Sunday, May 1, 2016

William K. Black — Obama’s Great Lie: What’s Good for Wall Street Felons is Good for America

To no one’s surprise, President Obama lobs periodic attacks on Bernie Sanders’ plans to restore the rule of law to Wall Street elites. Obama launched his latest attack, fittingly, through Wall Street’s sycophant-in-chief, Andrew Ross Sorkin. Sorkin’s column expresses his shock at how Obama repeatedly extended their interview for hours beyond its scheduled length. No one else is shocked that Obama, trying to make the case that bailing out the Wall Street felons was an act of supreme genius, would find Sorkin’s relentless sycophancy towards those felons and their political cronies so endearing. This is the first segment of my response. It focuses on the Obama administration’s great lie – the only policy “tools that work” in response to a financial crisis are getting “in bed with the banks” and making even wealthier through federal bailouts the bankers who grew wealthy by leading the fraud epidemics that caused the crisis.
The context of Sorkin’s column was Obama making the pitch for his “economic legacy.” Obama is distressed that we do not understand how great he was because he was too busy saving us to have the time to “explain” to us how great he was.
New Economic Perspectives
Obama’s Great Lie: What’s Good for Wall Street Felons is Good for America
William K. Black | Associate Professor of Economics and Law, UMKC

I posted this comment over at NEP:

Great smackdown, Bill. 

I hope you will point out that in "saving the banks,"actually the US financial system, the president was acting as global "emperor" in that the US controls the world through finance more than military. Military power is just the backup. It's through the lock on global finance that the Anglo-American empire retains global hegemony. The American empire is the historical extension of the British empire as a sea power. The East India Company has morphed into transnational corporatism, and global finance is run out of Wall Street and London. Thus, the "special relationship."

Saturday, April 30, 2016

Robin Scher — New Poll Shows a Majority of Young Americans Oppose Capitalism

New Poll Shows a Majority of Young Americans Oppose Capitalism
Robin Scher, AlterNet

Angry Arab — FLASH: Huffington Post removed an article after posting it because it was critical of the Qatari regime

"Our guys."

MATT DAMON on the Evil Elite

Some libertarian right winger put this video out but Matt Damon is really on the progressive left.

My girlfriend takes no interest in politics and thinks I'm a bit mad when I tell her how the world is up-side-down where good is evil and evil is often not so evil after all.  Come to think of it, my last girlfriend used to say to me when I bought the Guardian, or the Observer,  that why couldn't I buy a normal paper like everyone else (you know, like the The Sun)? I don't read those papers anymore, though, as I now know they are full of neoliberal crap and disinformation. 

Anyhow, here's Matt Damon telling an audience how wicked the people in charge of our society really are. That the good people are in prison and the bad people are going about scott free. Organised crime is heavily involved in the top echelons of our western society, I might add, and these people are very dangerous indeed.  But most ordinary people take no notice, watch celebrity culture and listen to its gossip, and think everything is fine, or good enough. My girlfriend is one of them. 

The Western elite and organised crime are taking us further along the path to a world war. 


Peter Lee — The Price of the Pivot: Scarborough Shoal

The PRC is in a pretty solid position, legality-wise in occupying Scarborough Shoal.
And that means it’s pretty much free to build on it. Even island-build it.
The United States and the Philippines know that.
Losing Scarborough Shoal was the price of the pivot.
It’s just hard to admit it.
Just like losing Crimea was the price of the coup in Ukraine.

And the rise of "radical Islam" was the price of inserting the "freedom fighters" into Afghanistan to counter Russia.

Tradeoffs. Zbig still believe that the tradeoff that created "radical Islam" was worth it.

"Geopolitical economy." I wonder if anyone has modeled it economically. The numbers are huge and growing.

