By Lambert Strether of Corrente.
TPP/TTiP/TISA
List of traitors in House and Senate, with phone numbers. Hat tip, reader Vatch. Be sure to visit them when they return to the district. If a traitor is mentioned in Water Cooler, their name is in bold.
“Why Everybody Hates TPP” [CNNMoney]. [Oddly, or not, I had the link to the boa constrictor story here. Fixed!]
New Zealand: Oppostion demands that “That Corporations cannot successfully sue the Government for regulating in the public interest” [TVNZ]. In other words, that TPP not be the TPP.
Canada: “With a national election a few months away, the prospect of overhauling some of Canada’s biggest business sectors has politicians from all parties waffling on the agreement” [The Tyee].
Australia: “‘We’re particularly concerned when the Productivity Commission — and they’re not known for being anti-trade — comes out and says ISDS is a risk too far, that the benefits don’t outweigh the costs,’ [Matt Levey, spokesman for consumer group Choice] said” [ABC].
“The European Union will soon give the United States a formal proposal for revamping an investment dispute settlement mechanism that has raised concerns in Europe over the proposed Transatlantic Trade and Investment Partnership pact” [Politico].
2016
Readers, I am recategorizing this section. I had been filing items in candidate- and party-focused buckets, but I think that’s encouraging readers to discuss their votes or, worse, proselytize for candidates or even parties. We have Kos, Reddit, and any number of conservative sites for that. I hope this recategorization encourages discussion of policy and structural issues, though I have to confess I love the human interest of the campaign trail, which is in there too. I’m retaining the Clown Car because the stupid! It b-u-r-r-n-n-n-n-s!!!!!
Policy
“As you’d expect from his “A+” NRA rating, Gov. Walker has no interest in strengthening background checks, but a majority of our constituents do. In 2013, a Marquette University Law School poll revealed that 81 percent of respondents statewide supported universal background checks” [Salon]. Walker and Sanders should talk….
Money
Trump: “The RNC has not been supportive. They were always supportive when I was a contributor. I was their fair-haired boy” [The Hill]. “Fair-haired” doesn’t begin to describe it!
“The leading Democratic candidate and at least three major Republican candidates are all relying on members of the same lobbying firm to help them raise presidential campaign cash: Akin Gump Strauss Hauer & Feld” [The Intercept]. Bush, Rubio, Clinton, Kasich. Corruption on the Orient Express.*
A sample of the sort of speech Clinton was so well paid to give [Wall Street Journal].
–“How would camper Hillary Clinton like to spend her day at camp?” –“I love the outdoors. I think we all do.” http://t.co/W1phBHbx3J
— Matthew Rose (@MtthwRose) July 23, 2015
She didn’t answer the question, although, to be fair, no transcripts were permitted, so the answer may be incomplete. (Clinton added: “Adults need camp too.” Susan Sontag would be so pleased.)
Campaigning
Inside Hillary’s campaign
bunkerheadquarters (photos) [Politico]. It’s Brooklyn. Where’s the artisanal mayonnaise? And while we’re at it, where’s the sound-proofed script-writing room? How about the vaults where the dry powder is stored?
Voters
Trump is so popular because Americans are angry [Wonkwire].
Clown Car
Trump threatens third-party run [The Hill]. Awesome. Son of Ross Perot!
NOTE * They’re all in it together. Hillary Clinton (“Mrs. Hubbard”) is, of course, played by Lauren Bacall. Not.
Stats Watch
Leading Indicators, June 2015: “Housing permits for a second straight month fed an outsized gain” at the high end of the consensus range [Bloomberg]. ” Interest rates are also a positive, at least until the Fed raises its policy rate which is expected sometime later this year.”
Chicago Fed National Activity Index, June 2015: “June proved to be a slightly stronger month for the economy than expected, based on the national activity index” [Bloomberg]. “This report is a bit of a head fake, not reflecting the weakness in manufacturing and the special factor behind the decline in the unemployment rate.” Good explainer of this index (noisy, use the three-month): “The economy was growing faster last month based on the Chicago Fed National Activity Index (CFNAI) 3 month moving (3MA) average – but continues to grow (now insignificantly) below the historical trend rate of growth (but well above levels associated with recessions)” [Econintersect].
Jobless Claims, week of July 18: “Auto retooling, and related temporary layoffs, is always a major wildcard for jobless claims in July and are likely at play in a startling 26,000 fall in initial claims.” The 4-week average is less startling. [Bloomberg]. “Jobless claims data are hard to read at this time of year and there’s no guarantee of similar strength for the monthly report.” And: “Claim levels remain near 40 year lows” [Econintersect].
Bloomberg Consumer Comfort Index, week of July 19: “coming off long-term highs” [Bloomberg].
“Rail Data Continues to be Soft” [Econintersect].
