aerdil posted:
i just realized david graeber was slightly late to that talk because he was having a massive flame war on twitter...

"I take the opposite view. Even commerce turns into something else in the absence of state power. I resist totalizatoon"

i would like to know what the hell he means by that, surely hes talking about like some examples from pre-modernity, from cultural anthropology, and not decentralized consumer culture.

dm posted:
lol, i forgot he used twitter. this link owns: http://www.scribd.com/doc/79424474/Harvard-Spring-2012-Catalog-Supplement

yeah its hard to pick out a single best thing but "the spicy patois of dollars and millions of dollars" stuck with me throughout. its true, as they say, that difference and repetition is the key to comedy

The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.

“Budget consolidation has to be put under a strict steering and control system,” the proposal reads. “Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time.”

Athens would also be forced to adopt a law permanently committing state revenues to debt service “first and foremost”.

The German plan, circulated on Friday afternoon to finance ministry officials from eurozone countries who make up the so-called “euro working group”, underscores the depths of mistrust between Greece and its European Union lenders.

Despite the appointment of economist Lucas Papademos as technocratic prime minister in November, attitudes towards Greece within the EU have continued to worsen.European officials privately say that there has been little movement on public sector reforms under Mr Papademos.

A senior Greek finance ministry official said Athens was unaware of the proposal and could not comment. A German finance ministry spokesman declined to comment.

Greek voters have already expressed anger about EU attempts to assist in implementing reforms. Horst Reichenbach, the German national who heads an EU task force to assist Greece, was depicted in German military garb by leftwing Greek newspapers when he arrived last year.

Under the new German plan, Athens would only be allowed to spend on the normal functioning of its government after servicing its debt. If such a law is adopted, the proposal states, financial markets and other creditors would be reassured that defaults would not occur in the future.

“If a future tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement,” the document said.

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of “prior actions” Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

The document, dated Monday, also calls for major budget cuts in defence, healthcare and “entity closures” to bring down this year’s budget deficit. The document said the preliminary estimate for the 2012 deficit target is about 1 per cent of economic output – implying swinging cuts, since previous estimates by lenders put this year’s budget deficit at 7 per cent.

Negotiations between Athens and EU-IMF officials this week have been stormy. On Friday, talks broke up without a deal on two elements of the EU-IMF plan: a request that Greece’s €750 monthly minimum wage be reduced, as well as elimination of the two-month salary bonus granted to private sector workers as an annual bonus.

George Koutroumanis, the labour minister, instead backed a joint counterproposal by employers and trade unions for a three-year wage freeze, arguing wage cuts would plunge Greece into a deeper recession.

Edited by dm (Jan. 28, 2012 15:56:02)

Yesterday evening I attended a private dinner attended by a number of very well-informed people.

We were asked by a participant the following question: if someone solvent offered a contract that would pay out a dollar in five years if the eurozone broke up, what do you believe the market would pay for it today and what would you yourself pay for it?

Break-up was defined as the departure of countries with, in aggregate, at least 10 per cent of eurozone GDP (so more than just the current three small IMF programme countries).

The average of responses was 26 cents for the market price and 27 cents for the true value. In other words, the average view of participants was that the market would price the risk of such a break up at about one in four – and, on balance, they agreed with what they thought the market would think.

Of course, there was a wide range of estimates for both variables, from zero to 100 per cent probabilities. The averages were probably affected by a small number of ultra-pessimists. The total number of participants was also just a little over 20.

Nevertheless, this suggests how little credibility the eurozone now has in well-informed circles. This is surely the result of initial flaws exacerbated by bad policy-making over the past few years.

this is basically how a credit default swap (CDS) works. the amazing thing about them is that they depend on the underlying contract not being paid out. notice also how the much feared "break-up" is given a definition by mortals.

it's like what Durkheim called a "social fact" that is created more or less instantaneously ex nihilo. once created, it gains a "phantom-like objectivity". it's instantaneous reification.

this contingent nature of the definition of "default" is also behind all kinds of insanity: http://www.nytimes.com/2011/11/20/business/credit-default-swaps-as-a-scare-tactic-in-greece.html

AS the debt mess in Europe deepens, bankers are pressing Greece’s bond holders to swallow big losses.

