Thursday, July 26, 2012

Thursday, July 26, 2012 at 05:53 AM
beezer said in reply to Darryl FKA Ron...
I think Alpert correctly sees our overall predicament. And I agree direct hiring by government on a massive scale is a first step.
Creditors must take their hit too. But that 'recalibration' will be less if the hiring comes first.
Alpert lims over the issues of what 'recalibration' means for wages and income growth, so I suspect he means nominal wages will decline, but not in real terms.
Here I think he's incorrect. We possess more influence on our wages and income than Alpert gives us credit for.
But overall, he's got it right.
Darryl FKA Ron said in reply to beezer...
Alpert wrote:
"That means both allowing our price and wage structures to align themselves with global supply and demand and, more importantly, feeding and nurturing investment in those areas of the private sector that can employ large numbers of people at market clearing wage rates."
Beezer wrote:
"Alpert lims over the issues of what 'recalibration' means for wages and income growth, so I suspect he means nominal wages will decline, but not in real terms."
My take on Alpert is slightly opposite yours. To me Alpert implies nominal wage growth perhaps, but nominal price increases and real debt decreases through inflation (as well as write downs) but offset by real investment to boost RGDP and real wages (but at a lesser pace to nominal wages). But I could be wrong.
Darryl FKA Ron said in reply to Darryl FKA Ron...
Plus this is complicated by existing price distortions like cheap oil with strong dollars. Relative prices will be going in different directions where relative price levels are presently distorted by currency manipulations, the dollar reserve Triffen Dilemna being a significant source.
paine said in reply to beezer...
u guys are flying at very high altitudes here
and seems to me
without your oxygen masks on
paine said in reply to paine...
alperts airplane view :
"(i) exogenous oversupply relative to global demand "
ya ...

(ii) classic Fisher-described debt deflation,

no the real value of existing debt is not rising because the demand dirth has not triggered wage and product price reductions only stagnation
is this important
yes we get a spontaneous stag here not
a spontaneous constractionary ala 30-33

(iii) excess technological productivity relative to the availability of global labor
true this slowly leaks labor required at a given real output level
but again its a leak not a gusher
(iv) inter-generational demographic challenges
pure moon shine talk

---------------------------------
the point
stick with point one
and argue out fiscal policy versus monetary policy
its well worth while showing the stymie on monetary policy
refered to as the liquidity trap
coming up with new excape hacthes that require absurdly "unprecendented " buy up measures by the fed
is pure flash gordon poicy games

the example delong mentioned in hisdepression post
is a fact based alternative
increasing uncle indsuced demand by running huge deficits has worked in the past
and can work again
we don't need to build a war machine
in fact all we need to to now is get back to a hot job market by uncle subsidizing immediate household spending on consumer products
paine said in reply to paine...
alpert adds nothing
he by implication suggestts radically reduced
taxes and increases in transfer payments
to the huge credit constrained class here
would be ineffective
as is further doses no matter howq massive
of quant ease
there is no parallel here what so ever
hand money to credit constrained households and they wil spend it
tie the payments to earnings past and watch the super majority buy into that policy
pump in enough ignore the import bulge and the job markets will heat up
and if accomodated by the fe we could combine a dollar fall with a wage boom
just what we need and not in aggegate
a global demand negative either
since we will run higher trade deficits
would that germany and japan
would move likewise eh ?
Mark A. Sadowski said in reply to Goldilocksisableachblonde...
1) The concern over disruption of long term Treasury markets is legitimate but overblown. There are over $1.15 trillion in T-Bonds (20 year or longer maturity) outstanding of which thanks to Operation Twist the Fed now owns over $340 billion. So the Fed is now a big player in these markets, but wasn't that the whole point?
2) Sumner's not talking about long term Treasuries. He's talking about the complete range of assets which the Fed is permitted to legally buy, Treasuries, Agencies, foreign securities, gold etc. of which there is over $29 trillion outstanding (not counting what they already hold). This is a completely different issue, totally unrelated to Williamson's comment.
Fred C. Dobbs said...
Romney Falsely Claims Colorado Gunman Obtained Weapons Illegally http://thkpr.gs/Q5JaYR via @thinkprogress
(Perhaps Romney is suggesting that prospective gun-
purchasers would need to take some kind of 'sanity
test' *before* their purchases are handed-over. That
sounds like a fine idea, but hardly one the NRA would
accept.)
...According to a transcript of an interview (*) that will air Wednesday night on NBC Nightly News, the presidential candidate said “it was illegal for him to have many of those [weapons] already,” and suggested that stronger gun laws would not have prevented the tragedy. Instead, Romney claimed that the way to deal with such senseless violence is by “changing the heart of the American people”:

ROMNEY: Well this person shouldn’t have had any kind of weapons and bombs and other devices and it was illegal for him to have many of those things already. But he had them. And so we can sometimes hope that just changing the law will make all bad things go away. It won’t. Changing the heart of the American people may well be what’s essential, to improve the lots of the American people.

In fact, 24-year-old Holmes legally purchased every firearm, bullet, and piece of tactical gear that he used for the attack, according to local law enforcement. He bought most of it over the Internet. Mentally ill people are barred from purchasing firearms, but Holmes had no previous record of illness, and would not have been flagged in a background check.
Unfortunately, rather than addressing the inadequacies of the nation’s existing gun laws, Romney instead focused on “changing the heart of the American people” and successfully dodged the larger conversation about gun control. ...
*- Romney talks with NBC’s Brian Williams in exclusive interview http://nbcnews.to/QJbKUz via @NBCFirstRead
Fred C. Dobbs said...
My Big Fat Belizean, Singaporean Bank Account http://nyti.ms/MF3hxq
NYT - July 24, 2012 - ADAM DAVIDSON - Sunday Magazine

Earlier this month, I decided to see how hard it would be to set up my own offshore bank account. I figured it would be pretty difficult, because I’m not rich and don’t have a team of tax lawyers to oversee my money and because the E.U. and U.S. governments have been cracking down on tax havens by imposing stricter tax-sharing requirements. So I proceeded with some caution.
First, I Googled “company registration tax haven” and randomly picked three firms that set up accounts in offshore jurisdictions. ...
I ended up working with A&P Intertrust, a Canadian company that I chose largely because I liked its Web site the best. (The other two companies’ sites appeared stuck in a late-’90s style with lots of flashing boxes.) A&P works with the governments of Panama, the British Virgin Islands and Belize. (Other companies that I contacted prefer the Seychelles, Cyprus or the Cayman Islands, where Mitt Romney has been reported to have money.) I decided to start my shell company in Belize because it would be exempt from all Belizean taxes and, as A&P’s site explained, “information about beneficial owners, shareholders, directors and officers is not filed with the Belize government and not available to the public.” And I’ve been to Belize and like the place.
Setting up the company was a lot cheaper than I expected. A&P charged $900 for a basic Belizean incorporation and another $85 for a corporate seal to emboss legal documents. For $650 more, A&P offered to open a bank account to stash my fledgling operation’s money in Singapore — a country, the Web site also noted, that “cannot gather information on foreigners’ bank accounts, bank-deposit interest and investment gains under domestic tax law.” ...
Amazingly neither A&P nor I broke any law in Canada, Belize, Singapore or the United States. ... Just before they processed the paperwork, I explained that I was a journalist working on an article about offshore tax havens, and I haven’t heard from them since. (A representative from A&P declined to comment for this article, but he did note in an e-mail that the company was still “happy to serve [me] as a client.”) ...
bakho said...
Thumbs up to the Dan Alpert link.
He makes a very clear case that ought to become conventional wisdom.
paine said...
yet another PK cocktail one part smart aleck snort
to three parts goo goo wail