“Based on the moving average, today’s age 25-54 cohort would require 2.8 million additional people in the labor force to match its interim peak participation rate in 2008 and 4.1 million to match the peak rate around the turn of the century” [Econintersect].
The charts above offer strong evidence that our economy is in the midst of a massive structural change. The three mainstream employment statistics — unemployment, labor force participation and employment-to-population — all document an ongoing economic weakness far deeper than the result of a business cycle downturn.
“Japanese financial newspaper Nikkei has purchased the Financial Times for $1.29 billion from Pearson” [Politico]. So Pearson’s all in with its “educational” software, eh?
“The fear is that there will be no buyers if investors in junk bond ETFs panic and stampede for the exits. … We may be closer to that trigger than many investors realize. Bloomberg Business is reporting this morning that ‘SandRidge Energy Inc. bonds have lost almost 30 percent since June, while notes of miner Cliffs Natural Resources Inc. are down more than 27 percent.; The article also notes that bonds of distressed debt issuers ‘are on pace to lose more than 20 percent for the second straight year, the worst performance since 2008′” [Wall Street on Parade]. Gentleman prefer bonds. Until they don’t.
“$4,536 a day buys you a Bitcoin denial of service attack” [Medium]. Hmm.
Black Injustice Tipping Point
“Sandra Bland’s Voice Mail From Jail: ‘How Did Switching Lanes Turn Into All of This?'” [The Root]. Good detail.
Sandra Bland: “Talking on the phone after things have calmed down, Encinia and his boss sound like they may be discussing how Encinia is going to portray his side of what happened: or, in the vulgate, get his story straignt [The Marshall Project]. Provides a transcript, with the video clips.
Sandra Bland: “The conversation turns hostile when the officer asks Bland to put out her cigarette and she asks why she can’t smoke in her own car. The trooper then orders Bland to get out of the vehicle” [Corpus Christie Caller]. Always watch for agency, in this case “The conversation turns.”
“Ulysses S. Grant Died 130 Years Ago. Racists Hate Him, But Historians No Longer Do” [HuffPo]. I mean, seriously, what’s wrong with sending troops into South Carolina to crush the KKK? (It would be nice to see some #BlackLivesMatter people running for school board, to get all that neo-confederate propaganda out of the textbooks.)
Police State
“Three people killed by police in Chicago should be alive today, according to a retired cop who says he was fired for reaching that conclusion after investigating their deaths for the city” [Daily Beast]. “If the allegations made by Lorenzo Davis are true, then the authority charged with investigating the Chicago Police Department for police shootings and claims of misconduct since 2007 can no longer be trusted.” A good cop!
Greece
“European Central Bank Governing Council member Jens Weidmann said Thursday that the European Stability Mechanism could only give loans to solvent states and he suggested that Greece’s solvency was in doubt” [Market News].
“European Economic and Monetary Affairs Commissioner Pierre Moscovici said on Wednesday that creditor institutions were seeking to conclude talks with Greece on a third bailout in the second half of August” [Ekathimerini].
Our Famously Free Press
“Der Spiegel itself. It turns out the publication is home to what is most likely the world’s largest fact checking operation” [Columbia Journalism Review]. And to think we though fact-checking a peculiarly American phenomenon. But see Adam Gopnik on fact-checking. Then think about ordoliberalism. Then again, we are all prisoners of culture….
“How much have things improved? According to the 2014 American Society of News Editors (ASNE) census, the number of black newsroom employees has increased from “fewer than 5 percent” to … 4.78 percent” [Columbia Journalism Review].
Gaia
“[P]lankton help to control clouds over remote seas far from land. These clouds in turn bounce the sun’s energy back into space” [The Conversation].
Class Warfare
Auto company negotations with unions coming up [Labor Notes (TG)].
And despite the employers’ recovery, now that it can’t be un-bailed out, Chrysler makes no secret of its desire to phase out the top tier altogether. CEO Sergio Marchionne told reporters last year he wants to make first-tier workers “a dying class.”
“Why not let the CEO class be a dying class?” counters Asar Amen-Ra, a 40-year employee at the Chrysler subsidiary Mopar in Center Line, Michigan.
From his point of view, Amen-Ra says, “the point of bargaining this year should be to make all UAW employees whole, from the time we made all those concessions.” He means both the first and second tiers—and the union’s unacknowledged third tier, outsourced workers.
On the first, second, and third tiers, see this handy chart.
“A mass e-mail sent to new Uber drivers in New York City late last fall encouraged those drivers to ‘position’ themselves in the ‘busiest areas of the city’—Manhattan below the north end of Central Park, plus a swath of Brooklyn from Greenpoint south to Park Slope—if they hoped to receive a ‘guaranteed’ $5,000 for their first full month of driving” [Gothamist]. Uber is so sleazy. But wait! I thought Axelrove had hired corrupt pol Al Sharpton to ‘splain how Uber was sending drivers to underserved areas? How does this fit in with that?
