By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
Dreaming, I was only dreaming
I wake and I find you asleep– Billie Holiday “Gloomy Sunday”
The criticisms of Modern Monetary Theory (MMT) on the internet and in academia can be placed into three categories: the cranks; the nit-pickers; and the Kaldorians.
Read more...The state of play in Cyprus is that negotiations in Parliament are underway, with the hope of a yes vote on a “Plan B” today. The Cypriot officialdom has allowed for slippage in this timetable, with the bank holiday in effect till Thursday. The latest events were largely a nothingburger, aside from the big news of the failure to approve the president’s plan yesterday: European ministers confirmed that they’ll approve an agreement so long as Cyrpus obtains €5.8 billion from depositors. Monday night, President Nicos Anastasiades gave his version of the Hank Paulson armageddon speech on national TV, laying out the fact that no deal means an immediate collapse of “one bank” (presumably Liaki), and a possible exit from the Eurozone.
The widespread assumption is that the Cypriots will fall into line, since the alternative really does look even uglier. But the runway is pretty short.
Read more...By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives
MSNBC persists in running a pro-austerity line by falsely presenting Paul Krugman as a isolated opponent of economic malpractice.
Read more...By Cathy O’Neil, a data scientist. Cross posted from mathbabe
There have been lots of comments and confusion, especially in this post, over what people in finance do or do not assume about how the markets work. I wanted to dispel some myths (at the risk of creating more).
Read more...By C.P. Chandrasekhar, Professor of Economics, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India. Cross posted from Triple Crisis
If the international media are to be believed the world, still struggling with recession, is faced with a potential new threat emanating from China. Underlying that threat is a rapid rise in credit provided by a “shadow banking” sector to developers in an increasingly fragile property market.
Read more...Yves here. The comparatively low wealth of Germans should come as no surprise. It’s a direct result of German policies to suppress domestic wages, known as the Hartz reforms (see this post for more detail). But as Wolf indicates, that’s not how it will be seen in Germany.
Read more...Yves here. This post is useful in that it suggests short, simple ways to debunk the idea that deficit cutting is a good thing and to make the argument politically palatable. The trouble some readers will have is in positing that Obama is interested in policies that are good for middle class Americans, as opposed to his wealthy backers.
Read more...It’s hard to fathom the celebratory mood in the US markets, save that the moneyed classes are benefitting from a wall of liquidity reminiscent of early 2007, when risk spreads across virtually all types of lending shrank to scarily low levels. Then the culprit was not well understood, although Gillian Tett discerned that CDOs were a huge source of leverage, and in April 2007, an analyst, Henry Maxey at Ruffler, LLC, did an impressive job of piecing together how levered structured credit strategies were driving market liquidity.
Now it’s a lot easier to see what is afoot.
Read more...By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
While it is probably true that no one has ever gone broke underestimating the intelligence of the public, it is also true that many who try to turn a profit from stupidity often become the victims of their own nonsense. As we have discussed previously, the fear industry that has grown up since 2008 – mainly centred on the gold market – is a manifestation of this dynamic.
Read more...One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political leaders masquerades as news in the US. And we have a less controlled press than, say, Italy does.
So I will give readers some fresh data points and let you duke it out.
Read more...The Wall Street Journal reports tonight that there has been a big increase in homeless families, particularly in New York City.
Read more...It turns out Lambert’s mother-in-law research is pretty good.
Read more...Even though we were keen about how voter repudiation of austerity in the Italian elections last week was throwing a wrench in the Troika’s austerity plans, we also warned, based on the example of Greece, that they’d try to neutralize the results. That effort is already underway.
Read more...Richard Smith recommended this video by Bill Emmott, the editor of the Economist from 1993 to 2008. I was an enthusiastic reader of the Economist before Emmott took the helm of the magazine and quit reading it in the early 2000s, after it had moved to the right and had that slant permeating its coverage (and mind you, I was apolitical back then).
Nevertheless, there is a lot of useful detail on the power structure of Italy that may prove useful in interpreting the arm-wrestling of the next few months.
Read more...This Real News Network interview with Professor Dr. Heiner Flassbeck of Hamburg University (recently with UNCTAD) provides a cogent overview of why the impact of the sequester and any budget deal will be to weaken an already-struggling economy. I personally enjoy Flassbeck; he’s articulate and manages to get more information into his interviews than most of experts while keeping his remarks accessible to a broad audience.
Read more...