The Unz Review
The Price of the Pivot: Scarborough Shoal
Peter Lee

See also at Unz Review

Trump’s America First Policy: Remarkably Sophisticated
Ilana Mercer

Trump Has A Sound Trade Policy, But Where Will He Get Sound Trade Policy Aides?
Eamonn Fingleton

Jeff Brown — Baba Beijing lowers the communist boom on foreign NGOs

Last year, I reported about the draft law proposed during the National People’s Congress (NPC), March 2015, to govern the activities of foreign NGOs (FNGOs) in China. Every law proposed in China is published for public comments, from both Chinese citizens and outsiders. This proposed FNGO law created such a hue and cry among Western governments and agencies, bordering on apoplexy, that the NPC tabled it for further review and consultation. China’s law was largely based on Russia’s FNGO law passed previously, and which was also largely adopted by India.
In the interim, China’s NPC passed a comprehensive update to its National Security Law, which has many common features with the FNGO legislation.
A year later, it’s official. On April 28th, China’s new “Management of Foreign Non-Governmental Organizations”, was signed into law by the NPC Standing Committee.…
Turning up the heat on foreign NGOs operating in the PRC in order to foil attempts at color revolution. Russia and India have taken similar steps.

China Rising
Baba Beijing lowers the communist boom on foreign NGOs-China Rising Radio Sinoland 16.4.30
Jeff Brown

See also

Legally India
China learns from India, passes law to restrict foreign NGOs
Gaurav Sharma, IANS

World Politics Review (May 18, 2015)
Foreign NGOs Hamstrung by Indian Funding Regulations

Of course, the US also has laws against subversion and requires registration for foreign agents.

There is also a push on to push out PRC-sponsored US branches of the Confucius Institute, which teach Chinese language and culture in US universities.
Lawmakers are investigating whether academic freedom is being threatened at universities building campuses in China and partnering with the Chinese on "Confucius institutes" in the U.S.
Rep. Chris Smith, R-N.J., chairman of a House subcommittee focusing on human rights, said at a hearing before the panel Thursday that he will seek a Governmental Accountability Office study of agreements between U.S. universities and China that allow China to promote its culture and language here through education programs it supervises and finances.
Smith said Congress could decide to withhold money for the Education Department or for State Department exchange programs if it decides the Chinese-sponsored efforts are compromising academic freedoms in the U.S.
"I think we can all agree that U.S. colleges and universities should not be outsourcing academic control, faculty and student oversight or curriculum to a foreign government — in this case a dictatorship," said Smith, chairman of the House Subcommittee on Africa, Global Health, Global Human Rights and International Organizations.
USA Today (December 4, 2014)
House panel investigates 'Confucius institutes'
Nicole Gaudiano, USA TODAY

Nikhil Sonnad — The Stanford Encyclopedia of Philosophy: This Free Online Encyclopedia Has Achieved What Wikipedia Can Only Dream Of

A fundamental problem faced by the general public and the members of an academic discipline in the information age is how to find the most authoritative, comprehensive, and up-to-date information about an important topic.

That paper is so old that it mentions “CD-ROMs” in the second sentence. But for all the years that have passed, the basic problem remains unsolved.

The three requirements the authors list—”authoritative, comprehensive, and up-to-date”—are to information what the “impossible trinity” is to economics. You can only ever have one or two at once. It is like having your cake, eating it, and then bringing it to another party. 
Yet if the goal is to share with people what is true, it is extremely important for a resource to have all of these things. It must be trusted. It must not leave anything out. And it must reflect the latest state of knowledge. Unfortunately, all of the other current ways of designing an encyclopedia very badly fail to meet at least one of these requirements….
The Stanford Encyclopedia of Philosophy: This Free Online Encyclopedia Has Achieved What Wikipedia Can Only Dream Of
Nikhil Sonnad
ht Miles Kimball at Confessions of a Supply Side Liberal

Friday, April 29, 2016

James Petras — President Obama: The Race for the Imperial Legacy

Harsh. Makes one cringe at the prospect of a Clinton presidency.

James Petras Website
President Obama: The Race for the Imperial Legacy
James Petras | Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia

Gunnar Bjornson — Trump Doctrine explained, with another view by Paul Pillar

Parsing Trump's foreign policy speech.

