Level 3 Capital Advisors, LLC. Level 3’s direct investments are primarily focused on sustainable, regenerative land use, food, and water issues. Through both Capital Institute and Level 3, John brings a unique theory and practice approach to financial system transformation. Previously, John was a Managing Director of JPMorgan where he worked for over 18 years. At JPMorgan, John managed various capital markets and derivatives business around the globe, then shifted focus to private investments and was subsequently the Chief Investment Officer of LabMorgan through the merger with Chase Manhattan before retiring from the bank in 2001. Following JPMorgan, and after experiencing 9-11 first hand, John spent years embarked on more entrepreneurial ventures as an impact investor while engaging in deep study of our multiple interconnected systemic crises that led to the founding of Capital Institute, officially launched in 2010. John was a member of the Long Term Capital Oversight Committee that managed the $3.6 Billion rescue of the distressed hedge fund in 1998. He is a Co-Founder and Director of Grasslands, LLC, a holistic ranch management company in partnership with the Savory Institute, and a Director of New Day Farms, Inc., New Economics Institute, and Savory Institute.org. He is also an Advisor to Armonia, LLC, a Belgian family office focused on impact investments, and to Richard Branson’s Business Leader’s initiative. He sits on the steering committee for the New America Foundation's Smart Strategy initiative as well. John writes the bi-weekly Future of Finance blog, which is widely syndicated on platforms such as The Guardian and The Huffington Post. He has appeared on Frontline, and been interviewed by Bloomberg, The Laura Flanders Show, The Real News Network, INET, and WOR radio. John received a BA in Economics from the University of Michigan, and an MBA from the Stern School of Business at NYU.

High-Frequency Trading is a Blight on Markets. Tobin Tax Can Help.

This blog post previously ran in The Guardian's Business section.

A tax on financial transactions can calm the frenzy of speculation fuelled by computer-driven...

Fri, 04 Apr 2014
Exclusive Sneak Peek at "Limits to Investment"

Perhaps the most important book missing from the bookshelves of most financiers is Limits to Growth, written in 1972 under the auspices of the Club of Rome.

Demonized as neo-Malthusian alarmism when it came out, the book has since sold 12 million copies, been updated three times, each validating the original message, and it...

Fri, 21 Mar 2014
Can We Escape Bank Regulation by Lawsuit?

When I worked at JPMorgan in the 80s and 90s, even in the context of deregulation, the concept of “self-regulation” in the financial industry was discussed with a straight face. 

Last week, Better Markets, a sophisticated civil society non-profit organization, run by former Skadden attorney Dennis Kelleher and committed to protecting the public interest in the...

Thu, 20 Feb 2014
Transcending the Tension between Climate Change and Inequality

This year’s gathering of the World Economic Forum at Davos was kicked off with the reading of a letter from Pope Francis, which ends: “I ask you to ensure that humanity is served by wealth and not ruled by it.” One can almost feel the squirming.

I recently participated in a roundtable among leading thinkers, activists, and social entrepreneurs on the need to put...

Tue, 28 Jan 2014
Startled by the Clarity of Regeneration

Several years ago, my friend and Capital Institute Advisor Simon Rich introduced a group of us to the hauntingly poetic wisdom of T.S. Eliot:

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

...

Mon, 16 Dec 2013
Evergreen Direct Investing: A Two-Part Series

Here in The Future of Financewe previously...

Thu, 05 Dec 2013
Harvard and Brown Fail Moral Leadership Exam

At a time when institutions of business and government continue to fail society, two of our leading academic institutions missed the opportunity to provide essential moral leadership on the most pressing challenge ever faced in the history of human civilization.

Harvard President Drew Faust issued her October statement...

Tue, 19 Nov 2013
6 Reasons Why Stock Markets Are No Longer Fit For Purpose

Another version of this post ran earlier today on The Guardian's Sustainable Business Blog.

6 Reasons Why Stock Markets Are No Longer Fit For Purpose: ...

Mon, 21 Oct 2013
Are We Not All Jasmines Now?

What is it about a Woody Allen film that leaves us always with a discomforting feeling of identification with its most abysmal character? This is certainly true with his latest film “Blue Jasmine,” which initially disappointed me, Kate Blanchett’s hauntingly brilliant performance notwithstanding. But given a little more time and reflection, its deeply disquieting meaning...

Tue, 20 Aug 2013
Commodities are Different (In a “Full World”): Part 3

(This post is the third in an occasional series on why stronger oversight of commodity markets must be a public policy priority.)

JPMorgan has announced that it plans to exit the physical commodities businesses, while remaining committed to its historic roots in commodity...

Mon, 05 Aug 2013
Beyond Sustainability: The Road to Regenerative Capitalism

Thomas Berry tells us, “It’s all a question of story.  We are in trouble now because we don’t have a good story.  We are in between stories.  The old story, the account of how the world came to be and how we fit into it, is no longer effective.”

For better or worse, economy, from the local to the global, is now a central component of the human...

Mon, 08 Jul 2013
CO2 400ppm Milestone Hit Last Week

Sun, 12 May 2013
Beyond Divestment

Two years ago, students at Swarthmore College began a fossil fuel divestment campaign, initially focused on coal. Last November, 350.org, the grassroots activist NGO dedicated to reducing carbon in the atmosphere to 350 parts per million joined the fight with a nationwide “Do the Math” campus tour. The movement spread to cities, and soon to...

Thu, 28 Mar 2013
Why I Marched Against the XL Pipeline

My daughter and I joined an estimated 50,000 demonstrators in Washington, D.C. marching against the XL Pipeline that would connect the Canadian Tar Sands to American refineries.  After a half century on this planet, I took to the streets.  Here’s why.

The “business as usual” arguments in favor of building the pipeline as articulated by the liberal and...

Tue, 19 Feb 2013
What JPMorgan's Recently Released Internal Reports Unintentionally Say

After apologizing at Davos - but only to his shareholders - according to William Cohan on the Bloomberg View, the JPMorgan Chairman and CEO hastened to add about 2012, “We did have record profits. Life goes on.”

It is true; JPMorgan reported a strong financial performance in 2012, “London Whale” trading fiasco notwithstanding. I must admit that despite my 18...

Mon, 04 Feb 2013
Of Guns, Whales, Freedom, and Justice

After visiting an awe-inspiring women’s empowerment program at work in several rural villages north of Delhi, our host at the Ashram, scanning his Blackberry, related the news: a horrific shooting…assault rifle…children slaughtered…in a school…in Connecticut (my son’s school is in the state)…and then after what seemed like an endless pause as I...

Mon, 14 Jan 2013
Will Sandy Trigger Our Great Transformation?

We are now a couple of weeks into the aftermath of Super Storm Sandy, and no one has yet improved upon the analysis of Bloomberg Businessweek’s November 1 cover story: “It’s Global Warming, STUPID.”

In 1944, the famous political economist Karl Polanyi explained the root...

Mon, 26 Nov 2012
Reimagining Capitalism in Post Sandy America

No scientist will tell you with certainty whether doping was the reason Lance Armstrong won any particular leg of his seven Tour de France titles. You know where I’m headed with this reasoning.

Bloomberg Businessweek put it rather succinctly on this week’s cover: “It’s Global Warming, STUPID.”

For the first time since 1984, not one challenge...

Tue, 06 Nov 2012
Inextricably Linked to Int'l Relations. So Why Isn't Climate Change Being Debated Tonight?

With the third and final debate scheduled for this evening, we undoubtedly will witness the first presidential debate in the United States of America since 1984 in which Climate Change is not part of the national debate, according to Brad Johnson in his post...

Mon, 22 Oct 2012
Of Ina and Ahab

In her New York Times Magazine cover story on the fall of the well-regarded Ina Drew titled “Swallowed by the London Whale,” Susan Dominus ends the article quoting Drew’s former colleague who recently lamented with Drew: “You know, Ina, sometimes I think I’d give my right arm to return to those (good ol’) days at Chemical (Bank), you know?...

Wed, 10 Oct 2012
The Case for Spending Down a Charitable Foundation

“Have things become so critical – both in terms of the scale of the challenges we face but also the possibility of change – that this radical step [of spending down our assets over the next ten to fifteen years] is a good move?”

This is the question recently put to the advisor of a foundation deeply concerned about the environment, which he in turn shared...

Tue, 18 Sep 2012
While Rome (and the Western US) Burns...

It’s officially election season, and (surprise) we’re off to a terrific start. There are plenty of very real short and medium term issues for the candidates to mold their ideologies around. Most notably, like much of the so-called “developed world,” the US has a jobs crisis, both in quantity and quality, that challenges modern capitalism for answers it does not have...

Tue, 04 Sep 2012
Good Knight HFT

The futile debate between market fundamentalists and those who claim you can’t stop “progress” on the one hand, and proponents of tighter government regulation and oversight on the other continues on with no resolution in sight. From too-big-to-fail banks, a second front is now opening, this one focused on the structure and regulation of equity trading in the United States...

Mon, 13 Aug 2012
Financial Overshoot
Last week, I gave a talk to the Missouri Association of Public Employee Retirement Systems annual meeting.  This was the first time I presented my developing thesis of financial overshoot, which arithmetically accompanies ecological overshoot unless we manage to...
Mon, 23 Jul 2012
Off-Grid Financing

The ramifications of the Libor scandal—what Warren Buffett glibly called a can of worms that affects the whole world—grow by the day.  Criminal indictments of individuals, even if firms are too big to indict, appear to be in the making as the tsunami’s shock waves are about to spread to many of the usual suspects. One can...

Mon, 16 Jul 2012
Will Barclays' CEO Surprise Us?

Like Lloyd Blankfein with the Abacus fiasco, and Jamie Dimon with “the whale trade,” Barclays CEO Bob Diamond has an unparalleled opportunity to surprise us this week during his appearance before Parliament to explain the most recent financial scandal involving the systematic manipulation of LIBOR, the benchmark interbank lending rate upon which hundreds of trillions of dollars...

Mon, 02 Jul 2012
Is Jamie Dimon's Business First Class?

JPMorgan CEO Jamie Dimon will today, once again, stand before the authors of Dodd-Frank and attempt to make the case for why a $2 billion trading loss was a stupid mistake, not a willful breach of at least the intent of the law. Our representatives who wrote the law should hold him to the standards set by JPMorgan’s own Code of Conduct: following the spirit and intent, not just the...

Mon, 18 Jun 2012
Freedom in the Anthropocene

Much needs to change in the Anthropocene, including our willingness to have constraints placed on our precious right to individual freedom.  This is particularly challenging for Americans whose country was founded on an Enlightenment-inspired understanding of freedom, uninformed by the advances of modern...

Mon, 04 Jun 2012
Real Prosperity Starts Here

I spent two days last week in Grand Rapids, Michigan at the "Real Prosperity Starts Here" conference organized by the Business Alliance for Local Living Economies (BALLE).  Even though I was only able to attend for a short time, I left re-energized and excited by all I saw and engaged in.  The annual BALLE conference, which has for 10 years been among the leading places...

Mon, 21 May 2012
10 Questions JPMorgan’s Board of Directors Should be Asking

Much has been written about the trading—not hedging—debacle at JPMorgan.  Jamie Dimon’s mea culpa is intended to head off deeper questions. No cover-up on his watch—get out in front, be direct, deal with it, move on.  Right?  Not so fast.

JPMorgan’s board has a responsibility to probe more thoughtfully into the uncomfortable truth about...
Mon, 14 May 2012
Flawed, Ignorant and Dangerous: A Bain Capital Partner’s Worldview

“At base, having a small elite with vast wealth is good for the poor and the middle class.” 

This is how Adam Davidson’s piece in the New York Times Magazine summarized the frustrated former Bain...

Tue, 08 May 2012
Is There a Case for Public Banking in America?

Last week I participated in the inaugural Public Banking Institute conference in Philadelphia - not a coincidence, freedom from tyranny of the banks underscored the program.   When I first learned of this idea of state-owned banks as a solution to our economic challenges, I was a real skeptic.  Just what we need, our government...

Mon, 30 Apr 2012
A Letter to the Hopeful Inhabitants of the Anthropocene

A hypothetical letter from the future to today’s global citizens.  Written by John Fullerton for the House of Futures In100Y Project and released today on their site.

A hopeful vision for the future inspired the founding of the Capital...

Mon, 16 Apr 2012
Financial Statesmanship for a New Economy

Reactions to departing Goldman derivatives salesman Greg Smith’s “Why I am Leaving Goldman Sachs,” which appeared as an op-ed in the New York Times last week, have ranged from the hyperbolic — Robert Reich’s “...