“After the crash, can biologists fix economics?” [New Scientist (Synoia)]. “The problems start with Homo economicus, a species of fantasy beings who stand at the centre of orthodox economics. All members of H. economicus think rationally and act in their own self-interest at all times, never learning from or considering others.”
How a VC missed out on investing in AirBnB — he calls it “the collaboration economy” — and the lessons learned [Arenavc]. Fascinating for method, jargon, ethnography, everything.
News of the Wired
“New research: Comparing how security experts and non-experts stay safe online” [Google Online Security Blog].
“Before you decide to shoot that drone out of your backyard, there are a few important things you need to know…. [I]n the eyes of the law, a drone is a full-fledged aircraft” [Gizmodo]. I’d like a drone, so I could get a bee’s eye view of my garden….
“[A] new study finds that rats attacked by boas don’t die from a lack of air. Instead, the boa’s tight coils block the rat’s blood flow, leading to circulatory arrest” [Live Science]. Sounds like what happened to Greece…
“What Pet Should I Get? — a [lost manuscript] from famed children’s author Dr. Seuss (real name: Theodor Seuss Geisel) — publishes July 28.” I hope not a boa [Hollywood Reporter]. Readers, who many of you learned to read on Dr. Seuss?
Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s honorary plant, a fungus (Michael):
And here is an anti-plant, from Clusterfukashima:
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Amerikas aca health care at it’s best. Who knew this would happen to the we’ll pass the bill and then fix it.
http://www.marketwatch.com/story/the-newest-obamacare-fail-penalties-of36500-per-worker-2015-07-23?siteid=yhoof2&ref=yfp
Lambert you were way ahead on this.
jeb to save the day.
http://www.huffingtonpost.com/entry/jeb-bush-medicare_55b11e41e4b0a9b94853e9eb?ncid=txtlnkusaolp00000592
Is this a fun election cycle or what?
It’s finally starting to sink in to some of my Demo friends that the TEA partyers may have had a point on this one.
Funny I still have people trying to tell me it is better then doing nothing. And some even believe it will be fixed.
I believe they have crossed the fine line between optimism and delusion.
Don’t forget Obama is an imaginary friend. People are emotionally invested in Obama’s success for a variety of reasons (there are reasons other than America’s relationship with race). I’m sure there are people who trashed TPP on Facebook but said, “there’s the president I voted for,” when Obama sang.
I would contend they were desperate and looking for a high and easy fix (electing a minority or woman will solve problems) not driven by optimism. Now, they need their emotional fix.
The other problem is comparisons such as “democrats watch HBO, republicans watch duck dynasty” and the subsequent feeling of superiority have become ingrained in Team Blue voters. If they acknowledge Obama’s perfidy today, they have to ask why did they miss it over the last six years. The answer is they were willfully ignorant and behaved very much like the Republicans they mock. This is difficult for people to accept because it undermines their identity of being the super mommy party and superior to the other when their real voting identity was just an imprinted behavior from their parents and nothing more. “Why mommy is a democrat” is such a god awful trash.
That covers it, Thanks.
That is my take on it. My limousine liberal friends ( and I used to be one) are still very happy to believe that they are superior to the low information Republican voter. They don’t realize that they too are low information voters by listening to NPR and watching MSNBC and Bill Maher.
Ding ding ding!
How true….
I’ll just drop this here:
Sorry about that coffee!
Not inaccurate.
Most of those started to sing a different tune after encountering the craptacular offerings and premiums. I still have a couple of holdouts, but they don’t count: they are doing exceedingly well in the Obama economy and do not have to rely on the exchange.
Go Asar! I interviewed him a couple weeks ago…I’ll be sure to post the video here when it’s edited. It turns out, Detroit is chalk full of total bad-@$$es
RE “The conversation turns . . .”
Reading the Reuters account, I gathered it was all the “situation’s” fault.
Here’s a little reality-check for Paul Mason from someone who’s been known to haunt these parts:
paul mason has been pretty good on greece but this post-capitalism screed of his was delusional at best. there were so many faulty assumptions in the first few paragraphs that i gave up for fear of getting lost around paragraph 6.
You didn’t miss a thing, and saved yourself some time. So many things wrong, one doesn’t know where to start.
Are those Fukushima daisies? Creepy…
I remember hearing or reading once that here and there in the woods downplume from Three Mile Island are maple trees with leaves 15-20 inches wide. I sometimes daydream about going there and finding these maples and taking cuttings . . . and patenting the progeny under the name Thornburgh Atomic Maple.
