LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive of "Economy" Category
Tom Lehrer: Poisoning Pigeons In The Park
I just discovered the delightful pianist and satirist, Tom Lehrer, via Roderick Long’s blog. A mathematician (BA magna cum laude from Harvard, a phi beta kappa, and teaching stints at MIT, Harvard, and Wellesley, although he never finished his doctorate), Lehrer was employed at Los Alamos and the National Security Agency and then lectured widely in political science and musical theater. There are dozens of great pieces of his posted on youtube, on everything from Werner von Braun to World War III. To my ears, Lehrer sounds a bit like Danny Kaye (another of my favorites) - for the politically savvy.
The lyrics of this song, “Poisoning Pigeons In the Park,” perfectly capture the macabre sangfroid toward cruelty and wanton destruction that the corporate-state tries to inculcate in the population.
BP Oil Spill: Criminal Negligence Or Sabotage?
I couldn’t find any other convenient run-down of the evidence pointing to sabotage or extreme negligence in the BP oil spill, so I’ve linked PrisonPlanet.com’s report. I’ve checked the material and it’s well-sourced and confirms my own research, so I’m comfortable posting it. (more…)
BP Burning Rare, Endangered Sea-Turtle
For people who think passing a law or imposing a fine on some behavior invariably gets you less of the behavior or an improvement of it, try this heart-rending Natural News report:
“By now, almost everyone is aware of the out-of-control oil spill down in the Gulf of Mexico that seems to be getting exponentially worse with each passing day. But what people may not know is that BP’s efforts to control the oil by burning it are actually burning alive a certain rare and endangered species of sea turtle.
Fascist Alito Rules In Favor Of Monsanto’s GM Alfalfa
From Bloomberg, some bad news for small farmers fighting agribusiness giant, Monsanto. Libertarians shouldn’t fall into the trap of thinking that adoption of the precautionary principle is anti-libertarian. It’s not. How can any company give an assurance that it won’t do substantial, irreversible damage to other people’s property through pollination of other alfalfa strains? It cannot. Thus, any assurance that it can is patently fraudulent. Besides, Monsanto, like BP and Goldman Sachs, is a state-created, state-subsidized crony-capitalist outfit and not a product of the free market anyway. (more…)
16 Burning Questions About The BP Oil Spill
From The Economic Collapse Blog, 16 burning questions about the BP oil spill in the Gulf of Mexico:
#1) Barack Obama has authorized the deployment of more than 17,000 National Guard members along the Gulf coast to be used “as needed” by state governors. So what are all of these National Guard troops going to be doing exactly? Are the troops going to be used to stop the oil or to control the public?
Daily Bell: Elites Conspire Over Afghan Mineral Wealth
The Daily Bell on the Afghan mineral discovery:
Here is what the Anglo-American brain-trust may have in mind:
1. It will invite countries into the region to “exploit” minerals, operating through the Afghan government. (And has already invited China.) Each country, once involved, will be expected to provide its own security.
Sauvik Chakravarti On Eco-Statism
Sauvik Chakravarti at Antidote on human-hating environmentalism:
“Next: look at the different “utopias” of libertarians and environmentalists. Libertarians idealise the most perfect freedom. Environmentalists idealise “pristine” Nature. They are all from cities – but they love the jungle. They love beasts – the tigers and the elephants – and never consider what life must be like for someone who lives near wild elephants and tigers. These forest-dwellers are enemies of the environmentalist. Their greatest friends are the State forest guards – the very people the forest-dwellers hate. Environmentalists are therefore enemies of Man, enemies of Freedom, and friends of the State. This should always be borne in mind. They are all “watermelons”: green outside, but red inside.
Well On The Road To Serfdom
Rob Viglione at Seeking Alpha:
We can explain the rapid declines in homeowner wealth with the real estate bubble bursting in 2007, but how can we explain the general shifting in real estate capital structures going from 84% equity in 1945 to a mere 38% in 2010?
Forbes On Where Richer Households Are Moving in America
Forbes on where richer than average households are moving within the USA, June 14, 2010:
No. 1: Collier County, Fla.