Mon, 19 Mar 2012
Update: Commodities are Different (in a "Full World")

The concern I raised last June that we should enforce the Bank Holding Company Act and not allow the too often irresponsible, gigantic, TBTF and taxpayer-subsidized banks to engage in proprietary physical commodities trading has now been raised in a...

Mon, 05 Mar 2012
Beyond Firm-Level Sustainable Capitalism

Co-authored by Peter Malik, Director of Center for Market Innovation at the NRDC

Generation Investment Management’s recently released white paper calls for a “paradigm shift” to Sustainable Capitalism. It is an admirable and important contribution to the discussion...

Mon, 27 Feb 2012
Ending the Debate on Keystone

In his February 10th essay, New York Times columnist Joe Nocera asked a simple question: “Can a person support the Keystone XL oil pipeline and still believe that global warming poses a serious threat?”

Joe answers “yes,” with...

Mon, 13 Feb 2012
Finance for Sustainability: The Future of Business Education

I was honored to join Majora Carter, Eban Goodstein, and Elysa Hammond at the launch of Bard College's new MBA in Sustainability last week to discuss how finance has been a major factor driving our ecological and social crises and how fixing finance must be a part of the solution.  The ideas I presented - an all hands on deck, bottom-up and top-down/systemic approach to sustainable...

Mon, 30 Jan 2012
A Systems Approach to Financial Reform

I spoke last Thursday at the Congressional Progressive Caucus Policy Summit in Baltimore on how our work at Capital Institute might have relevance to the 2012 Congress’s financial reform agenda. These are the hopes I shared for how policy could shape the Future of Finance:

 
“Good Afternoon, and thank you for offering me the opportunity to address you...
Mon, 23 Jan 2012
What's Wrong With the Debt Debate

This former banker, and now sustainability investor and humble blogger, will not offer grand predictions for 2012.  Forecasting in a world of rising uncertainty suggests a lack of understanding about uncertainty.  Instead, inspired by my holiday reading, Debt: The First 5000 Years, by anthropologist...

Tue, 03 Jan 2012
Time to Plan: The Climate Crisis is Here

This is what the fight over Stranding Assets will look like.

The spotlight on “stranded assets” is growing brighter, and that is good.  The idea was brought to our attention when Carbon Tracker released their report, “Unburnable Carbon,” on...
Mon, 19 Dec 2011
Europe to Investors: “This Time We Really Mean It."

All eyes are trained on Europe these days. While I look on, I can't help but yearn for the day when financial markets and financial institutions are a little less interconnected, and a lot more resilient. Whether such a system lies in the future, or only in the past, is open to question. It's clear that the factious nature of the nation state, the shape of the...

Mon, 12 Dec 2011
The Wisdom of Melville

"If your banker breaks, you snap."  -  Herman Melville, Moby Dick

During the summer between the day I resigned from JPMorgan after eighteen years, and the horror of witnessing 9-11 up close and personal, I joined a couple of friends on their fifty foot sailboat in an attempt to sail across the Atlantic Ocean.  What better time to...

Mon, 28 Nov 2011
The Joint Chiefs of Staff and OWS... Who Knew?

 

Last week, I had the privilege of meeting Colonel Mark (“Puck”) Mykleby, recently retired from the US Marine Corps.  Puck was a “Top Gun” pilot, and finished his military career working in the Office of the Chairman, Joint Chiefs of Staff, as a senior advisor on strategy reporting to Admiral Mike Mullen, Chairman of the Joint Chiefs. 

...
Mon, 21 Nov 2011
Financial Collapse: It's Only Natural

What does the collapse of MF Global, the Euro crisis, the sub-prime mortgage crisis, the collapse of Fannie Mae and Freddie Mac, and the 1998 collapse of Long Term Capital Management all have in common?

Certainly these crises all shared the following characteristics: too much leverage, lack of transparency, inadequate regulatory oversight, agency problems of misaligned incentives,...

Mon, 14 Nov 2011
A Tax for the Supercommittee to Embrace

Last Friday, I participated in a Special Briefing on Capitol Hill in support of the Financial Transactions Tax (FTT). I came as a seasoned practitioner speaking on behalf of the real economy, not for the interests of the Wall Street trading community.  What I tried to convey was that what the US and World needs is enhanced capital market function, and that an FTT can help bring it...

