Michael Hudson — Bloomberg’s Hit Job on Venezuela – and Me

None of my beliefs are what Bloomberg and Caracas Chronicles implied.

Moar on the creation of fake news by the MSM.

Counterpunch
Bloomberg’s Hit Job on Venezuela – and Me
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

ECB explains why it can't go bankrupt. Can someone at the Fed please explains this to idiots here?

Interesting stuff's been coming out of Bloomberg of all places. Very much "in-paradigm" columns. (A breath of fresh air after years of that moron, Caroline Baum.)

Here's the footnote:

"Central banks are protected from insolvency due to their ability to create money and can therefore operate with negative equity."

By the way, this applies to sovereign, currency issuing governments, too, but don't expect the idiots in the mainstream (economics, media, Wall Street, corporate, policy or otherwise) to understand or admit this.

I don't know what the Fed would do in a negative equity situation simply because Congress might get on their case about not remitting profits. The ECB doesn't have that problem. It is truly independent from the idiots in Brussels.

Read the article here.

In typical clueless Bloomberg reporting style, company says U.S. has no options to avoid downturn

Looks like Bloomberg has a new "Caroline Baum." Remember her? She was the cinema major who regularly opined on economic matters and each time it was a shock and awe display of economic and monetary ignorance.

But Baum left earlier this year so the new girl over there is some chick named Kasia Klimasinska. Today she writes that the U.S. had, like, zero options to deal with a downturn.

The headline caught my attention (stupid fodder) so I checked it out. I wanted to see if she said anything about fiscal policy or, if was all going to be about the Fed not having any "bullets."

And guess what? I did find this pearl on fiscal policy:

U.S. debt stands at 74 percent of gross domestic product, compared with 35 percent in 2007, based on a Congressional Budget Office report released Tuesday. That burden is expected to grow further in coming years, limiting government options for additional fiscal stimulus in the form of spending or lower taxes.

While the U.S. could follow in the footsteps of Japan, Ireland, Italy or Greece, which have racked up   even higher debt-to-GDP levels, heftier deficits would be a hard political sell. After all, Congress has been loathe to borrow, curbing spending through "sequester" limits and pushing the nation to the brink of default in 2011 amid disputes over a debt-limit extension.

Yes, you did see that..."follow in the footsteps of Greece." If it came out of Bloomberg you KNEW that had to be there.

When she says that the debt level of 74% of GDP "limits government options" I'm left wondering, according to who? Her?

To her credit she says it would be a hard political sell. She's right on that score, but that's only because we have an inept leader named Barack Obama who believes that "we're out of money."

Then she says this:

Partly for that reason, the Bank for International Settlements has warned that still-low rates around the world pose a looming economic risk. 

So according to Kasia it looks like the United States of America is taking marching orders from the Bank for International Settlements now.

And Mike Bloomberg built a $40 billion fortune on this crap? I'm REALLY in the wrong business.

JiminNH — Complete Media Fail in Blaming Russia for Last Year's US Bank Hacks

The Wall Street Journal, Bloomberg, the Daily Telegraph - they all piled on, trumpeting the news fed to them by the FBI and NSA that the Russians were behind it - suggesting it was a pseudo military attack in connection to war tensions over Ukraine.

Now the perpetrators have been caught. Turns out they have no connection to Russia.…

Flash forward a year, and you will find reports that emerged on July 21, 2015 that four people were arrested for the JPMorgan and other bank cyber attacks of August, 2014, with a fifth suspect remaining at large. Unsurprisingly, those arrested were not “Russian state sponsored hackers.” Also unsurprisingly, very few of the reports included any reporting that informed the reader that the JPMorgan hack was initially, and incorrectly, blamed on Russia.

The MSM reports detailed how the four suspects, two Israeli citizens as well as US citizens Joshua Aaron and Anthony Murgio, were charged with using the hacked data in a “complex securities fraud scheme”, as reported by Fortune, where the data was used for a “pump-and-dump” stock fraud, using bulk emails and pre-planned trading to pump up the targeted stocks for their own personal benefit. USA Today, among others, reported that the scheme also included an “illegal bitcoin operation.”

Perusing the reporting of the titans of western MSM, from Bloomberg to Fortune to Reuters to USA Today to CNBC, it is difficult to find any reporting on the arrest that point out that blame for the subject cyber attacks was initially placed upon a “resurgent” Russia. 

Not quite complete media fail, since some reported the correction.

Russia Insider
Complete Media Fail in Blaming Russia for Last Year's US Bank Hacks
JiminNH, The Vineyard of the Saker)

Media bewildered as China sells huge amounts of Treasuries and nothing happens in bond market, rates don't soar. Idiots.

Bloomberg and other financial media outlets are running a story about how China sold $180 billion in Treasuries and the market did nothing.

Why are we not surprised?

It seems that Bloomberg and the rest of the financial media mental midgets are still clueless. They still believe, I guess, that China sets rates in the U.S. or, that dollars come from anywhere else, but the U.S. government.

We have long said here in Mike Norman Economics that the worries over China selling our Treasuries or, any other entity selling Treasuries is meaningless because, a) there will always be demand for Treasuries when the Federal Gov't is spending $11 trillion per year (Gross "withdrawals" as per the Treasury's end of the Fiscal Year statement), which equates to vast amounts of resrves piling up in the bankiing system. And, b) when reserves pay nothing and Treasuries pay something.

Here are some of the idiotic statements by the media with regard to the China sales:

"America has relied on foreign buyers as the Treasury market swelled to $12.7 trillion in order to finance stimulus that helped pull the economy out of recession and bail out the banking system." 

America relied on foreign buyers to stimuluate its economy and savce the banking system?? Seriously??? Hahahaha. What utter idiocy.

And this...

"Now, the Asian nation is stepping back as it raises money to support flagging growth and a crumbling stock market, and allows its currency to trade more freely." 

China is selling Treasuies to "raise money to support flagging growth." Hhahahaha....are you fucking kidding me??? China is spending in yuan.

Then there's this by the woman who will probably be our next  president:

And in 2007, Democrat Hillary Clinton, then a Senator from New York, said in a letter to then-Treasury Secretary Henry Paulson and then-Fed Chairman Ben S. Bernanke that foreign ownership of U.S. debt was a “source of great vulnerability.” The economy “can too easily be held hostage to the economic decisions being made in Beijing, Shanghai and Tokyo,” she said.

A real, "leader," she is going to be. Running over to China, begging them not to sell. Pathetic. And worse yet, that's "insight" coming from her advisers.

Let us not forget, either, the quote from our military commanders. This one from former Chairman of the Joint Chiefs, Admiral Mike Mullen who said:

“I’ve said many times that I believe the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat,” he said. “We must, and will, do our part.”

There you go, people. These are our leaders. Totally, fucking, clueless ideologues who think they needn't know or understand anything more than the shit that litters their brain dead minds, which they spew out to us on a daily basis. And the media is there pathetic mouthpiece.

Bloomberg...ha!!

Bloomberg gives props to 9 people who saw the euro crisis way before it happened and 5 of them are MMT people!

Bloomberg calls out 9 people who predicted the euro crisis before it happened and 5 of them that they mention are MMT people.

They are, Wynne Godley, Matt Forstater, Stephanie Kelton, Warren Mosler and Randy Wray. Kudos!

Danielle Ryan — Bloomberg's Coverage of St. Petersburg Econ Forum Was Embarrassing. Here Are the Highlights

I have just spent far too much of my day watching Bloomberg’s coverage of the St. Petersburg International Economic Forum, so this will be brief.

I could go through it all in detail and analyse it more deeply, but quite frankly, it was actually so mortifyingly bad that it doesn’t deserve to be taken quite that seriously. If anyone else out there had their TVs or computer screens tuned to Bloomberg, please know I feel your pain...

The reality: Charlie Rose conducted a wide-ranging, serious, 70-minute long interview with Putin and this is all Bloomberg could come up with in response. It’s juvenile.

Bloomberg’s coverage can’t be taken seriously, because they refuse to take their subject matter seriously and debate it in the way it deserves to be debated; with nuance, and by adults. Not squealing children who see the world in black and white.

Russia Insider
Bloomberg's Coverage of St. Petersburg Econ Forum Was Embarrassing. Here Are the Highlights

Danielle Ryan

Danielle is an Irish journalist and blogger. She has a degree in Business and German from Trinity College Dublin and studied political reporting at the Washington Center for Politics and Journalism in Washington, DC. Special interests: American politics and foreign policy, US-Russia relations and media bias. Her blog can be found at journalitico.com.

For once Bloomberg posts something on their website that makes sense.

I thought I was seeing things just now when I came across an article on Bloomberg.com that was entitled, "Here's how to add 2.4 million jobs to the economy." I figured since it was Bloomberg there'd be a bunch of dumb suggestions like get the government out of the way, reduce regulation, cut corporate taxes and that sort of stuff.

To be honest I don't even know why I started reading it because I hardly ever read what's on that site as it's always the same, incessantly wrong, out-of-paradigm neoliberal cheerleading that we hear everywhere.

However, this article was different. So different in fact that I don't know how Bloomberg let this slip through the cracks. It was written by some guy named Peter Gosselin and I have no idea who the dude is, but he seems to get it.

Check it out:

"The U.S. is paying a big price in growth, jobs and wages by practicing the kind of fiscal austerity that it criticizes European nations for pursuing." Read on. 

In the article Gosselin talks about how government spending cuts are weighing heavily on the economy. He  points out what we have been saying here on MNE and what every MMT person knows: that government consumption  and investment is the second biggest component in GDP and the most easily varied (save for the politics, anyway, and I know that's not easy).

The article states pretty emphatically that government  spending has to be increased; that's the only way to boost GDP and job growth. It also says we "gave up on fiscal stimulus too soon." (We said that here on MNE back in 2009!)

Gosselin also rightly shames clueless Conservative lawmakers and doesn't give the Democrats a pass either. Read below:

Opponents of using fiscal tools, especially higher government spending, focus on what they regard as a greater threat than tepid growth: federal deficits and debt. “Government can’t spend its way back to a strong economy,” said Representative Kevin Brady, a Texas Republican and member of the House Ways and Means Committee.

and...

"The nation’s retreat from tax cuts and spending increases to promote the recovery has been a bipartisan affair. Democratic President Barack Obama and Republican House Speaker John Boehner agreed in 2011 to apply the fiscal brakes by negotiating $1 trillion in spending cutbacks over 10 years and a process to impose more."

Anyway, kudos to Bloomberg--THIS ONE TIME.

I'm sure they'll go right back to doing what they usually do, which is posting up the same ignorant and inapplicable shit that has become a mainstay of their opinion writers. (Cue Caroline Baum right about now.)

Will Tsipras and Varoufakis get the hint? Regular Germans are sick and tired of Greece and want them the hell out of the euro.

The German people are apparently Fed up with Greece and they want Greece to exit the euro.

Check it out:

Berlin cabdriver Jens Mueller says he’s had it with the Greek government and he doesn’t want Germany to send any more of his tax money to be squandered in Athens.

“They’ve got a lot of hubris and arrogance, being in the situation they’re in and making all these demands,” said Mueller, 49, waiting for fares near the Brandenburg Gate.

"Maybe it’s better for Greece to just leave the euro.”

Mueller’s sentiment is shared 

Read rest of the story here.

There are three problems (at least) that I see with this.

First, Tsipras and Varoufakis have no balls. They're all talk and they will never pull out of euro. They've ideologically bought into it and will go down trying to make it work.

Second, the common German working man and woman doesn't understand that their comfortable situation is partially due to Germany being able to run surpluses with countries like Greece. In other words, being able to suck everyone else dry. Greece leaves, who knows? Italy next? Then Spain? Then Portugal? You see what I mean? That German cab driver starts to look like a Greek cab driver.

Finally, the bankers and financial predators who set Greece up to fail and who want their 100 cents on the dollar back and then some, will never let Greece go and if Greece does decide to go Washington or Brussels or both will probably send military to collect on those debts.

That's the problem.

Zap — A World Overflowing With Debt – Bloomberg Business

Taking the geniuses at McKinsey and Bloomberg to task for money moronism.

Fearmonger much? I find it hard to believe that neither McKinsey or Bloomberg is aware of the fact that the “debt” of sovereign governments *cancels* the debt of the other side of the balance sheet–the private sector. In this mathematically-moronic piece, they’re counting the money supply twice!…

This kind of nonsense hysteria-mongering is a transparent attempt to stir up sentiment against government spending, which would *pay off* the private debt, and deprive the vampire squid of it’s endless gushers of blood from our arteries. That’s the last thing the shills at Bloomberg and their vampire masters on wall street want to see happen. 

How about some responsible reporting for a change? Government debt on one side of the balance sheet and private debt on the other, so we can see where we *really* stand?

Political Reality
A World Overflowing With Debt – Bloomberg Business

Zap

Bloomberg: Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet

Via Bloomberg: 

"The surprising resilience of Treasuries has investors re-calibrating forecasts for higher borrowing costs as lackluster job growth and emerging-market turmoil push yields toward 2014 lows. That’s also made the business of trading bonds, once more predictable for dealers when the Fed was buying trillions of dollars of debt to spur the economy, less profitable as new rules limit the risks they can take with their own money."

Shouldn't be "surprising" unless you don't understand the operations. Didn't anyone learn from Japan?

"While they’ve ratcheted down their forecasts this year, they predict 10-year yields will increase to 3.36 percent by the end of December. That’s more than 0.6 percentage point higher than where yields are today."“My forecast is 4 percent,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank AG, a primary dealer. “It may seem like it’s really aggressive but it’s really not.” 

4%? Uh, ok good luck with that one. 

Seems like Matt Franko's prior analysis, that bond dealers hate the low rates and want to push for higher ones, is correct.  

"The biggest dealers are seeing their earnings suffer. In the first quarter, five of the six biggest Wall Street firms reported declines in fixed-income trading revenue.New York-based JPMorgan, the biggest U.S. bond underwriter, had a 21 percent decrease from its fixed-income trading business, more than estimates from Moshe Orenbuch, an analyst at Credit Suisse, and Matt Burnell of Wells Fargo & Co. Citigroup, whose bond-trading results marred the New York-based bank’s two prior quarterly earnings, reported a 18 percent decrease in revenue from that business. Credit Suisse, the second-largest Swiss bank, had a 25 percent drop as income from rates and emerging-markets businesses fell. "

Sadly the article makes no distinction between the nature of US government paper and corporate paper. Any further thoughts?

Bloomberg liked my MMT based show idea

Met with execs from Bloomberg TV today and pitched an idea for an MMT-based show. They seemed interested. Will be having some more meetings in the coming weeks to advance this, hopefully.

Out of touch, Mayor Bloomberg?

For 13 days, hundreds of demonstrators have encamped themselves on Wall Street in New York City, hoping to call attention to the financial sector’s greed and inequities in the American economic system.

This morning, while on local radio host John Gambling’s show, New York City mayor Michael Bloomberg was asked about the demonstrations on Wall Street. Bloomberg condemned the protests, claiming that the protesters are targeting people who making “$40-50,000 a year and are struggling to make ends meet.” He then went on to say people are focusing too much on the causes of the financial crisis and that we need to be nicer to the banking industry so that it starts lending again. He concluded by saying that we are “blaming the wrong people” by “blaming the banks” for the recession:

Read the rest at Think Progress, Mayor Bloomberg Claims ‘Occupy Wall Street’ Protesters Are Targeting Bankers Who ‘Are Struggling To Make Ends Meet’.

Really?

Wall Street versus the Tea Party

The crazy continues:

Bloomberg — Boehner’s Views on Economy Contradicted by Indicators, Studies

Reuters Exclusive — Wall Street says cuts alone won't fix budget

Slate — A new powerhouse for ridiculous GOP economics

Move over, Milton Friedman: Make room for tiny Northwood University and the Austrian economist Ludwig von Mises

Washington Monthly — Boehner’s functionally illiterate on economic policy

"I suspect you're one of those MMTers"

I sent an email to Caroline Baum today. She's a columnist for Bloomberg.com. (Bloomberg is notorious for their terribly misinformed economic "columnists" and Baum is a good example.)

I was responding to an article she wrote entitled, "Rear-View Mirror Can’t Forecast 2011 Economy."

In the article she attempts to argue that the 1.8% Q1 GDP growth was an aberration. According to her, one of the reasons why we should be getting ready for boom times is because (sigh), finally that darned, growth killing fiscal stimulus will soon end.

This is her "logic"...

"Finally there are the waning effects of “fiscal stimulus,” or government spending by another name. Since one dollar can’t be spent by two entities at the same time, government spending can only substitute for private spending. Any resulting increase in GDP is temporary."

So, being the masochist that I am, I decided to send Ms. Baum an email and ask her to clarify.

Here's how it went:

Me: "How does the “non-government” get the dollars to satisfy their tax liabilities or, to “net save” in that unit of account?"

(Sorry for the formatting. Baum writes in all CAPS, like an angry pwerson, so that's why the formatting is like this)

C. Baum : "I DON'T UNDERSTAND THE QUESTION BUT I SUSPECT YOU ARE ONE OF THOSE MMTERS."

Me: LOL!!! YOU RESPOND TO MY QUESTION WITH A SNARKY REMARK. OKAY.

SO, THE QUESTION SEEMS TO BE PRETTY SIMPLE. HOW DOES THE NON SOVEREIGN, I.E., THE PRIVATE SECTOR GET THE DOLLARS TO SATISFY THEIR TAX LIABILITIES? WHERE DO THEY GET THOSE FROM? IT HAS TO COME FROM SOMEWHERE? YOU SAY THE GOVERNMENT AND THE PEOPLE CANNOT SPEND THE "SAME DOLLAR." WHAT IN THE WORLD DOES THAT MEAN? DOES THE GOV'T HAVE TO GET BACK THE DOLLARS IT ISSUES IN ORDER TO BE ABLE TO SPEND? IS THAT WHAT YOU ARE SAYING?

C. Baum: I'M TALKING ABOUT BASTIAT'S BROKEN WINDOW. ACTUALLY AFTER BEING ATTACKED BY MOSLER FOR A SPELL, I FINALLY UNDERSTAND AFTER READING ROBERT MURPHY ON MISES YESTERDAY WHAT MMT IS ALL ABOUT. NOW IT REALLY MAKES NO SENSE. I DON'T NEED THE GOVT TO SPEND SO I CAN SAVE. THAT'S LUDICROUS. I CAN'T IMAGINE ANY SMART PERSON CAN THINK THAT. MAYBE YOU CAN ANSWER A QUESTION: WHY IS IT CALLED MMT SINCE IT'S ABOUT FISCAL POLICY.

Me: MOSLER ATTACK?? HARDLY. HE'S THE MOST RESPECTFUL AND POLITE PERSON I HAVE EVER MET. THAT "ATTACK" WAS YOUR OWN COGNITIVE DISSONANCE. (CREATES STRESS, INTERNAL CONFLICT. MAY HAVE CAUSED YOU TO PERCEIVE IT AS AN ATTACK.)

MURPHY'S PIECE MAY WELL DESCRIBE AN ECONOMY OF PRIVATE ACTORS WHERE THERE IS NOT AN AUTHORITY THAT IMPOSES A TAX THAT CAN ONLY BE PAID IN UNITS OF ITS OWN CURRENCY. IF A WORLD LIKE THAT EXISTS, PLEASE LET EVERYONE KNOW IN A NEW COLUMN. I CERTAINLY AM NOT AWARE OF ONE.

I BELIEVE THE TERM MMT CAME ABOUT FROM A BLOG POST BY SOMEONE BACK IN THE 1990S AND IT WAS NOT AN MMTER. (DON'T QUOTE ME.) HOWEVER IT CAME ABOUT, THE NAME STUCK.

C. Baum: MOSLER USED TO SEND ME NOTES AND SEND TO HIS ENTIRE DISTRIBUTION, SO THEN I HEARD FROM THEM. WHAT IS HIS MOTTO? THERE IS NO PROBLEM THAT CAN'T BE FIXED BY MORE GOVERNMENT SPENDING? C'MON.

Me: NO, THAT IS CERTAINLY NOT HIS MOTTO. YOUR STATEMENT SHOWS THAT YOU HAVE NOT EVEN TAKEN THE TIME TO INVESTIGATE MMT. YOU CRITICIZE IT WITHOUT EVEN UNDERSTANDING IT.

C. Baum: B/C THERE IS NOTHING TO UNDERSTAND BUT SOME ACCOUNTING TAUTOLOGY. I DID LOOK AT IT AT THE TIME. SO PLEASE DON'T ACCUSE ME.

MOSLER'S LAW: THERE IS NO FINANCIAL CRISIS SO DEEP THAT A SUFFICIENTLY LARGE TAX CUT OR SPENDING INCREASE CANNOT DEAL WITH IT.

THE GIST IS THE SAME

Me: THAT'S RIGHT, READ WHAT YOU WROTE:

YOU SAID THAT MOSLER STATES, "THERE IS NO PROBLEM THAT CAN'T BE FIXED BY GOVERNMENT SPENDING."

YET WHAT HE SAID (FROM THE ACTUAL QUOTE FROM HIS WEBSITE, WHICH YOU INCLUDED IN YOUR EMAIL TO ME) IS, "THERE IS NO FINANCIAL CRISIS SO DEEP THAT A SUFFICIENTLY LARGE TAX CUT OR SPENDING INCREASE CANNOT DEAL WITH."

TWO DIFFERENT THINGS.

ANYWAY, NICE CHATTING WITH YOU. GOOD BYE.

You get the "gist" of it. ;)

Oh yes, the "elites" are getting nervous now. We have entered their domain and one by one they are getting picked off. They've already lost Goldman, Morgan Stanley and the other smart ones among their ranks will soon become converts, too! Baum will certainly be among the last to turn, if ever.