Arriving average income per capita: $76,161
Departing average income per capita: $26,128
Stationary household average income per capita: $49,959
Total arriving people: 15,150
Total departing people: 16,802
Top origin: Lee County, Fla. (2,987 people) (more…)Sudha Shenoy: The Evolution Of Accounting (Bibiliography)
Organizations and Markets has a brief bibliography of the evolution of accounting by the distinguished libertarian economic historian, Sudha Shenoy. Accounting emerged without state intervention as a type of Hayekian spontaneous order:
“Someone asked whether accounting conventions can be interpreted as a kind of “spontaneous order,” in Hayek’s sense, or if the standard rules are the result mainly of state intervention. Sudha replied with these reading suggestions (lightly edited by me):
Oil Spill, Possibly Worst Ever, May Continue For Years
“The Obama Administration and senior BP officials are frantically working not to stop the world’s worst oil disaster, but to hide the true extent of the actual ecological catastrophe. Senior researchers tell us that the BP drilling hit one of the oil migration channels and that the leakage could continue for years unless decisive steps are undertaken, something that seems far from the present strategy.
In a recent discussion, Vladimir Kutcherov, Professor at the Royal Institute of Technology in Sweden and the Russian State University of Oil and Gas, predicted that the present oil spill flooding the Gulf Coast shores of the United States “could go on for years and years … many years.” [1]
According to Kutcherov, a leading specialist in the theory of abiogenic deep origin of petroleum, “What BP drilled into was what we call a ‘migration channel,’ a deep fault on which hydrocarbons generated in the depth of our planet migrate to the crust and are accumulated in rocks, something like Ghawar in Saudi Arabia.” [2] Ghawar, the world’s most prolific oilfield has been producing millions of barrels daily for almost 70 years with no end in sight. According to the abiotic science, Ghawar like all elephant and giant oil and gas deposits all over the world, is located on a migration channel similar to that in the oil-rich Gulf of Mexico.
New Research Shows Radiation Linked To Cancer
From Natural News.com (hat-tip to Unfiltered News Network):
“Our work shows that radiation can change the microenvironment of breast cells, and this in turn can allow the growth of abnormal cells with a long-lived phenotype that have a much greater potential to be cancerous,” Paul Yaswen, a cell biologist and breast cancer research specialist with Berkeley Lab’s Life Sciences Division, said in a statement to the press.
Chinese Buyers Holding Up Beaten Down Real Estate
While the government meddlers aim at the impossible (”stimulating the economy”) with the aid of the unethical (appropriating tax payer funds for their interventions), the much-maligned market is doing its best to sweeten the pain the only way it knows - providing new buyers at prices that turn the old buyers into sellers. Joel Bowman at The Daily Reckoning reports (June 12, 2010):
“For a growing number of well-to-do, geographically mobile Chinese citizens, property investments abroad are becoming a popular store of wealth, and a hedge against an increasingly precarious market back home.
BP Oil Spill Aids Expansion Of Regulatory Police State
The New York Times (June 11, 2010) reports on the failure of a republican effort to block the EPA (environmental protection agency) in its efforts to regulate carbon emissions as a health hazard to humans
“Senate Republicans failed yesterday to halt the Obama administration’s plan to regulate greenhouse gases, engulfing the chamber in a sprawling daylong debate that bounced from climate skepticism to posters of dead birds smeared in oil.
Agenda 21 Alert: Cap & Trade’s Scoping Plan Will Crush Small Business
Cassandra Anderson at Freedom Advocates sounds the alert about the underhanded push for “sustainable development” - Agenda 21 - through ‘Cap and Trade”.
(By the way, we’re all for sustainable development as long as it’s voluntary and comes without the heavy hand of the kleptocracy. So too we’re all for caring for the environment, choosing your family size wisely, reusing resources, and cultivating modesty, restraint, and thrift as essential components of the supremely capitalist moral virtue of prudence. But we’re not for any of these things when they’re hustled through surreptitiously as part of an agenda of top-down control and expropriation of people’s wealth and work). (more…)
Buckle Up For The Deflationary Ride
From Rick Ackerman:
We all need to get on board with paying down debt like any responsible citizen debtor would do. We owe big-time and this is but a taste of how it may cost us:
- Major employment reductions amongst those working in the public service
- Health care services that are rationed. Fewer nurses, health practitioners and support staff
Jamie Dimon Weighs In On “Too Hot” Former Citi Employee?
