Yearly Archives: 2013
“When You Bareback With the Internet, You Ride With the NSA”
You must watch this talk, even if some parts are a bit technical for mere mortals. No matter how bad you think the NSA’s information surveillance and capture is, I can just about guarante that this will show you that it’s an order of magnitude worse than you imagined.
Read more...Solomonic Judgment vs. Sophists, Economists and Calculators
Yves here. This essay achieves the difficult task of working through some of the implications of Arrow’s impossibility theorem, which might alternatively be called “the inescapability of politics theorem” in an accessible manner. In fact, one of the conclusions that the author Raphaële Chappe focuses on is that how well a society “does politics” matters, that the structure and health of institutions matter. Thus it’s perverse that economics, which readers of this blog understand full well is really political economy, has virtually no interest in questions of governance (the closest it comes is in principal/agent and game theory and information asymmetry).
Read more...Wolf Richter: Cesspool Of Greek-German Corruption
Apparently, it has been impossible to sell Greece any weapons at all, not even a water pistol, without bribing officials at the Defense Ministry. Corruption is so pandemic that Transparency International awarded Greece once again the dubious honor of being the most corrupt country in the EU. For 2013, Greece ended up in 80th place of the 177 countries in the survey, same as China. But it takes two to tango.
Read more...Links 12/30/13
“Honey, I Shrunk Killed the Middle Class”
A new Bloomberg story, Americans on Wrong Side of Income Gap Run Out of Means to Cope, is a zeitgeist indicator: the normally-well-insulated-from-realty investing classes have noticed that large swathes of what was once the middle class aren’t just downwardly mobile but are struggling.
Read more...Wolf Richter: Next Shoe To Drop In Broke California’s Lopsided ‘Recovery’
f you come to San Francisco or Silicon Valley and look around, you’d arrive at the conclusion that California is booming, that companies jump through hoops to hire people, that they douse them with money, stock options, and free lunches. But in the rest of the state, the picture isn’t that rosy.
Read more...Ilargi: The Taper And The China Credit Power Struggle Squeeze
Yves here. We described the funding mismatch with Chinese wealth management products during the first liquidity crunch earlier in the year, but given that most readers aren’t familiar with these structures, it’s good to have another summary as to how they work and more discussion of why they pose a risk to the Chinese economy. They are troublingly similar to structured investment vehicles, which were one of the detonators of the credit crisis in the US and UK.
Read more...Links 12/29/13
Open Thread: Best and Worst of 2013
What do you flag as the standout events of 2013 and why?
Read more...Philip Pilkington: Interest Rates and Animal Spirits – A Response to JW Mason
Clarifying what believing in risk versus uncertainty means for how you view the role of interest rates.
Read more...Links 12/28/13
Essays in Monetary Theory and Policy: On the Nature of Money (Continued)
Yves here. I thought this essay on money was useful in and of itself, and it also contains a useful primer on the views of major schools of thought in orthodox economics.
Read more...Wolf Richter: What Happens Next, Now That The 10-year Treasury Yield Hit The Psycho-Sound Barrier Of 3%
Yves here. As Wolf describes, in our brave new work of super-low interest rates, the 10 year Treasury breaching 3% was regarded with fear and loathing by the officialdom. Now with the Fed’s reassurances that the Fed funds rate will remain at just about zero for the foreseeable future, the stock market has popped the Champagne. But will the impact of the withdrawal of support for bond prices impact stocks sooner than the current rally would have you believe?
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