Links 7/13/15

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This 3D map shows every object orbiting earth Business Insider

The Earth erupts! Spectacular pictures show THREE volcanoes ablaze in Mexico, Chile and Indonesia while a fourth rumbles away Daily Mail. Gaia’s ticked. And rightly.

Iowa Makes a Bold Admission: We Need Fewer Roads City Lab (furzy mouse).

This Rooftop Garden Is Feeding Atlanta’s Homeless Vice

Calpers’ private equity problems pile up FT. Nice to see the pink paper catching up, here.

Trouble-Shooting Wall Street (cartoon) New York Times

Global investors hang on as China swings Australian

An annotated chart of China’s stock market boom and crash Business Insider

China’s Incendiary Market Is Fanned by Borrowers and Manipulation NYT

Malaysian Central Bank Fights to Stay Above 1MDB Political Mess Bloomberg

Putin Leads BRICS Uprising Counterpunch

Sharing economy disruption, maybe not so disruptive? FT Alphaville

Is there a chance that whilst everyone’s talking about Airbnb’s stellar growth — which increasingly stands, just like in the case of Uber, for getting amateurs to invest in fixed assets on the false presumption they can make guaranteed profits and then being sorely disappointed — there’s going to be significant churn in the next few years as those who can’t stomach the costs, the depreciation or the hassle pull out?

Less politely, the initial “disruption,” exactly as with Uber, is breaking the law.


The Ugly Heart of the European Project Ed Harrison, Foreign Policy

Political will keeps Greece’s stopgap loans remain — for now FT

ECB likely to hold meeting on Greek ELA on Monday Hellenic Shipping News

French deny EU report of possible loan for Greece Reuters

Greece debt crisis: Athens fights against temporary Grexit plan – live Guardian.

There are also many questioning the sense in a group of people, no matter their ranks or experience, making decisions like this at 5am after an all night meeting.

Chernobyl: 1:23AM. Three Mile Island:  4:37AM.

Greece news live: eurozone split over Grexit ultimatum plan as Greeks says they are being ‘crushed’ by Brussels Telegraph

Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras Guardian

UPDATE 1-“Kindergarten” as weary euro ministers divide over Greece Reuters

Timothy Geithner reveals Schauble’s plan to kick Greece out of the euro and ‘terrify’ the rest of Europe The Press Project (2014).

What were the Greeks thinking? Here’s a poll taken just before the referendum. WaPo

Where does the legal right to a 5y GREXIT exist? Brian M. Lucey

Greece’s Tsipras faces storm at home over debt talks Ekathimerini

Greek Debt Crisis: Germany Flexes Its Muscles in Talks With Bailout Ultimatum WSJ

Greek Bailout Offer Passes Ian Welsh. 

The Moment The Euro Became Reversible Sky News

How a Chinese puzzle could enable the Greeks to have the last laugh David McWilliams. Greece could adopt the Chinese Renminbi; an idea from Ireland.

We Can All Get by Quite Well Without Banks – Ireland Managed to Survive Without Them Common Dreams (Edward Qubain). Another idea from Ireland:

Undated checks, often endorsed over to others but never cashed, became a form of currency. When the supply of checks dried up, people wrote new ones on any available piece of paper, sometimes adding a postage stamp to give it an official appearance. There was talk of some checks being written on beer mats and lavatory paper. It was a system that worked because it drew on local knowledge and trust. The people exchanging checks and IOUs knew each other well, and if they did not, they could soon find the necessary information to assess each other’s credit-worthiness. At that time there were 11,000 pubs in Ireland and 12,000 shops that became substitutes for the banks. Antoin E Murphy, who carried out a study on the strike’s effects, found the public’s ability to assess risk ‘was based on a vast pool of information available to transactors on the credit-worthiness of other transactors’.

Yves has addressed this idea, but I thought it was important to hoist the link for the record. It’s a fascinating take on Minsky’s epigram that “Everyone can create money; the problem is to get it accepted.” Yves points out this idea will hardly work for the tourist industry (18% of GDP) or imports (oil to refine for export; pharmaceuticals). I’d point out that a strike is, by definition, temporary; it’s not clear how long Ireland could have played pass the parcel like this, let alone Greece. Now, it’s possible that if Greece reverted to autarky, this might be tried, assuming that cultural factors don’t prevent porting an Irish solution; but my guess is that if this were going to be done, it would already have been done, and that an existing local currency like TEM might be a better bet.

Finally, these ideas — this one, and the previous one — although well-meant, are just that: Ideas. Planning or at least publicity for each would have had to have started long ago, and there’s no sign that any of that has been done, or that the Greece has the organizational capacity to do that, or even did any planning for a Grexit.

Romanian PM steps down as party leader amid graft probe France24


Presidential Candidate Sanders Stirs Rousing Response at N. Arlington Event Falls Church News-Press. Jim Webb’s back yard. Cheeky!

Here’s what Bernie Sanders thinks President Obama got wrong WaPo

The Bernie Sanders Moment New York Times

Listening to Donald Trump swear and talk politics on his private plane WaPo

Trump basks in adulation at Arizona immigration rallyThe Hill

Donald Trump storms Phoenix Politico

The Dream World of the Southern Republicans New York Times (furzy mouse).

The Democrats’ Demographic Edge The Atlantic

Document Reveals Billionaire Backers Behind United Against Nuclear Iran LobeLog

Get ready for the pro-Israel NRA Jennifer Rubin, WaPo

Psychologist accused of enabling US torture backed by former FBI chief Guardian. Well, naturally.

Health Care

Health Law’s Contraceptive Rule Eased for Businesses With Religious Objections New York Times. Category error: A “business” can’t have a “religious objection.” 

Modern Doctors’ House Calls: Skype Chat and Fast Diagnosis New York Times. What could go wrong?

Small Business Health Insurance Exchanges Are Off To A Rocky Start KHN. Shocker.

Class Warfare

In Fiery Speeches, Francis Excoriates Global Capitalism NYT

Pope Francis Condemns Corruption And ‘Unbridled Capitalism,’ In South America HuffPo

About that hammer-and-sickle crucifix presented to Pope Francis in Bolivia The Dialog (GF).

A Radical Vatican? Naomi Klein, The New Yorker

Whataburger takes stand against Texas’ new open carry gun law and bans visible weapons from restaurants Daily Mail

Why humans run the world TED 

F-35 Nears Combat Readiness As Massive Order Planned InvestorsBusinessDaily. 2,443. Save the skeets!

Building real markets for the good of the people – speech by Mark Carney Bank of England

Real markets are professional and open, not informal and clubby. Participants in real markets compete on merit rather than collude online.

Real markets are resilient, fair and effective.  They maintain their social licence.

Real markets don’t just happen; they depend on the quality of market infrastructure.

Robust market infrastructure is a public good, one in constant danger of under-provision because the best markets innovate continually.  This inherent risk can only be managed if all market actors, public and private, recognise their responsibilities for the system as a whole.

Well, as I said yesterday, I dunno. I would like, seriously, for somebody to explain, historically or theoretically, why Carney’s view of what “real markets” are is not a Utopian fantasy, and why the humongous LIBOR fraud — only one of many — is not the reality. Note that at the very least, Carney flushes the concept of “equilibrium” down the toilet — where it belongs — since as he explains markets are, as it were, aerodynamically unstable, requiring the constant intervention of skilled and authoritative humans to remain airborne. Leaving aside the edge case of a controlled flight into terrain, as we have been seeing in Europe.

Antidote du jour:


Winter is coming! Unless you are in the Antipodes, in which case it is already here. Poor cows! (Snow in New South Wales south and north-west, and west of Sydney.)

See yesterday’s Links and Antidote du Jour here.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. bwilli123

    …” there was point blank refusal to engage in economic arguments. Point blank. You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply.”

    1. norm de plume

      He sounds like Ned Stark dealing with the Lannisters. Or the Boltons.

      ‘In the Game of Thrones, you win or you die’

      1. Lambert Strether

        More like Sansa Stark, if you ask me. (Not because of Sansa’s gender, but her empty-headed muddled romantic dreams.)

    2. Uahsenaa

      As much as I love Yanis’ analytical bent, he fell into exactly the same trap my students (as well as many well-meaning leftists) always fall into, which I typically characterize as, “it isn’t goo enough merely to be right.” As much as people may tut tut about the “liberal bias” of reality, if you lack the capacity to effectively communicate the realness of that reality, which is at least in part a conceptual construct, then you’ve already lost. The ability to recognize what the best rhetorical/communication/political strategy is is what makes one effective. Yanis, though spot on, for some reason could not see this. On the other hand, I have been impressed by Sanders, precisely because, though I don’t find him to be as spot on, he at least manages to effectively communicate the reality we live in to those who need to here it.

      1. MyLessThanPrimeBeef

        Tsipras wanted, at some point, to resolve it among the politicians…a political solution…financial stuff for financial ministers tand political stuff for politicians.

        Similarly, economic technical stuff for economic technicians. Yanis should have let his expert people talk to the technical people of the creditors.

        I doubt, for example, Bill Clinton’s lack of expertise on designing weapons hindered his arms negotiations with anyone. Even if he knew, it would have alienated his counterpart had he tried to use most of his time lecturing on the details

        I think this is what you are getting at – being an effective communicator.

        1. Brian

          Yanis was used as a tool by the Greek status quo and the National Socialists. Denying he can communicate indicates you don’t like what he said, not how he said it. He made the case very clear, demonstrating the debt was odious and unpayable. Nothing has changed.
          Blame the messenger. I feel your personal confusion but don’t share the same fact set you have used to make your conclusions.

          1. MyLessThanPrimeBeef

            They could have the Justice Minister go to court about the odious debt.

            Anyone can look up the debt-to-GDP ratio and know it’s not sustainable. At the time, they talked about restructuring the debt in the next phase (the third bailout).

            It’s not a case of I don’t like what he said. I hear these two claims and don’t dispute them (though he might not have lectured them on the odious debt part. He would need a legal expert for that).

            When you get blank stares from your audience, you can move on and say they fail to understand, or you can try something different.

            Would this have made any difference?

            1. Maybe. Then he should have tried to communicate differently.
            2. Maybe not. Then, why talk about it now?

          2. hunkerdown

            Another common modern mistake is to assume that “all that one needs to do to get people to listen to one is to have the Correct Answer,” or, put another way, that one’s moral onus ends when the duckspeak leaves one’s fingers/lips, and that it is indecorous and indolent for others to fail to interpret and act upon the revealed wisdom exactly as intended. If you look carefully you can see the “because markets” tumor spidering out, and you might also get a whiff of “smell of the poor” snooty bourgeois alienation in there.

            Whereas, in the real world, communication, in the sense of faithfully conveying a comprehensible representation of one’s thought or position to another, requires the interaction (not just participation) of both parties and a willingness to understand their interlocutor’s context.