the zone will be salvaged
why ?
the horror ring fence called the common cxurrency
run by a popularly unreachable central bank
that now crowds the piigs and the teuttons into one big mayhem arena
ie
locking them in a never ending
gladiatorial grudge match
---this round its a mighty mars against a naked neptune---

ya get it ...right ?
t'is simply deliciously profit making for MNCs
and better yet
mostly of the unearned artificial "wind fall"-ish
arbitrage "prefered" variety
paine said in reply to paine...
money where mouth is ?
if i had the funds to throw at opportunity
like a had in say 1985
well i'd be poised to move into piig sovereigns..
but noot quite yet
the "state" of the systtem is still at the high noise to info stage
timing is everything and that final up surge is still an uncertain distance away
---for the record
i was on occasion wrong between 1979 and 1989
and if so here too
i can rejoyce in my humility
much good will come
of the now purely spiritual thwacking
i'll take
nothing allows a learning curve to go steeply up
on ya
like a total miss call !----

btw my last got it right
was both sides of the fall 87 down
and 2 quarters post down.... up
the giant equity hiccup
short term good money
to be had on both slopes eh ?
but alas one can grow sassy and knotheaded
after a good call
soon enough i was rush(ed/ing)
to one of the many exits
surrounding "the great game "
paine said in reply to paine...
"...problem would be solved if the ESM became a bank, giving it access to unlimited ECB liquidity"

the economist narrates the future ?
Darryl FKA Ron said in reply to paine...
t'is simply deliciously profit making for MNCs
and better yet
mostly of the unearned artificial "wind fall"-ish
arbitrage "prefered" variety
[It's an addiction much like sugar candy, gambling, and sex all at the same time. How can anything that feels so good be so bad??? :<) ]
Darryl FKA Ron said in reply to Darryl FKA Ron...
Judging from my limited experience with addicts that I have known, their blind addiction first destroys everything good in their lives (e.g., families and careers - lose their homes as well) and then it ultimately destroys themselves as well in the end. The elite just have so much more around themselves to destroy that it takes much longer to come home to roost, sometimes not until their progeny and of course their nation, with which they are only loosely coupled in their own minds until the end.
paine said in reply to Darryl FKA Ron...
you obviously believe in
another stage of personal life ahead
for all todays leading
profiteering addicted
earthly spirits
strikes me most of our
current corporate types are still
livin large
thru all this
and may continue to live large
right thru their coming death gate
Darryl FKA Ron said in reply to paine...
"strikes me most of our
current corporate types are still
livin large
thru all this
and may continue to live large
right thru their coming death gate"
Mostly I agree. I operate in longer time horizons than most. Still, I believe that the next two decades will be challenging for a lot of positions. My grandchildren are just starting to graduate from high school. It is the golden years of their children that I think about mostly in this context. If we are on a geometric progression from decade to decade of only 10% dumber in each succeeding decade then compound interest will catch up with the elite class eventually. Whether "compound interest" is just an economic evolution or a euphemism for populist revolt remains to be seen. In either case it is just the ol' "that which is unsustainable will eventually end" meme.
Darryl FKA Ron said in reply to paine...
Plus, I would not rule out a little "Caligula effect" on some. It has been happening to some well invested but not rich folks already. Self destruction is always the quickest route.
Darryl FKA Ron said in reply to Darryl FKA Ron...
To economists behavioural science at the social level is just magical thinking. Yet we must acknowledge that rational expectations must allow for broadly irrational actors at times. Then there was the rise of the Third Reich as a chilling example of behavioural science at a social level.
Darryl FKA Ron said...
"Oil Price Spike Exacerbated by Wall Street Speculation?"
The important takeaway here is that if you cannot model it then it really did not happen. This is comforting to know.
:<)
paine said in reply to Darryl FKA Ron...
excllent

if our model can't hear it
crack and crash
did the tree in the forest
really fall over ?
paine said...
pk:

"I expected more clear evidence of deflation by now"
i assume this means actual wage deflation
not simply demand dirth driven
commodity price plunging
in the end
we must come to our star center stage
micro wage generating models
and ask
why hath thou foresaken us ?
the disinflation floor
is more then we dreamed of
in our leading journal placed
stylistically "real-oid" micronize/macro gadgets
Fred C. Dobbs said...
(Romney re-kindling that special relationships
with the Anglo-Saxons, finally on a subject he
knows something about: Olympic Preparation.)
Romney's Remarks on Olympics Cause Stir in London http://nyti.ms/SVKdO4
NYT - LONDON — Mitt Romney’s carefully choreographed trip to London caused a diplomatic stir when he called the British Olympic preparations “disconcerting” and questioned whether Londoners would turn out to support the Games.
“The stories about the private security firm not having enough people, the supposed strike of the immigration and customs officials, that obviously is not something which is encouraging,” Mr. Romney said in an interview with NBC on Tuesday.
That prompted a tart rejoinder from the British prime minister, David Cameron. “We are holding an Olympic Games in one of the busiest, most active, bustling cities anywhere in the world. Of course it’s easier if you hold an Olympic Games in the middle of nowhere,” an allusion to Salt Lake City, which hosted Games that Mr. Romney oversaw.
...
Fred C. Dobbs said in reply to Fred C. Dobbs...
Mitt Romney and America’s "Anglo-Saxon Heritage" http://blog.pfaw.org/content/mitt-romney-and-america-s-anglo-saxon-heritage
Fred C. Dobbs said in reply to Fred C. Dobbs...
(BTW, Mitt did NOT make the 'Anglo-Saxon'
remarks. That was some unnamed source in
the campaign, now in deep hiding. Mitt
was to keep quiet & smile today, but he
could not quite bring himself to do that.)
anne said...
http://www.salon.com/2012/07/26/protectors_of_wall_street/
July 26, 2012
Protectors of Wall Street
A vital new book from the TARP IG, and yesterday's vote on a Fed audit, reveal some disturbing truths
By Glenn Greenwald
If you believe the Federal Reserve has done a fine job of managing monetary policy and trust it to continue to exert vast power with no accountability or transparency, then you are probably content with the status quo. But yesterday, “a powerful left-right coalition” in the House of Representatives — defying the Fed as well as a likely White House veto — voted overwhelmingly to enact Rep. Ron Paul’s bill to subject the Fed’s monetary policy to audits by the Government Accountability Office, a nonpartisan and independent congressional agency. As Dennis Kucinich, one of 89 Democrats to vote for the bill, put it: “It’s time that we stood up to the Federal Reserve that right now acts like some kind of high, exalted priesthood, unaccountable to democracy.”
Despite the large bipartisan House majority in favor of the bill, it is almost certain, as Reuters put it, “to die in the Democrat-controlled Senate.” That’s because “Majority Leader Harry Reid, Nevada Democrat, at one time expressed support for an audit — though he reportedly has changed his mind.” Indeed, despite substantial Democratic support for the bill (including some from the progressive wing, such as Kucinich, Jerry Nadler and Raul Grijalva), “every top Democratic leader [in the House] voted against the bill, including Minority Leader Nancy Pelosi of California and Whip Steny H. Hoyer of Maryland.” As former Alan Grayson aide Matt Stoller documented yesterday, Democratic leaders did not merely oppose the bill but actively whipped against it, meaning they sought to pressure caucus members to stay in line and oppose it; but as he observes: “The Democratic leaders, despite whipping, barely got a majority of the caucus to vote no. This is a massive failure on their part, and shows how weak they are.”
It was this same left-right coalition, led by Paul and joined by liberal Democrats such as Alan Grayson, that succeeded in enacting an Audit the Fed bill back in 2010. Even though that 2010 bill was substantially weakened by the same forces that oppose the bill now — the Fed, the White House, and party leadership — that audit, once completed, “revealed 16 trillion dollars in secret bank bailouts and has raised more questions about the quasi-private agency’s opaque operations” and independently showed that the Fed ignored rules to aid the largest banks. Sen. Bernie Sanders, whose watered-down Audit the Fed amendment is what passed in the Senate in 2010, said this about the audit revelations:
"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. . . . 'As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,' said Sanders. 'This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.' "
The argument has always been that the Fed must be able to act with independence and secrecy and that transparency would undermine its credibility and lead to political interference in monetary policy; especially now, the ostensible concern is that Republicans will impede necessary measures. But as Stoller points out, none of the parade of horribles about which the Fed warned resulted from the 2010 audit, and more to the point, the Fed — prime enablers of banks, crony capitalism and oligarchy — has proven that it deserves neither the trust nor the credibility which it had previously commanded. It’s remarkable to watch the Democratic Party become its most devoted defenders. As Stoller said about yesterday’s vote: “It’s so tiresome to see the Democratic leadership take the side of Wall Street, over and over and over.”