HuffPo has a transcript of the Sandra Bland traffic stop. The real interesting part is toward the end when the cop calls his supervisor to explain the events. He makes it sound like Bland just went berserk for no apparent reason. Doesn’t mention the “put out the cigarette” part. Says he was trying to de-escalate the whole time. Total misrepresentation of what happened.
“State Trooper Brian Encinia
…Over a simple traffic stop. Yeah, I don’t get it. I really don’t.
Why act like that, I don’t know. ”
Poor misunderstood sociopath. hahahah
http://www.huffingtonpost.com/entry/sandra-bland-arrest-transcript_55b03a88e4b0a9b94853b1f1
Says he was trying to de-escalate the whole time
So why is the patrol car equipped w/ a camera that looks forward w/an insufficient file of view of the action –if by procedure they take the perp to the curb?
Haven’t seen that question brought yet.
Hope they (the family) has the services of a good pathologist
Encinia sounds like a Spanish name. If Encinia is “chicano” descended, then this is NOT a problem of “white racist” policing. It is an example of generalized police occupationist aggression against occupied America. He was probably trained to do exactly this, which would make it a problem of Aggressionist Police Academies and On-the-Job Training, NOT a “rogue cop” problem or a “bad cop” problem.
And remember, it takes a jail to suicide a detainee, not one “lone wolf” guard.
There has always been hierarchy within the racial structure which is overlooked in America in favor of our more obvious problems. Irish, slavs, french Canadians, field negros, religions, accents, languages, Spanish, Italian, etc all spring to mind. Even within seemingly unified minorities, there are different strata. MLK and the notion of “black” as a unifying force helped wipe this strain of thought from African-Americans on the grand scale, but if he had been darker, he would have been less appealing to many African Americans.
Who knows how the officer sees himself?
that’s the point i made in the links earlier. encinia was just the first step of a multi-step deadly encounter with the police department over three days.
He was the crucial first step without which the next steps could not have been taken.
Did you check out the link to the right of this article, also from HuffPo?
Emphasis mine: Sandra Bland Swallowed Or Smoked ‘Large Quantity Of Marijuana’ In Jail: DA
This “finding” was TEXTED by the Waller County, TX DA to the family’s attorney. Texted. Oh, and Bland was being held in a cell by herself. Just she and a LARGE QUANTITY of the demon weed which, apparently, went undetected when she was detained or was smoking up a storm. Not to mention she refused breakfast.
They must have a heckuva ventilation system in that jail. Not to mention REALLY LOUSY food if someone is maximally stoned and doesn’t want to eat it.
http://www.huffingtonpost.com/entry/sandra-bland-swallowed-or-smoked-large-quantity-of-marijuana-in-jail-da_55b12ba9e4b08f57d5d3f041?cps=gravity_3967_-3505967028057514712
In a few days I’m sure we’ll find out the truth–it was aliens trying to smear the good people of tex-ass.
Really, that’s pretty crude.
Why? Reefer Madness is real. There’s even a movie!!!
They must have a heckuva ventilation system in that jail. Not to mention REALLY LOUSY food if someone is maximally stoned and doesn’t want to eat it
And she was wearing an unmatched pair of sox… How is it possibly relevant? She was getting the munchies so she decided teh best course of action was to commit suicide?!
“Looking at the autopsy results and toxicology, it appears she swallowed a large quantity of marijuana or smoked it in the jail,”
So is this the TX DA doing a Mea Culpa on the modest qualifications of their pathologist’s expertise that apparently falls short of being able to ascertain whether she smoked pot or ate it??
Maybe check w/ the chef?
This reminds me of Cass Elliot who died when she was either eating or smoking a rather large ham sandwich, I don’t remember which it was..
I keep waiting of some journalist to ask how a rather large plastic bag got into a jail cell, much less was big enough to serve as a means of hanging someone. Her hanging herself seems a tad difficult to believe….
Does Texas require that large plastic bags be offered to prisoners? Or just placed in the cell as, oh, a barf bag?
That was the bag that the large quantity of pot that she ate or smoked came in.
A very super-simplified hypothesis occurs to me. There are 3 Americas: Black America, White America and Police America. A lot of White America is afraid to speak too harshly to Police America about all this for fear that Police America will say ” you shut your mouth. Or you’ll be next.” If the only way to restrain criminal police departments would be a low-grade civil war wherever these criminal police departments function, with 10-to-1 kill ratios in favor of the criminal police departments, how many Americans of any sort are ready to hold up their end of such a civil war?
They’re all in it together. Hillary Clinton (“Mrs. Hubbard”) is, of course, played by Lauren Bacall. Not.
mmmm.. I think Amy Poehler could do that .
Discussing policy, yea but not in the context of presidential politics. It makes little sense to do so, as they can run on any policy they want and vote for an entirely different policy.