            The Troika’s context depends upon the conceits that banks and wealth are infallible and that agreements are more important than equality. Greece and its government share almost no context with the Troika other than the acknowledgement of a previous obligation agreed under desperate circumstances which have only worsened.

            I suspect elites maintain their status through the simple expedient of living and thinking as if unfavorable conditions or utterances simply did not exist, and having a sufficient number of willing confederates to support one’s reality creation. Say, does anyone know offhand whether the Asch conformity experiments have been rerun recently? I find myself wondering whether the results were a product of its time.

            (Things to do when invited to Schäuble’s home: hide every measure, calculator, shoe, or other tool-like artifact in their house; move furniture slightly; rearrange their cupboards; reverse hinges on doors; reset all clocks and watches to the same arbitrary offset from real time…)

            1. Chauncey Gardiner

              Fascinating comment and question re Asch conformity experiments and the role of psychological manipulation. Triggered related thinking about the Stanford Prison experiment and the potential role of psychology in “negotiations” where Tsipras and Varoufakis found themselves isolated, the former in an all-night negotiating session, as representatives of those nations which share a common set of issues stemming from the economic effects of austerity abandoned Greece and sided with the Troika; and the “ultras” of Northern Europe projected even harsher negotiating positions.

              Would seem to make “game theory” considerations almost irrelevant.

        2. Uahsenaa

          I might mean “effective communicator,” so long as it is more narrowly defined. For example, if someone is being a raging !@#$%^&, the last thing you want to do is say to that person, “hey, you’re being an !@#$%^&. Please stop.” Yet, on any number of occasions, I have been told that honest, straightforward, plain, clear, whatever speech is always the best. Here, it seems to be rather a bad idea. Effective communication requires being able to read the moods, both good and bad, prot- and antagonistic, and knowing that sometimes circumlocution or indirect means of getting your point across are much more effective than simply speaking truth to power, as Yanis did. His indignation may be red meat for those fed up with austerity, but it also got his country nowhere in the negotiations. Also, I cannot understand why he would just come out and say that they had no intention of using the only leverage they had (i.e. Grexit). Even if they didn’t, it’s far better to keep that a secret.

  2. Yonatan

    “The Earth erupts! Spectacular pictures show THREE volcanoes ablaze in Mexico, Chile and Indonesia while a fourth rumbles away Daily Mail. Gaia’s ticked. And rightly.”

    The earth’s immune response has started to kick in to eject the parasitic infection (lame metaphor).

  3. Gilbert

    “Leaving aside the edge case of a controlled flight into terrain, as we have been seeing in Europe.”

    I would argue a better metaphor is the two sides are effectively bringing the aircraft closer and closer to a stall, one side by pulling back on the stick and the other side by reducing engine power.

  4. Kokuanani

    Re Bernie in. N. Virginia: it’s appalling that Don Beyer (D-VA) was by Bernie’s side, and apparently hoping some of the enthusiasm would rub off on him.

    Beyer is one of the Trade Traitors, and a huge Obama-bot.

    Watch your back & get a food taster, Bernie.

  5. JohnB

    On parallel currencies, something I posted the other day (another Irish idea ;)) – very similar to McWilliams idea, but with potentially more control over the currency:
    I’ve been thinking, would it be possible for another country – say, a small island/tax-haven – to introduce a parallel currency, which gets officially ISO approved and integrated into worldwide financial systems; then to give control over the currency, to a country exiting the Euro?

    Assuming you can get enough business in that new currency operating in the Euro country in question long before the exit (to encourage financial system integration), might this be a viable way of preparing a parallel currency for an extremely quick (and possibly stealthy) transition?

    Of course, it’s too late for this with Greece, but for the next Euro country to exit, it may help prepare.

    1. craazyboy

      Ecuador, like Panama, use USD as a official currency.

      Panama has had a national parallel currency for some time, tho from what little I’ve heard about it, it tends to be ignored even for most local transactions and USD is dominant.

      Ecuador is just introducing a parallel currency. Or, that is how they describe the process now. (probably worried about currency flight) But some people think after the process is complete, all the way thru making it part of the international payments system, Ecuador will drop the dollar and make the national currency legal tender. No estimated time frame on the process that I’ve seen anywhere.

      1. Robert Dudek

        Cuba has had a duel currency system in place for several years now. They have the domestic peso used for basic goods almost exclusively by locals, and a convertible peso that is used by tourists and by locals for luxury goods. Foreign currency is converted into the convertible peso at a fixed rate determined by the government (pegged to the dollar). Almost all major credit cards, being U.S. based, are not usable in Cuba or useable with massive surcharges. The result is that Canadian tourists (who visit Cuba in droves during the winter) bring enough Canadian dollars with them to spend and convert them to convertible pesos at the airport or at their resorts. I have never seen a tourist use a bank machine in Cuba.

  6. Clive

    Re: Carney’s Speech.

    This was a real Curate’s egg. Reminded me of what I think when I get to the end of a particularly nice packet of biscuits. What there was was great, up to a point. But it didn’t go far enough. Take, for example, “market infrastructure”. Now what could that be all about then ? You couldn’t mean regulation and/or state provision of natural monopolies like healthcare and utilities could you, Mark ? If so, please next time have the courage of your convictions and come on out and say it.