Along those lines, Neil Barofsky, the Inspector General of the TARP bailout program from 2008 until 2011, has a must-read new book entitled Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. When he was serving as IG, I praised Barofsky’s independence and adversarial watchdog mentality several times when he was warning of the Treasury Department and Tim Geithner’s overarching devotion to the interests of Wall Street at the expense of everyone else. But this new book lays out the case as clearly and powerfully as it can be made that the Obama administration and Geithner, as The New York Times‘ Gretchen Morgenson put it, “eagerly served Wall Street interests at the public’s expense, and regulators were captured by the very industry they were supposed to be regulating.” She adds: *
" 'The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true,' Mr. Barofsky said in an interview last week. 'It really happened. These suspicions are valid' . . . .
" Mr. Barofsky joins the ranks of those who believe that another crisis is likely because of the failed response to this one. 'Incentives are baked into the system to take advantage of it for short-term profit,” he said. 'The incentives are to cheat, and cheating is profitable because there are no consequences.' "
* http://www.nytimes.com/2012/07/22/business/neil-barofskys-journey-into-a-bailout-buzz-saw-fair-game.html
anne said in reply to anne...
http://www.salon.com/2012/07/26/protectors_of_wall_street/
July 26, 2012
Protectors of Wall Street
A vital new book from the TARP IG, and yesterday's vote on a Fed audit, reveal some disturbing truths
By Glenn Greenwald
Predictably, Barofsky, a life-long Democrat and 2008 Obama supporter, has now become a Prime Enemy of Democratic partisans and banker-loyal, establishment-protecting, status-quo-perpetuating apparatchiks (as yesterday’s vote demonstrates, there is substantial overlap between those two categories). When Barofsky left his job as IG in 2011, a cowardly Obama official — naturally allowed by a Washington Post reporter to hide behind a shield of anonymity — maligned him as being desperate for media attention and “consistently wrong about a lot of big things” (without specifying any of those things)....
In sum, Barofsky is as well-positioned as it gets to describe the priorities and loyalties of the economic policymakers inside the administration, and is one of the very few Washington officials with the independence and courage to do so. Unsurprisingly, his book presents the definitive case for how the Obama administration devoted itself to the interests of the very plutocrats who precipitated the financial crisis in the first place....
im1dc said...
Jobs Numbers
http://www.thedailybeast.com/cheats/2012/07/26/sharp-drop-in-u-s-jobless-claims.html
"Sharp Drop in U.S. Jobless Claims"
"New claims for jobless benefits neared a four-year low last week, dropping by 35,000 claims—sharper than economists predicted—according to the U.S. Department of Labor. New orders for durable goods manufactured in the United States, however, also dropped in June. Automakers are shutting down fewer temporary plants than in the past, making labor department statistics volatile, as many auto companies have layoffs around this time of year. Last week, Federal Reserve Chairman Ben Bernanke said he’d be willing to take further action to improve the economy if employment levels didn’t increase."
Read it at Reuters: http://www.cnbc.com/id/48334146
"July 26, 2012 9:13 AM"
im1dc said...
https://twitter.com/breakingnews
"Breaking News ‏@BreakingNews"
"Dow Jones average jumps 240 points after European Central Bank vows to keep the euro intact - @AP"
from this probably
"Breaking News ‏@BreakingNews
US initial weekly unemployment aid applications fall by 35,000 to 353,000, reversing previous week's gain - @AP "
im1dc said...
The Bush/Cheney IRAQ legacy: SNAFU
https://twitter.com/breakingnews
"Breaking News ‏@BreakingNews"
"12 killed, helicopter downed in clashes between security forces and al-Qaida in Iraq, official says - @AP"
anne said in reply to im1dc...
"The Obama IRAQ-SYRIA legacy: SNAFU"
im1dc said in reply to anne...
anne, is that a question or a statement?
im1dc said...
Feel Good Items of the Day:
https://twitter.com/breakingnews
"Breaking News ‏@BreakingNews"
"3 hospitals say they will limit or wipe out medical bills for Colorado theater shooting victims - @AP http://apne.ws/LP6Izn"
and,
"Breaking News ‏@BreakingNews"
"Residents are allowed back into apartment building where theater shooting suspect lived - @Meagan9News"
im1dc said in reply to im1dc...
The Ten Most Dangerous Words in the English Language: 'I'm from the Government and I'm here to help you.'
If you have one on your desk you better put it out of reach and sight of children -- NOW! I've read that at least one child swallowed these magnetic little balls and had to have surgery to have them removed.
Also, if you have one it is probably going to be a collectors item in 50 or 100 years or so, will it to someone.
https://twitter.com/breakingnews
"Breaking News ‏@BreakingNews"
"Feds file suit against magnetic desk toy Buckyballs; retailers ban product - @usatoday http://usat.ly/LOqtac"
paine said...
"Economic arguments that justify no government intervention are often easy to construct and understand. Justifying intervention is hard. Try to actually define what an externality is, or to construct a Keynesian model with all the proper working parts. Those things are difficult. "
williamson is getting to be a bolder version of nicky rowe
he's now playing with his models like they hang betweeen his legs:

