Tuesday, September 30, 2014
Posted by Yves Smith at 6:55 am |
Iceland demonstrates that prosecuting banksters does not hurt, and likely aids in real economy recovery from a financial crisis. But since when has the US been run as if making the real economy work was of paramount concern?
You can’t talk about whether economics is a science without getting clear on what you mean by “science”.
Today’s Water Cooler: Secret Goldman tapes, Saudis and Syraqistan, new GDP figures (and we get?), and Manhattan gallery shows invisible art.
Yves here. As Don Quijones explains, “In many ways, Mexico is the poster child of neoliberalism.” So take this as a cautionary tale of what rule by our modern oligarchs will look like.
Posted by Yves Smith at 6:58 am |
This is an important and wide ranging conversation about the history of economic ideas and how it played out in political discourse, specifically, how free market fundamentalism, an idea that appeared to be dead in the 1940s, survived and became dominant.
Yves here. This post is more important than it might seem. I find it is taking more and more effort to navigate through the hall of mirrors of propagandizing, particularly in the geopolitical realm. Thus it is critical to read news on two levels: its content, and how it is presented, as in how it is framed, what experts are cited, what issues are buried or omitted. Living with all Pravda, all the time, is intellectually taxing, at least if you care to understand what is really going on.
Yves here. Martin Khor focuses on the alarm created by the ruling against Argentina that allowed a Paul Singer’s NML, a vulture fund with a small position in Argentina’s bonds, to vitiate a hard-fought bond restructuring. The particularly ugly part that don’t get the attention warranted is that it is widely believed that Singer took a much larger position in credit default swaps, meaning he was seeking to create and betting on an Argentine default. And another ugly wrinkle is the role of private law in these processes. ISDA, a private organization, determines what is an event of default for credit default swaps.
Singer was on the committee that voted whether Argentina was in default (recall it had made payment under the restructuring to the trustee, Bank of New York, but BONY was barred by the court from remitting payment to the bondholders). This gave him a direct say in an event in which he had a large economic interest. And that was no lucky accident.
Eric Holder bails while press maintains radio silence on his failure to prosecute criminal banksters, ObamaWar news, and Apple’s buggy software and bendy phone.
Topics: Water Cooler
Posted by Lambert Strether at 1:58 pm |
In a mere four months, the SEC has gone from calling out widespread abuses in the private equity industry to not just walking back its detailed criticisms, but actually enabling a coverup.
Posted by Yves Smith at 6:55 am |
A corrosive development is the ease with which lenders
steal extract income which is not properly theirs from borrowers through what is at best incompetence and in far too many cases is fraud. This pattern has repeats itself again and again: in mortgage servicing, with debt collection, and more and more with student loan servicing.
Yves here. It’s hardly uncommon for big international pow-wows like the G20 to produce grand-sounding statements that when read carefully call for unthreatening, which usually means inconsequential, next steps. But this G20 just past was revealing, in a bad way, about the state of international political economy.
If you had any doubt the US economy had been rearchitected to favor the haves versus the have-lesses, this chart by Pavlina Tcherneva should settle it. Justin Wolfers, hardly a raging liberal, just tweeted: