Yearly Archives: 2013

So if you are the big tree
We are the small axe — Bob Marley and the Wailers, Small Axe

“The market state,” which Phillip Bobbitt introduced in The Shield of Achilles: War, Peace, and the Course of History (2002) is a supremely evocative phrase more often cited than defined or critiqued. But “market state” is so suggestive, so evocative of “goodness of fit” for present circumstances, that I can’t help but think “That’s the market state in action!” when curating material on such seemingly disparate subjects as charter schools, nudge theory, ObamaCare, the end of the rule of law (at least as we have understood it), and blood donation. So I’m going to try to think through the implications of Bobbitt’s work, 11 years on, in a series of posts of which this is the first.

By Lucrezia Reichlin, Professor of Economics at London Business School; co-founder, Now-Casting Economics and CEPR Research Director, Adair Turner, Member of the UK Financial Policy Committee; Senior Research Fellow, Institute for New Economic Thinking, and Michael Woodford, John Bates Clark Professor of Political Economy, Columbia University and CEPR Research Fellow. Originally published at VoxEU.

With persistently weak economic conditions becoming the norm in Europe, economists are considering increasingly unconventional policy options. One tool that has yet to be taken out of storage is ‘helicopter money’, i.e. the overt monetary financing of government deficits. This column recounts a policy debate on helicopter money that was held at LBS in April 2013 among three of the world’s leading monetary economists.

Jessica Desvarieux Jessica Desvarieux, Capitol Hill correspondent for the Real News Network, reports on the hunger strike at Guantanamo.

Since Obama plans to give a speech on Guantanamo (and drones) this coming Thursday, this video provides useful background.

By Jayati Ghosh, Professor of economics at Jawaharlal Nehru University, New Delhi, and the executive secretary of International Development Economics Associates. Cross-posted from Triple Crisis.

Since her death, many eulogies of Thatcher have spoken of her as a revolutionary. Thatcherism (along with the associated Reaganomics) is seen as a radical transformative agenda that changed the face of economy and society. But seen from the developing world decades later, much of this agenda appears familiar, in the form of structural adjustment policies that have been forced upon different countries at different times by international institutions.

Paul Jay of the Real News Network interviews Heiner Flassbeck, who served as director of the Division on Globalization and Development Strategies of the United Nations Conference on Trade and Development, known as UNCTAD. He was a vice minister at the Federal Ministry of Finance in Bonn in 1998 and ’99. He’s now a professor of economics at Hamburg University.

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser.

What has become of our markets? Nanex, the market analysis firm, has animated a half second of trading activity in Johnson & Johnson stock. The animation is both intoxicating and mindblowing, not only because of the sheer quantity of trades, each of which is made by computer algorithms (i.e. without human intervention) in such a miniscule timespan, but also because of the tremendous scope that high-frequency trading creates for what Nanex calls “abusive behaviour” — including arbitrage and market manipulation — and systemic risk.

Bill Moyers is joined by the heads of two independent watchdog groups keeping an eye on government as well as on powerful interests seeking to influence it. Sheila Krumholz, executive director of the Center for Responsive Politics and OpenSecrets.org, and Danielle Brian, who runs the Project on Government Oversight, talk to Bill about the importance of transparency to our democracy, and their efforts to scrutinize who’s giving money, who’s receiving it, and most importantly, what’s expected in return.

Cross-posted from Testosterone Pit. Contributed by Chriss Street: Specialist in corporate reorganizations and turnarounds, former Chairman of two NYSE listed companies. His latest book, The Third Way, describes how to achieve management excellence and financial reward by moving organizations from Conflict and Confrontation to Leadership and Cooperation. He lives in Newport Beach, CA. Lambert here: […]

By Sell on News, a macro equities analyst. Originally posted at MacroBusiness.

One of the puzzles of the global financial crisis has been that there has been no push for debt to equity swaps. In previous crises, most notably the Latin American debt crisis of the 1980s, arguably the beginning of the modern era of hyper usury and financial debauch from globalising Western banks, the situation was solved by at least the appearance of debt for equity swaps. The obvious difference being that with equity the risk lies with the creator of the funds and with debt the risk lies with the recipient of the funds. When there is a risk to the whole system, this is a way to reduce the overall peril.

I wonder as we look to Cypriot savers taking a “haircut”, if we are seeing the shape of what will happen in the next crisis. The essence of a debt for equity swap is that the obligation that goes with debt is taken away. Calling the confiscation of bank deposits equity instead of theft would be a way to prettify the actions of the hyper-usurers. Michel Chossudovsky thinks that Cypress is a dress rehearsal  for things to come. A “savings heist” in European and American banks deemed too big to fail.