2011-07-21

Marknaden gäspar …

… och kliar sig förstrött på den välfyllda buken när den amerikanska politiska ”sideshown” (inför valet nästa år) om lånetaket utspelar sig mellan den mindre vetande presidenten och tok-republikanerna, vilket visar deras totala förakt för de underprivilegierade i samhället som kommer att drabbas..

it becomes clear that the bond markets are like parasites and rely on governments unnecessarily issuing debt. At any time a government chose it could stop issuing debt and ignore the parasitic need of the investors for risk-free assets.
From a MMT perspective it is preferable that governments stop issuing debt at all maturities. Sure enough debt-issuance is just an elaborate form of welfare assistance – the benefits of which are skewed to the more advantaged members of the society. But the usual concerns the conservatives have about it are without foundation.
And … the bond markets know it.


Dagens noteringar från bloomberg.com/
5 year: 1.47
10 year: 2.94
6 month: 0.07
”sideshown” är förstås realt och verkligt nog för alla de medelamerikaner och fattiga som nu ska drabbas av den (utsedde banemannen) Demokratiske presidentens slakt av Social Security och MediCare. Det andra stora problemet för de nämnda offern är att ingen talar om för dem vad som verkligen pågår.

Självklart spelar de borgerliga tidningarna här med i charaderna och som vi kunnat se i ökande utsträckning de senaste decennierna även den ”vänster” som kan skriva i typ Aftonbladet och ibland tillåts till och med i den otäcka malliga morgontidningen. Tex den ekonomiskt okunnige Kielos svamlar i aftonblaskan om det ”allvarlig” läget och den förstående konkursen för imperiet. Kielos är iofs annars en duktig skribent som kan utrycka sig både vasst och med humor.


2011-07-15

Kapitalismens fiende, IMF


How the IMF’s business model sabotages properly functioning capitalism.
(...)
The Greek debacle and the North African drama raise existential questions about the IMF. Responsible governments have no business borrowing vast sums from abroad, rather than from domestic sources. That’s what tinpot regimes do. And lending even more to borrowers who can’t pay what they already owe? That’s what loan sharks and mafiosi do.

The IMF’s business model sabotages properly functioning capitalism, victimizing ordinary people while benefiting the elites. Do we need international agencies to enable irresponsible—verging on immoral—borrowing and lending? Instead of dreaming up too-clever-by-half schemes to stumble through crises after they happen, why not just stop imprudent banks from accommodating foreign borrowing by feckless governments? After all, it’s French and German taxpayers who are on the hook—not just the Greeks and the Irish.
(...)by Amar Bhide and Edmund Phelps

Mer analys av artikeln, IMF och den internationella valutaordningen:
I agree with a mainstream economist
Bill Mitchell


2011-07-14

Obama ger bort nästa period




It’s official.
Obama has decided to become a one term president.

It never had anything to do with debts and deficits and tens of trillions of dollars of unfunded “entitlements”. The goal all along has been to find a Democratic president willing to kill Social Security. Washington finally has one. Al Gore probably would have done it—but his “lockbox” proposal was too silly to sell with a straight face, so he never got the chance. Obama became the willing sacrificial lamb.

Wall Street wants blood for its vampire squids, and Obama is willing to deliver it by the truckload. To be clear, he is no martyr. Martyrs have to be unwilling, at least up to a point. It appears that President Obama wanted this outcome from day one.


In the old days, the enemies were simply too obvious to be successful—using Cold War rhetoric and labeling the program a communist plot, they never gained traction.

As they became more sophisticated, they moved on to railing against future costs of taking care of babyboomers. They enlisted Alan Greenspan, who chaired a commission that unnecessarily jacked up payroll taxes to run surpluses to be “saved” for future use—something that was impossible for a sovereign government to do since Trust Fund assets were simply government IOUs (something later admitted by Greenspan). But the high taxes helped to build hostility to the program.

