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.
Thursday, July 31, 2014
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).
Banana Republic thinks there’s enough exuberance left out there to sell this “Startup Guy” look to millions of non-startup guys. That’s rather a lot of exuberance.
A shot across the Fed’s bow from Simon Johnson, former IMF chief economist and bank critic, on the surface looks to be a good bit of news. Johnson, in a recent Project Syndicate article, warns that the notoriously cloistered central bank is overly confident about its political position.
Michael Hudson and James Henry discuss the legal and practical issues surrounding the battle between vulture fund NML and Argentina.
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.
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.
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.
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.
Oil is at $100 owing to its peak production, not Ukraine, and ISIS presents the real risk.
U.S. Officials: MH17 Missile May Have Been Launched By a “Defector from The Ukrainian Military Who Was Trained To Use Similar Missile Systems”
Yves here. I wanted to add this short post as an indicator of the lack of definitive knowledge (at least among those who are being candid with the media) as to critical details as to how the MH17 was destroyed, in particular ones that would give a definitive reading as to what group pulled the […]
Let us know if you are coming to our meetup in San Francisco so we can make a reservation!
Posted by Yves Smith at 2:20 am |