    1. Susan the other

      It was all cliche. Markets must be ethical, blablablah. I noted that he mentioned the concept of risk immediately, making the point that risk should be spread evenly among all people. Within what confines, I wonder? Didn’t make much sense as a logical piece, but the tone was to beg for forgiveness for the hopelessly corrupt City of London. A new fire is probably just the thing they need. Because spreading risk only works for select damages. The damages to the rich for the most part. I got this insight because Carney seemed to be avoiding reality: The banksters want to maintain the idea of risk (which is not well defined) in order to maintain the false idea that money has value or is a store of value. Which it probably is not. And he avoided mentioning, as he has done before, that money is manufactured at the whim of banksters as long as they have an expanding market of borrowers. That market is as dead as the concept of the value of money.

    2. cnchal

      There are some very precious moments in that speech, and where it was held is just the start.

      Speech given at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, London.

      We go from the Great Fire of London to insurance as great financial innovation within five sentences, and then this.

      Public authorities complemented private initiative.

      There was a Royal Proclamation that set standards for wider roads and houses built from brick and stone instead of timber.

      And Parliament passed the Parish Pump Act to prevent “mischiefs that may happen by fire” by establishing fire brigades and improving water supply.

      So that spark in Pudding Lane ignited much more besides the Great Fire itself:

      1 – the provision of liquidity to limit contagion;
      2 – a recognition that clear, well-understood codes contribute to the greater good; and
      3 – a belief that financial markets can solve real world problems.

      I have to put that through the Carney’s Blarny translator. Carney is just buttering up the guests before he slices and dices them with his sharp wit later. He slipped that last one in there, since obviously if there had been insurance before the fire, the insurance companies would have been bankrupt.

      Lets have another precious moment.

      Today the City remains the leading global financial centre. The UK is the venue for 40% of foreign exchange trading volume, half of all trades in OTC interest rate derivatives, and more than two-thirds of trading in international bonds. More international banking activity is booked in London than anywhere else, and the UK is host to the world’s third largest insurance sector as well as its second largest asset management industry. UK markets matter for global commerce. But above all, our markets matter for our prosperity.

      Markets are a major part of the UK economy. 350,000 people are employed in financial services in London alone, and 1 million across the UK as a whole. Across the country, their enterprise contributes £130 billion to our national income and £70 billion to our exports. On current trends, the UK-based non-bank financial system would increase from around six times UK GDP to nearly fifteen times by 2050.

      Most fundamentally, our markets serve our real economy.

      The Carney’s Blarny translator says that the real economy tail wags the fictitious economy dog. There isn’t a bankster in the room that would see the absurdity of the claim “our markets serve our real economy”.

      After a mild tongue lashing of the guests on their criminal behavior we get to this precious moment.

      . . . These are evidenced by enforcement actions which continue to appear with depressing frequency. These sanctions, while necessary, aren’t the solution, not least since the $150 billion of fines levied on global banks translates into more than $3 trillion of reduced lending capacity to the real economy.

      Carney is pissed here. The opportunity to shove more debt onto the real economy has been squandered.

      The unreal economy lends unreal money to the real economy, which has to pay it back in real (earned, as in sweated for) money. The huge profits, never mind all the extra larceny generated gains, allows those in the unreal economy to now spend their money in the real economy.

      The guests would agree that is a virtuous circle.

  7. Timmy

    Its interesting to examine, for example, the single largest US direct-to-retail securities market (muni bonds) in light of Carney’s remarks. This is a market dominated (measured by the number of trades) by individual investors in or near retirement.

    Let’s see: clubby. Okay, the MSRB runs the muni bond market and six household financial names have 50% market share.

    Let’s try “open”: muni bond markups are not disclosed by dealers to their clients. Essentially, dealers and their salesman decide how much they earn on a trade. There are 5 million or so trades annually by retail for less than $100k in size. The SEC has asked the MSRB to disclose markups five times over the last fourty years but it still hasn’t happened. The availability of actual trade prices wasn’t available freely and widely until 2008 despite the dealers being shamed into developing one by Aurthur Levitt in 1993. It took fifteen years to develop.

    That’s what you get when you ask dealers to run your market…

  8. lylo

    Regarding “The Democrats’ Demographic Edge” in The Atlantic:
    I know this is sensitive, but let’s have a reality check here. Historically, minorities are underrepresented in the polls, and while we can all argue about access and various issues, the fact remains that they just have never voted at the same rates. (Women are more likely to vote than men, by the way, across races.)
    The black population, after years of slow improvement, has had a very recent and large spike in participation rates but I don’t think it’s sustainable. And as much as the expansion of the hispanic population is touted, they just don’t vote at the same rates–as in less than half of the eligible population, in any national election ever–and aren’t nearly the Democratic stalwarts they are made up to seem.
    And if you really want to have the argument from the other side, Asians are now voting Republican (as of 2012, took the majority) and a quickly expanding group as well. Perhaps Democrats would do well to take it as a warning instead of counting demographic chickens prior to their hatching.

    Basically, I think it’s kind of messed up just to assume that minorities ALWAYS vote Democrat, so any increase in the minority population is of course good for Democrats. I say this as a kindly reminder; we would eviscerate the other side for assuming how generations of people would vote based on their ethnicity/race… For very good reason.

    1. NotTimothyGeithner

      The “demographic edge” is how Team Blue elite keep a hold on their voters who express doubt about Team Blue’s betrayals excuse everything will be fixed later. It’s an updated version of keep the powder dry. The obvious flaw is Team Blue won in 2006 and 2008 and relied heavily on anti-republican backlash to keep the status quo in 2012. 2010 and 2014 demonstrated a lack of the demographic edge.