Leading the charge is BNP Paribas, the big French bank, which has been hired by the Greek government to help persuade investors to accept a deal that would cut the value of their investments in half.

On paper, this restructuring would be voluntary. Bond holders would exchange their old Greek bonds, at a 50 percent loss, for new ones that would mature in 30 years. Painful, yes. But in theory, such a move would help Greece get a handle on its debt, and that would be good for everyone.

this is the "private sector involvement" and they whine incessantly about it being labeled as "voluntary".

Investors who own Greek debt and have bought insurance on it, in the form of credit default swaps, wonder why they should accept the offer that’s on the table. If Greece stops paying after the restructuring, those swaps are supposed to cover their losses, much the way homeowners’ insurance would cover a fire.

The International Swaps and Derivatives Association agrees. The group, which represents the industry and is largely controlled by big banks, says anyone who doesn’t like the offer can walk away. “If a payment is missed, trigger the C.D.S. and be made whole,” the group said on its Web site.

BNP and its client, Greece, want to corral as many investors as they can. The more bond holders they persuade, the more that Greece would benefit — and the more the bank would collect in fees.

So it is perhaps unsurprising that some recent meetings have taken on a forceful tone, according to three portfolio managers who attended three different sessions with BNP Paribas. The investors spoke on condition of anonymity because they feared retaliation by the bank.

Contrary to what the I.S.D.A. says, the BNP Paribas bankers have been telling bond holders that their credit insurance may not pay off down the road, because after the restructuring is completed, the terms of the old debt might be changed, these money managers said.

Normally, investors would shrug off such an argument.

But the warnings from BNP Paribas carried weight, the money managers said, because of one of the officials who was making them. She is Belle Yang, a BNP specialist who also happens to serve on a powerful I.S.D.A. committee. The panel, the “determinations committee” for Europe, decides what constitutes a “credit event” in Greece or elsewhere on the Continent.

This is the committee that will likely rule that the Greek deal would not constitute a default. That is because the restructuring would be “voluntary.” Some investors who were counting on their credit insurance would be out of luck.

the "credit event" was substituted for the term "default" because they don't actually want Greece to default since the CDS contracts cannot actually be paid. i have no idea what the volume of CDS outstanding is, but it's definitely something even more insane than the last time

aerdil posted:
spot teh rhizzoner

better hold on to dear life!

discipline posted:

Ahaha Regulation Just Doesn't Work You Guys *sells 8-10x the quantity of oil in existence somehow...*

that's reminds me of what i was pointing out earlier about Krugman and the environmental signifiers: http://www.nytimes.com/2008/06/27/opinion/27krugman.html

"Several ideas are being discussed in the euro group right now on how to react to a program that is consistently off track apart from saying the situation is impossible with the possible consequences that would ensue," the official said.

we have run into the Absolute. in this case, we appear to have something like an eternal present (is impossible/would ensue). the resolution lies both within and beyond by exploiting a paradox of self-reference

Macaulay got it about right: “We know no spectacle so ridiculous as the British public in one of its periodic fits of morality.”

The great historian was mocking Victorian society’s treatment of those who had strayed sexually, but he could have been describing the kind of lynch-mob fury that has now enveloped the nation’s bankers – as witnessed this week in the stripping of a knighthood from Fred Goodwin, the disgraced Royal Bank of Scotland chief executive, and the intense pressure placed on his successor, Stephen Hester, to refuse a bonus.

The politicians from all three main parties involved in fashioning the nooses are doubtless congratulating themselves this weekend on reading the popular mood so astutely. They would do better to reflect on what message these episodes send to the world about British scapegoating and attitudes to business.

Don’t misunderstand: the public is right to be furious with the banking industry. Its folly, ignorance and absurd risk-taking, against a background of extraordinary regulatory laxity, played a large role in getting us into our economic mess. Arrogant bankers, insulated from reality, were slow to take any responsibility for the crash or accept that their lavish pay and profits turned out to be underwritten by an implicit government safety net. Heads I win, tails the taxpayer loses.

