Thursday, September 19, 2019

Links —19 Sep 2019

Zero Hedge
Luongo: Will The Yemen War Be The End Of Saudi Arabia?
Tom Luongo

Sputnik International
Accepting Houthi Responsibility for Saudi Oil Attack Means Admitting Riyadh’s War in Yemen Failed

Sputnik International
Overseas Investors Emerging as New Owners of India's Road Assets

Sputnik International
Chinese PM Notes 'Huge Prospects' for Cooperation With Russia After Talks With Putin

Checkpoint Asia
Russian Navy to Be First to Field Hypersonic Cruise Missiles on Submarines
H. I. Sutton, Forbes

Russia Insider
5 Years of Sanctions Have Been a Huge Stimulus to Russian Economy (Russian TV News)
Transcript of "First Five Years Special Report" by Arseny Molchanov

Fort Russ
U.S. White Paper Says It Will Oppose Russia and “Predatory” BRI in Arctic

Laurie Mcfarlane Tweet - The FT

A few weeks ago the FT came out in favour of state planning and moving towards a worker-led economy. Then, a few weeks later, it backed a caretaker Corbyn government. Now this.
The times they are a changin’

Houthi rebels overturned the chessboard — Pepe Escobar

This was not supposed to happen.

Important article.

Asia Times
Houthi rebels overturned the chessboard
Pepe Escobar

The Financial Times’ Martin Wolf Discovers that Rentier Capitalism and Financialization Increase Inequality and Hurt Growth — Yves Smith

Finally taking on economic rent, and financial rent in particular. This is not capitalism, which is about productive investment based on risk-taking, but rather rentier oligarchy based on expropriation through rent extraction. Rentiers are free riders on the systems. Martin Wolf uses his Financial Times bully pulpit to attack it before the parasites kill the host (ht Michael Hudson).

Naked Capitalism
The Financial Times’ Martin Wolf Discovers that Rentier Capitalism and Financialization Increase Inequality and Hurt Growth
Yves Smith

See also at Naked Capitalism

Two Entrepreneurs Explain Why the Health Insurance Industry Is a Direct Threat to Middle-Class Life
Joe Sanberg, a co-founder of Business for Medicare for All and, which empowers customers to match their banking and spending with their values and Richard Master, a co-founder of Business for Medicare for All. and the CEO and chairman of MCS Industries, the leading supplier of mirrors, picture frames and wall decor in North America. Produced by Economy for All, a project of the Independent Media Institute

Press TV - The UK has lost its measles free status

I've always doubted whether vaccines were dangerous, and felt that not getting vaccinated posed a far greater risk.

The UK has lost its measles free status. Experts are worried and the government is considering making the MMR vaccine obligatory in view of recent breakouts in places like London.

Sorrel Neuxx - What we don't hear about Tibet

While the world moralises over China's occupation, feudalism and abuse in Tibetan culture has been conveniently forgotten

This was written in 2013, so I doubt if you would ever read anything like it today now the Guardian has been taken over by MI5, according to recent reports. The Guardian today regularly puts out anti-Chinese propaganda.

When I was youger, I would regularly go to my local Buddhist centre to practice Buddhism. But its nihilism, along with being dispassionate, losing desire, and snuffing out the flame of life, wasn't for me at the time. But nowadays I have discovered that the Western translations of the ancient Buddhists texts often got it wrong, and that Buddhism is nowhere near as stark as it seems. Quite the opposite, in fact, so I'm now back into it, but in a gentle way without fundamentalism, and within the Quaker movement.

Anyway, one day I came across an article about Tibetan Buddhism and I was stunned. The Tibetan Buddhists were brutal warlords who run an oppressive cast system and had turned most Tibetans into serfs. The Tibetan monks were the aristocracy who engaged in the brutal suppresion of the population, including using torture. The article said how most Tibetans were pleased that the Chinese had came in to end their oppression.

This article from the Guardian says very much the same thing, but it does mention some Chinese brutality as well.

Tibet seems like as a celestial paradise held in chains, but the west's tendency to romanticise the country's Buddhist culture has distorted our view. Popular belief is that under the Dalai Lama, Tibetans lived contentedly in a spiritual non-violent culture, uncorrupted by lust or greed: but in reality society was far more brutal than that vision.
Last December, Ye Xiaowen, head of China's administration for religious affairs, published a piece in the state-run China Daily newspaper that, although propaganda, rings true. "History clearly reveals that the old Tibet was not the Shangri-La that many imagine", he wrote "but a society under a system of feudal serfdom."

Until 1959, when China cracked down on Tibetan rebels and the Dalai Lama fled to northern India, around 98% of the population was enslaved in serfdom. Drepung monastery, on the outskirts of Lhasa, was one of the world's largest landowners with 185 manors, 25,000 serfs, 300 pastures, and 16,000 herdsmen. High-ranking lamas and secular landowners imposed crippling taxes, forced boys into monastic slavery and pilfered most of the country's wealth – torturing disobedient serfs by gouging out their eyes or severing their hamstrings.

The Guardian

Sorrel Neuxx - What we don't hear about Tibet.

Ed Jones - Five reasons why we don’t have a free and independent press in the UK and what we can do about it

Britain's press is controlled by the same networks of people as run everything else. Is it really free?

A really good article saying about how much of our media is controlled by oligarchs. If the truth were known, Corbyn would be well ahead in the polls. For instance, if people knew about what was happening in Yemen and how the Tory Party is complicit in that genocide, how many people would still vote for them? 

MI5 and the CIA routinely influence and pay journalists to put out propaganda, and some intelligence officers go under cover to become journalists. 

The article gives an extensive list of independent news media, many of which I have never heard of before, so I thought I better pin this to my Start Screen. 
“Only 25 per cent of the population earns more than £30,000 a year. Most media commentators (including me) do. For people like me, the country basically works. Politics doesn't affect me. Politics, for me, is about how other people are treated. It's easy inside my echo-chamber to believe that I am the norm, or the middle. Easy to forget that there are voices outside.

“To people in my position, austerity can be read as regrettable but pragmatic. But to my friends and family, who live outside the bubble, it's not regrettable, it's terrifying. It's also not pragmatic. The crackpot, gimcrack ideological nature of austerity becomes more apparent the closer you get to the point of delivery.”

Evans went on to say:“Mr Murdoch was continually sending for my staff without telling me and telling them what the paper should be. He sent for the elderly and academic Mr Hickey, who went in tremulously, to be told by Mr Murdoch, "Your leaders are too long, too complex. You should be attacking the Russians more."”David Yelland, a former editor of The Sun – another Murdoch owned paper – admitted in an interview:

"All Murdoch editors, what they do is this: they go on a journey where they end up agreeing with everything Rupert says but you don't admit to yourself that you're being influenced. Most Murdoch editors wake up in the morning, switch on the radio, hear that something has happened and think: what would Rupert think about this? It's like a mantra inside your head, it's like a prism. You look at the world through Rupert's eyes."

Wednesday, September 18, 2019

Links — 18 Sep 2019

The American Conservative
To End Endless Wars, We Must Give Up Hegemony
Daniel Larison

Reminiscence of the Future
Sic Transit Gloria Mundi. Some News.
Andrei Martyanov

The Nation
Will Russia Be Driven From the West?
Stephen F. Cohen | Professor Emeritus of Russian Studies, History, and Politics at New York University and Princeton University

Trump Makes Another Bad Choice for National Security Advisor
Daniel Larison

Yahoo News
Exclusive: Russia carried out a 'stunning' breach of FBI communications system, escalating the spy game on U.S. soil
Zach Dorfman, Jenna McLaughlin and Sean D. Naylor | Reporters, Yahoo News

GSEs loan sharking

Oh this is just too good....

LOL!!! I guess they "never read the MMT literature!" where they would have learned they only should ask for a basis point above FFR!!!

Two government-backed financial giants, Fannie Mae and the Federal Home Loan Banks, both stepped up their repo lending at higher rates on Tuesday, according to people familiar with the matter. 
The home-loan banks, a network of government-backed lenders, were offering to lend overnight at 4% Tuesday morning, twice the recent going rate.

Government owned and operated sitting on hoards of system Reserve Assets!!!!  LOL!!!!!

Hey maybe they were trying to get a better deal for the taxpayers!!!!  LOL!!!!!  Reduce "the deficit!".... LOL!!!!

Jealous that they don't get the IOR so trying to make it up by asking for double the rate?!?!?!  LOL!!!!

Then think of all the moron lefty losers going all around blaming every world ill on the "neoliberal conspiracy!" operated by all those "greedy banksters!"  LOL!!!!

Can We Afford a Green New Deal? — JW Mason

The correct question is, Can we not afford a GND?
So when we look at the cost of the climate proposals out there against today’s macroeconomic background, the question should not be, are they too expensive? The question should be: Are they expensive enough?
The purpose of policy is meeting policy goals effectively and efficiently. This means getting as close as possible in the design solution to "just right — not too much and not too little."

But in the case of serious challenges overshooting is better than undershooting, even if it "costs" more on spreadsheets and uses more real resources that turn out to be necessary.

The way it is looking, climate change is an existential threat as great as war. No nation can afford to scrimp on defense spending since national security is the highest priority of a government.

J. W. Mason's Blog
Can We Afford a Green New Deal?
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

Jerome Powell September Fed Speech Transcript: Fed Cuts Rates for 2nd Time in 2019 — Ryan Taylor

Victoria Guida: 25:18 Victoria Guida with Politico. Another money-market question. Banks have been pointing to liquidity rules as having contributed to some of the volatility we’ve seen in repo markets and potentially some capital rules as well. Are you all looking at whether some tweaks to the liquidity coverage ratio might help and also, what is the status of the net stable funding ratio rule? Are you all still planning on putting that out soon?
Jerome Powell: 25:47 I think if we concluded that we needed to raise the level of required reserves for banks to meet the LCR, we’d probably raise the level of reserves rather than lower the LCR. It’s not impossible that we would come to a view that the LCR’s calibrated too high, but that’s not something that we think right now. On the other hand, it might be that more reserves are needed in which case we are in a position to supply them.
Jerome Powell: 26:12 In terms of the net stable funding ratio, I believe we put it out for comment and got comments and I believe we’re looking at finalizing that in the relatively near future.
Victoria Guida: 26:28 Just a follow up, in terms of tweaks to the LCR, there’s also been some talk about potentially giving banks some room in times of stress to maybe dip into their liquidity buffers.
Jerome Powell: 26:40 I think we want banks to use their liquidity buffers in times of stress rather than pull back from the markets and pull back from serving their clients as a general rule....
Jerome Powell September Fed Speech Transcript: Fed Cuts Rates for 2nd Time in 2019
Ryan Taylor

Rick Sanchez - Huge! China ready to dump Boeing

The Trump administration has really upset China, which is now trying to become much more independent.

China will soon be flying more planes than the US and Europe, so it will be a massive loss for Boeing and Airbus if China develops its own planes.

Rick Sanchez says that Boeing is so linked to the US government that it is almost a state owned industry.

China is Boeing’s top client country by far. But now China is getting ready to make their own planes, potentially disrupting the Boeing-Airbus duopoly on global airline manufacturing. RT America’s Michele Greenstein joins Rick Sanchez with the details.

The trouble with capitalism — Chris Dillow

Are the faults of capitalism curable, or are they instead symptoms of a chronic disease? This is the question posed by Martin Wolf:
What we increasingly seem to have…is an unstable rentier capitalism, weakened competition, feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded democracy.
There is much to admire in this piece. But I fear it understates the problem with capitalism....
Falling rate of profit?

Stumbling and Mumbling
The trouble with capitalism
Chris Dillow | Investors Chronicle

Personality, Progress And Promise In Japanese Leadership — Wisdom Tree

At least to this observer, Europe and the U.S. bring to mind the fumbling and growing desperation that Japan went through during the long period of political instability before strongman Abe arrived. To turn modern monetary theory into practice, you need functioning and decisive fiscal coordination and plans that go beyond the expediencies of annual budget cycles or election cycle pork-barreling. No fiscal policy vision, no fiscal dominance... make no mistake! Abe-Aso-Kuroda do know what they want to spend on.
In clearer terms, watch for a boost in fiscal spending if or when global or local economic momentum loses steam. The Bank of Japan will finance the added borrowing requirement if excess savings fail to absorb it.
More evidence that monetary policy is waning and fiscal is waxing. It's likely that this will involve a gradual switch, however, rather than a sudden one, absent a pressing crisis that forces a faster pace of change.

Seeking Alpha
Personality, Progress And Promise In Japanese Leadership
Wisdom Tree

Money From Nothing: Democrats' Socialism for Free — Richard Porter,

This is interesting from the point of view of evolution of MMT criticism.

It's not the same old "printing money" argument but a refurbished one that at least attempts to get what MMT says, even though it fails. I think that it is more likely ill-informed rather than intentional caricature.

But it does indicate that the opposition is realizing that it has to deal with MMT in a way that appears serious rather than back of the hand, just dismissing as "obvious" nonsense.

So I would count this as a sign of progress.

Money From Nothing: Democrats' Socialism for Free
Richard Porter, Illinois’ national committeeman to the RNC

Bill Mitchell — ECB confirms monetary policy has run its course – Part 2

This is Part 2 of my two-part commentary and analysis of the – Monetary policy decisions – by the ECB (September 12, 2019). In Part 1, I discussed the shifts in the deposit rate and the changes to the Targeted longer-term refinancing operations (TLTROs). In Part 2, I am focusing on the decision to introduce a two-tiered deposit rate on excess reserves, which is designed to reduce the costs of the penalty arising from the negative deposit rate regime that the ECB has had in place since June 2014. But the most important aspect of the ECB decision was not the monetary policy changes, which will have relatively minor impacts on the real Eurozone economy. The telling part of the whole episode was Mario Draghi’s comments on fiscal dominance. We are entering a new era where the neoliberal obsession with so-called monetary policy reliance is becoming increasingly discredited and exposed by the evidence base. Fiscal dominance is approaching. And the only body of work that has consistently argued for this approach to macroeconomic policy making has been Modern Monetary Theory (MMT) despite what the mainstream economists who are now starting to realise their reputations are in tatters might say....
Bill Mitchell – billy blog
ECB confirms monetary policy has run its course – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

U.S. home construction

More bearish news.... oh... wait a minute...

FT Open Day

FT Open day today where you can read lots of articles for free.

Martin Wolff - why rentier capitalism is damaging liberal democracy

Economies are not delivering for most citizens because of weak competition, feeble productivity growth and tax loopholes

I haven't been able to read a FT article for two weeks, but today the paywall let me in. FT must allow people to read an article for free from time to time. This is an excellent article describing what is wrong with present capitalist system, and it goes over a lot of different areas.

Martin Wolff describes the feedback loop where certain companies can attract the best talent because they can offer the best wages, and then these people help to keep the company ahead by increasing sales, and so the company becomes richer and can attract more of best talent, and so on. But Martin Wolff says how this is a form of monopoly which affects the rest of the economy and other cities. And without enough competition these companies can extract rent.

A 2015 study by Stephen Cecchetti and Enisse Kharroubi for the Bank for International Settlements said “the level of financial development is good only up to a point, after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental to aggregate productivity growth”. When the financial sector grows quickly, they argue, it hires talented people. These then lend against property, because it generates collateral. This is a diversion of talented human resources in unproductive, useless directions.

in unproductive, useless directions.-activities.pdf


Martin Wolff - Martin Wolf: why rentier capitalism is damaging liberal democracy

Frances Coppola - If You Don't Understand Banks, Don't Write About Them

Many economists don't understand how the banking system works, says Frances Coppola, and  go on to write inaccurate books or give ill advice to governments. Here, in this article, she severely criticises a prominent economist for writing such a misinformed book.

One thing MMTers are pretty clued up on is how banking works, and yet many economists - who don't understand how banks work at all - criticise MMT.

The author, a young economist with a first-class degree from Oxford, the famous English university, acknowledges that banks don’t need deposits in order to lend. But she then reintroduces the discredited “money multiplier” explanation of bank lending. Furthermore, she confuses bank reserves with liquid assets, and liquid assets with capital. This confusion exists not just in this paragraph, but throughout the book. How on earth can someone write a book about “financialization” without apparently even a rudimentary understanding of how banks work?

Having to explain all this again has made me realize that the new generation of economists is every bit as ill-informed as the old one. Though this is not surprising. After all, they’ve been taught by them. The “money multiplier” has been shown many times to be an inadequate and misleading explanation of how banks work, yet it still features in many undergraduate economic courses. No university would teach the Ptolemaic system to young astrophysicists, so why are they still teaching its financial equivalent to young economists?


Frances Coppola - f You Don't Understand Banks, Don't Write About Them=true

Tuesday, September 17, 2019

Why is “millennial socialism” on the rise? Because liberalism is failing — Lea Ypi

Should be "neoliberalism" instead of "liberalism."

Good article on the paradoxes of liberalism.

New Statesman
Why is “millennial socialism” on the rise? Because liberalism is failing
Lea Ypi | Professor of Political Theory at the London School of Economics and Political Science

Reserves collapse

Still lingering effects of  "debt ceiling!" now causing a sudden collapse in Reserve Assets as Treasury seeks to quickly increase the General Account to $350b...

Treasury could have done a better job in August post the suspension of the "debt ceiling!" ... by increasing net issuance sooner and more evenly on a weekly basis... instead these morons have delivered EVEN MORE chaos... and have had to do a special repo operation for some institutions that apparently have become deficient in reserve balances they need to operate...

Snip from Mike below documenting yesterday's sudden TGA increase (thus reserve reduction) of $83b...

Idiots running the thing...

Saudi Arabia oil output back to normal

Complete scam...

Bill Mitchell — ECB confirms monetary policy has run its course – Part 1

I will have little time to publish blog posts in the next two weeks. But as I travel around I have to sit in trains, planes and cars and that is when I tend to write when I am away from my desk(s). Today, I am in Maastricht – after travelling by train from Paris. I have two events – one on framing and language and the other on Reclaiming the State and Modern Monetary Theory (MMT) basics. Then I am heading to Berlin for a talk at PIMCO and on Friday I am presenting an MMT workshop at the European Central Bank. Last week, the ECB made its next move, the last one for current President Mario Draghi. It will also lock in Madame Lagarde for a time and represents a rather overt statement about the failure of mainstream macroeconomics. While the mechanics of their various policy decisions are interesting and are worth discussing (albeit briefly) the overall optics were more powerful. The ECB has now joined a host of central bankers around the world in, more or less, admitting that monetary policy has run its course and is being pushed into ever more desperate configurations. At the same time, the corollary is that fiscal policy makers are failing in their responsibility to use policy to avoid stagnation and elevated levels of unemployment. Despite rather significant monetary policy gymnastics, aimed at stimulating economic growth and lifting inflation rates, central bankers have largely failed. They have failed because they are wedded to mainstream theory. Fiscal policy makers are constrained by an austerity-biased ideology and/or voluntary institutional machinery that has been created to stifle fiscal initiative (destructive fiscal rules). The cracks are widening. We are approaching the period of fiscal policy dominance – finally! This is Part 1 of a two-part series on this topic. Part 2 will follow tomorrow....
Let's hope it does take another great depression to learn the lesson, like it did last time.

Interesting that Bill will talking to the ECB. Who woulda thunk it even a short time ago. Seems like the last mile is closing.

Bill Mitchell – billy blog
ECB confirms monetary policy has run its course – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Saudis ready to pump more

Saudi stands ready to "pump!".... "money!" not more oil that is...

Recession Fears

looks like "Debt Ceiling!" induced "inversion!" really took its toll on sentiment last month in addition to the usual Trump Derangement Syndrome induced bearishness ... This measure at 10 year high bearishness:

Labor Costs

This is going to take all of Trump's persuasion skills to prevent the Fed from increasing the policy IOR in response to these substantial wage increases he seeks to foment...


Ann Pettifor - The beauty of a Green New Deal is that it would pay for itself

Governments around the world don’t need to raise taxes in order to transform their economies and avert climate disaste

Ann Pettifor hasn't come around to the idea of MMT yet, but it's good news the New Green Deal could pay for itself. 

So where should the money come from? There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.

To raise the money for a green deal, governments would have to draw on their equivalent of a giant credit card, but would also be able to take advantage of investment by savers. Thankfully, the creation of millions of jobs will generate the income and tax revenues needed to repay any borrowing. As Sanders argues, the whole thing will pay for itself.

The Guardian

Ann Pettifor - The beauty of a Green New Deal is that it would pay for itself

Nick Hanauer - The dirty secret of capitalism — and a new way forward

Nick Hanauer says the mainstream economists have been captured by the oligarchs. He says how the evidence shows that a pure free market suppresses wages and employment so much that the demand falls off and a viscous circle sets in - a lack of demand means underperforming companies, which means companies employ less people and pay them less, which generally decreases the demand for goods and services, and so on. Everyone loses, except the 0.1%, the oligarchs.

There's a curve, and increasing wages sufficiently will push up the demand meaning that the order books become full again.

TEDx video:

Nick Hanauer - The dirty secret of capitalism — and a new way forward