Mon, 24 Oct 2011
Listening to Occupy Wall Street

 

I’m a former banker, a one percenter, and I’m mad as hell too. 

Let’s be clear.  This movement is not frustration being expressed, as President Obama, Treasury Secretary Geithner, and now Eric Cantor have suggested.  Frustration is passive; anger is active.  Martin Luther King was not frustrated.  But beyond my anger is real...

Mon, 17 Oct 2011
Taming the Casino

Bloomberg View has joined its Wall Street customers in coming out against the Financial Transactions Tax proposed by Germany and France, and recommended by the European Union, declaring it politically unfeasible while undermining economic growth.  

Presuming for a moment that the politically unfeasible can become reality when good ideas are pursued in a real democracy, it...

Sun, 02 Oct 2011
Why We Need an Independent Infrastructure Bank

Banking used to be a profession, not just a business.  That profession is vital to the real economy, and essential at a time of profound economic system transition.  It’s about time we rebuild the banking profession, with public-private hybrid models as necessary to promote critical public purpose such as rebuilding our energy infrastructure for the post-carbon era.  ...

Sun, 25 Sep 2011
This Labor Day: Can CEOs Lead?

 

Jobs.  Depending on how you count, the challenge is 7 to 10 million net new jobs in the United States over the next 5 years or so from a current base of about 130 million.  A five to seven percent increase, the sooner the better.  Here’s how.

First, we need to break the challenge down into two pieces:  emergency triage, and long-term...

Mon, 05 Sep 2011
Freedom

 

Forty eight years ago this Sunday, the Rev. Dr. Martin Luther King Jr. began his famous “I have a Dream” speech on the steps of the Lincoln Memorial by proclaiming it, the greatest demonstration for freedom in the history of our nation.” And it was.

While the struggle for freedom has made progress since that historic...

Mon, 29 Aug 2011
Why We Need a Financial Transactions Tax

 

Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation. 

                   - John Maynard Keynes, Speculator and Economist

You know you’ve hit a hot button when publicly traded...

Sun, 21 Aug 2011
Only One Notch S&P?

I recall when JPMorgan lost its AAA rating.  Those of us working there a long time felt the gloom of losing our specialness.  The rating agencies were right -- the truth hurt.  Egos were stung.  And they were late, as they almost always are.

No different with the downgrade of US Sovereign debt.  Any rational, objective observer must conclude “too...

Sun, 07 Aug 2011
The Big Choice

- A $20 trillion “externality” appears to present civilization with its BIG CHOICE: economic destruction or ecological destruction, both with chilling global security implications.  Here’s why, along with a practical and more hopeful alternative to “Sophie’s Choice.”

Carbon Tracker has released an illuminating report,...

Tue, 19 Jul 2011
Debt Limit Nonsense

The debt limit negotiations are 99% political and 1% economic, so I have little directly to say about them.  But I do have some related thoughts to share as we stumble toward the deadline, with much wasted tax payer money paying for amateur hour in Washington while real challenges are left to smolder and in some cases burn.

I was surprised to learn that Americans for Tax Reform...

Mon, 18 Jul 2011
Hell Hath No Limits

Somehow I missed the release of a new collection of essays by Wendell Berry in 2010, What Matters: Economics for a Renewed Commonwealth.  The introduction is by Herman Daly, whose clarification of how scale limits transform economics remains the most important idea still not acknowledged in mainstream economics today. 

When two of my heroes collaborate on a book...

Mon, 27 Jun 2011
Three Fathers for Father's Day

Last week, Capital Institute and Benjamin Barber’s Interdependence Movement co-convened a conversation at NYU’s Kimmel Center titled, “Ecological and Economic Interdependence: A Conversation with Bill McKibben and Graciela Chichilnisky.”  The video link will be available on our site soon. 

As I sit here on Father’s Day thinking back on the...

Sun, 19 Jun 2011
Commodities are Different (in a "Full World")

Foreign Policy’s recent “How Goldman Sachs Created the Food Crisis” reflects the dangerous, myopic thinking all too prone to “blame Wall Street” that is a natural consequence of Wall Street’s appalling, anti-social behavior in recent...

Mon, 13 Jun 2011
"Welcome to the Anthropocene"

"The Economist" ran this cover story last week.  It’s the most important news item in 10,000 years. 

Of course it’s not really “news.”  In 2000, atmospheric chemists Paul Crutzen and Eugene Stoermer first suggested the term, meaning “the recent age of man,” the...

Mon, 06 Jun 2011
“US Debt Default Would Be a Moral Disaster”

 

So declared JPMorgan CEO Jamie Dimon regarding the prospect of a US default on its debt, after which he received a standing ovation at the University of Colorado’s Denver School of Business.  Hmm…Let’s do a little press review - the following items quoted from recent news articles:

  • JPMorgan Chase recently lost a class-action lawsuit...
Sun, 22 May 2011
The $4 Billion Pen

 

Matt Taibbi’s “The People vs. Goldman Sachs” which appeared in Rolling Stone this week is a good and damning piece.  In his latest attack on Goldman ("the Vampire Squid"), Taibbi likens the scathing 650 page bipartisan Levin-Coburn report on...

Sun, 15 May 2011
"No Compound Growth is Sustainable"

 "The fact is that no compound growth is sustainable.  If we maintain our desperate focus on growth, we will run out of everything and crash.  We must substitute qualitative growth for quantitative growth."  -  Jeremy Grantham, GMO Quarterly Letter

That sounds like something you've heard before at Capital Institute!   But...
Sun, 01 May 2011
Finance Professor Earns "King's" Ransom at Galleon Trial

I’m not following the trial of hedge fund manager Raj (“King”) Rajaratnam very closely, and I have no unique insight into the case other than what I read in the press.  To me, the wiretap evidence incriminating “the king” appears overwhelming.  The defense’s strategy suggesting it was all “public information” is insulting to common...

Sun, 24 Apr 2011
Progress at Bretton Woods

 

I returned late last night from the second Institute for New Economic Thinking (INET) Conference which took place at Bretton Woods. This was the site of the historic Bretton Woods Agreement signed in 1944, establishing the IMF and the World Bank, and creating the global world financial order...

Mon, 11 Apr 2011
The Relevance of EF Schumacher in the 21st Century

People often ask me to recommend "just three books" in order to study the ideas behind my current thinking.  While this is an impossible task, when forced I usually answer Small is Beautiful, by E.F. Schumacher, For the Common Good, by Herman Daly and John Cobb, and The Great Work, by Thomas Berry, listed in the order that I read their work....

Sun, 03 Apr 2011
The President's Counsel on Jobs and Competitiveness ... and Tax Avoidance

 

The NY Times report by David Kocieniewski on GE’s aggressive tax strategies under the leadership of John Samuels, a former Treasury Department tax lawyer, which enabled the company to pay no income taxes to Uncle Sam on their $5.1 billion of US-based income has many...

Sun, 27 Mar 2011
Finally, a Discussion of Scale

Adair Turner, Chairman of the FSA (the SEC of the United Kingdom) is smart, articulate, and more aware than any senior regulator or finance official currently in power on this side of the Atlantic in my judgment.  His 2011 Clare Distinguished Lecture in Economics and Public...

Mon, 14 Mar 2011
My First USDA Conference

I attended the annual US Department of Agriculture conference this week in Washington DC.  My job was to participate on a panel with The Savory Institute, organized by the Risk Management Agency of the USDA.  Our topic was “Critical Thinking: The Best Risk Management Tool.” 

My message was about systems thinking, and how the financial system collapse...

Sun, 27 Feb 2011
As Goes Egypt...

I am no Middle East expert, and clearly there are a multitude of factors beyond a humiliated fruit cart vendor in Tunisia that have triggered the revolutions playing out on our nightly news.  Certainly decades of repression and unfathomable corruption (Mubarak is thought to have in excess of $40 billion invested securely outside Egypt) are primary drivers.  But I would like to...

Mon, 07 Feb 2011
The Six Root Causes of the Financial Crisis

“We conclude first and foremost that the crisis was avoidable,” declared Phil Angelides, chairman of the Financial Crisis Inquiry Commission.  No act of God.  Thanks Mr. Chairman.

The report is weak and inconclusive, with no clear root causes.  The FCIC is no Pecora Commission, the exhaustive, two year inquisition into the causes of the 1929 crash in which...

Mon, 31 Jan 2011
Goldman and Facebook: Who's Using Who?

I sure got that one wrong.

At the end of my 2009 year end letter to Lloyd Blankfein, Chairman and CEO of Goldman Sachs, the third in an exchange that took place during the depths of the financial crisis, I predicted that Goldman clients would begin to defect, either of their own volition, or because their own...

Sun, 16 Jan 2011
Holistic Finance

I have discussed the problem of reductionist thinking, grounded in the Enlightenment, in the past.  Nowhere is reductionist thinking more in force than in finance.  Derivatives disaggregate risk into component parts, and then atomized parts are reconstructed into new wholes using securitization.  This process goes on, with greater and greater leverage applied until it...

Sun, 09 Jan 2011
Carnegie’s “Gospel of Wealth” and the Gates/Buffett Giving Pledge

Andrew Carnegie’s essay titled “Gospel of...

Mon, 03 Jan 2011
How Banks Make Money in Derivatives

The mystery of derivatives, the secretive multi-trillion dollar market that few understand but is believed to be at the heart of the financial meltdown needs illumination. Without it, policy makers have no chance of getting much needed regulation right.  The recent NY Times piece, “A Secretive Banking Elite...

Sun, 19 Dec 2010
Open Letter to President Obama

I was privileged to co-sign this Open Letter to President Obama as the UN Climate Change Conference opened in Cancun last week.  It calls for the US to live up to its prior commitment to support climate change funding for mitigation and...

Mon, 06 Dec 2010
Un-blissful Ignorance of "This Wild Balloon"

After my Thanksgiving turkey, I digested two recent commentaries on the financial industry, “Inside Job,” the mostly fair but incomplete documentary narrated by Matt Damon, and the balanced and accurate New Yorker essay, “What Good is Wall...

Sun, 28 Nov 2010
Energy Independence? Really?

“There Will be Fuel”, by Clifford Krauss, was the feature article in a special Energy section of the NY Times on November 16th. Not only was it amateur and unbalanced, it was irresponsible. The thesis was “peak oil is a joke, we’re now swimming in oil”. Nothing could be...

Sun, 21 Nov 2010
The Trade Balance, Free Trade, and Energy

Obama had a bad week at the G20.  He was rebuked by Western leaders on the weak dollar consequences of QE2, and he failed to secure a Trade Agreement with South Korea.

There is something not terribly compelling about a trip to India, Indonesia, Japan, and South Korea, and pitching these countries on expanding exports from the US to create US jobs.  After the pummeling he...

Sun, 14 Nov 2010
Fractals and the Passing of Benoit Mandelbrot

I am grateful to the Triple Crisis Blog for making me aware of the passing this month of the great mathematician, Benoit Mandelbrot, who coined the term "fractal". 

Mandelbrot defined a fractal as "a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size...

Sun, 31 Oct 2010
What I Learned about Resilience in Rural Oregon

I recently gave the keynote at the annual meeting of Oregon Rural Action in La Grande, Oregon, “Making the Shift: Building a Vibrant Local Economy Amidst the Broken Global Financial System.” (My slide deck is posted on our resource section here.) To...

Tue, 26 Oct 2010
B Lab Advances Stakeholder Capitalism

I had the pleasure of attending B Lab’s National Leadership Gathering last week in Long Branch, New Jersey.  B Lab is a non-profit organization dedicated to using the power of business to solve social and environmental problems.  “B Corporations” explicitly seek to balance the needs of all stakeholders, and this requirement is...

Sun, 24 Oct 2010
Footprints and Foreclosure

The global economy now uses 1.5 times the earth’s capacity to regenerate the natural capital we use every year, up from the 1.4 times of the prior year, according to a report of the well-respected Global Footprint Network.  In their Living...

Sun, 17 Oct 2010
The Great Transformation

There are several "Great Transitions" circulating, visions for a transition to a just and sustainable economy and society.  Tellus Institute convened the Global Scenario Group, to produce the Great Transition Initiative in 2002, a comprehensive set of alternative futures.  More recently, the New Economics Foundation...

Sun, 03 Oct 2010
The End of Investment?

I recently attended a school function and was chatting with a friend (“Pam” for the sake of this post) who is a buy-side analyst at a major asset management firm, the kind that manages hundreds of billions of pension fund assets, and 401Ks. Pam’s firm, like many mainstream asset management companies, is a signatory of the Principles for Responsible Investment (PRI). ...

Sun, 26 Sep 2010
Financial System as a Global Commons

Last week, Capital Institute co-convened with futurist Hazel Henderson at Ethical Markets Media (USA and Brazil), her company's facility in Florida, the new Committee on Transforming Finance (CTF).  The CTF is a group of seasoned capital markets practitioners, scholars, and financial writers who share a belief that the policy responses to the financial crisis were more...

Sun, 19 Sep 2010
Labor Day: For Tony, with Appreciation and Respect

We immerse ourselves in facts and figures; turning real life suffering into an abstraction.  The official unemployment rate is 9.6 percent in the United States. Estimates vary about the additional unemployed who have given up looking for a job.  Some say the real number could exceed 15 percent.  The unemployment for black youths in America aged 16 to 19 is 44 percent.  ...

Sun, 05 Sep 2010
If the Bathwater Becomes Toxic Enough, Throw Out the Baby

The more I discover about the modern financial system, the less I recognize it, and the more incredulous I grow.  And I worked at the center of the financial system until 2001.

My comment is prompted by the latest news that several leading hedge fund managers and private equity moguls are lashing out at the Obama Administration and funneling money, lots of it, to the GOP...

Sun, 29 Aug 2010
Toward a Finance Ethic

 

An ethic, ecologically, is a limitation on freedom of action in the struggle for existence. An ethic, philosophically, is a differentiation of social from antisocial conduct. These are two definitions of one thing.  The thing has its origin in the tendency of interdependent individuals or groups to evolve modes of cooperation.

The...

Mon, 16 Aug 2010
From Risk to Uncertainty

Stress-test complacency will be a cause of the next financial meltdown.

Economic commentators have been increasingly using the word "uncertainty" of late.  The context has included the business climate, the stimulate vs austerity debate, and forecasting the investment outlook across capital markets.  Two examples:

"When...

Mon, 09 Aug 2010
Where's the Middle Class?

Capital Forum's current series on "Reducing the Wealth Gap" ties in nicely with Edward Luce’s July 30 piece in the Financial Times, “The Crisis of Middle Class America,” a sobering reality check, putting real people behind the statistics.  ...

Mon, 02 Aug 2010
They Just Quit?

I can’t believe they just quit.  No fight, no public debate from the government of the country that represents 5 percent of the global population yet emits 20 percent of the carbon, more than twice the per capita average of even our European counterparts of the developed world?  No prime-time TV address by the President?  No more talk of a...

Mon, 26 Jul 2010
A Busy Week, but No Joy in Mudville

Last week was a busy week in the world of financial reform.  Congress passed “the most sweeping financial reform legislation since the Great Depression" (at least measured by its 2,300 pages).  Treasury appears to be blocking the selection of Elizabeth Warren to head the new consumer financial protection agency, despite its denials.  And the SEC...

Sun, 18 Jul 2010
Is Sustainable Growth an Oxymoron?

The first and overarching theme of the G-20 Toronto Summit is "laying the foundation for sustainable and 

...

Mon, 28 Jun 2010
Allan Savory Wins Prestigious Buckminster Fuller Challenge!

We are delighted to congratulate Capital Institute Advisory Board member Allan Savory and his 

team at the Savory Institute for their well deserved...

Mon, 07 Jun 2010
Gus Speth Joins Capital Institute's Brain Trust

 

"John, I think you are pursuing one of the most important initiatives around these days. Please call on me any time. All the best, Gus"

Well, I decided to take Gus at his word, and today I am pleased and honored to welcome Gus Speth to our Council of Advisors. Gus' impressive career of service to the environment...

Mon, 17 May 2010
Goldman v. United States: What It Means
 "It is not what a lawyer tells me I may do, but what humanity, reason and justice tell me I ought to do."                                                                    ...
Mon, 26 Apr 2010
Why the US Should Join the Momentum Building in Support of a "Speculator" Tax

On April 15, I made a statement at the Press Club in Washington, DC., 

...

Fri, 16 Apr 2010
INET Conference Boggles the Mind

No doubt, we've all been to conferences that are both stimulating and exhausting at the same time. 

The George Soros backed Institute for New Economic Thinking (INET) inaugural conference that took...

Fri, 16 Apr 2010
Welcome

Welcome to our blog, “The Future of Finance”. Here you will find 

expert opinions and analysis on the critical challenges of finance in the context of forging a just and sustainable economic system....

Wed, 07 Apr 2010