Gunnar Bjornson: Trump Doctrine explained

See also

Consortium News
Trump’s Foreign Policy Mishmash
Paul R. Pillar

Brad DeLong — Rescue Helicopters for Stranded Economies

Brad prefers fiscal, calling it a no-brainer, but if the political will is not there, then helicopter money from the central bank is needed to prevent a further slid.

Project Syndicate
Rescue Helicopters for Stranded Economies
J. Bradford DeLong | Professor of Economics at the University of California at Berkeley, a research associate at the National Bureau of Economic Research, and formerly Deputy Assistant US Treasury Secretary during the Clinton Administration

Another warped, Goldman fuck

All you have to do is listen to the comments coming out of the mouths of Goldman Sachs’ executives to understand in an instant that this company is nothing more than a racket run by highly educated and privileged morons. Some of them even depraved.

In a recent speech given by a former Goldman Sachs’ president, some guy named John Thornton, he says that he is very concerned about “our economic future” and predicts that it will “end in tears.” 

Did Thornton have any particularly insightful reason why he would say that, like, who knows, maybe because the insane neocons in Washington (whom I am sure he supports) might decide to start World War 3 with Russia?


Instead Thornton says that the United States and other countries will see their economic situations end in tears because those benevolent central banks, you know...the ones who have collectively worked so hard to “buy time” for governments to “get their houses in order,” will realize that all their efforts have been in vain.

“After the events of 2008, really since then, the central banks either collectively or individually have tried to implement policies which would, in effect, buy time for individual governments to take the actions they should take to put their houses in order,” Thornton says.

What this imbecile is referring to is what he sees as some timebomb of massive government debt, obviously. What else would he be talking about?

The dead giveaway is the fact that this guy is now the chairman of the super right wing neoliberal think tank, the Brookings Institution. And Brookings is the gold standard of organizations that peddle the insidious and destructive doctrine of neoliberalism, i.e. privatization, austerity, debt reduction, “free trade,” regime change, war, etc.

Funny I should mention gold standard because this guy is also on the board of Barrick Gold, it appears. (Probably pushing for a Balanced Budget amendment and a return to the gold standard, of course.)
The prescriptions of these psychopaths have brought nothing but massive economic dislocation, poverty, inequality, never-ending regime change and war yet here they are still giving speeches.

What’s so amazing about the whole thing is how shamelessly brazen guys like Thornton are. They spend their careers making fortunes at institutions that openly admit to operating criminal rackets, then casually pay fines while criticizing the very governments that allow them to operate with impunity in this fashion.

These guys know nothing and subscribe only to their own, warped ideology and criminality. Yet they parade around all over selling their poisonous snake oil, all the while buying the politicians that will make sure their thievery gets officially sanctioned by the force of law.

It literally makes me want to puke.

In trading, what do you do when things don't go your way?

What do you do when things don't go our way?

Miles Kimball — Scott Adams on Donald Trump's Powers of Persuasion

Miles Kimball notices Scott Adams. IIRC, Miles Kimball was Noah Smith's dissertation adviser, so expect Noah to pick up on it, too.

Why is this important for economics? Because it shows that voting choice is not so much about policy (rational) but rather about persuasion and shaping perceptions (non-rational). The fact of the matter is that arguably most choices socially, political and economically are "managed" by preseason rather than "free" and "rational" as assumed.

Confessions of a Supply Side Liberal
Scott Adams on Donald Trump's Powers of Persuasion
Miles Kimball | Professor of Economics and Survey Research at the University of Michigan

Everett Rosenfeld — Icahn: Republicans don’t understand economics and it’s killing the country

The Republican Party that I used to be more sympathetic with — I'm right in the middle now, although as you know I'm for Trump — but what I would say is Congress is in this massive gridlock," he said, explaining that the Republican-controlled body is "obsessed with this deficit to a point that I think it's almost pathological."

The result of this gridlock and a lack of fiscal stimulus has been that the Federal Reserve has been forced to keep interest rates low, and that has created "tremendous bubbles" and "the wealth gap."

Additionally, worrying about a deficit when there is no significant inflation and the dollar remains the global reserve currency is not a smart way to govern, Icahn said, adding that "a country is not a company."…
Icahn: Republicans don’t understand economics and it’s killing the country
Everett Rosenfeld

I need to "trade out" of my long, USDJPY position

Yesterday I posted here how that early morning 300 point collapse in USDJPY was ridiculous.

It came about as a result of the BOJ standing pat on rates. "That's how people trade?" I asked.

Well apparently.

As if a greater degree of negative rates was somehow a "stimulus." The whole thing was absurdity to the extreme and completely out of paradigm with the current reality so what was I supposed to do? I simply HAD TO go long USDJPY and I did.

That trade was actually in the money for about 2-3 hours, but then it turned around and we're about 100 pips lower than where I bought in.

Then what did I do? Did I panic? Did I beat myself up? Did I frantically PAY the market to get out and take a loss?

No. That is not the proper mental game and not the proper strategy.

While I believe my reasoning for buying USDJPY was correct (although in the backdrop there is a serious, bearish dollar environment developing now), it is not working out.

What I teach in my Forex course is that we trade according to the principles of MMT. This trade was. (Japan enacting a nearly, $200 billion FISCAL stimulus for the economy and earthquake cleanup and reconstruction. That's bearish for the yen all things equal.)

However, when MMT trades do not work and we are caught with losses (it can happen because sentiment, too, drives markets and when clueless idiots believe something they can push the market like a stampeding herd) my course teaches you the SKILLS to trade out of what is not working.

The best offense is a good defense!

So, that's what I am about to out of this position that is not working. I am adding another unit of long, USDJPY at 106.89 to lower my average.

Stay tuned...

And by the way, if you haven't already, BUY MY FOREX COURSE. 25 hours of instruction for $250 bucks. ($10 an hour for those of you who are math-challenged.)

Here's what Tom Hickey, an invaluable contributor to this blog said about my course...

"Excellent presentation and so true. Your course is an incredible deal. Wish I hid this to work with back in the day."

Click the button below to purchase the course and start trading Forex now.
 Forex course

By the way, if you want to read some really cool and prescient calls, go back and read the posts on this blog from 2008

I was just looking through some of the posts put up on this blog on 2008 and, BOY, did we get things right. Amazing.

Check it out.

Fun read. Go here.

And leave you comments here.

Obama: the only president never to see a single year of 3% growth. I wonder why?

Obama...the worst.

The only president never to see a single year of 3% growth.

Well, maybe that's because he raised taxes on the middle class, bragged about deficit reduction, supported austerity, stood by as Wall Street went on an unprecedented (even for Wall Street) rampage of fraud, backed democracy-busting trade deals, handed trillions to the health insurance industry so they could pay their CEO's hundreds of millions in compensation while shoring up their profits (for stock buybacks), watched as public unions were decimated.

Maybe it had something to do with that stuff?

Maybe that's why labor's share of national income fell to the lowest level ever in history? Even as their productivity rose to the highest level in history.

Pure theft.

Obama...simply the worst. And by the way, this blog predicted it, way back in 2008 right after he was elected when I posted a picture of his economic team, which were a bunch of neoclassical economists and neoliberal zealots.

What did you expect?

The BRICS Post — US military challenged territorial claims of India, China: Pentagon

US military aircrafts and naval ships carried out these operations against China, India, Indonesia, Iran, Libya, Malaysia, the Maldives, Oman, the Philippines and Vietnam, the Pentagon report on Monday said. The purported aim of these assertive US missions are to demonstrate that Washington will not accept the claims of jurisdiction of these countries over disputed areas.…
Not just picking on China.