"what's the big deal? ..... so There are no litmus tests that allow us to throw out bad theories so we can be done with them.
that makes economics fun.....

We have to be creative about using the available empirical evidence to reinforce our arguments. ...

We get to have interesting fights in public. Who could ask for more?"
perhaps we might expect policy recommendations eh ?
but i suspect most of us
prefer to work with policy
"prefereeds "
not simply based on a jocker like
"creative " use of the facts .....
why ?
well because we prefer to make our class bias explicit
and our class based missions as well
not hide behind some cherry picked "data" and a gadget that turns this into
DO NOTHING !!!
-----------------------
both these hemi-clever guys are
addicted to their private romper room games
i say fine more power to em
i agree with willy
its fun to play at stuff
however
to the extent an aggregating blog like this one
is about policy paths ahead

guys like
forever fudge packed rowe
and non 'toi-dee' trained
naughty boy williamson
oughta get assigned here
to shadowy performances
in one of the more
' off to the side' rings
that is
if not to
dumped into
one of those painted cage
at the thoma side show
im1dc said...
We need jrossi to weigh in on the Ambien issue.
Ambien is for very short term use, not long term use. It messes up your brain, loads of side effects.
https://twitter.com/breakingnews
"Breaking News ‏@BreakingNews"
"Report: Kerry Kennedy tests positive for Ambien on day of crash, sources tell @newsday http://bit.ly/PITr0k"
paine said...
why oh why can't brad delong be like dean the dream baker ?
he's certainly confident enough
when hitting out at
an over certified target like mugs mulligan ...
why not try hitting
bondage bobby rubin next time
say after one of his ghost written
magisterial fatuity jaunts

tommy gun one of them for a change
certainly the great one's
occasional sub-delphic
sunny but sober side of wall street op eds deserve a trashing no ... MR De-L ?

well because brad serves a different master
not an economic class like dean
but a climbing ever cherished "one off " creature
called by his parents
"our boy bradford "