Wednesday, February 22, 2017

Fox News host, Brenda Buttner has died. So sad. She was a good friend.

Brenda Buttner has died at the age of 55 after a battle with cancer.

In my 12 years at Fox News there was probably nobody I felt closer to than Brenda Buttner. She was the host of Bulls & Bears, the Saturday show where I appeared so many times.

Brenda was not just a great host--smart, witty and always in control--she was not afraid to comment and editorialize outside the ideological "party line" of Fox News. So many times she let me loose on the many clueless, ideological, gold-bug morons on these shows' panels. It was fun.

She was a wonderful person. Gone way too soon.

Two Year German Govt Bonds at all time (negative) lows

So is the Fed going to raise rates in the face of all of this over there?  I don't see it happening for now, looks like continued ZIRP at least short term. US Two year at least positive 1.22%. US overnight being supported at 0.5% pretty pathetic.

Brian Romanchuk — Paperback Edition Of Abolish Money Now Available

The paperback edition of Abolish Money (From Economics)! is now available at online booksellers. It will take time for it to appear on some websites.…
Bond Economics
Paperback Edition Of Abolish Money Now Available
Brian Romanchuk

Zero Hedge — "It's Absolutely Out Of Control": Did Trump Just Spoil The Deficit-Spending Party?

Taking away the punchbowl? Sounds like signing on to the Ryan budget?

Zero Hedge
"It's Absolutely Out Of Control": Did Trump Just Spoil The Deficit-Spending Party?
Tyler Durden

Robert Parry — NYT’s Fake News about Fake News

The West’s anti-Russian propaganda links Moscow to the blight of “fake news” but the evidence doesn’t connect the two. So, The New York Times makes the case with its own “fake news,” reports Robert Parry.
The m.o. on this is usually the same.  Reports that are verifiably true but peripheral to the point are introduced first to establish credibility and then reports that are not documented are brought in to persuade uncritical readers (probably most) to accept information that is dubious or bogus to carry home the propaganda point. The key to success is to repeat the narrative.

Consortium News
NYT’s Fake News about Fake News
Robert Parry

Duncan Green — How do we encourage innovation in markets? What can systems thinking add?

Earlier this month I spent a fun 3 days at a seminar discussing Market Systems Innovation. No really. I discovered a community of very smart people working on markets, who seem to be on a similar journey to the people working on governance and institutions, who I have spent most of my time with in recent years. Chatham House Rule, so the speakers must remain shrouded in mystery, but I will say it was at the Rockefeller Foundation’s Bellagio Centre, just to make you jealous....
From Poverty to Power
How do we encourage innovation in markets? What can systems thinking add?
Duncan Green

Norbert Häring — How India became Bill Gates’ guinea pig: A conspiracy as recounted by the main actors

Microsoft’s Bill Gates is one of the richest and most influential people on earth. He announced in 2015 that his Bill & Melinda Gates Foundation was aiming at achieving full digitalization of the payment systems of India and other populous developing countries by 2018. This “financial inclusion” program for India dates back to well before Narendra Modi came to power. It was elevated to official US policy by Executive Order in 2012, because the President saw vital US security interests are at stake....
Real-World Economics Review Blog
How India became Bill Gates’ guinea pig: A conspiracy as recounted by the main actors
Norbert Häring, Handelsblatt

See also
Merijn Knibbe

Ruble is up 11% since the rate cuts last June. I said to buy it back then.

The ruble is up 11% since the rate cuts last June. I said to BUY THE RUBLE at the time. By the way, an 11% move in currency markets is big.

Rate cuts are bullish for currency, all else equal. People don't understand that, yet we see it over and over again.

Rate cuts are price reductions--deflationary. It literally means the currency has more purchasing power. It's reflected in forex markets as a higher exchange rate.

Rate hikes are the opposite. They are bearish, not bullish. Rate hikes are price increases and that means the currency buys less, not more. It's reflected in forex markets as lower exchange rate.