2011-07-11

Obamas ickefråga


As Unemployment Spikes, Obama's Got a Bigger Problem Than the Debt Ceiling -thenation.com

“David Plouffe, the president’s political czar, said on the eve of the release of Friday’s dismal jobs numbers that he does not believe that the high unemployment rate poses a threat to President Obama’s 2012 re-election campaign.
Speaking to reporters this week, Plouffe said, “The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ”

Obama is toying with the notion of running for reelection as the president who did what George Bush could not: cut Medicare, Medicaid and Social Security.
That calculus suggests that Obama and his team really are out of touch with the electoral dynamic.
…”

Man kan nog spekulera om inte röstskolket fäller Obama i nästa val. När det är så att det i praktiken bara finns två alternativ för väljarna är det inte orimligt att anta att folk känner sig så totalt grundlutade av löftena om ”change we can belive in” och ”hope” att folk stannar hemma.


Obama förklarar varför arbetslösheten är hög:


More Proof That Obama is Herbert Hoover - nakedcapitalism.com
Not only is Obama assuring that he will go down as one of the worst Presidents in history, but for those who have any doubts, he is also making it clear that his only allegiance is to the capitalist classes and their knowledge worker arms and legs.

The other front page article, appallingly, shows Obama, rather than the Republicans, pushing for $4 trillion in deficit cuts:

Even knowing how dedicated to bad ends Obama is, I still feel like I’ve walked into a parallel universe. He’s now determined to make these horrific entitlement cuts a sign of his manhood. This is “Change” for sure, to a more brutal, grasping, dog eat dog society, all administered by self serving elites. They will in the end reap the whirlwind they are creating, but not before it mows a path of destruction through our social order.


DN, DN2, SR




2011-07-10

Phone hacking


Söker man på ”Rebekah Brooks” på SR/Ekots nyhetsarkiv får man EN träff, en notering om nedläggningen av ”News of the world” i dag.

Torygraphen har faktiskt en bra artikel om den stora skandalen, vilken förstås rent principiellt i långt större utsträckning handlar om medias roll som politiska kungamakare än om den kriminella avlyssningen. Så som vi sett medias politiska bevakning utvecklas här de senaste 10 åren och inte minst sen valet 2006 kan man fråga sig om Murdoch gjort någon skillnad om han kontrollerat svensk media.

Phone hacking: David Cameron is not out of the sewer yet
But he did not just control our media. He dominated British public life. Politicians – including prime ministers – treated him with deference and fear. Time and again the Murdoch press – using techniques of which we have only just become aware – destroyed political careers. Murdoch also claims to determine the results of general elections.
So it is no wonder that politicians paid court. David Cameron and Tony Blair both flew round the world to make speeches to Murdoch’s News Corp while they were in opposition. Ed Miliband was primed to follow suit before the latest scandal broke.

Though many were appalled, Murdoch himself was protected by his potent political contacts. Tony Blair, for example, would do anything to help out his close friend and ally. I can even disclose that, before the last election, Tony Blair rang Gordon Brown to try to persuade the Labour Prime Minister to stop the Labour MP Tom Watson raising the issue of phone hacking. And as recently as two weeks ago both Ed Miliband and David Cameron attended the News International (News Corp’s British newspaper publishing arm) summer party, despite the fact that the newspaper group was the subject of two separate criminal investigations.

The bitter truth is that no major figure in British public life was prepared to take on and expose the Murdoch newspaper empire. Rival proprietors were silent. Senior public figures did not dare to speak out for fear of exposure and attack in the Murdoch newspapers.


”toll-booth” samhälle

Keiser Report: Europe's Neo Feudalism (E162)

Som Stacy och Hudson säger Europa håller på att förvandlas av sk ”toll-booth” samhälle där den arme europén snart inte kan blinka utan att behöva betala ”toll-booth” till rentierer i stället för att ha väsentlig samhällsservice till självkostnadspris det senar vilket förstås underlättar den ekonomiska aktiviteten i landet och gör det så billigt så möjligt att göra ”affärer”. I ”toll-booth” samhället ska det betala skatt till både samhället och privata rentierer. Total galenskap. Folk som Wigforss torde rotera i sina gravar.

Ett tidigare extremt ”toll-booth” samhälle var Frankrike under 1700-talet, ”skattebördan” till rentiererna/överheten var monstruös, en normal bonde betalade jämfört med dagens inkomstberäkning typ 80% i ”skatt”, när det var dåliga skärdar kunde det mycket väl bli över 100%. Tillslut fick folk nog och reste sig i motstånd mot denna absurda samhällsordning.

Och Europas socialdemokrati står där ”som vanligt” med mössan i handen och skrapar lite med foten för att visa rentiererna sin vördnad när Europa omvandlas till en tid som vi trodde vi lämnat bakom oss för länge sen.

Hyckleriet och dubbelmoralen är som vanligt oerhört när de EU-vänliga politikerna gråter krokodiltårar över bond-vigliante spekulanterna som jagar som en vargflock. Själva syftet med EMU och EU:s ekonomiska regelverk och lagar för centralbanker har ju varit att ”befria” pennigen från demokratisk kontroll och disciplinera den folkliga demokratin. Det var klart uttalat, om politikerna inte ”sköter sig” och håller folket i schack skulle de straffas av marknaden som ska ha vetorätt över den demokratiska viljan.

Nu gör ”vargflockarna” vad politikerna beställde när de totade ihop det ekonomiska ramverk som EU och Euroländerna lever under. Från vänster till höger var man rörande överens om att detta var den enda vägen. I stället för att gnälla om den hemska marknaden borde vara nöjda och belåtna och slå sig för bröstet, det fungerade precis som man planerade.



2011-07-09

Egen valuta



Japan and Moody’s
In November 1998, the day after the Japanese Government announced a large-scale fiscal stimulus to its ailing economy, Moody’s Investors Service began the first of a series of downgradings of the Japanese Government’s yen-denominated bonds, by taking the Aaa (triple A) rating away. The next major Moody’s downgrade occurred on September 8, 2000.

Then, in December 2001, Moody’s further downgraded the Japan Governments yen-denominated bond rating to Aa3 from Aa2. On May 31, 2002, Moody’s Investors Service cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana, Chile and Hungary.

In a statement at the time, Moody’s said that its decision “reflects the conclusion that the Japanese government’s current and anticipated economic policies will be insufficient to prevent continued deterioration in Japan’s domestic debt position … Japan’s general government indebtedness, however measured, will approach levels unprecedented in the postwar era in the developed world, and as such Japan will be entering ‘uncharted territory’.”

The then Japanese Finance Minister responded (with some foresight): “They’re doing it for business. Just because they do such things we won’t change our policies … The market doesn’t seem to be paying attention.” Indeed, the Government continued to have no problems finding buyers for their debt, which is all yen-denominated and sold mainly to domestic investors.

In the New York Times the logic of the rating was questioned:

How … could a country that receives foreign aid from Japan have a better rating than Japan itself? Japan, with an economy almost 1,000 times the size of Botswana’s, has the world’s largest foreign reserves, $446 billion; the world’s largest domestic savings, $11.4 trillion; and about $1 trillion in overseas investments. And 95 percent of the debt is held by Japanese people …

Rating sovereign debt according to default risk is nonsensical. While Japan’s economy was struggling at the time, the default risk on yen-denominated sovereign debt was nil given that the yen is a floating exchange rate.

Once we understand how a sovereign government operates with respect to the monetary system this point become obvious.

First, when a particular government bond matures (that is, becomes due for repayment) the Government of Japan would simply credit the bank account of the holder with the principle and interest and cancel the accounting record of that debt instrument. Simple as that. The banking reserves would rise by that amount and the wealth of the private investor would change in mix from bond to bank deposit.

Second, the massive fiscal deficits that the Japanese Government has run since the 1990s just work in the same way – adding reserves on a daily basis to the banking system (as people spend the yen and deposit them back into bank accounts etc). The bond issues are designed to give the private sector an interest-bearing financial asset to replace the non-interest earning bank reserves. The way the Bank of Japan (BOJ) has kept the interest rate in Japan at virtually zero for years now is that they do not issue debt volume of debt to match the reserve-add of the deficit spending. That is, they leave just enough excess reserves in the cash system overnight each day to force the interbank market to compete the rate down to zero. This is a very clever way of ensuring that the longer rates (the so-called investment rates) are as low as they can be.

Third, what if the Japanese Government decided it didn’t want to issue any more debt but still ran the deficits? The net spending would still occur – day by day – and provide stimulus to the economy. But the liquidity effects would just remain in the excess banking reserves and force the private sector to hold the new net financial assets pouring in each day via the deficits in the form of reserves rather than interest-bearing bonds. The other angle on this that is often overlooked is that the bond holdings of the private sector also constitute an income source – that is, the government interest payments on its outstanding debt constitute another avenue for stimulus. So when the Government retires debt it reduces private incomes.