When living standards are being squeezed and bankers still seem to be taking home obscenely large (though thankfully falling) remuneration, rage against the industry is understandable. But gut reactions do not make good policy. We still need a banking industry – albeit a better regulated one – to oil the wheels of commerce, while the City, like it or not, remains one of Britain’s most important and globally competitive industries.

There is certainly visceral pleasure to be had from the humiliation of Mr Goodwin, given his arrogance while running RBS and his lack of repentance after he led it to ruin and resisted giving up part of his pension. On hearing of his de-knighting it is tempting to punch the air and say: “Yes, that will teach the bastard bankers!” Yet the decision is wrong.

The obscure honours forfeiture committee, a kind of latter-day Star Chamber, has ruled that Mr Goodwin, brought the honours system into disrepute by his actions at RBS, now a ward of the state. George Osborne, the chancellor of the exchequer, says the bank symbolised “everything that went wrong in the British economy over the last decade”.

But while Mr Goodwin may have been a particularly egregious example of bad banking, he was hardly alone in causing the credit crunch. It was a collective international failure by banks and those meant to police the credit system. In Britain, the ranks of those in charge were stuffed with knights and peers who have dodged Mr Goodwin’s place in populist hell.

For example, Lord Stevenson was chairing HBOS when it had to be saved from collapse by Lloyds, and James Crosby was knighted when he stepped down as chief executive of the bank in 2006, a mere 18 months before the crisis broke. Sir Callum McCarthy was chairman of the Financial Services Authority as the crisis gathered. And don’t forget Alan Greenspan, the honorary British knight and former Federal Reserve chairman whose easy money policies played such a large role in inflating the bubble. Should we strip them all? Or does the easy sacrificial victim absolve these fine gentlemen?

The action against Mr Goodwin also sets a sinister precedent: until now, removal of an honour has required the commission of a crime or censure by a regulatory authority. Mr Goodwin has suffered neither. His perceived crime is incompetence. Once you set out on that path, where do you stop? Enter Lord Sugar, driving a tumbril.

It is ironic that, by contrast, Mr Goodwin’s successor is in trouble for his business competence. By all accounts he is doing a good, if not stellar job at RBS, and the board decided he qualified for an annual bonus worth almost £1m (evidently massaged down by government pressure). Yet amid popular outrage and political mischief-making, he waived the award. In the circumstances this was sensible, if he did not want to be permanently etched into the national psyche as a “fat cat” (his girth and hunting garb do not help) hate figure.

Mr Hester needs defending. He did not cause the crisis at RBS; he was headhunted to sort out Mr Goodwin’s mess and gave up a good job to do so. To secure his services the government agreed to pay him a commercial rate and that included the prospect of annual performance-related bonuses of the kind he has now forgone.

There is a widespread popular view that it is wrong for him to get a large bonus when he is in effect working for the state, has only been doing the job he was brought in to do, and the pay of many workers is being squeezed. Yet the truth is that across swaths of the private sector, annual executive bonuses are a common component of remuneration and, while related to performance, have an element of entitlement attached – except in dire years or for dire personal failure. They are, in part, the salary that dares not speak its name. Understandably, people who stand no chance of getting bonuses loathe them – and as taxpayers they see the Hester case giving them, for once, a very direct say on the issue.

The pros and cons of the bonus system is a subject for larger debate, which certainly needs airing. The point is that it is unfair to damn Mr Hester for finding himself caught at the nexus between normal corporate bonus practice and popular distaste or misunderstanding of the system – though you may find him naive in not seeing the storm coming.

Alas, fairness doesn’t really enter into it. As Macaulay went on to observe, Victorian fits of morality took the form of some unfortunate man being “singled out as an expiatory sacrifice ... a sort of whipping boy, by whose vicarious agonies all the other transgressors of the same class are, it is supposed, sufficiently chastised”.

Perhaps the humbling of Mr Goodwin will play a similar role, leading to a collective banking catharsis. It’s the kind of valuable social work that deserves rewarding. For services to the national psyche, arise Sir Fred ...?

VIOLENCE!!! STOP LOOKING AT ME SO VIOLENTLY.