In nation’s capital, $15-hour minimum wage is headed toward 2016 ballot
Gaia
https://www.youtube.com/watch?v=kthqEHIjGMQ
Deathworld – Harry Harrison
…Everything on the planet is predatory, and capable of killing an unwary human instantly. All large animals are strong enough to destroy small vehicles. All small animals have neurotoxic venom. All plants are carnivorous, even if only by default—their victims fertilize their soil. All microorganisms consume insufficiently protected tissue as quickly as acids. On top of this, all the aforementioned life evolves so quickly that even Kerk and his Pyrran crew have to be retrained upon their return from Cassylia in order to survive.
Because of this harsh environment, the settlers are engaged in a ceaseless struggle to survive, which—despite generations of acclimation and a training regime harsher than that of ancient Spartans—they are losing. Their numbers are less than when the planet was first colonized, and they are restricted to a single settlement. The world’s very name is a reference to Pyrrhic victory, a success that comes at devastating cost to the victor.
After a futile attempt at acclimating to the harsh planet, dinAlt turns his attentions toward solving the planet’s mysteries and saving the faltering colony. The colony’s few historical records are intriguing, proving that the planet’s life was once far less hostile to humans, but possess no real answers. The only information that holds any promise is the mention of “grubbers”, humans living outside the city, to whom the Pyrrans trade hardware for increasingly necessary food.
After several weeks, Jason leaves the city in search of the grubbers, who live in harmony with the harsh environment; they are in fact thriving, with numbers well in excess of the city’s, despite lacking its advanced technology. They practice what many would consider suicidal forms of animal husbandry, with the assistance of their telepathic “talkers”. Jason is able to earn their trust by demonstrating his own abilities.
Jason now reveals all. Although all life on Pyrrus competes for survival individually, they react collectively to natural disasters. The grubbers, with the assistance of their talkers, have integrated themselves peacefully into the planet’s ecosystem, killing only for food or in self-defense. The junkmen, however, think only of killing, and kill everything they can simply because they can.
The ecosystem is simply responding in kind, and in fact cultivates mutations around the city dedicated to the sole purpose of killing humans….
https://en.wikipedia.org/wiki/Deathworld
Lambert, I’m not sure the link for “Why Everybody Hates TPP” [CNNMoney] is going to the right place. I clicked on it and got: http://www.livescience.com/51639-boa-constrictor-snakes-prey.html
I think the link you want is: http://money.cnn.com/2015/07/23/news/economy/tpp-free-trade-deal-obama/
/It was an amusing surprise, though.
Ha! Multinational corporations using ISDS don’t kill by suffocation, they kill by stopping the blood flow to vital organs.
Multinational Corporations don’t kill people, people kill people….oh wait. Corporations are people….
I LUV the newly revamped 2016 section!
Agree. Be the change you want to see…in political reporting.
RE: Dr. Seuss —
I don’t remember if I learned to read with Dr. Seuss, but have some of the Seuss books that I had as a child. I’d guess that they were a prime part of my learning to read experience.
Early memory, I was wild about this book:
http://www.amazon.com/Apples-Bright-Early-Board-Books/dp/0679892478
Ten Apples Up on Top!
I didn’t encounter the Dr. Seuss books until middle school. My Dad used to read to me before beddybies; Winnie the Pooh, Wind in the Willows, Robert Louis Stevenson, Wonders of Nature, an eclectic mix. I do remember the Dick and Jane books from first grade school. Then on to the Hardy Boys, Edgar Rice Burroughs, Robert Heinlein, Andre Norton, Arthur C Clarke, the Harvard Classics, (we were introduced to them in sixth grade,) Great Books, Defoe, Addison and Steele, (yes, I had a great English teacher in eighth grade,) and the beat goes on. Parenthetically, does any video commonly available today have even one fourth of the depth and challenge of those works we encountered back then? I do remember being told that cartoons were for Saturday morning, and not for all the time.
O tempora, o S’mores!
The bond market illiquidity story should be under the title of “next big short” to remind folks what is really going on here: big institutions/hedge funds are exploiting liquidity issues with practices likely to generate considerable volatility.
Yesterday and today’s Water Cooler linked articles on this issue demonstrate two things: one that the brittleness of the bond market’s liquidity is widely recognized and; two, yesterday’s story demonstrated that hedge funds are acting on this knowledge by looking for ways to establish shorts. I really, really hope regulators understand the implications of that process. Let’s sketch out a scenario of the most natural way hedge funds would play this opportunity and see where it goes…
1. The inventory of corporate bonds held by ETF’s and large mutual funds is remarkably transparent and easy to acquire, along with details of each issue, which allow one to get a pretty estimate of the bond’s float or liquidity. This allows one to select issuers that have enough float to get a short position established but not much more, making it particularly leveraged to a collapse in liquidity. The greatest number and most liquid issuers are at the bottom of the investment grade category and just above junk, rated BBB.
2. Credit default swaps or protection from default are a highly leveraged way to establish a short position in a specific issuer. These are relatively cheap to establish and finance, particularly for issuer’s in good credit condition.
3. Bid prices in an illiquid but stable market like we have right now generally approximate fair value but dealers will absorb very little size before they stop dropping the bid aggressively. When there are sellers in size, for whatever reason, prices will fall rapidly.
4. As hedge fund short positions in specific credits are established, liquidity is actually coming out of the market though no one can see it. This is because the small nominal values in the CDS ramp up in value very quickly in a market downturn and those holding the offsetting long position of the hedge fund have to sell to cover the position. Suddenly, a modest downturn, and no more float.
5. So this scenario suggests there is a kind of trap down of some degree sitting below the market. One piece of it is a dealer sector that can’t absorb any material increase in selling and then you have what amounts to pre-sold bonds by hedge funds if the market goes down in what seems to be a relatively modest amount.
6. So we are basically waiting for a catalyst for retails to dump bonds, probably a negative credit surprise of some kind. This raises an interesting question about where the retail banker’s “leadership” is on this issue. On the one hand they should protect their clients and, my god, their regulators have expressed all sorts of concern about this and its all in the media, so they know all about this issue, but, on the other hand, they also would be trying to quietly sell the assets held by fund companies who are critical business partners and who trade like mad with the investment bankers on the other side of the organization. So which way do you think they’ll go on that trade?
The retail chump gets it. By quietly selling the same type of assets as held by the fund companies, a selling panic can be induced, after enough has been sold to lower the price.
*Sigh*
1. ETF and mutual fund positions are anything but transparent. Disclosure is at most quarterly, which might as well be the stone ages as far as trading is concerned. Yes, most of these funds and ETFs are either explicitly or surreptitiously index replicators. But that is a hell of a long way from inferring exact bond holdings. And if I were a fund, I might do what amounted to window-dressing, as in show a lot more in the way of actual securities holdings at reporting times, and make heavier use of futures the rest of the time.
2. The assumption on the link between bonds and CDSs is also dubious at best. If you are truly hedged then the MTM changes should offset if you are holding both positions. There would be no reason for the bond holders to sell.
3. In addition, the bond and CDS markets are parallel universes increasingly (with emphasis now on indexes rather than single names) meaning that price changes often diverge.
4. Generally speaking, all investors are liquidity users not providers, irrespective of whether the market is going up or down.
The real issue is much simpler (i) ETF and funds are momentum following (ii) they have an asset liability mismatch (redemptions are on terms more generous than the liquidity of the investments) and (iii) the central banks have engineered a game of pass the parcel with risky assets while market-making capacity dropping.
1. The vast majority of ETF’s publish their holdings daily on their own web-sites. And, as you mention, many are based on indices where the percentage holding is detailed to a hundredth of a percent.
2. The linkage between CDS and bonds doesn’t have to be tight, it needs only provide a short exposure to large, representative issuers to big sectors of the indices or ETF’s. This absorbs float on a contingent basis with the contingency a decline in values of some incremental amount. So, hedge funds that put on the trade are gaming the liquidity difference between the ETF’s and their underlying assets.
Let me repeat that since this is what you don’t accept: hedge funds are gaming the liquidity difference of the ETF’s and their underlying holdings and they are further reducing liquidity in the market in the process, making some type of bond flash crash more likely. Not certain to happen, but more likely.
There, I’ve managed to respond without being patronizing about it.
Can you please double check the Sandra Bland / Marshall Project link? It may be broken. Thank you.
Deft reference indeed. I know that Susan Sontag’s “Notes on S’mores” is an important ember in my intellectual campfire.
Clinton added: “Adults need camp too.”
Susan Sontag would appreciate the fact that Hillary Clinton has become the poster child for “Political Camp.” (And no, I do not mean Camp Runamuk.)
Clinton should use an Andy Warhol style photo montage as her official portrait. Caio, Wall Street! (Maybe she could get Alan Ginsberg to do her Acceptance Speech Dejour, in the nude, from the bottom of an empty swimming pool.)
That would be some camp that Andy would appreciate.
Oh my. We could get Joe Dellesandro to play Bill and Ultraviolet to play the Young Hillary. (Danger Danger Man Eating Snark Warning!!! We could get Divine to play Old Hillary. “Trouble in Mind” anyone?)
ambrit – Your reference to Dallesandro brings back ancient memories of watching him in Trash with my college girlfriend at the U. of Pa. What a depressing movie, but oddly fascinating.
something’s happening to the seagulls in cornwall
http://www.theguardian.com/environment/2015/jul/23/killer-seagulls-top-the-pecking-order-for-a-media-frenzy
RE: Clouds and plankton
Interesting science article. Unfortunately the caption on the krill photo is wrong. Krill are a type of crustacea that eats zooplankton. They are the upper trophic level in this sequence: Krill > zooplankton > phytoplankton. An essential part of marine life dynamics.
