Yearly Archives: 2013

Links 9/6/13

David Dayen: BofA/Merrill Lynch Analyst Says QE and Housing Policy Boosting Inequality

Anyone surprised by the housing recovery is simply blind to the context that the Federal Reserve has administered a bazooka full of aid and comfort over the past few years. They bought up enough mortgage bonds to force interest rates to near-record lows, boosting the fortunes of asset holders. And in so doing they made housing an attractive investment product, bringing lots of Wall Street cash into the REO-to-rental play, at least for a short while. That predictably increased demand and put housing prices on their current trajectory.

Wolf Richter – Bonds Bleed: Largest Bubble In History Unwinds, But The “Great Rotation” Into Stocks Is Deceptive Wall Street Hype

The bond-fund massacre has been spectacular. Prime example: antsy investors yanked $7.7 billion in August out of the largest bond fund in the world, Pimco’s Total Return Fund. In July, they’d yanked out $7.5 billion, in June a record $14.5 billion. From May 1 through August 31, the fund’s assets shriveled 14%, from $292 billion to $251 billion; $26 billion from outflows and $15 billion from the shrinking value of the bonds. The fund lost 5.5% during that period.

Thinking Like Coase, Not an Economist

I have often railed against the economic approach to social organisation problems which can be described as ‘assume first ask questions later’. There are too few good economists following more scientific methods of sound reasoning and the reliance on evidence in light of real world institutional structures.

The first approach is often called ‘thinking like an economist’.

David Dayen: Character Attack on Spitzer Veiling Wall Street-Led Establishment Assault on His Comptroller Candidacy

Bill DeBlasio’s ascension in the New York City mayoral primary is something liberals everywhere are supposed to care about (outside the CORRIDOR THAT MEANS EVERYTHING, here in Los Angeles, we just elected our own fairly progressive mayor, Eric Garcetti, two months ago, but I guess it’s only in New York where one example makes a trend). From my perspective, I’m more interested in the Democratic primary for Comptroller, which pits Manhattan Borough President Scott Stringer against comeback hopeful Eliot Spitzer. The polls have been wildly divergent: Quinnipiac has over the past week shown a virtual dead heat, while the Marist poll gives Spitzer a double-digit lead. Polling is notoriously difficult in citywide elections generally, and especially for downballot races, so it’s hard to get a full read on this. But Quinnipiac shows a racial divide, with African-American voters going 60% for Spitzer and white voters 60% for Stringer.

Links 9/5/13

David Dayen: Jack Lew Shows His True Colors By Forcing Deregulation of Derivatives on the CFTC

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen I don’t know of any clear-eyed analyst who held out much hope that the handover of the Treasury Department from Tim Geithner to Jack Lew would herald a new era of stringent financial regulatory reform. […]

As Austerity Lifts, So Does Europe

Another good week for Europe as the latest PMI data shows the tentative recovery is gaining pace.

Eurozone manufacturing recovery gathers pace in August

• Final Eurozone Manufacturing PMI at 26 – month high of 51.4 in August (July:50.3)
• Growth improves in Germany, the Netherlands, Italy, Austria and Ireland.
• Input prices broadly unchanged since July

Obama on the Verge of Being Handed a Major Defeat on Syria

The Obama Administration is presenting the upcoming Congressional votes on its ~~blank check~~ Authorization to Use Military Force in Syria as justified, irrelevant (since Kerry has asserted that the Administration doesn’t need Congress’ approval can attack even in the face of a no vote), but a done deal nevertheless. None of those claims stand up to scrutiny.

Lynn Parramore: Seven Reasons to Fight Obama on Picking Out-of-Touch Crony Capitalist Larry Summers as Fed Chair

The Fed chairman is the most powerful official Obama will pick— directly affecting each and every wallet in America. As much as anything, this appointment will shape our country’s future.

Obama appears to want Summers, and so do the most powerful people on Wall Street. But he is not the people’s choic

Dear Landlord: Please Heed These Words That I Speak

I play too hard when i ought to go to sleep
They pick on me because i really got the beat
Some people give me the creeps
every other week i need a new address
Landlord landlord landlord cleaning up the mess
Our whole f*cking life is a wreck
We’re desperate get used to it
–X, We’re Desperate

By Lambert Strether of Corrente

This weekend all over the country students were not only entering their decades-long and hopefully fruitful (for them) relationship with the FIRE sector, they were moving into their new apartments.

Links 9/4/13

David Dayen: Student Loan Servicers, Like Mortgage Servicers, Failing to Inform Borrowers of Cheaper Payment Modifications

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen We’re well beyond the Presidential “Message: I care about the middle class” tour, but among his priorities at one whistle-stop was a plan for reining in the cost of higher education. The idea for a […]

Bill Black: The New York Times is Wowed that Obama’s Six Rubinites Support Larry Summers

The Obama administration, for reasons that pass all understanding, has been running a campaign of leaks disparaging one of Obama’s few senior female appointees, Janet Yellen. Her high crimes include not being a protégée Bob Rubin and doing exceptionally well in economic forecasting. Rubin wants the job of Fed Chair to go to his top protégée, Larry Summers. Yellen, as Vice Chair of the Fed stands in the way of Rubin’s ambitions. (Rubin is too toxic to take the Chair directly.) The administration has been leaking primarily to the New York Times’ Binyamin Applebaum. His latest article contains this remarkable statement, without analysis…

Yanis Varoufakis: Was Chancellor Merkel right (about Greece)?

By Yanis Varoufakis, a professor of economics at the University of Athens. Cross posted from his blog

Is Chancellor Merkel right when she recently said: “Greece should not have been admitted into the euro area”?