Mandrill makes ‘pedicuring’ tool BBC
Farm Felons Pick Off California Crops New York Times
Tony, the last pit pony, dies aged 40 Independent, (hat tip Buzz Potamkin)
Rescuing One Japanese City’s History Wall Street Journal
Probe of Ex-IMF Chief Is Widened Wall Street Journal
Former employees claim James Murdoch misled British parliament Raw Story
Eurozone leaders hail leap towards economic union Ambrose Evans-Pritchard, Telegraph
Some useful steps but not much of a strategy Wolfgang Munchau, Financial Times. Munchau IMHO has got the correct reading on this one:
Those who are in the thick of it are running the danger that they got so obsessed with the formidable technical complexities that they lose sight of the bigger picture…the survival of the eurozone depends on whether its leaders will be able to take decisions that would allow Italy and Spain, and everybody else as well, to remain inside the eurozone on a sustainable basis. Greece is now just a side-show….the ceiling will not be big enough to bring in Spain, let alone Italy. To do that that the ceiling would have to be doubled, or trebled. Without this increase, it is inconceivable that the eurozone can get through this crisis intact…
This will not be agreed today and this alone is why the summit will fall short of what is required. As it stands, the eurozone has a mechanism that can deal with Greece, Ireland and Portugal, but no other country.
I can’t imagine Germany and the other surplus countries are prepared to fund a facility two to three times as large as their current commitments. Even if their leaders get their minds around it, I doubt they can bring voters along with them.
Euro Statement Translated Macro Man. Funny and useful.
EU agreement on Greece – no solution at all Bill Mitchell. A more sober translation.
George Marshall turns in his grave MacroBusiness
The Sovereign Debt Crisis and Currency Sovereignty Ed Harrison
Democrats in ‘volcanic’ mood Financial Times
House votes to overhaul consumer agency Washington Post
`Use It or Lose It’ Should Be the Management Rule on Corporate Cash: View Bloomberg
Why Cenk Uygur Left MSNBC – Part 1 You Tube (hat tip MBH)
Is There Something Worse than Despicable? Lambert Strether
Questions on Holdings at the Fed Wall Street Journal. Why is it not surprising that the Fed does not seem to understand conflicts of interest?
The Fed Audit Bernie Sanders. Aargh, I need to read the report (the WSJ story above is one of its findings, as is the to-be-expected “even more loans to even more unlikely parties than you possibly imagined”).
Understanding the Federal “Debt Crisis” CounterPunch (hat tip reader Bruno)
The Lesser Depression Paul Krugman
Antidote du jour:
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Germany passed the Rubicon.
Germany made a routemap to cross the Rubicon but, alas, a routemap it will never use…
It isn’t even an option for the EU to remain quaint at this point in history. The EU will become the united states of Europe because it really has no choice. They will kluge their finances together and align their interests with Russia and become as powerful as the world will allow. It’s there for the taking.
We had quite an advantage when starting up the US. We were just broke – as in 0 money. Then banks were places that had bank vaults.
Yves, can you imagine an Indignant-like movement in the US?
http://www.adbusters.org/blogs/adbusters-blog/occupywallstreet.html
There’s the October 6 movement:
http://october2011.org/welcome
And I forgot to mention that the October2011 coalition has come out in support of Adbusters, the group at Diego Méndez’s link, and their #OCCUPYWALLSTREET project:
http://october2011.org/node/452
While I support an end to the destructive political economy of the world, I fear that this group is not aimed at the right target.
If one does not deal with private ownership of anything/everything and inherited wealth we end up with the same puppeteers behind the curtain.
Boo ! He is BACK !! Be afraid. very very afraid. “Go big” and all that nonsense:
http://www.usatoday.com/news/opinion/forum/2011-07-21-obama-debt-ceiling-debate_n.htm
Greenwald on the sellouts on the left :
http://www.commondreams.org/view/2011/07/21-6
The “debt crisis” is a fiction. The US government incurs NO NEW LIABILITIES when it borrows its own currency. The liability was actually incurred when the borrowed money was first created. It is merely transferred (via a debt swap) when it is borrowed.
Is this significant? Yes.
It means we are not “borrowing from our childrens’ futures” when we “add” debt, one of the primary talking points of President Obama on why we have to attack this fictional liability.
It also means the the specific number called National Debt ISN’T our national debt. (The debt is actually what is called the National Debt PLUS all outstanding currency PLUS all bank reserves. But this sum also has another name. We call it money.)
It also means that if we try to “pay down” this fictional liability, what we will actually be doing is collapsing our hard money supply, which will lead in turn directly to a depression.
We could use a President who understood this. We MUST HAVE a Treasury Secrutary who does.
For what President Clueless actually believes, see Obama Op-Ed “Go ‘big’ on debt deal” [ http://www.usatoday.com/news/opinion/forum/2011-07-21-obama-debt-ceiling-debate_n.htm ].
Note that Obama is also believes in “crowding out” out, the GOP fiction that federal borrowing increases interest rates. (The borrowed money comes from reserves, and is spent right back into reserves, hence, no crowding out. Empirical evidence confirms this.) Eliminating (non-existent) crowding out is the basis of about 90% of the GOP’s job creation plan, which means that neither the GOP nor the President has anything to offer in the way of job creation.
5 Weird Academic Studies on Economics and Consumer Behavior
http://moneyland.time.com/2011/07/22/5-weird-academic-studies-on-economics-and-consumer-behavior/
They all seem like silly science… so they read rather like economist jokes. The biggest chuckle is this one ”
Larger penis size relates to poor economic growth.” LOL…
Of course these 3 facts are useful to keep in mind when reading any research: correlation is not causation, observer effect, observer bias. Perhaps another needs to be added… the “titillation effect.”
I recall a study that proved the economy goes up and down with women’s hemlines. Since economists like making dependant and independent variables interchangeable, I think there could be some useful application of the theory here.
First of all, you just gotta believe it’s true over the long run. For instance, back in 1900 at the beach women even wore ankle length bathing skirts and bathing shoes (not flippers – shoes!). And everyone knows how much better the economy is today than it was in 1900.
So I think to jumpstart the economy we should consider bringing back the mini-skirt. And if we really want to get things humming, there is always the thong!
That theory is under fire here :)
Have Short Hemlines And A Rising Economy Decoupled? http://www.businessinsider.com/john-carney-have-short-hemlines-and-rising-economy-decoupled-2009-9#ixzz1SszmjhEk
The other day my hairdresser observed that the poor economy seemed to increase demand for hair cuts (esp. significant changes), colors, beard trims. Her thought was that people wanted to treat themselves to something that made them look and feel better to counteract financial worries and concerns. I wondered if they were more concerned with looking good for job retention and/or job interviews.
In Fed funded NYC, my salon (fancy but the haircolor is a bargain) has had to downsize. People who used to get color once a month have pushed it out to 5-6 weeks. My manicurist reports business is off.
So I think your job thesis has to be correct. Maybe that plus keeping your hair nice is the new lipstick (in downturns women allegedly buy lipstick as a cheap cheer me up to compensate for cutting back on clothes and shoes. Having never had a lipstick fetish, I can’t relate).
Can someone explain the dearth of reporting on the Greek bailout?
After all of the fear and apocalyptic warnings of the Eurozone breaking up, it sounds like everyone just shut up and moved onto the next topic.
What happened? Why is S&P and Moody’s not issuing downgrades after all their posturing?
Have the Eurozone actually beat the “pundits” and made it such that they came up with a good plan that will work? I’m confused.
Here’s the latest from WSJ…
Euro Pulls Back As Few Details Of Greek Bailout Emerge http://online.wsj.com/article/BT-CO-20110722-708827.html
On Thursday, European leaders announced a plan that would extend Greece a new bailout and revamp the region’s bailout fund, the European Financial Stability Facility, sparking a sharp rally. But it has been short-lived because of uncertainty over details of the plan and the long-term health of the euro zone.
McCormick said the Fitch announcement also “spooked” the market slightly, even though it is widely expected a Greek debt exchange will trigger a default.
Moody’s Investors Service later said it is reviewing the new plan “and will issue a public comment on any credit implications in due course.”
Broader risk sentiment also waned after reports of explosions in Norway.
FYI, in case this is behind the firewall, go to Google News and search on the headline. You can always get into WSJ (and most subscription news) via Google News. Also suggest ging to Google News and searching on greek bailout.
Thanks for the link, Valissa. What I don’t understand is, is the problem solved? Have they done it?
Everyone was saying how the only solution was for bondholders to take a haircut. But instead, they rolled over the debt to longer-termed maturities, and the markets seemed to buy it.
So is that it? Is the Greek problem solved?
If that’s the case, what was everyone so worried about? Why were the market so roiled the past month over Greece, if this solution will work? This is what I don’t understand and there must be something that I’m missing.
Nah, all the systemic competitiveness issues are still there, while the greeks are going to have ever more trouble simply surviving, because of the wage cuts.
Read “Euro Statement Translated Macro Man” for the quick translation.
Sure. All solved. What could go wrong with that plan? Finding the money somewhere, I guess. Government buildings blowing up all around the EU, I guess. But who can tell the future, anyway?
But Greece, and eventually the rest, will get lots of consultation to put them back to the economic powerhouses they once were when they had their own Drachmas, Punts, Pesos and Lira. All it takes is a Delorean and a flux capacitor.
I think the larger question is… what does “the greek problem” really mean? What does it symbolize or indicate about the nature of the EU? This may not be the kind of answer you are looking for, but I’m going to approach this from geopolitics (which includes history) as a driver of finance and economics.
If you look at Europe and Greece geopolitically, you start by looking at the underlying geography. To oversimply a bit, Europe has lots of nooks and crannies (more than other areas the same size on the planet)… mountains, valleys, plains, and rivers, and this is why there are so many different small countries there. The fact that the rivers criss-cross and connect very well in Europe (again rather unique compared to other land masses) leads to ongoing trade and communication between the different areas (also to great wealth for the region as a whole). In summary, there are forces of separation and forces of connection and integration in Europe.. two trends that can either dovetail or collide, and throughout history have done both.
Of all of the countries in Europe, the individual country with the most ‘nooks and crannies’ is Greece! However these sub-regions of Greece are poorly connected with each and poorly connected with the rest of Europe, which is why historically they had so many city-states. The coastal and island areas of Greece can use the sea, but inland Greece is another matter. To guote a 2010 report from STRATFOR*:
To this day, its rugged topography gives Greece a regionalized character that makes effective, centralized control practically impossible. Everything from delivering mail to collecting taxes — the latter being a key factor in Greece’s ongoing debt crisis — becomes a challenge.
Greece is mountainous with few valleys for growing food, and combining that with poor connectivity between regions which inhibits trade, geopolitics postulates that Greece will tend to remain a poor country compared to the rest of Europe (maritime regions in Greece fair a bit better).
For at least 100 years various groups of US and Euro elites have held a vision of One Europe with all the little countries banding together, and becoming like states in the US. However, that means there has to be a central gov’t of some kind, which includes centralized money and some kind of tax structure. However, the geopolitics of Europe I discussed above, makes this challenging. This is the big issue of sovereignty. We have been in the era of nation-states for several hundred years… is the next step further integration of countries? And if so, how does one proceed?
Since commerce has been a strength of Europe, the integration of Europe started there. It could be argued when this started, but it goes like this:
1952 European Coal and Steel Community
1957 The Treaty of Rome brings the EEC European Economic Union
1991 Treaty of Maastricht, which came into effect
1993 now called the Euopean Union
1999 the Euro is born
As you can see, the EU unification project has a long history. But there is no precedent for doing this sort of thing so they are making it up as they go along.
Add to this the nature of fiat money and central banking and the highly interconnected nature of the markets and that means much of the world is being effected by “the Greece issue” and Greece has become the focal point of various historical and financial trends.
The trend in Europe is for integration but Greece will never be a wealthy or well off country and this is also known by the elites (and was known when Greece was admitted to the EU). So if they want to keep the EU project going forward they HAVE TO FIND A WAY to keep Greece in the game, and they will be very creative, both financially and politically. We all watching this live, like a sporting match and who knows how it will turn out in the end. But as long as the will for union is stronger than the will for disunion, the unification project will continue in some form or another. The markets will react to the various ideas put forth and that will iteratively effect future solutions proposed, and so on.
In other words, there is no easy answer with the Greece issue… it’s a fulcrum point in world history right now.
*source (sorry couldn’t find link at site) STRATFOR monograph-
The Geopolitics of Greece: A Sea at its Heart (6/28/10)
Unless they discover oil or rare earth metals in Greece…then geography is no problem.
You can build fortified castles on your ports and rivers.
There is the Troy gambit, but Turkey is not doing so well nowadays either. Besides, stealing Helen was kind of an elitist thing anyway.
I put this up last night in a different thread but it is more appropriate here.
Re the GAO audit of the Fed:
http://www.gao.gov/new.items/d11696.pdf
Reading through the appendices, I came up with the following:
I. Agency Mortgage-backed Securities Purchase Program: $1.25 trillion
II Asset-backed Commercial Paper Money Market Mutual Fund Liquidity Facility: ~$217.3 billion
III Aid to AIG: Revolving Credit Facility: $85 billion; $72 billion used
Securities Borrowing Facility: $37.8 billion: $20.6 billion peak
Maiden Lane II: $19.5 billion
Maiden Lane III: $24.3 billion
IV Bear Stearns/Maiden Lane I: $30 billion
V Bank of America Lending Commitment: Backstop not used
VI Citigroup Lending Commitment: Backstop not used
VII Commercial Paper Funding Facility: $738.3 billion
VIII Direct Money Market Mutual Fund Lending Facility: Never operational
IX Dollar Swap Lines with Foreign Central Banks: $10.057 trillion
X Money Market Investor Funding Facility: Backstop not used
XI Primary Dealer Credit Facility and Credit Extensions for Affiliates of Primary Dealers: Primary Dealers: $7.3894 trillion
Affiliates: $1.5616 trillion
XII Term Asset-backed Securities Loan Facility: $200 billion authorized; $71.1 billion used
XIII Term Auction Facility: $3.818 trillion
XIV Term Securities Lending Facility: $2.319 trillion
Total: $27.5881 trillion
There are lots of caveats to this. Some of the listings are only for the largest users and so incomplete. The GAO in its summing at the beginning of the report uses peak not total numbers. Some numbers are authority rather than money spent. I tried in my calculation to include money that actually went through the facility or program. If memory serves, the reason that the money market wasn’t used was because Treasury ran a big one of its own. I never heard the exact number on it but it was supposed to be in the trillions. Similarly, the initial buy up of crap assets by Treasury’s TARP program was ditched because the Fed was already running bigger buy up programs, like some of those above. Still the number above gives a reasonably good figure for the overall extent of the Fed’s activities covered in the report. And again if memory serves not all of what the Fed was doing is covered, just the special programs.
The total would be $600 million higher if you take the Agency MBS purchases without the sell offs or around $28.2 trillion.
Given the number of deals within each program, it is certain that the Fed had no idea what was being put up as collateral. I second Yves’ comment too that some of the lists of the biggest users make for surprising reading. The Fed wasn’t just acting as the US central bank bailing out US banks. It was acting as the world’s central bank and bailing out the world.
Supplement to the Cenk Uyger thing — because this is an interesting look into the workings of the mainstream media:
http://www.youtube.com/watch?v=pGtrnXI0ai4&feature=player_embedded#at=112
re: Is There Something Worse than Despicable?
“But I’m so disgusted with what’s happening in this country right now that I’m having trouble finding words to express it.”
Not a wordsmith anyway, but I too have this same dilemma, perhaps due to outrage fatigue. I’m sometimes reduced to juvenile constructs such as ‘execrable times ten’; I might just as well say ‘poopyhead’ I suppose.
Anyway, this seeming lack of words corresponds to lack of shame I think. If you’re not lying, thieving, cheating and whoring, well then, you’re now a loser.
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The regular CPI assumes that consumers buy the same things every month, so if the price of pork goes up then so does the cost of their shopping. But in reality, if the price of pork goes up but the price of beef does not, then some consumers will switch. The chained CPI tries to take account of that switching – and it tends to rise by less on average as a result
———-
From the Democrats feeling volcanic link, talking about chained CPI.
What if they are all up (beef, pork, chicken, bread, milk etc) and people are forced to eat from trash dumps?
People can’t afford them, but there is no inflation – because they have now swithced to free eating from trash dumps?
What about if your medication is too expensive and you switch to cheaper voodoo medicine men? That lowers the inflation for that month, right? Maybe fewer people using that particular medication will lower the price of that medication ventually, but for that month, you can’t say there is no inflation.
We can all thank the Deep Research Dept. of the Coinclippers Economic Institute for that CPI innovation.
You don’t understand. The axiom is that inflation ranges between 0 and 2%. The economic theories then flow from there.
Alternate Inflation Charts http://www.shadowstats.com/alternate_data/inflation-charts
More data at the home page http://www.shadowstats.com/
According to the 1980 formula, inflation is over 10% now. As with so many things, inflation and unemployment numbers reflect how you define it.
What if we define money to also include the number of carbon dioxide molecules in the air?
Then, we don’t have to rely so heaviley on increasing the ‘public debt’ as the way to have more money.
After that, we will also tinker with the defintion of ‘rich’ as, at this moment, having more public debt and therefore more money doesn’t seem me to necessarily mean we are ‘richer.’
I think the challenge is to get some sort of group or collective agreement on the definition of money for it to be “real.”
To repeat a quote I used recently…
“Power is the ability to define phenomena.” – Huey Newton, the cofounder of the Black Panther Party
“After that, we will also tinker with the defintion of ‘rich’ as, at this moment, having more public debt and therefore more money doesn’t seem me to necessarily mean we are ‘richer.’”
Wonderful point for contemplation, LOL ;)
In the old days, one would get a job and then get debt free money from his/her employer. But I guess it’s not done that way anymore.
“After that, we will also tinker with the definition of ‘rich’ as”
Not so fast. Aren’t we still waiting to know what the definition of “is” is?
http://www.guardian.co.uk/science/2011/jul/20/bbc-climate-change-science-coverage
The Bill Mitchell article is good.
Re the euro-mess, kleptocrats don’t do solutions. They do extend and pretend to keep the looting going and even expand it. The austerism we are seeing here and in Europe is going to push the economies of both into depression. But depression from a kleptocratic viewpoint is not the catastrophe it is for the rest of us. It is an unparalleled opportunity to extend their power, control, and above all wealth relative to the rest of us.
The only thing that can derail this march to serfdom is revolution. Reform isn’t possible. Look at Obama. Look at Merkel and Sarkozy. Look at their “oppositions”. Where can reform come from? The kleptocrats own the machinery through which it must run. This brings us back to revolution. Change which the elites can not control because it is outside the system.
A good guage of how near or far we are from revolution is how acceptable, shocking, or unrealistic this notion is to you. A year or two ago, terms like kleptocracy, class war, corporatism, fascism, imperialism, elites, and looting were beyond the pale, at least with regard to their current usages. Now they seldom elicit any response and their use has been normalized. Revolution is like these. It is unthinkable until it isn’t. But looking at the current situation and where it is heading, can we really afford not to think about it?
> The Lesser Depression Paul Krugman
The stimulus fire hose was being run by the looters,
Paul….smell the reality. You are so freaking slow (or
such a pathetic shill, take your pick). :economicsishard:
No amount of volume increase is going to fix where the money is aimed….that’s right, Paul, looter’s pockets!…hello? McFly? Are you in there?
A looter controlled/aimed fire hose is NOT going to trickle down into US job increases and wage growth, in a globalized labor pool. If you are unwilling to wrest control of the hose from the looters, then admit defeat and make your peaces with the second Great Depression.
So what does that leave? Austerity. Boo. Hiss.
But if the money is getting siphoned off by looters,
and the bill goes to future tax payers, why not
austerity? It’s not as if the bottom 99% have anything
to show for backing the stimulus.
The current system appears to be incapable of
self-repair….it’s been strapped into looting mode
until something breaks. It’s time to hit the reset button.
Hm, actually something nice for once:
Some guy called Frederick Kaufman wrote an article published in Harper’s in january about food price speculation. He also published something about it in Foreign Policy, and this was picked up in may by the nyt.
It seems that it’s been languishing a bit since, though.. Might I suggest it as a link for tomorrow? Who knows, some more people might read it.
Matt Taibbi also reported on the phenomenon of commodity speculation in Griftopia, and it seems sort of a shame to me that it is so horribly under-covered in the media.
Yves-
The headlines about the debt ceiling make for good TV, but IMO the real elephant in the room here is the potential downgrade of U.S. by Moody’s or S&P. I have a feeling this could throw the entire short-term funding market into utter chaos, and we would see a freezing up of the repo market on scale much larger than Lehman. The Fed of course can step in and be the lender of last resort, but is that enough?
You are more familiar with this area than I, do you have any thoughts?
The enigma is they have been threatening the downgrade for two reasons now.
1) The national debt going too high.
2) The debt ceiling not getting increased.
Go figure.
One big union:
http://www.guardian.co.uk/uk/2011/jul/22/bob-crow-rail-union-merger
Labourites merging with Trotskyites… hmmmm… why am I reminded of this song (ignore text):
http://www.youtube.com/watch?v=GhAXtVRopaw
Just to highlight, this guy IS a communist:
http://en.wikipedia.org/wiki/Bob_Crow
He’s part of the neo-communist movement that began its rise in the early-00s. Generally Trots that never had any real affiliations when the Soviet Union was around.
I hate communists, but I’d love to see the Trade Union movement radicalised. That would scare the shit out of policymakers.
Mr Pilkington;
It might even get some ‘trickle up’ economics going! There’s always a bellwether labour group. And as for the future; a Fifth International?
http://www.guardian.co.uk/media/2011/jul/22/phone-hacking-authorities-subpoena-news-corp
http://www.guardian.co.uk/media/2011/jul/22/andy-coulson-investigated-perjury-allegations
The question is “why now?” Anti-trust and laws against foreigners owning US media have collapsed incrementally for decades to allow Murdoch to monopolize media.
Something could have done to stop the inevitable anywhere along the way.
So, how come now? Just asking. Who’s gunning for whom? Her majesty? Did someone go too far permitting Andrew to be photographed and published trotting around the Upper East Side of New York City with a convicted pedaphile?
It’s not as if there was ever a law in place against anything TPTB wants to do; executive or otherwise; but there have been powerful constrains against depicting royals engaged in their worst most nefarious behavior. As in photos and facts.
So, was Murdoch going after the royals? overplaying his hand? The royals who, I’m happy to report, Alex Jones says are ‘mostly hidden because they’re all mentally retarded and deformed. So, they only bring out the ones who can talk.’
correction: execution or otherwise.
Those poor Royals are just the latest in a long line of attempts to cross breed with the Extraterrestials, for intelligence I suppose.
Asort of amusing story: Citizen claims house citing what’s basically a res nullius law, neighbors are jealous and want him out.
I encourage all Naked Capitalism readers to read pages 19 to 21 of a report The Jobless and Wageless Recovery from the Great Recession at the Center for Labor Market Studies at Northeastern University. It is a May 2011 study that AP writer Paul Wiseman incorporates in his AP story at Yahoo.com today. The conclusions by Wiseman and the data layed out by the CLMS group show why the Congress and the Bankers’ President are so obsessed with talking about deficits and taxes when the stark reality of a grossly distorted economy is staring them straight in their contemptible faces.