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2:00PM Water Cooler 9/18/14

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By Lambert Strether of Corrente.

FOMC

Fed pledges that interest rates will remain near zero. Fisher and Plosser dissented, arguing that guidance could tie the Fed’s hands [Reuters]. Rates will stay low for a “considerable time.” Whatever that means [Forbes]. But even if the rate rise is not soon, it may be sooner than we think [Independent]. QE expected to end at next meeting [Economist].

Loanable Funds Theory cheer: “Gimme a J!” J! “Gimme an O!” O!! “Gimme a B!” B!!! “Gimme an S!” S!!!! “What’s that spell?” JOBS!!!!! “What’s that spell?” JOBS!!!!!! “What’s that spell?” JOBS!!!!!!! (applause) [Fiscal Times].

Chair speech: Janet just as out of touch as Larry:  “[E]ncourage families to take the small steps that over time can lead to the accumulation of considerable assets… [S]aving for a rainy day…” [Board of Governors of the Federal Reserve System]. This calls for a song. (And why should we put our money anywhere other than the mattress when interest is near zero and our money melts away in fees? Am I missing something here?) Shorter: new normal [Bloomberg].

Scotland

Clickbait: “12 Things to Know About Scotland’s Independence Vote” [FOX]. “10 things to know about Scotland’s vote for independence” [Boston Globe].

“[O]ne of the most consequential democratic consultations in history”  [E.J. Dionne, WaPo]. Funny, I thought that in a democracy the people were sovereign. That’s not the same as being “consulted.” Maybe attitudes like eventheliberal Dionne’s are why The Upshot calls the Scot’s independence vote a “crisis of the elites”:  [Times].

Scotland’s push for independence is driven by a conviction — one not ungrounded in reality — that the British ruling class has blundered through the last couple of decades. The same discontent applies to varying degrees in the United States and, especially, the eurozone. It is, in many ways, a defining feature of our time.

True, except I don’t think the elites “blundered”; that assumes a level of good faith that’s not in evidence.  I think the elites made out like bandits, and are perfectly happy with the results.

“[M]uch of the U.K. justifiably regards London as unfairly privileged, snobbish and parasitical” [Bloomberg]. London traders man the currency desks [FT]. London traders and hedges bet on the pound, implying Scotland will vote “No” [Businessweek].

ISIS

“Rare unity” between Boehner and Pelosi as House votes for war [New York Times]. Dutch Ruppersberger (D-MD): “Obama is our commander in chief. You don’t weaken the commander in chief when we’re in a serious crisis.” Australian PM Tony Abbot says police raids follow ISIS beheading plot [Reuters]. Quick work, Tony!

And Syria just got some spandy new ground attack jets from Russia. They don’t need our help bombing ISIS. So why are we insisting on doing it? [Moon of Alabama] Our demonstrated competence in Middle East regime change? [Washington’s Blog]

Time for a new hostage video [ABC]. Meanwhile, Kerry, Syria: Chlorine [CNN].

And Bill went off message. Or did he? [Cannonfire].

Stats Watch

Housing starts for August: “Volatilty,” measured by starts, permits, and ratio of multi- to single family homes [Bloomberg]. Drops in every region, but drop in West twice as high as next highest  [USA Today]. Drought? July starts revised up [Reuters]. And better than last year [WSJ]. New homes sell for $339,100 (on average) [Christian Science Monitor].

Annals of Rental Extraction

Comcast’s Soviet-style service [VOX]. Just the company I want determining the future of the Internet.

And does California Public Utilities Commission chair Michael Peevey have a dacha? Or perhaps a ZIL? [San Jose Mercury News]. And anytime your PR person sees a phrase like “lobbied regulators to appoint its preferred judge to a key rate-setting case stemming from the San Bruno explosion”…. Well, you just shake your head. Explosions are bad [San Francisco Chronicle].

Keen Inventions

Solar roadways raise $2 million on Indiegogo and get Federal grant money. Parking lots too, using clever “ultra-tough” hexagonal panels [Daily Nebraskan].

Oscillator could replace escapement in mechanical watches [phys.org].

News of the Wired

  • Tracking the ebola virus to the village of Patient Zero [Vanity Fair]. Of all places.
  • U.S. Digital Services Playbook [CIO.gov]. Techies, can you spot any missing chapters? I spotted one right away….
  • Mad Libs with the iOS 8 predictive typing [WSJ]. “Burritos are the best thing about being in love.”
  • New Aretha Franklin album to be released September 30 [Detroit Free Press].
  • Credit Suisse thinks it’s time for Sears to wind down [Barrons]. Because they’re competing with a retail giant that doesn’t have to make a profit?
  • “Sheriff: Burned armpit hair led to Idaho car crash” [AP]. Hi, dad?
  • Now hiring: Sex columnist, with weed focus (apply by Oct. 1) [Cannabist]
  • SoHo bartender writes open letter to the hedge she says grabbed her a** at work  [Gothamist].
  • Field guide to squillionaire habitat and behavior, with handy charts [MarketWatch].

* * *

Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant:

honeysuckle_2

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Talk amongst yourselves!

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

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49 comments

  1. timbers

    Off topic, but sure you’ll be interested maybe for a future post. Just got an email from Amazon – “As part of our ongoing efforts to provide a great shopping experience, beginning November 17, 2014, only approved sellers will be eligible to list DVDs with Manufacturer’s Suggested Retail Prices (MSRP) of $25 or greater. We are implementing this restriction because these products may have a higher risk of authenticity issues.”

    If you want to continue selling blu rays over $25, you have to submit a Professional Seller Application and pay $40/ month(!).

    As a blu ray fan, I’ve had few OOP (out of print) blu rays that I’ve sold for higher than $25 and replaced them with less expensive European releases as I have a multi-region blu ray player.

    Am sure there is no need to explain the monopoly encouraging affects and screw the little guy affect of this action by Amazon to all the people here, who smarter than I.

    3. MaryL

      Need to rethink your reaction. I am not a fan of Amazon. They’re bad for our community for starters. However, this policy refers to counterfeit goods which a serious very bad horrible problem across industries. The only way to assure authenticity is by vetting authorized distribution channels.

      Yes this is going to damage all legit resellers. Personally I just bought 2 items that I’m certain are counterfeit sold as slightly used. Per the usual pattern we all suffer from criminal behavior and the consequences of these so called crackdowns put honest person should out of business too.

      Btw, be very very afraid of counterfeit batteries electronics …….

  2. Johann Sebastian Schminson

    We are ZIRP-bound.

    Good thing money doesn’t actually cost us anything — other than the endless charade we’re forced to play to maintain the status quo.

    The moment the Fed raises rates, the markets will crash, worthless “securities” will be exposed, the dollar will do a Schrödinger’s cat (violating the Law of Supply and Demand, depending on how it’s looked at — at least for a while), wages, prices, and real assets will no longer have a rational nominal value, and all hell will break loose.

    It won’t be allowed to happen.

    Tangential: The jig between government and the banks was up the moment ‘Forever Stamps’ became a real and actual hedge against the devaluation of the nation’s legal tender (not that the USPS won’t be privatized away). Forever Stamps: The other official currency.

    1. ambrit

      If the USPS is privatized, it won’t be for money. The real cash cow of mail delivery was packages, which Dick Nixon privatized way back when. That’s how FedEx and their competitors came to be. If the rump Post is privatized, it can only be to further marginalize the “lower classes.” (You know, the people who don’t want to, or can’t afford to use all those NSA designed electronic apps. The ones they track.) When the snail mail goes away, so will our anonymity.
      All we’ll need then is a CC:
      https://www.youtube.com/watch?v=PebCB0IIANI

      1. curlydan

        USPS still can beat FedEx and UPS for packages, but even there, Congress has hurt USPS.
        From Dean Baker:
        “Congress also has to be prepared to allow the Postal Service to win. About a decade ago, the Postal Service had an extremely effective ad campaign highlighting the fact that its express mail service was just a fraction of the price charged for overnight delivery by UPS and FedEx. The two companies actually went to court to try to stop the ad campaign. When the court told them to get lost, they went to Congress. Their friends in Congress then leaned on the Postal Service and got it to end the ads.”
        http://www.cepr.net/op-eds-&-columns/op-eds-&-columns/killing-the-messenger-the-downsizing-and-death-of-the-postal-service

        1. ambrit

          Upon further reflection, I’ve realized that this is a concrete example of a fiat currency. Create it when needed, and then withdraw it when the crisis is over. (It helped the Union win the war after all.)

