Yearly Archives: 2013

Swedish warning

"The hard data is in. Sweden's GDP fell by 0.1pc in the second quarter, astonishing everybody who relies on soft PMI confidence surveys. Year-on-year growth has been just 0.6pc, half the level expected, and Sweden is supposed to be a star performer in Europe. There are fundamental economic and mathematical reasons why Europe remains in dire trouble. Nominal GDP is contracting in a string of countries, causing debt dynamics to explode. As for Sweden, it had a housing boom and household debt bubble like the rest of us. The reality is that the Scandinavian pillar is not as strong as people think. There are no strong pillars in Europe." Continue reading →

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IMF finds $11 billion ‘black hole’ in Greece’s finances

"The International Monetary Fund warned the eurozone yesterday that it may be forced to write off a chunk of Greece’s debt after identifying an $11bn black hole in the finances of the recession-stricken country. In its regular update on the programme of financial austerity and structural change agreed to by Athens in return for financial help, the Washington-based IMF said weak growth and a sluggish pace of reform had opened up a funding gap in both 2014 and 2015." Continue reading →

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The Blindness of Modern Economists

"The economic establishment blames today's evils on free markets, a lack of government intervention, and banks for being reluctant to lend. It blames government deficits on cheats who don't pay their taxes. There are four horsemen of the global economic apocalypse, all interlinked: the overburdened economy; broken banks; expensive interventionist governments; and a developing welfare and pension crisis. As a politician aptly described to me when I interviewed him a few months ago in Brussels, trying to squeeze out economic growth under these conditions is like trying to fly a plane with concrete wings." Continue reading →

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The Pretense of Knowledge Is Alive & Well

"The Federal Reserve itself is a tool of the banks. It's a banking cartel. Trying to separate the banks from The Fed is an error. It's one big happy thieving family. Any (and all) government regulations that are put in place (or removed) are done for the benefit of the entire system. The best way to picture it is to think of a giant octopus. The head is The Federal Reserve and the sprawling arms are the banks. 'Regulations' and 'Deregulations' are just fodder for the masses out there to think that 'government is doing something'. To think that The Fed is some kind of 'regulator' is the same as thinking that the arsonist 'regulates' the fire." Continue reading →

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The Lady Who Votes Against Bernanke and Other Fed Members

"The Fed will continue its $85 billion bond buying program and the Fed says price inflation is below its 2% target, while the MIT Billion Prices Index shows price inflation around 2.5%, One FOMC voting member, Kansas City Fed President Esther George, continues to vote against current Fed policy. Why does she vote this way? George gives few speeches, but she did deliver a speech in June where she discussed her views. She is far from a hard money person, but her speech does contain some concern about the current massive additions to the monetary base." Continue reading →

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You Don’t Need a Weatherman to Know Which Way the Wind Blows

"There appears to be a tendency for market observers to follow the same news stories. The result of this phenomenon is that entire sectors are ignored or understudied for long periods of time. When the attention shifts, large swings can occur as the mob draws similar conclusions and takes action. Here are two phrases to wrap up the point: The first is: 'Liquidity only matters when it’s the only thing that matters.' This is a comment from the 2007-08 crisis, when otherwise functioning firms disappeared overnight because funding became impossible to find. Think Bear Stearns or Lehman Bros. The second is: 'Borrowing is cheap until it isn’t.'" Continue reading →

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The Financial System Doesn’t Just Enable Theft, It Is Theft

"Needless to say, those with access to leveraged credit and the issuance of fiat money have the power to make claims on resources without actually having produced anything of value or earned tangible forms of wealth. Those with political power and wealth naturally have monopolies on the issuance of credit and paper money, as these enable the acquisition of real wealth without actually having to produce or earn the wealth. This system is intrinsically unstable, as the financial claims of credit and fiat money on limited real-world resources and wealth eventually exceed real-world resources, and the system of claims collapses in a heap." Continue reading →

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Illinois Legislative Leaders Sue Governor Over Vetoing Lawmakers’ Pay Raise

"The Democratic heads of the Illinois House of Representatives and Senate on Tuesday filed a lawsuit challenging Governor Pat Quinn's veto of lawmakers' pay during a legislative impasse over pension reform. Illinois House Speaker Michael Madigan and state Senate President John Cullerton said in a letter to fellow lawmakers that the purpose of the litigation 'is to protect the independence of the legislature and preserve the separation of powers.' 'It is our hope that the court will remedy this constitutional violation and that future governors will not feel empowered to use such coercive tactics,' the legislative leaders wrote." Continue reading →

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Obama’s Next Big Blunder

"Many believe Janet Yellen, the Fed’s current vice chairman, is the best option because she’s been involved in all major recent monetary policies. But I won’t be taken aback if Obama picks Summers. He’s perfectly qualified for the job. If you have a terrible track record of predicting the economy and like to favor big banks at the expense of everyone else, then you’ve got a good shot at becoming the Fed chief. Because that’s precisely what the Fed does. It punishes savers and helps make bankers rich. And it fails to predict all major economic developments. That’s why Obama is considering Summers." Continue reading →

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Ride-sharing companies like Uber may lose ‘bandit cab’ stigma in California

"The draft rules to govern companies that already operate under such names as Lyft, SideCar and Uber, allowing passengers to electronically hail rides through smartphone applications, were unveiled by the state Public Utilities Commission (PUC). Among the proposed regulations are requirements for ride-share operators to obtain a license with the PUC to do business in California, to submit their drivers to criminal background checks and to carry liability insurance of at least $1 million per incident. Taxi drivers registered their disapproval by staging a noisy demonstration against the ride-sharing services on Tuesday, circling San Francisco City Hall in their cabs." Continue reading →

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