Category Archives: Guest Post

Matt Stoller: Why We Need to Break Up Amazon – and How to Do It

Yves here. The main way that those of the left-leaning persuasion see Amazon as a bad guy is for its treatment of warehouse workers, who work in physically-taxing conditions and are paid what is barely a living wage for a single person.

As Matt Stoller describes in this piece, Amazon’s ambitions are monopolistic, and they’ve already gone a long way towards achieving that ambition in a large number of markets. They regularly engage in predatory pricing to crush competitors and gain market share. Their dominant position then allows them to chose how to extract more profit, which is usually a combination of squeezing suppliers and raising prices.

Antitrust has become close to a dead letter in the US. Amazon makes for a worthy object for reviving it.

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Peter Van Buren: Seven Worst-Case Scenarios in the Battle with the Islamic State

Yves here. This post describes, in a general way, some outcomes of our current Middle East adventurism, with the Islamic State as its current nemesis. However, at least one of Van Buren’s “worst-case outcomes” strikes me as not bad, which would be a thawing of hostilities with Iran. But I don’t see how Israel tolerates that.

But the looming issue behind all of these scenarios is that the game is being played to justify continued large budget allocations to the military-surveillance complex. The cost of defending the American is more guns in the guns versus butter tradeoff.

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DealBook Says Citi “Cannot Afford” to Run an Honest Bank in Mexico

Yves here. In our ongoing efforts to thrash Andrew Ross Sorkin when he shills shamelessly for banks (admittedly a Sisyphean task), we are turning the mike over to Bill Black, who also sees Sorkin as a pet project. We trust you’ll enjoy his shredding of another defense of financial firm misconduct in the New York Times’ DealBook.

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Wolf Richter: Toxic Mix for Fracking – Oil Price Collapse & Junk Bond Insanity

Yves here. As oil prices have collapsed, the fundamentals of fracking, which was overhyped given the short productive life of individual wells, now looks even more dubious at current energy price levels. And given how risky the sector has become, cheap debt, even in this time of ZIRP, is no longer freely available either.

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Bill Black: EU Austerity Witch Doctors Attack Each Other

As things go from bad to worse in the eurozone the putative adults have begun to fight openly in front of the kids.  The putative adults, of course, have refused to act like adults for six years and instead have lived in a fantasy world in which austerity – bleeding the patient – is the optimal response to a recession.  As many of us have been warning for six years, this is a great way to create gratuitous recessions and even the Great Depression levels of unemployment in three nations of the periphery with 100 million citizens.

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Dropping Oil Prices Send Shockwaves Through Energy Sector

Yves here. Commodity prices have been screaming deflation for some time, but oil prices remained stubbornly resistant…until now. In a period of mere weeks, oil prices have fallen considerably and the slide continues. Today, for instance, Brent fell by $1 this morning despite stronger-than-expected trade data out of China due to reports that OPEC won’t cut production till oil prices hit $80 a barrel. Note that that news hit after this post was published, and represents a much lower price level than analysts assumed. So the outlook is even gloomier than this downbeat piece indicates.

In addition, as this post discusses, the plunge in oil prices has an impact on other energy prices. Or perhaps to put it another way, the way deteriorating economic fundamentals are whacking oil prices clearly has ramifications for other fuel products.

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