    1. Johann Sebastian Schminson

      No more lifting of the kilts before using the driving range, then? Guess that’s what happens when one’s “membership” falls off.

      Sorry.

    1. RUKidding

      There were no “blunders.” It’s all gone according to plan, except that now the ungrateful rabble in Scotland want to flip the bird at the 1%ers in the City. Betty Windsor was moved to make a pitch for togetherness. Guess even QEII is afraid her numerous & extensive holdings might take a hit by this upstart rebellion to the north.

      1. MyLessThanPrimeBeef

        As I commented below, the rich are not ueber-menschen.

        They can and do blunder.

        That we have not been completely brainwashed is evidence that they have blundered.

        1. Propertius

          That we have not been completely brainwashed is evidence that they have blundered.

          Only if our opinions are of some consequence. Otherwise, it’s immaterial.

    1. DJG

      Who thought that dogs are optimists? They have fairly short lives. They are reliant on human beings, who have recently invented dog booties, among other horrors. They can’t digest chocolate or grapes. But dogs do have a sense of humor (not a well-known feline characteristic).

    2. MyLessThanPrimeBeef

      Do they know if rich dogs are more likely to be pessimistic or poor dogs?

      A more interesting study would be to see if rich dogs only hang out with other rich dogs, or do rich dogs hang out with poor dogs as well.

  7. trish

    re Australian PM Tony Abbot says police raids follow ISIS beheading plot

    He WAS quick – beat Obama and his team to the punch. A fear-monger coup! could have been our’s. or maybe partly is.

    1. RUKidding

      Some Aussie macho thing? Abbott should know by now that he’s the USA’s bitch, no matter what he does. If he doesn’t know that, then he needs to consult with Gough Whitlam or even Bob Hawk.

  8. Banger

    Good job bringing truth to the notion of “blunder” on the part of the ruling elites. It’s the old “mistakes were made” trope again. We need to understand that people in the elites can afford to hire competent people.

    1. MyLessThanPrimeBeef

      “Scotland’s push for independence is driven by a conviction — one not ungrounded in reality — that the British ruling class has blundered through the last couple of decades.”

      The blunder part refers to the fact that the propaganda campaign has not been effective enough to make people feel things are going in the right direction.

      That is, they have looted successfully, but blundered in not being able to convince some not to push for independence.

  9. Vatch

    While looking for something else, I discovered that Forbes magazine’s web site has a list of the richest families in America. This is similar to the list of 400 billionaires, except that is appears that there must be at least 2 rich people in the family who aren’t married to each other to make the list. So Warren Buffet’s family and Bill Gates’s families aren’t on the list. The riches families are, together with the number of years that they have been rich:

    http://www.forbes.com/families/#tab:overall

    Walton 52 years $152 billion
    Koch 89 years $89 billion
    Mars 103 years $60 billion
    Cargill-MacMillan 149 years $43 billion
    (Edward) Johnson 68 years $39 billion
    Hearst 127 years $35 billion

    Extreme wealth is very persistent among these people. Even the very old Du Pont family, 212 years old, is still on the list at number 15, with $15 billion. The 173 year old Mellon family is number 19, and the 156 year old Rockefeller family is number 24, with $10 billion.

    This contradicts the old saw “shirtsleeves to shirtsleeves in three generations”. That saying might be valid for mere millionaires or even some centi-millionaires, but it appears to be false when applied to a lot of billionaires. The number one issue on which most billionaire oligarchs seem to agree is the importance of wealth preservation. They might disagree about the environment, or Israel, or Eastern Europe, or even the taxation of future income. But they like to protect what they already own, and they do an effective job of it.

