http://monthlyreview.org/2012/05/01/the-endless-crisis
Moral of the story: Social democracy, strong trade unions and good regulation of banks is the key to happiness, no need to do away with capitalism at all!
dm posted:this time without shit from my personal life interrupting
http://monthlyreview.org/2012/05/01/the-endless-crisis
all hope rests on the broad shoulders of occupy wallstreet.
Ironicwarcriminal posted:I still find it bizzare hearing about the doldrums of the rest of the world, i haven't seen a recession in 20 years
Moral of the story: Social democracy, strong trade unions and good regulation of banks is the key to happiness, no need to do away with capitalism at all!
yall got hella private debt, a housing bubble and depend on china for trade, mere mineral wealth and bizarre throwback racism wont save you...
Trader "When I retire and write a book about this business, your name will be written in golden letters."
Submitter "I would prefer this not be in any book!"
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Submitter "Hi all, just as an FYI, I will be in noonish on Monday."
Trader "Noonish? Who's going to put my low fixings in? hehehe."
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Submitter " asked me to put it lower than it was yesterday … to send the message that we're not in the shit."
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Submitter to manager: "We are therefore being dishonest by definition and are at risk of damaging our reputation in the market and with the regulators."
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Trader to manager, complaining about a submitter: " the highest Libor of anybody … He's like, I think this is where it should be. I'm like, dude, you're killing us."
Manager to trader: "Just tell him to keep it, to put it low."
Submitter " see what I can do."
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External trader to a Barclays trader, asking for a lower Libor submission: "If it comes in unchanged I'm a dead man."
Barclays' trader promises to "have a chat".
External trader to Barclays' trader later that day: "Dude. I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger."
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Trader "Coffees will be coming your way, either way, just to say thank you for your help in the past few weeks."
Submitter "Done … for you big boy."
Ironicwarcriminal posted:I still find it bizzare hearing about the doldrums of the rest of the world, i haven't seen a recession in 20 years
Moral of the story: Social democracy, strong trade unions and good regulation of banks is the key to happiness, no need to do away with capitalism at all!
just wait until demand for your exports falls off!
that also reminds me that we should try to cover as much of the world as possible in this thread rather than just the US and Europe. there should be interesting stuff happening in terms of migration patterns w/ migration moving in the direction of capital accumulation
my pet topic wrt the US is stuff going on with state and municipal finances across the country.
dm posted:Ironicwarcriminal posted:I still find it bizzare hearing about the doldrums of the rest of the world, i haven't seen a recession in 20 years
Moral of the story: Social democracy, strong trade unions and good regulation of banks is the key to happiness, no need to do away with capitalism at all!just wait until demand for your exports falls off!
that also reminds me that we should try to cover as much of the world as possible in this thread rather than just the US and Europe. there should be interesting stuff happening in terms of migration patterns w/ migration moving in the direction of capital accumulation
my pet topic wrt the US is stuff going on with state and municipal finances across the country.
theres definitely no economics in south america otherwise the news would report it, ditto africa
also
cleanhands posted:Ironicwarcriminal posted:
I still find it bizzare hearing about the doldrums of the rest of the world, i haven't seen a recession in 20 years
Moral of the story: Social democracy, strong trade unions and good regulation of banks is the key to happiness, no need to do away with capitalism at all!
yall got hella private debt, a housing bubble and depend on china for trade, mere mineral wealth and bizarre throwback racism wont save you...
so when China falters we'll just export our minerals to India or whatever. Coal and Iron ore isn't going to be going out of fashion any time soon. Housing prices are inflated but we're not looking at a crash so much as a bit of a stagnation. Private debt is high but people have been pulling it back since the GFC and thorough bank lending practices mean that the amount of foreclosures is very low.
i know that pessimism is popular but we're riding out the "worst economic crisis since the 1930s!!!" with 4% annual gdp growth so i'm not particularly scared. at the end of the day, we have a fuckload of resources and land for an incredibly small population.
it might all go wrong but hubris, especially somewhat-justified hubris, is a lovely feeling
DM if you have anything about state/municipal finances that isn't too dry i'd like to read it. I remember it being big in the news for a while (Colorado Springs shutting off it's streetlights made news here) but i don't know what's currently happening or who has to pick up the bill in the end.
Ironicwarcriminal posted:she'll be right mate
DM if you have anything about state/municipal finances that isn't too dry i'd like to read it. I remember it being big in the news for a while (Colorado Springs shutting off it's streetlights made news here) but i don't know what's currently happening or who has to pick up the bill in the end.
it's all scattered, i'll post a dump of links when i get around to it. i'm trying to get an idea of the big picture.
e:
California: http://www.latimes.com/news/local/la-me-state-budget-20120628,0,2056875.story
Edited by dm ()
ive never even heard of libor and i guess its been the most important number in the world for quite some time but i dont even know where it lives, who curates it, who, how, why, anything, finance is such bullshit
Groulxsmith posted:It's an average of interbank trading rates over different short terms, it's not set by an institution like a target rate or anything. A lot of money market instruments are priced off parts of LIBOR directly or indirectly, like term Eurodollars are something like 5-8 points over, or directly, where an adjustable rate debt instrent is LIBOR plus 10 basis points. To call it the most important number or suspect any sinister mOtive is kind of weird though
im sorry that was out of line, theres no sinister motive, be nice to finance everybody
link
Starting July 1, there are a handful of other updates to federal loan programs that borrowers should be aware of. These changes will not affect loans that were originated before July 1, only loans originated for 2012-2013.
No more subsidized loans for grad students. Just like undergraduates, graduate students were previously able to receive both subsidized and unsubsidized loans. Starting this year, only unsubsidized loans will be available for grad. students at a 6.8% interest rate.
Elimination of interest subsidy for grace periods. Subsidized Stafford Loans were less expensive than there unsubsidized counterparts because 1) the interest rate was lower and 2) interest was subsidized while enrolled in school and durning the 6 month grace period after leaving school. Starting this year, there will be no interest subsidy during grace periods, however, the subsidy will still exist while enrolled in school at least half-time.
Decreased eligibility. Last December, President Obama signed the Consolidated Appropriations Act 2012, which brought with it a change to the Pell Grant Program for the 2012-2013 year. Starting in Fall 2012, the Pell Grant is limited to 12 full-time semesters per student. The way this is calculated is by percent, where 600% is the maximum a student is eligible for. For example, if you receive a maximum Pell Grant for both semesters, your percentage used would be 100%.
Lowered income limit for automatic zero . When families file the FAFSA (Free Application for Federal Student Aid), they receive their Expected Family Contribution (EFC) - a number detailing how much of the school costs a family should be able to provide out of pocket. In previous years, anyone with an income of $32,000 or less received an automatic zero for the EFC. This allowed lower income families to be eligible for more need-based aid. This year, the income limit has been reduced to $23,000, which will cut funding for many students.
Termination of repayment incentives. The Department of Education can no longer offer repayment incentives to Direct Loan borrowers, except an interest rate reduction for auto payment. Again, this is only for loans originated after July 1, 2012 -- Repayment incentives may still be available for older loans.
MF Global redux: CFTC says Iowa broker misused over $200 million
NEW YORK/CHICAGO/WASHINGTON (Reuters) - The futures trading industry reeled on Tuesday as federal regulators accused Iowa-based broker PFGBest with misusing over $200 million in customer funds for more than two years, resurrecting the shock of MF Global's collapse.
The Commodity Futures Trading Commission (CFTC), which had give a clean bill of health to the brokerage industry in January, said that the broker's regulated Peregrine Financial Group (PFG) unit and its owner had failed to maintain sufficient capital in segregated accounts since at least February 2010.
It said the shortfall was in excess of $200 million, more than half of the broker's total client funds.
"The whereabouts of the funds is currently unknown," the CFTC said in a complaint against the regulated broker arm and Russell R. Wasendorf Sr., the founder and chairman of PFGBest whose apparent suicide attempt on Monday morning outside the firm's Cedar Falls, Iowa, offices appears to have triggered the crisis.
Wasendorf, a well-known and mostly well-regarded figure in the industry, was reported to be in a coma, the filing said.
I remember dm saying a few months ago when the MF Global thing happened that "this is just the beginning."
Spain imposes further austerity measuresMADRID (AP) — Spain's government imposed more austerity measures on the beleaguered country Wednesday as it unveiled sales tax hikes and spending cuts aimed at shaving €65 billion ($79.85 billion) off the state budget over the next two and a half years.
A day after winning European Union approval for a huge bank bailout and breathing space on its deficit program, Prime Minister Mariano Rajoy warned Parliament that Spain's future was at stake as it grapples with recession, a bloated deficit and investor wariness of its sovereign debt.
"We are living in a crucial moment which will determine our future and that of our families, that of our youths, of our welfare state," Rajoy said to catcalls from the opposition socialists and other parties as he revealed the biggest single amount of projected deficit savings in modern Spanish history.
He spoke as thousands of miners stung by a huge cut in government subsidies marched through downtown Madrid and clashed with riot police outside the Industry Ministry.
The spending cuts, designed to cut €65 billion off state budgets by 2015, include a wage cut for civil servants and members of the national parliament and a new wave of closures at state-owned companies. Spain will also speed up a gradual increase in the retirement age from 65 to 67. They are to be approved officially Friday at a Cabinet meeting.
Even now in the face of the come-down that inevitably follows any stimulus-induced feelings of euphoria, certain central banks have taken to further monetary easing. The Bank of England recently announced an extension of its quantitative easing program by £50bn. Not to be outdone, both the People’s Bank of China and the European Central Bank cut interest rates in an effort to boost consumer borrowing. Still, these new rounds of monetary stimulus don’t appear to be doing the trick. The Keynesian miracle cure has been a spectacular dud thus far. All that modern day disciples of Keynes can do is scratch their heads and say “more should have been done.” They never allude to how many more trillions of paper dollars should have been created or spent; just call it the excuse that keeps on giving.
Perhaps for these reasons Gray doesn’t make a full blown recommendation of Keynes’ famed countercyclical policy to combat the ongoing downturn. Instead he asks if Keynes would propose a policy that contrasts heavily with the influential theories presented in The General Theory of Employment, Interest, and Money. To Gray, Keynes was an intellectual heavyweight who possessed a “deep understanding of the complex, unpredictable and at times insolubly difficult nature of human events.” According to Gray, policymakers worldwide should see to it to welcome Keynes’ vision of achieving an “intelligent variety of capitalism.”
Gray’s simple query of “what would Keynes do” really begs another question: who was Keynes and why is he looked to by as a brilliant mind? Does this man truly deserve the praise he receives by the intellectual establishment closely aligned with government?
To answer these questions, it helps to first observe the early years of the 20th century’s most famous economist. For starters, Keynes was not born into a family with little means. In fact he was incredibly privileged while growing up as his father, John Neville Keynes, was an important figure within Cambridge University. With the help of his father and his father’s good friend and economist Alfred Marshall, the young Keynes was introduced to the aristocratic life of Britain’s intellectual upper-class. This included his joining of the Apostles as a student at Cambridge University. The Apostles was a secret society reserved for those connected to or within the country’s ruling class. Keynes’ membership would ultimately shape his view on life and humanity in general. It would lead to his adopting a self-serving elitist bent for much of his career.
And it all began at Cambridge with the Apostles. He and other members would frequently refer to those not within the highly secretive clique as “phenomena” and not “real.” As an undergraduate, Keynes wrote in a letter to his friend Giles Lytton Strachey,
Is it monomania — this colossal moral superiority that we feel? I get the feeling that most of the rest never see anything at all — too stupid or too wicked.
Keynes’ feeling of superiority was also accompanied by the Apostles’ disdain toward notions of morality and values held by the middle class such as thrift. After graduation, he would help form the Bloomsbury Group which became an intellectual force in early 20th century England. The Bloomsbury Group, like the Apostles, embraced avant-garde views toward aesthetics and morality and detested traditional values. Much of Keynes’ hatred toward sensible views of good and evil was influenced by a philosophy professor at Trinity College named G.E. Moore. To Keynes, Moore’s magnum opus Principia Ethica was “exciting, exhilarating, the beginning of a new renaissance, the opening of a new heaven on earth.” In his memoir “My Early Beliefs,” Keynes insisted that Moore’s personal ethics, “made morals unnecessary….We entirely repudiated a personal liability on us to obey general rules.” Towards the end of the paper, he also ensures his readers that “I remain and always will remain an immoralist.”
Keynes’ rationalization for government intervention and horribly inflated ego lead him to be one of the most sought after economists during the initial throws of the Great Depression. To the politician who fancies himself as a molder of the perfect society, the theories Keynes presented which divorced themselves from all semblance of reality were a Godsend. The General Theory would go on to provide the intellectual cover needed by the political class to convince the man on the street that only the state could deliver him to the land of the plenty.