The Japanese Government is very sophisticated and knew that Government debt was seen as a safe haven during its decade or more of volatile economic times and also realised that the steady and predictable income flow derived by the private sector holding the public debt was a source of security and a positive influence on growth.

So any notion that a government that is running large fiscal deficits and also issuing debt for monetary policy reasons or in the Japanese case (given they have zero short-term interest rates anyway) for risk reduction purposes, might be a risk is ridiculous.

Note that this analysis does not consider foreign-currency denominated public debt which is subject to exchange rate exposure and clearly tells us that a sovereign government should never issue debt in any currency other than its own.

For Australia, foreign holders of our public debt will clearly face exchange rate (or currency) risk. But that is not related to the decision of the Government to net spend unless you bring the old furphy out that these amorphous hedge funds out there will mark a currency down if a Government borrows to much. That is possible but unlikely. Suggesting that this will push up interest rates (to provide some cover for the currency risk) assumes that the Government is stupid enough to keep borrowing from markets that want to impose this type of penalty. …
bilbo.economicoutlook

När Japan kan hantera detta så här infinner sig frågan varför den svenska sk 90-tals krisen utspelade sig som den gjorde. Och då speciellt efter att den fasta kronkursen släppts och kronan tilläts flyta. Än i denna dag är hela det politiska etablissemanget livrädda för "inviseble bond vigliantes" och deras lakejer på rating institut och grötmyndigt svammel från OECD och IMF.

2011-07-07

Vilka politiker kan vi lita på?

Vetenskapen för mänskligheten framåt, ständigt på språng efter ny och revolutionerade kunskap.

The bare-faced truth about big fat liars
Men with wide faces are more likely to lie and cheat than narrow-faced men but they seem to make better businessmen, according to a study that links facial features with a tendency to engage in unethical behaviour.

Scientists believe they have evidence to show that the width of a man's face relative to his facial height is an indicator of how powerful he feels and of his willingness to surreptitiously break social rules to achieve his goals.

The findings suggest that the width-to-height ratio of the face could be an ancient evolutionary signal of a man's aggressiveness when dealing with competitors, said Professor Michael Haselhuhn of the University of Wisconsin-Milwaukee, who led the study.

Guardian har en bild av Nixon som illustration, själv kommer jag sökt att tänka på vår brehuvade statsminister fredde. Även Juholt ligger illa till.

Man blir imponerad av den moderna vetenskapen som tagit gammal hederlig skallmätning till heders igen för att avgöra folks karaktär. Våra politiker bör förstås i fortsättningen varudeklareras med aktuella skallmätnings mått.




Undrar om grekiska politiker är av den bredkäftade sorten. De får i alla fall en avhyvling som heter duga av James Petras när han läser lusen av dem i sin senaste kolumn.


PASOK: Pan Hellenic Socialist Kleptocrats

“A self-proclaimed “Socialist” Government in Greece is imposing by ballots and clubs the most far reaching reversals of wages, pensions, jobs, educational, health and tax programs in the history of Western Europe.

The Pan Hellenic Socialist Party (PASOK) has totally abdicated any pretense of being a sovereign government, handing over present and future macro and micro policymaking to the European Central Bankers, the IMF and the power within the European Union/Germany, France).

Entry into the European Union (EU) provided PASOK and the Right with huge transfers of capital and loans ostensibly to “modernize” the economy and make it competitive. In exchange Greece lowered its tariff barriers and EU goods flooded the local market. EU funds financed PASOK’s patronage machine; private business borrowed EU funds and passed payment onto the state, with complicit politicians. Professionals and the middle class secured easy credit to buy pricey imports. The regime economists and politicians “cooked the books”, showing positive growth and hiding liabilities. Everything was mortgaged. The European banks collected interest; Western European manufacturers exported consumer goods. According to the experts, Greece was “integrated” into the European Union …

EU loans financed the modernization of Greek living standards, increasing the importation of German appliances and automobiles, as well as Danish and French feta cheese (cheap imports substituted for local products). In other words, Europe captured Greek markets increasing its trade deficit while the bureaucracy became the employer of last resort. These EU practices and relations allowed PASOK to retain a solid patronage base of business kleptocrats, small business tax evaders and new layers of state functionaries.

The EU bought Greece’s increasing politico-military subservience: Greece supported the Afghan, Iraq, Libyan and Pakistan wars. Especially under George Papandreou, PASOK’s subservience to Israel and its US Zionist backers exceeded all previous regimes
…”

2011-07-03

Fire Sale

Pass på, nu ska Grekland slumpas bort, den europeiska dårskapen firar nya triumfer.

Bl.a. är 39 flygplatser, 850 hamnar, järnvägar, motorvägar, vatten och avloppssystem, energibolag, banker, försvarsindustri, tusentals ha mark att bygga på, kasinon och det statliga lotteriet.

Ett helt land till salu för fyndpris, köp fyra flygplatser och betala för två typ. Ett tillfälle för den kapitalstarke som har tumme med Goldman Sachs och de andra som förmedlar slantarna och så att säga ytterst blir ägarna av Grekland.


Det kommer säkert att göra underverk för den Grekiska ekonomin när alllt det som tidigare varit offentlig infrastruktur till knappt självkostnadspris kommer att bli betydligt dyrare, en ökad kostnad i den Grekiska ekonomin som förstås kommer att få ”betalas” med att greken måste dra ner på annan konsumtion och ännu fler blir arbetslösa.

”Junk economics” firar nya triumfer i det alltmer galna Europa.

Redan innan EU/IMF ”hjälpen” till Grekland var klubbat hade socialist regimen i Grekland ”road show” i Storbritannien för att locka hugade spekulanter till den stora köpfesten till av det som nyligen var Grekernas hemland sen tusentals år:

Greece puts €50bn of national assets on sale in hotel ballroom
“Christodoulakis denied that the hastily arranged sell-off was a fire sale, preferring to describe it as a "professionally managed privatisation plan".”

“…a fellow Greek interrupted to say the sell-off was "destroying our country", Christodoulakis said there was "no point crying over spilt milk" and told his countryman to "try and be optimistic".”

Så talar en sann PASOK socialist, vars regeringschef är ordförande i Socialistinternationalen.

George Christodoulakis
George graduated from the Athens University of Economics & Business where he obtained his first degree in Economics and his first Masters in Economics & Econometrics. Following, he obtained his Masters and PhD in Finance from the University of London, Birkbeck College.
Greece's special secretary for asset restructuring and privatisations
Been an advisor to the Governor of the Bank of Greece and has substantial experience in the banking sectors of London and Athens.


=====================
Mer:

Nail That Coffin Shut!
Alexander Cockburn

How many nails does it require to whack down forever the coffin lid on European social democracy? Lenin, outraged in 1914 at the sight of Social Democratic parties across Europe rallying behind their national flags and voting war credits to unleash the horrors of the First World War, would have been caustically unsurprised just over a century later at the current spectacle in Athens.

Here, last Wednesday, Greek Prime Minister George Papandreou won a no-confidence vote for what Michael Hudson describes in his article on this site today as a program for national suicide, …

Let's move now to the case of Dominique Strauss-Kahn. Lenin would have given yet another caustic laugh at the sight of Strauss-Kahn calculating that the post of managing director of the IMF – bludgeon of the major capitalist powers to extort money from the poorer nations – as a fine qualification to be the presidential candidate of the French social democrats. To assist in this cause, Mark Hosenball revealed recently for Reuters that he retained TD International, a Washington DC consulting firm run by former CIA officers and U.S. diplomats, to promote his quest for the IMF post. Lately Strauss-Kahn's legal team has informally sought public relations advice from TD Internationa

Pure Victims, Real Human Beings
Straight from Riker’s Island to the Elysée? There’s a political arc worthy of Brecht and Weill! Dominique Strauss-Kahn has been sprung from house arrest in Manhattan and his supporters in France are agitating for his re-insertion into the presidential race against Sarkozy even though DSK cannot as yet leave the United States.

And yes, in Britain, Labour leader Edward Miliband has just condemned teachers and civil servants for their one-day work stoppage to protest savage Conservative government cuts in pensions. The sheep-like Miliband declared the one-day strike "wrong". As I wrote here last week, hamer the coffin lid down on the corpse of social democracy.