Trump:
As opposed to everyone else. Oddly enough, that’s really the only criteria I have for whether or not I’d support someone at this point. I’d like to see an outsider in their who might accidentally smash everything rather than the standard issue anointed kleptocrats. That could even be Sanders too–if he gets incendiary enough for my tastes.
Trump is an outsider in the sense the Clintons had great seats at his wedding. My sense is Trump is appealing to the self-identified “conservatives” who vote Republican because they aren’t Dimmiecrats. Much like voters on the left have a similar feeling, I think Trump’s supporters feel the GOP is too chummy with their adversaries. Trump isn’t a day trader or modern financier. Even tough I think he is a cad and a fraud, his name is on buildings you and I can walk into. He tried the XFL. If I’m trying to channel the Trump supporter, I can see how Trump appears to be the entrepreneur and job creator of GOP propaganda.
Well–you’re right. But at least he’s entertaining! And he seems crazy/incompetent enough to break the system out of sheer stupidity which is more than can be said for anyone else. So I like him.
I forced myself to watch Trump’s entire Phoenix speech, Malcolm-McDowell-In-A-Clockwork-Orange-With-His-Eyes-Pinned-Open style. I can report back that this is 100% about his ego…it is large enough to fill the known universe.
And as Karl Kraus once said, “a demogogue tries to sound as stupid as his listeners, so that they will think they are as smart as he is”.
A sample: “ISIS? ISIS? Believe me, they will be in such trouble when I am president” (crowd goes nuts).
‘Feeling left out that Trump hasn’t gotten around to insulting you or your friends? Here’s an app for that. Built on the real-live insults taken from the would-be President’s Twitter feed, @RealDonaldTrump, the generator below provides a Trump insult for everyone’
That cute orange fungus; is that an edible buckeyball?
It’s actually a Clathrus pusillus–member of the Stinkhorn family of fungi. Smells terrible, apparently, and attracts ants and flies. Yuk! More info here.
no, it’s clathrus cancellatus and doesn’t smell (that i’ve noticed) or attract anything but me (it’s my photo). certainly not like the stinkhorn, which i also have nearby.
Good work!
You mean Trumps hair?
NRA letter grades are a big joke. A republican who’s pro assault weapons ban will get an A while running against a democrat who’s against, who mysteriously gets a C-. The NRA is a republican partisan group and the press shouldn’t report their grades as if they actually correlate to candidates’ political positions.
Full disclosure: my father is a retired pipefitter from an assembly plant in Illinois, and my brother works in the repair shop of the same plant.
Having gone to my fair share of fish fries and socials at the union hall, mostly as a child, I can say that the culture of each local is, well, idiosyncratic, and one of the major sticking points has always been confusion among the masses as to why the national organization does what it does. Moreover, individual locals can be EXTREMELY conservative in their collective worldview, even going so far, on a number of occasions, to encourage voting against their own collective interest.
This has not been helped by the breaking of the wage scale. What it has done is create an entrenched faction who believe their superior pay and benefits fall to them entirely as a result of their innate superiority, so they go on believing all the poorly reasoned, libertarian, meritocratic b.s. fed to them by their preferred propaganda outfit (usually talk radio). These are then resented by newer workers who are, if not explicitly then certainly in subtle ways, treated as inferiors simply for being younger. It’s hard to organize a strike when one group (the younger ones) clearly might benefit from doing so, but the people who actually run the locals (the older ones) have a vested interest in the status quo. The wage tier system was the worst of Trojan Horses and I remember facepalming back when it was negotiated.
Also, a minor correction to the Labor Notes piece: skilled trades represent a weird exception to the tier rule. Technically they are no tier and have a completely different wage scale.
On the tiers: We have done just the same thing with Social Security and it’s an abomination and should be abolished. Social Security should begin at 60 and be age-neutral. That would help young people a lot, too.
“$4,536 a day buys you a Bitcoin denial of service attack”
That means that any Teuton or Finn with a bad attitude and a little money in a white envelope could take a Greek bitcoin system down. Eh?
Cat is not happy about getting neutered:
Jesus dude, do you really have to make fun of the poor boy? Better spring money for neuticles to placate him, otherwise he will eventually have his vengeance on you.
Nice job on the recategorization!
Here is an item in from “TPP/Class Warfare/News of the Wired” category (global) re Net Neutrality fight taken to India
“A recent report by the Department of Telecommunications has rekindled the fire over net neutrality. India is a land of the Buddha, who preached the middle path, the report — which wants the government to bring VoIP based domestic calling services under licensing — points out. What will immediately strike one about the report is the flawed logic at the heart of it. But things may be not as simple as that. The argument sounds disingenuous rather than merely wrong. The underlying attempt seems to be protection of telcos’ revenues at the cost of net neutrality.”
http://www.tradeindia.com/utils/showletter.html?n_id=13491&email_key=5312425&disp_id=8645&sub_id=3&hash=e5515e7f225dc1e1f555f4e3032c5696
The plutocrats operate globally to attack local systems so the resistance/reply needs a proportional awareness & response. However, this was all predictable from Modi election!
“European Central Bank Governing Council member Jens Weidmann said Thursday that the European Stability Mechanism could only give loans to solvent states and he suggested that Greece’s solvency was in doubt” [Market News].
Jens ‘Central banks – although they have the means – have no mandate, in my view, to safeguard the solvency of banks and governments.’ Weidmann
http://www.bis.org/review/r150713a.htm
Yes, we mentioned this speech in an older post. Pretty scary stuff.
Speaking of AirBnB
http://finance.yahoo.com/news/man-rents-out-back-of-van-on-airbnb-for–99-night-192424785.html
‘Australia: “‘We’re particularly concerned when the Productivity Commission — and they’re not known for being anti-trade — comes out and says ISDS is a risk too far, that the benefits don’t outweigh the costs’
Yes, it would be like the NRA coming out with some concerns about drone-guns or something.
I wrote to both my state and local members over a month ago, and again a fortnight ago after no reply to the first contact. Feeling a bit of a wallflower, I contacted three fellow-travelling Greens Senators to moan about this, and heard back from two of them within the hour!
My missive to the members said, inter alia ‘What I’d like to hear you say is ‘the ISDS panels are out for Australia, and even then we will not say yes unless we and our constituents have the right to read the fine print of the agreements’. I am aware that there’s been talk of having NIAs (National Interest Assessments) conducted for contentious elements, with ‘independent’ bodies such as the Productivity Commission invited to participate, but any public body with that weight of capital riding on its shoulders will not remain independent for long. Platitudes and hedging won’t do for this issue. Without an unlikely but necessarily widespread political movement in favour of such a set of demands, we need a referendum in order for the people to decide. If you think that on balance the benefits outweigh the costs, the lead-in to a referendum would provide an ideal platform from which to make your case’
Both members (both Liberals) did eventually respond last week, the state guy had a flack say ‘your comment has been noted, but really its an issue for the Feds’ and that was it. Then I received a quite long reply from my Federal rep, who is a senior government minister.
To begin he assures me ‘Thanks for your email and sharing your concerns. I’ve taken them on board’ and then some pablum.. ‘As a region-wide free trade agreement, the TPP offers an opportunity to strengthen job-creating trade and investment, and further integrate Australia into the fast-growing Asia-Pacific region by pursuing common and liberalising policy outcomes. The Trans-Pacific Partnership (TPP) Agreement will be unprecedented in its scale and level of ambition’
Yada and more yada, but then an attempt to address my concerns:
‘Contrary to some public commentary, ISDS does not protect an investor from a mere loss of profits and does not prevent a Government from changing its policies or regulating in the public interest. A loss of profits, by itself, does not amount to a breach of an FTA’
Disingenous of course: no-one is arguing that governments are physically restricted in their decision making by the treaties, only that fear of adverse ISDS findings would affect the making of decisions. And sure, loss of profit on its own is not a trigger clause, it’s how crafty panel member majorities would interpret the decisions which led to the loss.
‘Should the Government agree to the inclusion of ISDS provisions in any of the FTAs under negotiation, we will seek to ensure that the Government is not restricted in its ability to protect public health and the environment’
See above; technically correct. They can legislate for ponies but if the ponies affect the capitalisation of some asset slated to make a certain return for a company with deep pockets and they win at ISDS, then the compensation might in future prevent any more ponies.
‘Contrary to some reported claims, the TPP negotiations are not secret. The Australian Government made a public announcement about involvement in the TPP negotiations in late 2008 and has been carrying out domestic stakeholder consultations since that time….’ I have not so far been asked, perhaps I’m not a stakeholder. Maybe they advertised such consultations in the public notices on page 57 of the Australian one day, and the paper didn’t bother covering it anywhere else.
‘There will be an opportunity for full public and Parliamentary discussion prior to any agreement being ratified. In accordance with the Government’s treaty-making process, once the TPP text is agreed it will be tabled in Parliament for 20 joint sitting days to facilitate public consultations and scrutiny by the Joint Standing Committee on Treaties (JSCOT) before any binding treaty action is taken. Once tabled, the treaty text and an accompanying National Interest Analysis will be published on the JSCOT website and in the online Australian Treaties Library.’
I will try not to let that opportunity for discussion sneak under my radar… the price of freedom being eternal vigilance!