Thursday, April 28, 2016

Glenn Greenwald — New Study Shows Mass Surveillance Breeds Meekness, Fear and Self-Censorship

"Mass surveillance breeds meekness, fear and self-censorship" Doh. That's the point. It's called intimidation, and that is also the effect of police militarization, as well as coordination of all domestic security apparatus under the cabinet level Department of Homeland Security. It's a plan. You are supposed to notice it and act accordingly.
A newly published study from Oxford’s Jon Penney provides empirical evidence for a key argument long made by privacy advocates: that the mere existence of a surveillance state breeds fear and conformity and stifles free expression. Reporting on the study, the Washington Post this morning described this phenomenon: “If we think that authorities are watching our online actions, we might stop visiting certain websites or not say certain things just to avoid seeming suspicious.”…
As the Post explains, several other studies have also demonstrated how mass surveillance crushes free expression and free thought.…
There are also numerous psychological studies demonstrating that people who believe they are being watched engage in behavior far more compliant, conformist and submissive than those who believe they are acting without monitoring.…
There is a reason governments, corporations, and multiple other entities of authority crave surveillance. It’s precisely because the possibility of being monitored radically changes individual and collective behavior. Specifically, that possibility breeds fear and fosters collective conformity. That’s always been intuitively clear. Now, there is mounting empirical evidence proving it.
Until recently, this was a major indictment of "totalitarian" states leveled by the liberal West.

But, of course, if you are not thinking any thoughts that could be construed as subversive, or saying or writing anything that could be considered subversive, or doing anything that might look subversive, what's to worry about?

The Intercept
New Study Shows Mass Surveillance Breeds Meekness, Fear and Self-Censorship
Glenn Greenwald

Financial Diversion — Gordon Long interviews Michael Hudson

On the FIRE economy.
Financial Diversion
Gordon Long interviews Michael Hudson

Jeff Desjardins — Four Maps Showing China’s Rising Dominance in Trade

We often use big, overarching ideas to help us understand the world and the opportunities contained within. These narratives, which can change over time, are used to create context. They give us a frame of reference for comprehending the news and events that affect our outlook on things.
China’s economic prowess is one of these new paradigms that has emerged, but many people still can’t really wrap their heads around the scale or scope of it.

It’s happened suddenly, and the ramifications are extremely relevant to our investments and understanding. Here’s four maps on China’s trade dominance that will help you think differently about the world:
Visual Capitalist
Four Maps Showing China’s Rising Dominance in Trade
Jeff Desjardins
The Russian Central Bank is guided (among other considerations) in its inflation expectations by statistics produced by Rosstat (Russia’s governmental statistics agency) concerning the size of Russia’s imports relative to domestic production. The bank’s inflation expectation in turn is – judging by their policy statements – the decisive factor in its interest rate policy. Unfortunately, it seems that Rosstat has in its published statistics grossly overestimated the share of imports. According to the agency, the share of all imported products of the “consumer basket” would be 38%. Our research shows that the true figure cannot be more than 24%. When approaching the question from different angles we have derived results in the range of 4.9% to 24%.
The biggest problem in Russia’s economy is not its relative dependence on oil and gas revenue, rather it is the punitively high borrowing costs that should occupy the top spot in policy concerns. The Central Bank has been keeping its key steering rate at an inordinately high level of 11% although inflation has long ago fallen well below that. By end of March, the inflation for the past 12 months was down to 7.3% and running forward at a rate of approximately 6%.…
The Russian Central Bank thus proceeds from quite erroneous premises in motivating its cutthroat interest policy by historical inflation records and “inflation risks” based on faulty statistics connected with a distorted view of the share of imports in the national economy. There is yet a third, perhaps more fundamental error, which is the neoliberal belief that inflation is strictly a monetary phenomenon. This when in fact the root cause of Russia’s inflation over the last two decades has been insufficient supply to meet the demand. Therefore, the immediate concern of the Central Bank should be to make affordable lending available for Russian producers. This should be done even at the risk of increasing the inflation in the short-term, because before the supply side is addressed it will not be possible to break the vicious cycle.…

Ambrose Evans-Pritchard — The European Union always was a CIA project, as Brexiteers discover

What was that about conspiracy theories again?
The Schuman Declaration that set the tone of Franco-German reconciliation - and would lead by stages to the European Community - was cooked up by the US Secretary of State Dean Acheson at a meeting in Foggy Bottom. "It all began in Washington," said Robert Schuman's chief of staff.…
For British eurosceptics, Jean Monnet looms large in the federalist pantheon, the emminence grise of supranational villainy. Few are aware that he spent much of his life in America, and served as war-time eyes and ears of Franklin Roosevelt.