Another way to think about it is, a currency is like a government security of zero maturity. Everyone understands that when the central bank raises rates the PRICE of the government security (a Treasury, for example) goes DOWN. Price is inverse to the rate. The discount to "par" reflects the interest rate. 

Conversely, when the central bank cuts rates the PRICE of the government security goes UP.

Same with currency. The dollar is a Treasury of zero maturity.

Moon of Alabama — The War Hawks Rolled Donald Trump

Lt. Gen. H. R. McMasters may be better than Ambassador John Bolton as national security advisor but Moon of Alabama doesn't think by much. 

And now that Flynn has been disposed of, Bannon is next on the list.

Moon of Alabama
The War Hawks Rolled Donald Trump

Tuesday, February 21, 2017

Reuters — Trump's new security advisor differs from him on Russia, other key issues

Is Trump adopting Obama's team of rivals approach?
U.S. President Donald Trump has shown little patience for dissent, but that trait is likely to be tested by his new national security adviser, Army Lieutenant General H.R. McMaster.
McMaster is joining the White House staff with views on Russia, counterterrorism, strengthening the military and other major security issues that diverge not only from those of the Trump loyalists, but also from those the president himself has expressed.…
McMaster will not be alone, however. His prominent administration allies include Defense Secretary Jim Mattis; Marine General Joseph Dunford, the chairman of the Joint Chiefs of Staff; and Senator John McCain, chairman of the Senate Armed Services Committee; as well as many of the soldiers who have served with him....
Trump's new security advisor differs from him on Russia, other key issues
John Walcott

Interfax — Moody’s upgrades Russia rating outlook to stable

Moody’s Investors Service has changed the outlook for Russia’s sovereign ratings to stable from negative.
Russia’s issuer rating and the rating for Russian government bonds have been affirmed at Ba1, and the short-term rating has been affirmed at Not Prime, the rating agency said in a press release....
Johnson's Russia List
Interfax: Moody’s upgrades Russia rating outlook to stable

The New Cold War — Ivan Katchanovski, Interview with Telepolis magazine (Germany) Concerning New Revelations in the Maidan Massacre Investigation.

Ivan Katchanovski PhD is a researcher and lecturer at the School of Political Studies of the University of Ottawa. The English text of the above interview is published online here on The original in German is here.
Interviewer: Can you give a very short summary of your theory about the sniper-killings on 20th February in Kiev?
IK: My academic study of the Maidan massacre concludes that this mass killing was a false flag operation, which was rationally planned and carried out with a goal of the overthrow of the government and seizure of power. It found various evidence of the involvement of an alliance of the far right organizations, specifically the Right Sector and Svoboda, and oligarchic parties, such as Fatherland. Concealed shooters and spotters were located in at least 20 Maidan-controlled buildings or areas. The various evidence that the protesters were killed from these locations include some 70 testimonies, primarily by Maidan protesters, several videos of “snipers” targeting protesters from these buildings, comparisons of positions of the specific protesters at the time of their killing and their entry wounds, and bullet impact signs. The study uncovered various videos and photos of armed Maidan “snipers” and spotters in many of these buildings. Unreported revelations from the Maidan massacre trial and the investigations by the Prosecutor General Office of Ukraine, such as forensic ballistic and medical reports, testimonies of eyewitnesses in the investigation documents, newly released videos, and court rulings concerning investigations of the far right involvement in the Maidan massacre, corroborated major findings of my study.
I presented an expanded and updated version of my Maidan massacre paper at the Annual Meeting of the American Political Science Association in San Francisco in September 2015. This paper is freely downloadable without any registration from the Social Sciences Research Network and APSA conference websites, and it is also available on my Academia and Researchgate websites. My chapter summarizing the Maidan massacre study is scheduled for publication on February 11, 2016 in a Routledge book edited by two Canadian political scientists. My article, which includes examination of the role of the Maidan massacre in escalation of the conflict in Ukraine into a civil war in Donbas and subsequent Russian military interventions, is forthcoming in a special issue of a British refereed journal concerning the conflict in Ukraine.
The New Cold War Ivan Katchanovski, Interview with Telepolis magazine (Germany) Concerning New Revelations in the Maidan Massacre Investigation.
ht Johnson's Russia List

Anonymous — Paris On Brink Of Civil War’ Warns Le Pen – Media Blackout

May explain Le Pen's rise in the polls.

