Sunday, August 28, 2016

Jon Ashworth — Every day, Theresa May's mask slips a little further

The news that the new International Development Secretary is about to slash development spending and channel Britain's aid budget into defence spending is yet another major slip of the new government's centrist mask.
Theresa May has tried to pitch her policy agenda as prioritising social justice and a “Britain that works for everyone” but the reality is that this announcement is the true right-wing colours of her government shining through.
The appointment of the most right-wing Cabinet for decades was a major warning sign, with figures such as David Davis, who said he was “very worried” about sexual discrimination legislation, and Liam Fox, who said equal marriage was “social engineering”, now at the highest level in government.
Those of us passionate about development were horrified when Priti Patel, who has previously called for the Department for International Development to be scrapped, was appointed as the department's new Secretary of State, but few of us would have imagined such a dramatic break with Britain's strong development legacy so soon.…
More Thatcherism from Theresa and the Tories.

George H. Blackford — Economists Should Stop Defending Milton Friedman’s Pseudo-science

Science is explanatory as well as predictive. Milton Friedman's methodology is pseudo-scientific.

Economists Should Stop Defending Milton Friedman’s Pseudo-science
George H. Blackford | former Chair of the Department of Economics at the University of Michigan-Flint

An Alt-Right Response to Hillary's Alt-Right Speech

Response from Henrick at Red Ice which I think is best representative of a true "Alt-Right" response. (not an endorsement)

Deterministic and Probabilistic models and thinking

Short blog on this topic from an educator (who apparently leans stochastic) ... might cut through some of the bibble-babble in the current "Noah Smith" mathematics controversy for some.

Part of understanding variation is understanding the difference between deterministic and probabilistic (stochastic) models. 
Deterministic and probabilistic models are not familiar to all teachers of mathematics and statistics,
A deterministic model assumes certainty in all aspects. 
Some people have a more deterministic world model than others, contributed to by age, culture, religion, life experience and education.

Deterministic and Probabilistic Models and Thinking
Dr. Nic

Assad Abu Khalil — New York Times story about Russian disinformation campaigns

Increasingly, US media remind me of media back home in the Middle East. The subtlety of the propaganda has all but disappeared.
Angry Arab News Service
New York Times story about Russian disinformation campaigns
Assad Abu Khalil | Professor of Political Science, California State University, Stanislaus

Zero Hedge — "I’ve Never Seen Anything Like This Before" - The Housing Markets In The Hamptons, Aspen And Miami Are All Crashing

The US luxury home market is dominated by foreign buyers at least in part owing to non-existent money-laundering laws, with most sales being cash deals.

Zero Hedge
"I’ve Never Seen Anything Like This Before" - The Housing Markets In The Hamptons, Aspen And Miami Are All Crashing
Tyler Durden

Bond Price as a function of Duration and change in rate

Chart shows the decrease in bond price vs. change in interest rates for some different durations.

Some large losses indicated in the lower right of the table.

Brian Romanchuk — Yellen At Jackson Hole: Übergradualism Still The Baseline

Fed Chair Janet Yellen's speech at Jackson Hole may or may not get Fed watchers excited, but it seems to me that there was not a lot of new information. She made some hawkish noises, and it seems that we are due for another rate hike this year. I think December is the most plausible time, but it could be as early as September. In any event, the exact timing of the hike does not matter; the Fed is still following an übergradual rate hike path (hiking at a pace well below 25 basis points a meeting). Her discussion of policy options was mainly useful for those of us who are entertained by the collapse into incoherence of mainstream economics.…
Bond Economics
Yellen At Jackson Hole: Übergradualism Still The Baseline
Brian Romanchuk

Saturday, August 27, 2016

Italy’s broken banks – the spectre haunting Europe

Italian banks are on the brink of collapse and EU rules make bail-outs seem politically impossible. Will they fall – and who will they take down with them? Simon Wilson reports.

Why the worry over Italian banks?

A spectre is haunting Europe – the spectre of banking collapses in Italy, which could lead to renewed crisis in the eurozone, and a wider banking crisis affecting other countries with high exposure to Italian bank debt. Italy’s banks are in deep trouble, weighed down by €360bn of bad debt (“non-performing loans” in the jargon), equivalent to a fifth of Italy’s GDP (and about 18% of all the banks’ loans).

Shares in the sector have slumped this year as investors began to price in the risk of banking collapses. One of the worst affected has been Monte dei Paschi di Siena, the world’s oldest bank. The sell-off has gathered pace since the shock of the Brexit vote on 23 June caused investors to reevaluate the risks facing European assets.

Who is most exposed?

Italy’s nascent banking crisis risks political as well as economic turmoil in Italy itself. But there is also, crucially, a serious risk of contagion, with the potential to unleash a broader eurozone banking crisis. Most exposed, by some distance, are the French. According to figures from Die Welt, the total exposure of French banks to Italian debt exceeds €250bn.

That’s three times as much as the second most exposed European nation, Germany, whose banks hold €83.2bn-worth of Italian bonds (Deutsche Bank alone has more than €11.76bn, increasing the fears over that bank’s long-term stability). The other banking sectors most at risk of contagion are Spain (€44.6 bn), America (€42.3bn), the UK (€29.77 bn) and Japan (€27.6 bn).

The Bullshittery of the DNC

Another excellent video by TRUTHstreammedia about the DNC. I didn't know that the Bernie supporters had rebelled so much and that the Democratic Party had done so much to try to remove them from the DNC. Bernie supporters get real mad.

We Have to Talk About the Boy in the Ambulance...

Truthstreammedia are a soft libertarian group who sometimes make some good videos. Here's their take on the Aleppo boy.

Will Denayer — Ever more conservative regression. Why Theresa May wants to scrap Human Rights Act

Last Wednesday (August 24), most national newspapers failed to mention on their front page the bombshell that May’s conservative government had dropped: the UK will scrap the Human Rights Act.…
As Kerry-Anne Mendoza rightfully remarks in The Canary, the scrapping of the Human Rights Act is the most authoritarian and regressive decision taken by a UK government in modern history (see here). What is it about and what is behind it?….
Human and civil rights are the only restraint on the tyranny of the majority under liberal political theory.

flassbeck economics international
Ever more conservative regression. Why Theresa May wants to scrap Human Rights Act
Will Denayer

MMT books now available

Eric Tymogne's money & banking series is now available through the navigation bar at New Economic Perspectives.

Eric has also completed first draft of a book based on the series that it available at Scribd for download. It can also be accessed though the NEP money & banking link below.

NEP — Money and Banking

Bill and Randy's introductory MMT textbook is now available at Amazon Kindle for $20. Subscribers to Kindle Unlimited can read for free.

Modern Monetary Theory and Practice: An Introductory Text [Print Replica] Kindle Edition
by William Mitchell, L. Randall Wray, and Martin Watts

See also

Radical Political Economy
New Work by Eric Tymoigne: Towards a Heterodox Perspective on Money, Banking, & Macroeconomics
David M. Fields

IRS Offers New Cash Payment Option

The Internal Revenue Service announced today a new payment option for individual taxpayers who need to pay their taxes with cash. In partnership with ACI Worldwide’s and the PayNearMe Company, individuals can now make a payment without the need of a bank account or credit card at over 7,000 7-Eleven stores nationwide.
Why not post offices?

IRS Offers New Cash Payment Option
IR-2016-56, April 6, 2016

Jon Schwarz — Obamacare’s Faltering for One Simple Reason: Profit

As Reid writes, other countries have made it work with many different kinds of healthcare providers — doctors can work directly for the government, as in the U.K., or not, as in most other rich countries. Hospitals can be for-profit or not. But no one has been able to create a viable system of universal healthcare based on citizens being forced to help insurance companies make a profit.
Moreover, the political ramifications of non-profit healthcare financing go far beyond making it feasible to have a strong individual mandate to buy insurance. It also is a key reason why such systems have much lower costs: “When Aetna or WellPoint declines to pay for a drug or a procedure, the money saved goes to enhance the insurer’s profit, not to pay for another person’s treatment,” Reid points out. “So people are less willing to tolerate cost controls.”
So either Obamacare will include a universally-available, non-profit public option — which in turn would likely eventually become the only option — or it will eventually expire. There is no third way.
Capitalism confronts democracy. Which will win?

The Intercept
Obamacare’s Faltering for One Simple Reason: Profit
Jon Schwarz

Hillary, the Alt Right and Persuasion

Scott Adams argues it was a success.

Finding the Political Bottom

Paul Kaiser argues it was a monumental blunder.

Both make good points.

Hillary Feeds The Trolls with 'Racism' Speech - A Colossal Mistake

Russophobia and US Propaganda

Are the elites and influencers clueless or complicit? The likely answer is that some are so blindside ideologically that they are can't make contact with reality while others are professional propagandists or in the employ of professional propagandists. The disjunction is inclusive.

Russia Insider
The Media's Relentless Campaign To Smear Russia Turns Comical, And It's Backfiring - Jonas E. Alexis

Trump, Russia, and the Washington Post: Reader Beware - Philip Giraldi

Clinton Campaign Manager Mook Suggests Trump a ‘Puppet for the Kremlin’ (Video) - Pam Key

Jill Stein op-ed: In praise of WikiLeaks

While Donald Trump pretends to represent the anti-Establishment right (look at his tax policy), Jill Stein speak for the anti-Establishment left.
WikiLeaks founder Julian Assange is a hero. Like Edward Snowden, Chelsea Manning, and other whistleblowers facing government persecution, Assange has sacrificed his personal comfort and safety to bring us the truth.
George Orwell said, “In a time of universal deceit, telling the truth is a revolutionary act.” Thanks to WikiLeaks, we know that powerful institutions have been abusing their power and lying to the public. For example, redacted State Department communications published by WikiLeaks revealed that Secretary Clinton identified Saudi Arabia as a leading funding source for terrorist groups around the time she approved a whopping $29 billion arms deal with the Saudi dictatorship.…
Speaking truth to power and tell it like it is.

The Hill
Jill Stein op-ed: In praise of WikiLeaks

Neil Clark — Follow the Money Trail For Source of 'Russian Threat' Paranoia

Certain people are trying to scare us witless about Russia and the ‘threat’ the country apparently poses. The hysteria reminds one to the build up to the Iraq war, when we were warned every day about the ‘threat’ of Saddam’s deadly WMDs, which - surprise, surprise - turned out not to exist.
Now, we can talk for hours about grand, highfalutin theories in the field of geopolitics and international relations in attempts to explain why this is happening.But ‘follow the money’ trail is all we really have to do. Ask yourself who benefits financially from all this scaremongering and then you’ll understand it.
This week, The Intercept revealed how US defense contractors have been telling investors that the so-called ’Russian threat’ was good for business.
Retired Army general Richard Cody, vice-President of the US’s seventh largest defense contractor, L-3 communications, bemoaned the fact that "when the old Cold War ended’ defense budgets went south". Now though a ’resurgent Russia’ meant an "uptick was coming".
There was a similarly upbeat message from Stuart Bradie, chief executive of CBR, who talked of the "opportunities" the current situation presents.
The case for higher defense spending to counter the ‘Russian threat’ has been made by a series of think-tanks. And guess what? The most hawkish of these lobbyists - sorry, ‘think tanks’ - receive sizable funding from US defense contractors!
See The Iron Law of Oligarchy.

Follow the Money Trail For Source of 'Russian Threat' Paranoia 
Neil Clark

Vincent DeLarge — Hillary’s ‘Racism’ Speech, And the Stunning Emergence of The New Left and Right

Finally, the parameters of the debate have been re-framed now. This election is not about Republican or Democrat anymore, but about nationalism vs globalism. The establishment vs the native insurgency.
Russia Insider
Hillary’s ‘Racism’ Speech, And the Stunning Emergence of The New Left and Right
Vincent DeLarge

Katehon — Nicholas Nicholaides: President Putin must take control of the Bank of Russia

The bank’s separation from the state was achieved during the catastrophic Yeltsin years, when liberal traitors sold out the whole country. This was done for the benefit of the USA and foreign banks, not for the benefit of Russia. It was done to keep Russia down as a Third World country, as a mere exporter of natural resources without its own industrial production.

President Putin must immediately take back control over the Bank of Russia and monetary policy. This can be done by collecting a 2/3 majority in the Duma and passing an emergency law that re-subjugates the Bank of Russia to government. Then, the Bank of Russia would cease to work for foreign bankers and governments and start working for Russia. I am sure that the opposition parties would support such a step, as would even the oligarchs and businessmen (if they are not bought by USA) insofar as such would benefit business and investments.…
Now, of course, business is business, but business cannot be done properly with people who want to kill you, destroy your people, and only try to fool you. I hope president Putin understands this. The Western countries with whom Russia has done "business", particularly the USA, are not our "friends" or "partners". Such "friends" or “partners” can only be enemies. They see the world in the following way: first comes the US, then England (and other English-speaking countries), then Germany, France, the rest of Southern Europe, and then the Baltics, Eastern Europe, and the Balkans. Then they place Russia at the very bottom, together with Africa, South America, and Third World countries. This is the place that liberal traitors want for Russia. They must be neutralized. I also hope the President Putin has realized that any concessions to the West only bring Russia more trouble, not benefits.…
Yep. Central bank independence is a core principle of neoliberalism that is at odds with both economic liberalism (laissez-faire) and democracy. It is also at odds with a managed economy, where the purpose of management is public purpose. Central bank independence with respect to monetary policy is a command system that acts chiefly in support of finance capital.

Nicholas Nicholaides: President Putin must take control of the Bank of Russia

Robert Parry — The Dumbed-Down New York Times

More reasons that the NYT is a propaganda rag rather than the newspaper of record, if you didn't have enough reasons already, especially after midwifing the propaganda that enabled the invasion of Iraq on the pretext of fabricated evidence of Saddam's WMD — remember Judith Miller?

Bill Black has already documented the smoldering pile of domestic propaganda put out by the Times to justify neoliberal looting at home in the US.

Consortium News
The Dumbed-Down New York Times
Robert Parry

Making a Killing: The 1.2 Billion Euro Arms Pipeline to Middle East

I used to once so admire Europe because of its social democracy and culture. I was very pro European but little did I know that beneath the surface the old evil ruling class were still there. Arms are big business and where there is easy big money to be made the same old crooks come out of the woodwork. So much for culture and refinement.

How Europe Is Getting Rich by Fueling Its Own Terror Epidemic

Though Europe do not have the rates of gun violence the United States continues to grapple with, European governments have made over a billion euros by fueling gun violence in the Middle East and North Africa.

A report conducted by a team of reporters from the Balkan Investigative Reporting Network (BIRN) and the Organized Crime and Corruption Reporting Project (OCCRP) found a group of European nations has been funneling arms into the Middle East region since 2012, making at least 1.2 billion euros in the process.

According to the report, 68 flights that took place within 13 months transported weapons and ammunition to the Middle East, including to NATO member Turkey, which in turn “funnelled arms into brutal civil wars in Syria and Yemen.” The report also notes that these flights make up only a small portion of the 1.2 billion euros in arms deals between Europe and the Middle East since 2012.
The report’s conclusions are horrifying, to say the least. The report states:

Arms export licenses, which are supposed to guarantee the final destination of the goods, have been granted despite ample evidence that weapons are being diverted to Syrian and other armed groups accused of widespread human rights abuses and atrocities.”

Considering Europe is battling a continually rising terrorist threat, they seem to be going about tackling this issue the wrong way.

Making a Killing: The 1.2 Billion Euro Arms Pipeline to Middle East

Meanwhile, over the past two years, as thousands of tonnes of weapons fly south, hundreds of thousands of refugees have fled north from the conflicts that have killed more than 400,000 people. But while Balkan and European countries have shut down the refugee route, the billion-euro pipeline sending arms by plane and ship to the Middle East remains open – and very lucrative.

It is a trade that is almost certainly illegal, according to arms and human rights experts.

“The evidence points towards systematic diversion of weapons to armed groups accused of committing serious human rights violations. If this is the case, the transfers are illegal under the ATT (United Nations’ Arms Trade Treaty) and other international law and should cease immediately,” said Patrick Wilcken, an arms-control researcher at Amnesty International who reviewed the evidence collected by reporters.

But with hundreds of millions of euros at stake and weapons factories working overtime, countries have a strong incentive to let the business flourish. Arms export licences, which are supposed to guarantee the final destination of the goods, have been granted despite ample evidence that weapons are being diverted to Syrian and other armed groups accused of widespread human rights abuses and atrocities

Friday, August 26, 2016

Stephen Rosenfeld — Forget Swing States: The Presidential Election Will Be Determined by 20 Swing Counties in Linchpin States

In a nation where 130 million people are expected to vote for president this fall, it’s disconcerting to think 96 percent of those ballots won’t count as much as those from swing states and a few key counties. But that’s a result of the Electoral College’s hard math, which since 1988 has seen Republicans likely to win 23 states with 191 electoral votes, and Democrats likely to win 18 states and the District of Columbia, with 232 electoral votes. The remaining 10 states have been considered the swing states—Colorado, Florida, Iowa, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Virginia and Wisconsin—with a total of 115 electoral votes.…
What’s revealing about Schultz’s list of swing counties is that it pinpoints the fulcrums or likely tipping points in states that drive presidential candidates to Electoral College victories. That is not the same as the national popular vote, needless to say. Indeed, when Schultz identified these swing counties, he looked at their 2012 votes, and realized that had Mitt Romney been a little more successful in various combinations of these locales, he would have been elected.

“People don’t realize that the Romney-Obama race was actually far closer than most people think,” Schultz said. “There was an Electoral College blow-out, but if you had a shift of just a few hundred thousand votes across a few states, Romney would be running for re-election this year. We’re really looking at no more than a half-million votes shifting, depending on how you actually define it, and that’s a very small number of votes.” ….
Forget Swing States: The Presidential Election Will Be Determined by 20 Swing Counties in Linchpin States
Stephen Rosenfeld

RT — Close all mosques & ban the Koran: Poll-topping Geert Wilders launches ‘de-Islamization’ manifesto

Geert Wilders, the wild-haired head of the right-wing Dutch Freedom Party (PVV), launched a new manifesto that calls for the “de-Islamization" of the Netherlands as he leads in the polls to become the next prime minister.

Titled, “The Netherlands is ours again,” Wilders published the one page, 11 point screed on Thursday, highlighting the party’s hard-line positions on Islam.…
Close all mosques & ban the Koran: Poll-topping Geert Wilders launches ‘de-Islamization’ manifesto

Paul Buhle — In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment

The death of Warren Hinckle, a journalist long forgotten outside San Francisco, brings back Ramparts magazine’s crowning moment, also one of crucial moments of postwar liberalism. At a stroke, in March, 1967, the presumptions of innocence by purportedly freedom-loving (albeit hawkish) prestigious intellectuals were stripped off. It turned out that the grand banquets and conferences with literary-and-other luminaries, the New York Times-reported cocktail parties, indeed the whole egghead-celebrity thing, was at base a CIA operation called, without irony, the Congress for Cultural Freedom. The list of collaborators was a long one, but Mary McCarthy, Irving Kristol, Leslie Fiedler, Dwight Macdonald, Sidney Hook and the Trillings, Diana and Lionel, among the most famous Americans, with European stars including Isaiah Berlin and Arthur Koestler at the top (Hannah Arendt in both categories). The Partisan Review, Encounter and a considerable stream of literary or quasi-literary journals existed, as it turned out, with the help of intelligence-agency donations.
The operation had been established at the down of the 1950s with CIA executive Cord Meyer, and a youngish intellectual very much in the news, Arthur Schlesinger, Jr., whose original, brainy scheme it may have been.…
The CIA is still deeply involved with Hollywood.

In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment
Paul Buhle

Hedge fund a-hole, Eddie Lampert continuing his destruction of iconic American brand, Sears.

Eddie Lampert Sears

This hedge fund moron, Eddie Lampert, like so many others, systematically destroyed an iconic American brand, Sears. Now he's looking to dump some of its prized and most recognized brands and assets: Kenmore Appliances and Craftsman Tools.

Lampert is psycho Ayn Rand follower. It's said that his management style for Sears, where he is CEO, is to pit the company's operating units against each another. This is how he felt the business would benefit. Not by cooperation. Not by combining talents and strengths, but rather, by canabalizing each others' businesses and profits.

Can you imagine if the military was run this way? Army against Navy. Marines against the Air Force?

Sad, but it's just another example of sick, entitled, clueless gambler with lots of money allowed to run amok and leave destruction everywhere he goes. Like they all do.

Bill McBride — Comments on Home Sales in July

CR Note: When the New and Existing home sales reports were released this week, I was out of town and didn't post any graphs. Here are a few graphs and comments on the reports.
Calculated Risk
Bill McBride

Jeff Madrick — Why the Deeply Held Ideas of the Nation’s Most Elite Economists Were Direct Causes of Extreme Inequality

Remember in 2009 when everyone was dodging blame for the financial crisis? Depending on who you asked, it was the bankers, the federal regulators, Fannie Mae, fraudster mortgage companies, the ratings agencies and the sub-prime borrowers themselves. The favorite claim of excuse makers was that no single group was to blame — it was a cluster-f*** as one journalist friend put it.

If everyone did it, no one could be held accountable. But it wasn’t true. Bankers and regulators were the major creators of the crisis, for their neglect and single-minded self-aggrandizement that often involved bending the rules.

But let me single out one group that avoided blame and deserved plenty of it: mainstream economists. The deeply held ideas of the nation’s most elite economists from the Right and the Left were direct causes of the crisis, justifying perverse behavior on Wall Street and in Washington, and careless and ignorant behavior at the Federal Open Market Committee of the nation’s central bank, the Federal Reserve.

These ideas did a lot of harm along the way — in particular, they were responsible for slower than necessary economic growth that resulted in higher unemployment and inequality.…

Bill McBride — Fed policy and NGDP

Fed caught between a rock and hard place. They want to begin tightening, but NGDP won't cooperate. The "inflation" continues to be in asset prices rather than good price level or wages.

Calculated Risk
Yellen: "Case for an increase in the federal funds rate has strengthened"

Q2 GDP Revised Down to 1.1% Annual Rat
Bill McBride