General Charles de Gaulle thought him an American agent, as indeed he was in a loose sense. Eric Roussel's biography of Monnet reveals how he worked hand in glove with successive administrations.…
Nor are many aware of declassified documents from the State Department archives showing that US intelligence funded the European movement secretly for decades, and worked aggressively behind the scenes to push Britain into the project.…
The key CIA front was the American Committee for a United Europe (ACUE), chaired by Donovan. Another document shows that it provided 53.5 per cent of the European movement's funds in 1958. The board included Walter Bedell Smith and Allen Dulles, CIA directors in the Fifties, and a caste of ex-OSS officials who moved in and out of the CIA.…
 A memo dated June 11, 1965, instructs the vice-president of the European Community to pursue monetary union by stealth, suppressing debate until the "adoption of such proposals would become virtually inescapable". This was too clever by half, as we can see today from debt-deflation traps and mass unemployment across southern Europe. 
Who knew?

The Telegraph
The European Union always was a CIA project, as Brexiteers discover
Ambrose Evans-Pritchard

Jason Smith — Celebrate this blog's birthday with a model prediction success story

How a scientist thinks about economic models. Hint: He checks the success of what the model predicted. What a novel idea.

Happy blog birthday.

Information Transfer Economics
Celebrate this blog's birthday with a model prediction success story
Jason Smith

Amazon beats

Another 1Q beat... I don't think Amazon sells gasoline...

The yen rally this morning is ridiculous

stupid traders sell usdjpy

As you know I have been bullish on the yen for a while and it has rallied for the past three months, but two weeks ago I said to sell it and we caught a nice, 400 pip profit going short.

This was all based on strategic, calm, trading and an MMT understanding of what was happening.

However, we just saw something earlier today that shows you why people lose money. The yen surged because the BOJ decided to keep monetary policy unchanged. So?

That unleashed a massive 300 point move down in USDJPY.

People trade like this?

Yup. And that's why you can make so much money, trading against emotional, clueless, fools.

The lack of action by the Bank of Japan does not change the fact that Japan is putting through a major fiscal stimulus. They "front loaded" all their public works' spending ot the first half of their 2016 fiscal year (Apr-Sep, basically). It's about a $110b equivalent of spending. And they are probably going to pass a supplemental budget to deal with the recent earthquake.

What does this mean? It probably means USDJPY goes back up again and the fools who sold this pair this morning, on nothing, will get their money taken from them. That's as it should be.

Wednesday, April 27, 2016

Catherine Rampell — Millennials are increasingly rejecting voodoo economics

Younger people no longer drinking the Kool-Aid?

The Washington Post
Millennials are increasingly rejecting voodoo economics
Catherine Rampell
ht Mark Thomas at Economist’s View

Alexander Douglas — Individuals don’t have preferences

This is just a vague stab at a germ of an idea. It’s what I hope to work on in the future by looking at the history and philosophy of political economy. It’s not properly formed at all; I’m just getting the idea out there to be discussed by all the smart people who read my blog and have offered so much helpful advice in the past.
The basic claim I want to make is that the theory of individual preferences that lies at the basis of economic analysis, public choice theory, and other related social sciences, is wrong. Individuals don’t have preferences.…
Origin of Specious
Individuals don’t have preferences
Alexander Douglas | Lecturer in Philosophy at Heythrop College, London

Brian Romanchuk — Primer: Core Versus Headline CPI

The distinction between headline and core inflation is commonly made in market and economic commentary. This primer briefly introduces these concepts, and why they are used.
Bond Economics
Primer: Core Versus Headline CPI
Brian Romanchuk

Losing is a choice

This is a VERY IMPORTANT video. Watch it!!!