Security and order are the highest priority of government and when government seems to be failing, the tendency is toward greater authoritarianism.

‘Paris On Brink Of Civil War’ Warns Le Pen – Media Blackout

UPDATE: The Anonymous post has been taken down. Here is another link.

Adam Kredo — U.S. Government Computers Still Not Safe From Cyber Attacks

Can't afford it, I guess.

Washington Free Beacon
U.S. Government Computers Still Not Safe From Cyber Attacks
Adam Kredo

Ryan McMaken — Alan Greenspan Admits Ron Paul Was Right About Gold

AG: I view gold as the primary global currency.
OK, we got that cleared up.

Remember that Alan Greenspan said that central banks operate "as if" on a gold standard. He had also said that gold is the premier currency.

Mises Dailies

Chinese economy 2016-2017

China will maintain strong growth in consumption this year with deepening supply-side structural reform, Commerce Minister Gao Hucheng said Tuesday....
China on track in shifting away from an investment-export led economy to a consumption-domestic economy.
China's consumption to maintain strong growth in 2017
Consumption contributed to 64.6 percent of China's economic growth in 2016, up 4.9 percentage point compared with the year before, said Chinese Minister of Commerce on Tuesday.
Gao Hucheng, Minister of Commerce, said consumption has become the most important boost in the Chinese economy since 2014, which indicates that the country's economic structure has been undergoing historic changes.
Meanwhile, new characteristics have shown up in Chinese people's consumption. Demands for high-quality, multi-function and intelligent products have been increasing, said Gao. For instance, the sales volume of vehicles has exceeded 28 million, seeing a 13.7 percent year-on-year growth. Sales of SUVs under various brands have increased by 44.6 percent, added the minister.
The e-commerce development is booming in China. The 2016 online turnover has increased by 25.6 percent, accounting for 12.6 percent of the total turnover of the social consumption. "It is hard to imagine how the distribution industry would be like without the internet plus," said Gao.
More trends have also shown up in the consumption. For example, service consumption has taken a larger portion in the total consumption, and consumers have shifted to purchase personalized and customized commodities. A greener trend is on the rise in people's consumption concept as well....
MOC: Consumption contributes 64.6% to economic growth in 2016

Diane Coyle — Markets, states and humans

I was eager to read Paul De Grauwe’s The Limits of the Market because I profoundly agree with its premise that the false dichotomy between ‘the state’ and ‘the market’ has led to bad public policies and lower social welfare. The book is a short overview of the flaws of this dichotomous view of the world. It organises its discussion around two sets of reasons why a ‘free market’ is a meaningless abstraction: externalities and ‘internalities’…
Short and important. Deals with economic and non-economic factors that influence economic behavior that are not taken into account as information in market behavior.

The Enlightened Economist
Markets, states and humans
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Andrew Spannaus — Towards a New Trade Policy

International trade deals have lost their consensus support as more workers view them as anathema to good-paying jobs, requiring the U.S. politicians to rethink these strategies, writes Andrew Spannaus...
The goal is not to close borders and restrict trade, but to ensure that trade takes place without undermining the social and living standards of developed countries. Regulations need to be drawn up to certify whether companies, or entire countries, comply with certain standards. Some examples include rules on workplace safety, child labor and pollution, which can be enforced through both tariffs and in some cases outright bans.
Selective targeting of low-quality production will be complex at times, in part due to the existence of global supply chains, which exploit comparative advantages in terms of not only labor costs, but also logistics and infrastructure.
Yet the complexity of these issues is no excuse for ignoring the enforcement of provisions that are essential to protect economic well-being. Politicians and economists constantly make assurances that such standards are integral to the notion of free trade, yet on the list of priorities they seem to be squarely at the bottom.
The current political situation offers an opportunity to chart a new course, not of isolationism, but of setting clear rules for trade between countries aiming for high living standards....