    1. RUKidding

      Thanks for the historical info. These billionaire family dynasties don’t just want to “protect what they already own,” they want, insofar as possible, to massively increase it with the least amount of cost to their already vast fortunes. Therein lies the rub. Simply “maintaining” more or less what they have already wouldn’t be so bad, but they’re certainly not satisfied with that. And these days, they want gargantuan, not just reasonable, increases. Maybe they’ve always wanted that, but they’ve certainly made sure that they’re going to get that, at least for the time-being.

      That’s where the pinch is being felt by the rest of us. Wealth extraction on the current scale cannot come without a huge amount of pain felt by others. People can pretend that these billionaire dynasty families “work so much harder” than the rest of us, but the only thing they really work at is screwing over everyone else to enrich themselves.

      1. MyLessThanPrimeBeef

        The race is on for the first trillionaire.

        A place in history.

        Imagine, even if they take away your money, they can’t take away the record.

        1. trish

          so, re Field guide to squillionaire habitat and behavior, with handy charts

          if you see a squillionaire or trillionaire, shoot it.

          “A place in history” for someone if they donate the prize specimen to the first ever unnatural history museum?

      2. trish

        I would say that the accumulation of huge amounts of wealth in the past has inflicted a lot of pain on everyone else via broad but gradual environmental destruction (including contamination of our water, air, exposure to myriad toxins), the corporatization of our food, etc.

        Just less obvious, more indirect. and of course the pain was/is felt by other inhabitants of the planet, too.

    2. Vatch

      Hmm. Upon further reflection, it appears that the ages of the families isn’t based on the time when they first became wealthy, but upon the founder’s start in business. Sam Walton started the first Walmart in 1962, 52 years ago. And 156 years ago, John D. Rockefeller was not yet rich, but was just beginning his professional life. Still, most of these people became rich not long after starting in business, so the listed family ages are not very misleading.

  10. craazyman

    has the Scottish vote put anybody to sleep yet? If you take Ambien or Lunasom this may be the night to start getting off the meds. This is very bad news for the manufactured housing industry, though. it would have been a nationwide trailer park within 20 years if they’d cut loose from the mothership. Crazy indolent lazy fukkers that they are. Whiskey and laying around doing nothing would be the national pastime. Hearding sheep during moments of sobriety. Going for hikes in the highlands to shake off hangover till you felt good enough by 3 or 4 pm to start it up again with a few shots by the fire.

    How did these people even make the news? Lots of nonsense makes the news that’s for sure. Why even think about it. Then they try to turn it into macroeconomics and it goes from nonsense without math to nonsense with math. The it attracts a higher caliber of lunatic, somebody who sees the math and thinks something analyzable must be going on and starts analyzing mathematically. If they’re really really lucky they find people who’ll pay them to analyze! Imagine that. Being paid to analyze nonsense with math. That’s incredible if you think about it

    What’s the difference between that and laying around someplace in Scotland drinking whiskey and wastime time while sheep grow wool? It’s hard to say, except when it’s all said and done, at least the sheep have done something useful.

    The big news is the Aretha Franklin cover of Adele’s Rolling in the Deep. That’s what everybody will be talking about in a few weeks all over the UK. Nobody will even remember the vote. What vote? Let’s talk about Aretha and Adele. That’s what they’ll say

    2. OIFVet

      Hmmm, so what, pray tell, attracts hedge funds to invest into trailer parks here in the US? Have some parts of our fair land seceded from the swampy lands on the Potomac and I missed the news? Westminster and City are just as good at providing growth opportunities for trailer park operators as are DC and Wall Street.

  13. David Mills

    A little off topic, sorry, but almost every time I go on NakedCapitalism with my phone I get “Modomarket” or “Mobomarket” trying to install itself. REALLY ANNOYING.

      1. David Mills

        I am really not sure. This has only happened on NC, both on my Nexus and my wife’s Samsung. There is an online description saying it is like the Google Play app store with a better interface. I am not technologically adept enough to ascertain it. Could be embedded in an ad that detects android not sure if it hits on IOS (non-Apple using).
        Otherwise, Yves you are doing a terrific job. Just ordered Econned from Amazon. Cheers.

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