Category Archives: Guest Post

Whose Oil Will Quench China’s Thirst?

As the heir-in-waiting to the title of world’s largest economy, China finds itself in a strange position in terms of its oil consumption.

In September 2013, China became the biggest net importer of crude, beating out the U.S. for the first time. This came as no surprise, given how rapidly China’s thirst for oil has grown, although landing in top place happened a little ahead of U.S. Energy Information Agency (EIA) predictions that it would take place in 2014. However, where the U.S. has been shoring up its own internal production, China has lagged behind. Between 2011 and 2014, U.S. oil production rose by 31 percent, as opposed to China, which saw its own production increase by a little more than 5 percent over that time. This leaves China utterly dependent on oil imports, a vulnerable position to be in at a time when its economy is beginning to wobble.

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Financial Predators Move On From Foreclosure Rescue, Enter Student Debt, Military Lending Spaces

At one level, a crackdown on foreclosure rescue scams and not the overarching mortgage and foreclosure fraud is like letting the arsonist who set fire to the house go while busting the guy who took five bucks off the dresser before the house started to burn. Nevertheless, these scams do represent some of the worst elements of our society, featuring the kind of people who see suffering and vulnerability and think about dollar signs. One of my first entrees into this world of foreclosure nightmares was through a friend who had fallen behind on his payments, and then paid somebody up-front money to help him secure a loan modification. That person did nothing to help and then skipped town with the cash.

So it’s good to see CFPB finally take a crack at this, in conjunction with the Federal Trade Commission and 15 states.

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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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South Portland, Maine: The Mouse That Roared on Canadian Tar Sands

Yves here. The article below illustrates how local communities are throwing spanners in the works of various North American energy plays. For instance, New York State’s highest court (confusingly called the Court of Appeals) ruled that towns have the authority to ban fracking via local ordinance, a decision that sent shivers down the spine of natural gas developers.

Another development that is causing some consternation to energy industry incumbents is an ordinance passed by the city council of South Portland, Maine, which put in place new zoning rules that would prohibit the export of Canadian tar sands through the port.

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Philip Pilkington: Paul Krugman Does Not Understand the Liquidity Trap

I came across a very amusing piece from Krugman in 2010. The piece is entitled ‘Nobody Understands the Liquidity Trap‘. Actually, Krugman might have a point — if we include him in the ‘everybody’ that does not understand the liquidity trap and thus conclude that he, and all those that listen to him, do not understand the liquidity trap.

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Why Standard Macro Models, DSGEs, Crash During Crises

Many central banks rely on dynamic stochastic general equilibrium models – known as DSGEs to cognoscenti. This column – which is more technical than most Vox columns – argues that the models’ mathematical basis fails when crises shift the underlying distributions of shocks. Specifically, the linchpin ‘law of iterated expectations’ fails, so economic analyses involving conditional expectations and inter-temporal derivations also fail. Like a fire station that automatically burns down whenever a big fire starts, DSGEs become unreliable when they are most needed.

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The Argentina Debt Case

Almost everyone now knows that the world of international finance is not a particularly robust one, nor is it particularly just or fair. But it has just got even weirder and more fragile, if this can be imagined. A recent ruling of the U.S. Supreme Court, refusing to hear an appeal by the government of Argentine against a decision of a lower court on a case relating to its debt restructuring agreement with creditors over a decade ago, is not just a blow against the state and people of Argentina. It has the potential to undermine the entire system of cross-border debt that underlies global capitalism today.

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The Transatlantic Trade and Investment Partnership: Review of Economic Blogs

Yves here. This post from VoxEU gives a partial answer to a question many US readers have been asking: what are the prospects for the Transatlantic Trade and Investment Partnership? As we’ve written, the Transatlantic Trade and Investment Partnership’s evil twin, the TransPacific Partnership, looks to be in trouble. Both the Senate and the House are opposed, and Obama wants them to give him “fast track” approval to facilitate completing the accord. Our resident Japan commentator Clive says the Japanese press is treating the deal as dead, absent major changes in US posture that no one expects to happen. The Wikileaks publication of two draft chapters showed that all of the proposed parties to the agreement have significant objections to many of the provisions.

But much less is known about the state of play of the Transatlantic Trade and Investment Partnership.

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CBO – Still Pushing Deficit Scaremongering Propaganda

Yves here. We’ve written from time to time about the shameless partisan role that the Congressional Budget Office plays in stoking misguided and destructive concern about budget deficits. It’s important to recognize the CBO’s openly partisan stance on this issue, because it is supposed to make independent, apolitical budget forecasts and is widely and mistakenly seen as “objective”. In fact, the CBO’s regularly takes stances that put them in the same camp as billionaires like Pete Peterson and Stan Druckenmiller, who want to slash Social Security and other social safety nets.

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