Funny how it is OK to introduce artificial barriers in markets when it benefits capital but not when it benefits labor.

Consortium News
Towards a New Trade Policy
Andrew Spannaus

Dan Goodin — Hacks all the time. Engineers recently found Yahoo systems remained compromised

Yahoo is getting smashed. Verizon drops bid by 350M. 

C. J. Hopkins — Goose-stepping Our Way Toward Pink Revolution

The deep state, of course, is not a conspiracy. It is simply the interdependent network of structures where actual power resides (i.e., the military-industrial complex, multinational corporations, Wall Street, the corporate media, and so on). Its purpose is to maintain the stability of the system regardless of which party controls the government. These are the folks, when a president takes office, who show up and brief him on what is and isn’t “possible” given economic and political “realities.” 
Despite what Alex Jones may tell you, it is not George Soros and roomful of Jews. It is a collection of military and intelligence officers, CEOs, corporate lobbyists, lawyers, bankers, politicians, power brokers, aides, advisers, and assorted other permanent members of the government and the corporate and financial classes. Just as presidents come and go, so do the individuals comprising the deep state, albeit on a longer rotation schedule. 
And, thus, it is not a monolithic entity. Like any other decentralized network, it contains contradictions, conflicts of interest. However, what remains a constant is the deep state’s commitment to preserving the system … which, in our case, that system is global Capitalism.
I’m going to repeat and italicize that to hopefully avoid any misunderstanding. The system the deep state primarily serves is not the United States of America, i.e., the country most Americans believe they live in; the system it serves is globalized Capitalism. The United States, the nation state itself, while obviously a crucial element of the system, is not the deep state’s primary concern. If it were, Americans would all have healthcare, affordable education, and a right to basic housing, like more or less every other developed nation.[paragraphing introduced for readability]
Pretty much as I have been saying.

The author shows how the Left has been duped into supporting totalitarian corporate globalism in an effort to provoke a color revolution in the United States.

Goose-stepping Our Way Toward Pink Revolution
C. J. Hopkins, American ex-pat author living in Berlin

TASS — Settlements in national currency to be discussed with Iran in Moscow next week

Skirting the dollar and SWIFT in international settlement.

Settlements in national currency to be discussed with Iran in Moscow next week

Bill McBride — Mortgage Debt as Percent of GDP

Mortgage debt has declined by $1.21 trillion from the peak. Studies suggest most of the decline in debt has been because of foreclosures (or short sales), but some of the decline is from homeowners paying down debt (sometimes so they can refinance at better rates).
Calculated Risk
Mortgage Debt as Percent of GDP
Bill McBride

William D. Hartung — The Promise and Peril of H.R. McMaster

The good (assessment of Vietnam) and the bad (assessment of Iraq), and let's hope not the ugly (war with Iran).

Lobe Log
The Promise and Peril of H.R. McMaster
William D. Hartung | the director of the Arms and Security Project at the Center for International Policy and a senior adviser to the Security Assistance Monitor

David F. Ruccio — Class, race, and poverty in the United States

Before the new Republican administration has a chance to implement its campaign promises and dismantle the social safety net, it’s useful to remember who in fact is assisted by the existing programs.
According to a new study by the Center for Budget and Policy Priorities, people of all races and ethnic groups who lack a bachelor’s degree receive significant help from the safety net. But white working-class adults stand out....
Occasional Links & Commentary
Class, race, and poverty in the United States
David F. Ruccio | Professor of Economics, University of Notre Dame

