Author Archives: Yves Smith

More Signs of Doubt in Europe About the Costs of Siding With Ukraine

This week, the US hopes to get the EU to agree to impose so-called tier three sanctions on Russia to punish them for their alleged role in the downing of MH17 and for supporting the rebels in Ukraine. That would include prohibiting investment in Russian equity and debt of Russian banks more than 90 days maturity by European citizens as well as barring EU banks from sourcing funding for them on a regulated market.

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Wishful Thinking About Natural Gas: Why Fossil Fuels Can’t Solve the Problems Created by Fossil Fuels

Albert Einstein is rumored to have said that one cannot solve a problem with the same thinking that led to it. Yet this is precisely what we are now trying to do with climate change policy.  The Obama administration, the Environmental Protection Agency, many environmental groups, and the oil and gas industry all tell us that the way to solve the problem created by fossil fuels is with more fossils fuels.  We can do this, they claim, by using more natural gas, which is touted as a “clean” fuel — even a “greenfuel.

Like most misleading arguments, this one starts from a kernel of truth.

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Cigna: Crapification or Insurance Fraud?

We’ve been slowly working toward a theory of crapification and if we manage to sort it out, we might even develop a school of craopnomics. But in reality, Corporate America presumably already has that well codified but has yet to release the playbook to the great unwashed masses.

As much as I am of two minds about sharing personal anecdotes with readers, my recent experiences with the health insurer Cigna amount to several case studies in crapification in one nasty package. Moreover, since the American health care policy is to force even more Americans into the health insurance regime and call it “health care,” I thought my tale might elicit similar accounts from readers, as well as input from people who’ve worked in the insurance industry as to how much of what I am experiencing is incompetence versus design.

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Banks Scapegoat Regulations for More Costly Loans Post Crisis

Banks and their allies have been using every opportunity possible to blame regulations for changes in their business models after the crisis, particular if they can make it sound like the broader public, as opposed to their bottom lines, is what is suffering. Normally this messaging effort stays at the background noise level, but sometimes the lobbyists succeed in getting their message treated as a story in its own right.

A recent example is a Financial Times story early this week…

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Peter Van Buren: Drone-Killing the Fifth Amendment

Yves here. This post on the Administration’s efforts to justify its official policy of murder by drone shows how due process is dead in America. That may seem a bit far afield of Naked Capitalism’s beat. But the systematic assault on the Constitution is another, even more troubling, manifestation of what we see operating in the financial sphere: that hard-won protections for ordinary citizens are being stripped away, so that those who have access to resources (whether via personal wealth or institutional authority) can operate unfettered, to increase their power and ability to plunder even more.

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Philip Pilkington: Krugman Redux – Financial Markets in Keynesian Macroeconomic Theory 101

Yesterday when I published my post on Krugman and the vulgar Keynesians not understanding the meaning to the term ‘liquidity trap’ I came to realise that many readers — both sympathetic and hostile — do not really understand the Keynesian theory of financial markets. I then realised that this was actually quite understandable given that it is not much discussed today (with some notable exceptions such as Jan Kregel and Minskyians like Randall Wray).

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Unintentional Tax Humor on the Inversion Scam at Forbes

While you’ve all been busy being distracted by the strife in Gaza and Ukraine, or perhaps more sensibly decided to tune out and enjoy the summer, various not so pretty developments have been moving forward with alacrity in the US. One is a spate of so-called “inversion” deals, in which corporations use acquisitions to move their headquarters overseas, which allows them to arrange their affairs so as to greatly lower their tax bills. The latest group of companies to try this ruse are in the health care industry, brandishing the excuse that if they fail to follow this dodgy practice, they won’t be competitive.

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