      1. Spring Texan

        Yep. Why would minorities come out to vote for you when historically they have had low voting rates AND you aren’t doing anything for them but say a few kind words instead of blasting them?

        I hate Team Blue.

  9. vteodorescu

    This is Mitteleuropa, final act. First dreamed up in 1916, you have to admire the German tenacity! It will also end up in tears, like the previous two acts….

  10. DJG

    Greek loss of sovereignty. The Troika is insisting on passage on a revised code of civil procedure. Any lawyers out there? Greek lawyers? Why is this condition central to the deal?

    1. Chris in Paris

      Article 975 of the Code lists creditors in order of repayment in bankruptcies. Claims by employees, social security orgs and the Greek state are satisfied before those of any secured creditors. Not that I’m an expert on Greek law, but this has come up in my work occasionally when trying to collect from bankrupt business partners. I’m sure there’s lots of other stuff in there has to go to make Greece “better for business”.

      1. Ulysses

        Yes, the foreign looters need to know that no pesky protections for little people will hinder their looting! Whatever new Vichy regime emerges in Greece, its primary purpose will be to aid foreign looters in despoiling the country. I have the impression that the Troika was disappointed by the complete capitulation in the Greek Parliament. Having hyped themselves up to witness a quick collapse, now they have to hang around and slowly steal everything that isn’t nailed down– a similar end result, but less sadistically satisfying.

        1. Chris in Paris

          After reading about the possibility that some of the Greek banks would go into bankruptcy over the next few weeks as a consequence of lost business during the closure, this seems immediately applicable. Their employees and the state will be SOL.

          1. Ulysses

            CH has a strong polemical view, from 60,000 feet up, on this whole mess today:

            “The destruction of Greece, like the destruction of America, by the big banks and financial firms is not, as the bankers claim, about austerity or imposing rational expenditures or balanced budgets. It is not about responsible or good government. It is a vicious form of class warfare. It is profoundly anti-democratic. It is about forming nations of impoverished, disempowered serfs and a rapacious elite of all-powerful corporate oligarchs, backed by the most sophisticated security and surveillance apparatus in human history and a militarized police that shoots unarmed citizens with reckless abandon. The laws and rules it imposes on the poor are, as Barbara Ehrenreich has written, little more than “organized sadism.”

            Corporate profit is God. It does not matter who suffers. In Greece 40 percent of children live in poverty, there is a 25 percent unemployment rate and the unemployment figure for those between the ages of 15 and 24 is nearly 50 percent. And it will only get worse.”


            Neoliberals, like true believers in any religious dogma, refuse rational argument, empirical evidence, etc. to push the belief that there is no higher law than corporate profit. Very dark and totalitarian times are approaching us with alarming speed!

              1. hunkerdown

                mundanomaniac, given the human potentials discovered contemporaneously with Uranus, Neptune, and the subject to hand, what do you think of New Horizons putting the celestial representative of the shadow self under the microscope?

          2. JeffC

            The short hairs by which the troika holds Greece are the essentially insolvent and desperately illiquid Greek banks, which cannot be conventionally recapitalized and supplied with liquidity by a euro-starved Greek government.

            But could the Greek government not in principle recapitalize the Greek banks by handing them a different valuable asset in exchange for shares, perhaps some number of delinquent but in principle collectible tax accounts, perhaps of wealthy oligarchs or large businesses? Banks are probably better at collecting on debts owed than is the Greek government, and any such collections would amount to liquidity infusion. A bit of new legislation to strengthen the banks’ collection powers could boost such a plan.

            Just a thought (from an engineer, not a financier).

            1. JeffC

              Actually, I think I see the key catch with the above proposal, which catch appears to put said proposal in the hair-brained category: The “new” liquidity from collection of bank-owned taxes would come in the form of bank deposits handed over, so the net effect of the whole mess would be to turn the deposits of the delinquent taxpayers into bank shares and hand those over to the Greek government. It’s a sort of warped bail-in! It’s recapitalization without liquidity.

  11. Chauncey Gardiner

    Re the possibility of developing local “money” at the end of today’s Links section on “Grexit”, some Greek companies are already issuing private scrip money for local use according to a recent article by Ambrose Evans-Pritchard in the Telegraph:

    As you mentioned, a key issue is how they would pay for imported goods. That is critical.

  12. swendr

    “We apologise to Marxists worldwide for Greece refusing to commit ritual suicide to further the cause. You have suffered from your sofas.”

    Great point, but I think the premise is a little too narrow. I mean what about libertarians, nationalists, bit coin fetishists, and anti-globalists? Ideological purity varies inversely to how much skin you have in the game.

  13. Dan Lynch

    Re: the Irish writing checks. I believe I suggested something similar on a previous NC thread comment about a possible Grexit — just write checks like Grandma and Grandpa used to do. The government could pay its bills with checks, employers could pay their employees with checks, employees could pay their rent with checks, etc.. No reason it would not work for domestic spending.

      1. JTMcPhee

        Best of luck keeping up with the Mighty Derivative Churn… What is it now, $1.4 quadrillion and counting? What could possibly go awry?

        And about Private Parallel PersonalMoney ™ of the minuscule kind us Ordinary People might aspire to effectuate : Let me ask the pros — does injecting that into the Stream of Commerce have a “positive” effect (sic) on the “velocity of money?”

  14. BenjaNeil Lawrofsky

    A glorious juxtaposition: “This campaign is about making America great again. I copyrighted it.” – Trump

  15. Praedor

    ” Note that at the very least, Carney flushes the concept of “equilibrium” down the toilet — where it belongs — since as he explains markets are, as it were, aerodynamically unstable, requiring the constant intervention of skilled and authoritative humans to remain airborne.”

    The “authoritative humans” is, and must be, government intervention. There’s no such thing as a working “free” market. Never has been, never will be. The maker of stability in a dynamically unstable (and corrupting) market is an outsider: the government.

    Then you just have to police the regulators so they don’t work under the table for their own good (like all Fed members, Treasury Secretaries, etc who always work in ways to best set themselves up for when they leave the government or Fed).

    1. JTMcPhee

      As to Authoritative Humans, Eric Holder:

      and advice for others hoping for the same payoff, (click on the Budget tab, please). As to what you getf or your money,

      There are Model Rules of Professional Conduct that relate to Holderization, but check the many back doors out of even this gentle remonstrance:

      ABA Model Rules of Professional Conduct

      Rule 1.11: Special Conflicts of Interest for Former & Current Government Officers & Employees
      Client-Lawyer Relationship

      (a) Except as law may otherwise expressly permit, a lawyer who has formerly served as a public officer or employee of the government:

      (1) is subject to Rule 1.9(c); and

      (2) shall not otherwise represent a client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives its informed consent, confirmed in writing, to the representation.

      (b) When a lawyer is disqualified from representation under paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless:

      (1) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and

      (2) written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this rule.

      (c) Except as law may otherwise expressly permit, a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lawyer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. As used in this Rule, the term “confidential government information” means information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public. A firm with which that lawyer is associated may undertake or continue representation in the matter only if the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom.

      (d) Except as law may otherwise expressly permit, a lawyer currently serving as a public officer or employee:

      (1) is subject to Rules 1.7 and 1.9; and

      (2) shall not:

      (i) participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment, unless the appropriate government agency gives its informed consent, confirmed in writing; or

      (ii) negotiate for private employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially, except that a lawyer serving as a law clerk to a judge, other adjudicative officer or arbitrator may negotiate for private employment as permitted by Rule 1.12(b) and subject to the conditions stated in Rule 1.12(b).

      (e) As used in this Rule, the term “matter” includes:

      (1) any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties, and

      (2) any other matter covered by the conflict of interest rules of the appropriate government agency.

      Anyone interested can go look up the other “rules” for themselves. The link will take you to them. One among many reasons I no longer “practice law.”

      And one more little tidbit from a “government publication,” on bwahahaharegulation of securities markets:

      Fiscal year 2015 Analytical Perspectives: Budget of the US Government,

      Scroll back to page 148 and read forward for some good guffaws…

  16. Praedor

    Greece should REFUSE to sell its assets to private (foreign) corporations. They should make it illegal for foreigners to OWN property in Greece, leaving that for ONLY Greek citizens. All foreigners, no matter how rich, should only be allowed to LEASE property be it a mansion, a port, an airport. You can LEASE it (so the government and people ALWAYS get paid on a continual basis) properties and resources in Greece but you cannot OWN it unless you are a Greek citizen.

    Should be true in the US too. China can LEASE a building and Chinese citizens can LEASE real estate, but they cannot OWN it.

      1. Praedor

        Not “straw man” at all. The whole austerity/privatization thing is intended to primarily enrich foreign corporations. The EU and IMF are not thinking that a bunch of Greek corporations are going to take control of the airports and sea ports in Greece, they see it as a chance for GERMAN or other EU country corporations to sweep in and take Greek properties and transfer the wealth out of Greece. Privatization in the austerity regime is theft. Surely you aren’t so naive to think that privatizing Greece’s shipping ports will likely go to some Greek corporation? MAYBE it goes to an oligarch in Greece but more likely it goes to some German, Belgian, or UK company. Handing it to a local oligarch or to the oligarchs of the EU is the same thing: theft from the Greek peoples.

        1. MyLessThanPrimeBeef

          There are a lot of bad loans offloaded from banks to the public creditors.

          If the new owners of those bad loans send out repo-men to seize assets backing those bad loans, they wouldn’t need to buy those assets.

  17. bob goodwin

    There are moments in history, when something big just happened, but the world still does not feel different. Read letters from Ambassadors in Paris as the French Army collapsed and signed an armistice with Nazi Germany. Things were not really normal, but the phones worked, and there were jobs and transportation and food still. People were still being polite on the street. Same with the moment that Sherman resigned as president of a Louisiana college when South Carolina seceded. He had warm and deep conversations with his friends as he slowly disengaged from the south, and most people did not see the pain that was coming a mere 2 years later in both cases.

    What makes today and those two stories so similar was the speed of the breakdown of convention. People went from trying to dance, to just staring. A few years later nobody was staring anymore.

    The question for Greece was whether it wanted to be South Carolina or Vichy France. Which would you prefer? Sherman hollowing your infrastructure, or collaborating and providing 40% of the GDP for the Axis powers?

    Greece decided to lie down face up showing its belly, rather than face down, but you can be sure that when people feel disenfranchised, that the breakdown in conventions and accommodation’s can get a lot worse. I feel much worse for the world today than I did a week ago.

    1. MyLessThanPrimeBeef

      After Sherman’s March to Atlanta, the union was preserved with a far stronger central government than before that went on the reconstruct the sovereign states below the Mason-Dixon line, and investment money poured in to the pacified region, for what we can see as the19th century version of privatization.

      “Lots of assets to buy.”

      Now financial time moves faster, as Yves so astutely observes. So, perhaps with Scheauble’s March to Athens already over, the thinking over at the Old World is they can borrow the playbook from the New World, as they look forward, too, to a stronger Brussels.

      Surely, these would-be Union-preservers believe that while there will be talks of the KKK or the Golden Dawn still resisting, a more hegemonic future beckons.

      People also claim, with this victory, the success of failure of Greece in the future is the sole responsibility of the conqueror. That depends on the how success is defined, I believe.

      If by success, we mean more pliant serfs able to cheaply assemble, for example, German or Japanese products, like cars, etc., then it’s quite possible with this deal (all the structural reforms contained therein), Greek serfs, sorry, workers can look forward to out-efficient their Teutonic or other European/American/Asian counterparts in foreign-owned factories.

      But would that really be what you imagine success is?

      1. bob goodwin

        Personal income in the south fell by 50% after the civil war, and did not achieve pre war levels until 1920

    1. hunkerdown

      No, it’s not. Neoliberals just can’t understand that their own compulsion to fit everything into corporate terms is their disease, not ours.

  18. Susan the other

    Naomi Klein, “secular Jewish feminist”, speaks with other like-minded people about the environment. New Yorker. I am impressed with the efforts of the Catholics. But the thing that caught my eye was one sentence implying that the church is working toward a goal of population control without saying so. Like Mark Carney is working to end free markets without saying so. So it’s a dovetail because free market capitalism was just a population ponzi at the expense of the environment anyway.

  19. Robert Dudek

    Just listened to V interview on Australian radio podcast. Among other things he views the agreement as the total annihilation of remaining Greek sovereignty. And for the first time he has come to the realization that this set of conditions have changed his mind about one thing: he is no longer certain that Grexit is the worst outcome. That isn’t quite an endorsement of Grexit, but for a person who is fanatically pro European integration, that is quite a step.

    1. MyLessThanPrimeBeef

      Whether the Grexit option should be taken or not, that would be up to the Greek people*, I believe.

      *Especially those who will stay after the option is exercised. But, no, all Greeks should together decide, unless he/she was already abroad previously and will stay abroad in the future – these people (little skin in the game) are not much different from American or other foreign opinion-givers (no skin in the game).

  20. Robert Dudek

    V also claims that a small group within the government – five people – worked on and drew up a Plan B (parallel currency etc) on paper in secret. He says that in order to start concrete preparations, that circle of five would need to be expanded to 500. And at this point it would no longer be secret and by self-fulfilling prophecy would create the conditions for de facto Greek exit (presumably via reactions from the ECB and others). The government decided not to go beyond the paper planning stage.

    This, IMO, sheds light on why V resigned. After the ELA restrictions and subsequent capital controls, V pushed for those concrete plans but Tsipras said no.

    He also noted in the interview that with capital controls, Greece had already had a quasi-Grexit. He noted that it was in a “dual currency” model – what he cleverly called “bank Euros” (which you can move around from account to account, pay bills etc, but only within Greece) and “paper Euros” which could circulate without restriction as before.

    V has been much-maligned, and his stubbornness and perhaps naivete led to him believing that the Troika would come to their senses eventually. But I believe he is telling the truth as he sees it. He is neither a politician, nor a heartless technocrat. We need more people like him in government if there is any hope at all of avoiding totalitarianism.

    1. MyLessThanPrimeBeef

      Presumably, he was OK with the ‘equivalent measures’ proposed deal by Tsipras.

      How far would the creditors have to go to come to their senses? It didn’t seem that far.

      And it appears time is of essence and when one says or acts makes a difference. Was there a June 30 ‘final’ offer on the table at one time? Would he have been OK with that, assuming he was, as mentioned above, OK with the equivalent measures.

      The whole process is tragic.

  21. MyLessThanPrimeBeef

    Iowa – fewer roads.

    That’s less consumption.

    That means smaller GDP contribution from road-building infrastructure projects.

    A different vision of tomorrow.

    No more build, build, build.

    No more produce, produce, produce.

    No more consume, consume, consume.

  22. csissoko

    Re: Irish pub money. I’m pretty sure you need anglo-american style negotiable paper law for this to work, and my suspicion is that Greece has a civil law-based negotiable paper law that won’t support this type of innovation very easily.

    1. csissoko

      This is not a very well formed thought — because I’m mostly familiar with the anglo-american experience with circulating private obligations, so I might be underestimating the civil law traditions.

      Basically anglo-american financial systems developed very differently from continental financial systems and one of the key reasons for this was that in the early 19th century judge-made law allowed debts not just to be represented by paper (i.e. you could still be asked to prove the facts of the debt in court, and the paper was just evidence), but actually to embody the debt. In the latter case (with a limited set of exceptions) the final assignee of the paper had the right to collect the debt without making any other showing in court. After this change in the law, paper debts became more negotiable and the British financial system developed very quickly.

      As far as I know (and could very well be wrong about this), continental law never followed. So it is possible that collecting on a paper debt is a more complicated process on the continent, than in Britain and countries that adopted its legal structure. The real question is: If someone has written a check that has circulated from hand to hand many times, and you are trying to collect on it, can the debtor refuse to pay if there is no evidence of an underlying transaction when he wrote the check (which might still be the continental system) or does a debtor who doesn’t want to pay have to show that the instrument itself is flawed (e.g. it’s not his signature on the check) or something similar.

  23. hunkerdown

    Remember When Technology Was Exciting? (I, Cringely). Google searches for technology-related makes, models and terms have become less prevalent over the years. He suggests this is because the hobbyists have created their own, (I say only slightly) less branded commons of ideas and implementations, and finds it promising and exciting.

    Whaddaya think, craazyboy? You handing out the source code for your UAVs like a good community member? :)

    1. craazyman

      CB has a patent on his drone “Tit-Sighter” (TM) camera software.

      It could be a monthly subscription, from what i hear, to take full advantage — if he and the VCs commercialize it themselves. Or you can buy the drone and camera with code installed.

      That’s naked capitalism for you.

      1. craazyman

        speaking of cameras. they’re selling the Nikon FM10 now for $500 bucks! It was $329 just a few years ago. I got mine on eBay for $60 a few years back. it’s the same camera too. Film lives! Not only that, but it’s thriving. That’s not a surprise to photographers but it’s kind of interesting.

        People hunger for tangible reality. Pure imagination only goes so far. They want something they can touch and feel and squeeze. This may be an impediment to widespread success for the Tit-Sighter (TM), but maybe, like digital cameras, it can be a niche market for people who just want a quickie and don’t care about the majesty of True Artistic Creation. hahahahahahaha

        1. craazyboy

          Ya, right. The way I got the VCs interested was I told them my camera software can insert CA porn star titty footage into your video, no matter where in the country you use your camera. I think that’s what sold ’em. hahaha.

          But my cam is just a tiny GoPro clone for $65 – so I’m not really ever going to get cinema quality out of it. The thing I’ve been fighting with the last couple weeks is reducing frame vibration. These little cams have cmos sensors with “rolling shutters”. Vibration makes what is called a “jello” effect. It’s not good when landscape looks like a volleyball game at the Baywatch beach. Without the girls. Then I still need to get a camera gimbal if I want the video to be stabilized without all the frame motion rolling and pitching. The other thing about these sport cams is they all have wide angle lenses and the asssociated “fisheye” effect. That may make sense for close ground shots, but not so much for airborne photography.

          But anyway, took some ok video this afternoon at the park with all our mountains in the distance. Probably will post it tomorrow, after editing and adding music. This one gets Space Oddity by David Bowie, I think.

    2. craazyboy

      I’m just a recent amateur microcontroller programmer. I wrote my own code for a 8 bit Adruino when I made my GPS self driving monster truck.

      I knew I was in over my head when it comes to quadcopters/drones, so I evaluated what was happening in the open source world and finally settled on Tau Labs. They have some very nice firmware (open source on Git) and just released a new STM32F4 based 32bit flight controller that has full automation capability – sensors include accelerometer, gyros, barometer, magnetometer and GPS. They’ve been at for around 5 years now and they are real microcontroller developers. So now I’m just putting the pieces together, which is challenging enough.

      But here’s the community forum

      1. craazyboy

        Almost forgot. The Tau labs board also has an onboard UHF radio transceiver that is another open source project called OpenLRS. This is for both telemetry – data like battery voltage, current left in battery, radio control link signal strength, GPS data, altitude, heading, etc… and you can also use it to transmit you radio control signals and select options like flight modes. Low power ones can be good for a couple mile range, higher power ones for 10 miles or more. But those may be illegal.

        The telemetry data can run a heads up display in android ground control software on a tablet, or if you have goggles and a separate real time video transmitter connected to your onboard cam, it will superimpose all flight data on top of the real time video from your cam and you can fly “first person view” with the goggles. So far, I’m just starting to work on getting it to work with a tablet.

      2. Lambert Strether Post author

        That’s utterly awesome you wrote your Arduino code. I wish you’d drop more links about it. I’d really like to get a sense of the size of the Maker community.

  24. KFritz

    Re: Democratic demographic edge

    If the Republicans manage to capture the Executive and Congressional branches of government in the 2016 election, one of their first orders of business will be to begin rigging and distorting the laws to negate their demographic deficit, so that they’ll be able to govern in perpetuity. This makes it imperative that someone, somehow, persuade Ruth Bader Ginsburg to resign as soon as possible and insure that she doesn’t die in office with the Republicans in charge. That would hold out some hope of thwarting the Republicans, if they do triumph in 2016.

    1. PhilK

      What a great idea! It gets rid of the notorious RBG, it allows Obama to “reach across the aisle” and please his future employers by nominating someone more right-wing than the upcoming Republican president would dare nominate, and it unanimously avoids rancorous contention with bipartisan smiles and handshakes all around. Whatever right-winger Obama nominates would get all the Republicans’ votes (because Conservatism!) and all the Democrats’ votes (because Obama!)

  25. ewmayer

    Re. Überbankster Carney’s depiction of markets, I’ve heard this sort of fantastic nonsense described in physics-modeling terms as ‘spherical capitalism in a vacuum.’

    Assume the perfect ethics law applies, further assume 0 participant friction, no influence peddling, perfect knowledge by all participants, no exogenous shocks, no recessions, &c, then use that as a starting point for building a realistic model…

  26. George Phillies

    For yet another perspective, note saying that the asset sale plan has already not worked:

    Of course, there may someplace in the world be a multibillionaire who thinks the Parthenon would be absolutely perfect as the centerpiece of his shopping mall, and will pay for it. This proposal may be less than well received, somewhat like proposing to pay off the US National debt by auctioning the north wall of the Grand Canyon at so much per linear foot for condos. It is just not obvious where the Greeks have 50 billion in government assets. Bloomberg offers some numberific details.

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