Monday, February 20, 2017

Bill Mitchell — The ECB should not become a fiscal agent

On November 29, 2016, Mario Draghi, the President of the ECB wrote to Mr Jonás Fernández, a Spanish European Parliament member in reply to a request for clarification from the Chairman of the EP’s Committee on Economic and Monetary Affairs (ECON). The Letter discussed whether it would be legal under the Lisbon Treaty for the ECB to engage in direct monetary transfers to citizens bypassing the Member States and whether such a policy would be beneficial for economic growth. Several commentators have seized on the response from the ECB as saying that such a policy innovation would be both legal and beneficial. My view is that, in forming this conclusion, they have not fully understood the difference between a monetary and a fiscal operation. While I think the policy would produce positive results, in the sense that it would stimulate growth and employment and reduce unemployment, I also believe it would be illegal under the Treaty. Further, I don’t think it is a progressive position to argue that a group of unelected and unaccountable technocrats in the central bank should be in charge of economic policy. That should be the responsibility of the democratically-elected members of the government who are fully accountable every electoral cycle. The ECB should not become a fiscal agent. Rather, if the Eurozone elites cannot implement (which they cannot) a full federal treasury function then it should disband the monetary union in an orderly way.
Bill Mitchell – billy blog
The ECB should not become a fiscal agent
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Daniel Larison — McMaster Named as National Security Advisor

Bolton didn't get the national security advisor job but he is slated for some slot. Even conservatives are dismayed at that.

McMaster is a good choice given the circumstances. But he has been saying that the US is behind Russia in technology, so look for increase defense spending on high cost items and development funding.

The American Conservative
McMaster Named as National Security Advisor
Daniel Larison, senior editor

Jo Michell — Thoughts on the NAIRU

If you are following this.

Critical Macro Finance
Thoughts on the NAIRU
Jo Michell

Lambert Strether — The Term “Deep State” in Focus: Usage Examples, Definition, and Phrasebook

Lambert assembles different views about the US "deep state."

In my view, the deep state is chiefly a bureaucratic structure that maintains the continuity of US policy across administrations and takes on a life of its own separate from the administration that it purportedly serves. 

Some would limit the deep state to the intelligence services comparable to the siloviki in Russia. This would include the 17 intelligence department in the US, e.g.,  NSA, CIA,DIA. 

Others would extend it to the top level non-intelligence government bureaucracy, called nomenklatura in Russia. For example, the top level bureaucracy of the US State Department called "the 7th floor" and "the shadow government," that incoming Secretary of State Rex Tillerson just fired. They would constitute "moles" in the Trump administration.

Others would extend it to the operational arm of the dominant faction of the ruling elite that maintains their position.. Even when out of favor in a particular administration, this operational arm works to maintain policy constants as a "fifth column," and it is planted "deeply" to ensure this. Presidents find it difficult to replace people in droves and some are protected by having government service jobs that were isolated from "the spoils system."

The outer level of the deep state is the support apparatus like think tanks, policy journals and operatives in the media that form the domestic propaganda arm of the deep state. For example, the innermost layers of the Council on Foreign Relation is part of the deep state, whereas the outer layers are comprised of experts that give the organization public credibility.

This is only a "conspiracy" in that like-minded people that can be relied upon are selected and they bring others along so that the system self-perpetuates. The revolving door is also operative, linking government and the private sector

The problem here is that a Weberian bureaucratic state is required to direct modern governments, but the state is subject to capture ideologically and politically through the bureaucracy.

Naked Capitalism
The Term “Deep State” in Focus: Usage Examples, Definition, and Phrasebook
Lambert Strether

Zero Hedge — German Minister Calls For 'Plan B': "Greece Should Pledge Gold, Real Estate For New Loans"

Greece is a lesson in wringing blood from stones.

Zero Hedge
German Minister Calls For 'Plan B': "Greece Should Pledge Gold, Real Estate For New Loans"
Tyler Durden

Bill Mitchell — Mainstream macroeconomics – exudes denial while purporting to be progressive

Bill deconstructs the conventional explanation for the Global Financial Crisis (GFC).

Toward the end, Bill discusses ISLM.

Bill Mitchell – billy blog
Mainstream macroeconomics – exudes denial while purporting to be progressive
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia