One of the striking aspects of the furor over Thomas Herndon, Robert Pollin and Michael Ash’s dissection of the considerable flaws in the Carmen Reinhardt and Kenneth Rogoff austerity-justifying paper are the “the earth is still flat” efforts to salvage the theory.
Read more...Yves here. This article if anything underplays how much a one-trick pony Luxembourg is and what a fix it is in if Germany and/or the EU continues its campaign against tax avoidance and evasion. Luxembourg hope to come to an understanding with the Eurozone and slowly reach accommodations, which would still shrink its banks, but in a less brutal manner than Cyprus. But with such a large financial sector, any action is still going to cause a fair number of customers to flee. It’s hard to see how any gradual path can be found, which then raises the question of whether a series of bank failures in Luxembourg would have broader ramifications.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from http://www.macrobusiness.com.au/2013/01/imf-admits-more-mistakes/“>MacroBusiness.
Another day, another round of atrocious data out of the Eurozone:
Read more...This Real News Network interview with Peter Lee, an Asia Times Online columnist who has been covering China for 30 year, is a welcome antidote to some of the superficial, stereotype-laden coverage of North Korea, not just what its posturing means for the US but other major players in East Asia.
Read more...Whither gold?
Read more...Contributed by Don Quijones, a freelance writer and translator based in Barcelona, Spain. His blog, Raging Bull-Shit, is a modest attempt to challenge some of the wishful thinking and scrub away the lathers of soft soap peddled by our political and business leaders and their loyal mainstream media.
Catalonia’s riot police unleashed the untamed fury of the state upon the protestors and cleared Barcelona’s Plaza Catalunya of all occupants. A dense ring of shell-shocked people gathered around the square. I was one of them. A child riding on his father’s shoulders held up a sign: “No soy anti sistema, el sistema es anti yo,” it said (I’m not anti-system; the system is anti-me).
Read more...Nothing like dramatic proof that austerity is a failure
Read more...Wow, did I miss it? Didn’t we have a crisis just a bit over four years ago? And wasn’t one of the big drivers the fact that banks were overlevered and took on too much risk?
Well, not only do we seem to be rerunning that playbook, banks are using strategies right under regulators’s eyes last time around to create phony capital. Worse, are pulling the exact same tricks they did last time around. Worse, regulators seem to be doing nothing to stop it.
Read more...By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives
(Brussels) Nonplussed by this week’s unemployment report showing the Eurozone jobless rate rising to an unprecedented 12%, members of the European Parliament and Europe’s national governments pressed ahead on Wednesday with passage of a stringent new package of austerity measures. Dubbed “hyperaustérité” or “Übersparpolitik” by its backers, the new program of ruthless cuts and social demolition promises to deliver even higher levels of joblessness, misery and hopelessness than has been achieved so far by earlier rounds of austerity.
Read more...Although the TransPacific Partnership negotiations are being kept firmly under wraps, what little has leaked out is so appalling that it legitimates Alex Jones-type fears about world government, or more accurately, a market state where the interests of globe-spanning businesses come first. The TPP expands on NAFTA’s extreme investor-state regime that allows foreign companies to directly challenge a government’s derivatives regulation, capital controls, and other financial, health, and environmental policies.
We’ll be writing more about the TPP, and this Real News Network segment provides a good introduction.
Read more...When I first heard about the Cyprus ritual execution bailout, I had thought that the widespread predictions that the island nation’s economy would contract by 20% to 30% over the next two years were off base.
The IMF says that Slovenia will need to issue €3 billion in bonds this year. The country may be forced to seek painful assistance from the Troika. Will Germany be the heavy as it was with Cyprus?
Read more...Cyprus has imposed temporary capital controls. This column sheds light on how temporary and how damaging they are likely to be, based on Iceland’s experience. The longer controls exist, the harder they are to abolish. Icelandic capital controls, which have been ‘temporary’ for half a decade, deeply damage the economy by discouraging investment.
Read more...By John C.K. Daly, the chief analyst for Oilprice.com. Cross posted from OilPrice
As the practice of hydraulic fracturing to produce natural gas continues to spread not only in the U.S. but worldwide, the scientific community has increasingly focused on the environmental consequences of the technique. The most worrisome side effect of “fracking” is the rise of earthquakes in areas where the practice is extensive.
Read more...