By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience, who writes at Testosterone Pit.
As some readers have pointed out, there was a major problem in my last post, Deep Trouble at the Core of the Eurozone. I thank all commenters who criticized or defended my post, and I apologize for the errors it contained.
Read more...Yves here. This post from MacroBusiness provides a good point of departure, and I’ll provide some comments further down.
By Sell on News, a global macro equities analyst. Cross posted from MacroBusiness
A little known fact about John Maynard Keynes, detailed in Jane Gleeson-White’s book “Double Entry” is that he was responsible for the development of national economic statistics and that he expected them to be aggregated only on a temporary basis.
It was being done for the war effort, and would, he reasoned, not be necessary afterwards. This certainly puts “Keynesianism” in a different perspective, and poses the intriguing question: where would we be without economic statistics?
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In France, new vehicle registrations are plunging: -17.8% in December, -20.7% in January, -20.2% in February. French automakers suffered the most. PSA Peugeot Citroën -29.2% and Renault -28.5%. The German auto industry is still basking in last year’s glow of record worldwide sales and profits, and record bonuses for their beaming employees. But in January registrations edged down, and in February they collapsed brutally. And it’s just the beginning.
Read more...Yanis Varoufakis is a Greek economist who currently heads the Department of Economic Policy at the University of Athens. From 2004 to 2007 he served as an economic advisor to former Greek Prime Minister George Papandreou. Yanis writes a popular blog which can be found here. His treatise on economic theory ‘Modern Political Economics: Making Sense of the Post-2008 World’, co written with Nicholas Theocrakis and Joseph Haveli is available from Amazon.
Interview conducted by Philip Pilkington.
Philip Pilkington: Without getting into too much technical detail what is it that you refer to in your book Modern Political Economics: Making Sense of the Post-2008 World the ‘inherent error’ in all economic theories and models?
Read more...By Cathy O’Neil, a data scientist who lives in New York City and writes at mathbabe.org
A bit more than a week ago I went to a panel discussion at the Met about the global financial crisis. The panel consisted of Paul Krugman, Edmund Phelps, Jeffrey Sachs, and George Soros. They were each given 15 minutes to talk about what they thought about the Eurocrisis, especially Greece, the U.S., and whatever else they felt like.
It was well worth the $25 admission fee, but maybe not for the reason I would have thought when I went. I ended up deciding something I’ve suspected before. Namely, economists don’t understand the financial system, and moreover they don’t get that they don’t get it. Let me explain my reasoning.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Vote or die muth#%#^*#, muth#%#^*# vote or die,
Rock the vote or else I’m gonna stick a knife through your eye,
Democracy is founded on one simple rule,
Get out there and vote or I will muth#%#^*# kill you.– P. Diddy ‘Vote or Die’
The Irish Taoiseach Enda Kenny has announced that a referendum will be called so that the Irish people can vote on the new and oh-so-suicidal fiscal compact.
Read more...By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College
I have just returned from Rimini, Italy, where I experienced one of the most amazing spectacles of my academic life. Four of us associated with the University of Missouri at Kansas City (UMKC) were invited to lecture for three days on Modern Monetary Theory (MMT) and explain why Europe is in such monetary trouble today – and to show that there is an alternative, that the enforced austerity for the 99% and vast wealth grab by the 1% is not a force of nature.
Read more...By Chris Cook, former compliance and market supervision director of the International Petroleum Exchange. Cross posted from Asia Times
The end game is about to begin. On the one hand you have the noise and rhetoric. Greedy speculators gouging gasoline prices; mad mullahs preparing to wipe Israel off the map; bunker buster bombs and fleets being positioned; huge demand for oil from the BRIC countries; China’s insatiable thirst for oil; the oil price will head for $200 a barrel and will never again fall below $130 …
On the other hand you have the reality.
Read more...By Michael Olenick, creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data
The normally astute Bill McBride of Calculated Risk has joined the chorus of cheerleaders to argue that an alleged decrease in housing inventory means that house prices are near their ethereal bottom.
Living in W. Palm Beach, FL, the epicenter of the foreclosure crisis, it seems more likely that analytical ethics related to housing finance is the only element nearing a bottom, and only then because the home price pundits on which people like McBride rely can’t go much lower.
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In Greece, three-quarters of the independent doctors, lawyers, and engineers declare taxable income below the existential minimum. Tax fraud amounts to €20 billion per year (8.5% of GDP). And tax dodgers owe €63 billion in unpaid taxes (27% of GDP). The country is bankrupt and has been kept afloat by the Troika (EU, ECB, and IMF), of which Germany is by far the largest contributor. But there is a plan. And it’s not an endless bailout.
Read more...I’m late to the remarkable interview given by ECB president Mario Draghi to the Wall Street Journal. I find the choice of venue curious, since the Financial Times has become the venue for top European politicians and technocrats to communicate with English speaking finance professionals.
But Draghi’s drunk-on-austerity-Kool-Aid message was a perfect fit for the Wall Street Journal.
Read more...An anodyne seeming article at VoxEU, which I reproduce in full below, makes a straightforward seeming case for policies that bolster family ties in the face of a nasty combination of aging populations and high unemployment among the young.
It isn’t hard to see that this line of thinking is the policy equivalent of getting in front of a mob and trying to call it a parade.
Read more...By Philip Pilkington, a writer and journalist based in Dublin, Ireland
Speaking with a senior figure in Fianna Fail (the party that were kicked out of government last year by the Irish people) earlier this week something dawned on me for perhaps the first time. Namely, that the leaders in Ireland might know exactly what the issues and the problems are in Europe but they remain completely powerless to solve them.
Read more...The BBC’s Paul Mason, fresh back from Greece, gives a report on Democracy Now of how living conditions have deteriorated as a result of the imposition of austerity measures. One of the stunners, mentioned in Atlantic Wire (hat tip Lambert), is that not only will some Greeks have to work without pay, some will have to pay for their jobs (yes, that is not a typo). The euphemism is a “negative salary.”
Mason also discusses how this program is radicalizing the public. Communists, Trotskyists and other extreme-left groups are polling at 43%. That’s a strikingly high number. This plus the level of dissent on the street suggests Greece is on its way out of the eurozone. But will the technocrats prevail? As Michael Hudson has stressed here and in other commentary, the banks are succeeding in stripping Greece of assets, an operation that used to be possible only via military force.
From Democracy Now (hat tip Philip Pilkington):
Read more...Germans are euphoric these days—compared to the dour mood that prevailed for nearly two decades when real wages declined in a stagnating economy with high unemployment. This new optimism is joyriding the powerful German export machine and appears to be impervious to the nightmarish scenarios playing out at the periphery of the Eurozone. And now, Germans have something else to be euphoric about: a housing bubble.
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