Most controversial of Keynes’ theories was that investment should be socialized to, in a sense, “euthanize” the rentier class that had no justifiable income. He went as far as to write “Interest today rewards no genuine sacrifice…here are no intrinsic reasons for the scarcity of capital.” The ultimate solution would then be to engineer “an increase in the volume of capital until it ceases to be scarce.” To do so meant lowering the interest rate for borrowers by expanding the money supply. To the delight of public officials, increased government expenditures would then follow in tandem.
Of course this strategy would be successful if it weren’t for one critical detail: capital doesn’t consist of pieces of fiat currency. Capital is real savings represented by things such as industrial machines, assembly lines, factory equipment, optical cables, and raw materials. In other words, capital can never be rendered scarce since it can’t be printed on command. However, this truth has yet to stop politicians from promising “free” goodies for life to susceptible voters.
And that’s why The General Theory wasn’t just a book on economic theory; it was a “how to” guide on winning elections. Should it be any wonder then why so many apologists for the state saw it containing some great, hidden-until-then wisdom?
Indeed, what politician doesn’t love to hear that prosperity is just a few laws away? The world of homogenous aggregates Keynes presented to the Establishment played into their lustful desire for societal control. In a world of lifeless statistics, the people are nothing more than pawns on a chessboard to be moved to and fro with the faintest of ease. Objections matter naught; the path to virtue is only seen by those central planners who, like Keynes, regard themselves as the chosen few not constrained by the primal instincts of the common people.
In short, John Maynard Keynes didn’t just provide a roadmap for a centrally managed economy, he did so by wrapping his intellectual dishonesty in incomprehensible jargon and charisma. As Murray Rothbard pointed out in his short biography “Keynes, The Man,”
Keynes displayed a positive taste for lying in politics. He habitually made up statistics to suit his political proposals, and he would agitate for world monetary inflation with exaggerated hyperbole while maintaining that “words ought to be a little wild – the assault of thoughts upon the unthinking.” But, revealingly enough, once he achieved power, Keynes admitted that such hyperbole would have to be dropped: “When the seats of power and authority have been attained, there should be no more poetic license”
Keynes’ ego was so grand that when pressed by friend and Austrian economist Friedrich Hayek on the kind of totalitarianism his theories were inspiring, he assured a worried Hayek that he could swing public opinion easily; as if by the quick twisting of his hand.
The question of interest shouldn’t be “what would Keynes do” but rather “why even listen to someone so pompous and nihilistic to begin with?” Just as Keynes missed the Great Depression, modern day Keynesians missed the housing bubble and financial crash. From his contempt for moral principles to his enthusiastic support for eugenics, Keynes saw the world as something separate from the bubble of his fellow elitists. He was a charlatan who convinced a generation of economists that the pool of real savings for any given country could be made infinite if only the state fully embraced the printing press like a dictator embraces the gulag.
The “intelligent variety of capitalism” that Gray terms is just a clever way of saying central planning. To Keynes and his followers, capitalism is inherently ignorant because it is consumer based; which means the common man determines what is produced and how much of it. For someone who pictured himself as floating seamlessly above the fray of fools, the growth of the market economy must have worried someone as power-thirsty and narcissistic as Keynes.
Perhaps the best summary of Keynes comes from Rothbard who once remarked:
To Robbins (Lionel) he is the Godlike figure with a golden light…around a halo. I’ve got a slight different assessment. Sum up Keynes: arrogant; sadistic; power-besotted bully; deliberate and systemic liar; intellectually irresponsible; an opponent of principle; in favor of short term hedonism and nihilistic opponent of bourgeoisie morality…; hater of thrift and savings; somebody who wanted to liquidate the creditor class…exterminate the creditor class; an imperialist and anti-Semite; and a fascist.
Outside of that I guess he was a great guy!
Superabound posted:proof positive that society turning away from good Christian morals has led to its downfall
this, except the opposite -neetshe
babyfinland posted:nietzsche's "anti-christ" thing was actually a strong christian statement against enemies of the faith, a parody and invocation of the anti-christ in order to bring forth the second coming
just because he had professional respect for yeshua's/paul's accomplishments & was a little terrified of what would grow out of christianity's rotting corpse doesn't mean he liked it or lol believed in it
Edited by ilmdge ()