Update:
The case gets stranger. Lorenzana was on a 2003 TV serial, giggling about breast implant surgery she’d had. Knowing that, would any lawyer have framed her case the way it was? Of course, this doesn’t mean she wasn’t the target of harassment. The surgery itself says nothing. It’s commonplace. Do men who take viagra or steroids lose their civil rights? No. And a competent corporate lawyer would, of course, make it the first order of business to establish that the plaintiff in a harassment suit was a slut and “asking for it.” That’s quite usual. But I remain suspicious why this story, like the Helen Thomas story, has suddenly become so prominent….Maybe to create a little sympathy for the banks? Take the focus off the Gaza flotilla? (more…)
BP: Corporatist Couch Potato Or Market Hero?
“Corporatist System
But BP’s defenders and statist critics both have it wrong. This is not the story of a well-meaning or negligent firm operating in the free market. Negligent or not, BP is a player in a corporatist system that for generations has featured a close relationship between government and major business firms. (It wouldn’t have surprised Adam Smith.) Prominent companies have always been influential at all levels of government — and no industry more so than oil, which has long been a top concern of the national policy elite, most particularly the foreign-policy establishment.
We’re Too Broke To Be This Stupid
“The Spanish government pays over $800,000 for every “green job” on a solar-panel assembly line. This money is taken from real workers with real jobs at real businesses whose growth is being squashed to divert funds to endeavours that have no rationale other than their government subsidies—and which would collapse as soon as the subsidies end. Yet Tim Flannery, the Aussie climate-alarmist who chaired the Copenhagen racket, says we need to redouble our efforts. “We’re trying to act as a species,” he says, “to regulate the atmosphere.”
Why Not Build Barrier Reefs To Protect Coast From Oil Spill?
AP reported on May 17 that Louisiana Governor Bobby Jindal and others want to build barrier reefs to protect the coast from the BP oil spill. Sounds like a good idea at this point, now that pumping the well with mud hasn’t worked:
“Gov. Bobby Jindal and leaders from several coastal parishes are pushing a $350 million barrier island repair plan as a way to protect Louisiana’s coast from the Gulf of Mexico oil spill and reduce the ultimate cleanup and its costs.
Sand dredged from the gulf’s floor would be built up in 86 miles of the gaps between islands, returning land eaten away by decades of storms and slower erosion.
Jindal said Monday that the project could start within days after the Army Corps of Engineers approves it. He is asking for quick approval, and says he has been told that a decision could come in days.
Jindal says the price tag is much less than it would cost to try to remove oil from marshlands.
Read more: http://www.miamiherald.com/2010/05/17/1633826/jindal-has-350m-plan-to-rebuild.html#ixzz0pMYAqwP9Monsanto Claims Patents On Bacon, Steak, and Fish
From GM Watch:
Meat claimed as invention by Monsanto
Wednesday, 28 April 2010 11:22Meat claimed as invention by multinational company of Monsanto
No Patents on Seeds, Press release, 27 April 2010
http://www.no-patents-on-seeds.org/index.php?option=com_content&task=blogcategory&id=3&Itemid=28*Stop patenting the food chain!
Multinational seed corporations are following a consequent strategy to gain control over basic resources for food production. As recent research shows not only genetically engineered plants, but more and more the conventional breeding of plants gets into the focus of patent monopolies: International patent applications in this sector are skyrocking, having doubled since 2007 till end of 2009.
BP Oil Spill: Ten Horrifying Facts
Gulf Oil Spill: 10 Horrifying Facts You Never Wanted To Know
1. New estimates show the undersea well has spilled between 17 and 39 million gallons. These estimates dwarf those of BP, who claimed the spill had only released 11 million gallons to date, and mean that the Gulf leak is far bigger than Exxon Valdez, making it the worst spill in American history.
2. The National Wildlife Federation reports that already more than 150 threatened or endangered sea turtles are dead. And 316 sea birds, mostly brown pelicans and northern gannets, have been found dead along the Gulf Coast as a result of the spreading oil.
3. The Minerals Management Service, directly under the supervision of the Interior Department failed to impose a full review of potential environmental impacts of the BP drilling operation because preliminary reviews of the area concluded that a massive oil spill was “unlikely.”
Rule Of The Transnationals
Along Came the Transnationals, by Daniel Brandt, Name Base Newsline, July-Sept 1996
“Those who escape thought-reform at the end of history may trace our decline back to 1886, when the U.S. Supreme Court declared that corporations are legal persons whose life, liberty and property are protected by the Fourteenth Amendment. Ratified to protect freed slaves, it took railroad-company lawyers less than two decades to turn this amendment into a loophole. By 1904, corporations controlled four-fifths of the nation’s industrial production. Today transnationals control the world’s cultural and economic production as well, and generate most of its pollution.
Feds: No Right To Drink Raw Milk
The Feds now claim the right to tell you what kind of food you can put in your mouth.
From World Net Daily:
“Attorneys for the federal government have argued in a lawsuit pending in federal court in Iowa that individuals have no “fundamental right” to obtain what food they choose.
The brief was filed April 26 in support of a motion to dismiss a lawsuit filed by the Farm-to-Consumer Legal Defense Fund over the U.S. Food and Drug Administration’s ban on the interstate sale of raw milk.
The Entrepreneurs Of Dharavi
Financial commentator Joel Bowman looks at the Dharavi slum in Mumbai from a different angle:
“In an editorial pre-incarnation, your wayfaring author once found himself roaming the hot, sweaty crucible of economic chaos on the Indian Subcontinent in search of story and adventure. Mumbai squirms and pulses under the weight of three times the population density of New York City. It is both the commercial and entertainment centre of India, generating 5% of the country’s GDP and accounting for 25% of industrial output, 40% of maritime trade, and 70% of the nation’s capital transactions. Mumbai, sometimes still referred to as “Bombay,” is also a land of arresting dichotomy. For one, it is home to the world’s largest movie production industry…but just a short, bumpy ride from the glitz of Bollywood lays Dharavi, the largest slum in all of Asia. The latter area is a heaving mass of one million souls crammed into less than one square mile of unimaginable filth and grinding poverty. Needless to say, our visit to Mumbai’s underbelly was one of the most inspiring days of the whole trip.
The slum actually boasts an annual GDP of $660 million,” we wrote, awestruck after our short visit there, in The Rude Awakening. “The area, nestled between two railroad tracks, is bisected by an open-air sewage drain; commercial district on one side; residential on the other.
“On the commercial side, factories buzz around the clock, recycling the mass of waste spewed forth from around greater Mumbai. By day, ‘rag-pickers’ from the slum troll the city, collecting plastics, metals, bottles and all manner of other reusable matter. These materials are then melted down or repurposed in Dharavi before being sold back to metropolises all over India and, in some cases, across the region. Incredibly, all the machines are made on site. The men and women work 12 hours per day and each shift cooks a welcome meal for the incoming workers.
“Bound by the common oppression of multi-generational poverty, the people of Dharavi live and toil side by side, breaking their backs in the slum’s commercial district. Muslim people carve household Hindu temples, which then sell in the city’s markets, while the religious rift between the two groups rages on in the ‘outside world.’ Christian women watch over Muslim children, youngsters from different castes play together in the yards and Indian boys and girls learn in the slum’s schools alongside their classmates from all over Asia.”
Airline Prices Could Go Up 25% Says Industry Spokesman
Airline prices are set to rise this summer, says an industry spokesman:
“Airline capacity and routes flown are still down compared to recent years,” said Mark Koehler, Priceline’s senior vice president, Air. in a statement.
“We haven’t experienced the widespread, aggressive airfare sales seen a year ago. In general, travelers will find that summer airfares could be as much as 25% more expensive than last year, on average, and that’s before factoring in extra fees for baggage, pillows, food and such. Travelers who want to save on air travel will need to plan ahead, be flexible and try different approaches to booking their trips,” he said.
Airlines have started to see increased traffic as travelers returned after cutting back during the recession. The International Air Transport Association recently cut its full-year loss forecast for the airline industry by half to $2.8 billion.
Shares of airlines stocks jumped this morning.”
So, for anyone planning to become a stateless globe-trotter - and we’re all for it if your wallet can take it - here’s another monkey-wrench tossed into your plans.
Not only are fees and security at airports increasing, as I’ve blogged before, but prices and services on airlines are going up too. They even have a lavatory fee coming up at budget airline Ryanair. And they’re thinking of reducing the number of lavatories to make room for more seats.
Personally, I don’t think budget airlines - unless you fly often - are much of a saver. I’d rather pay $100 more and feel free to carry as much luggage as I want, get fed regularly with something other than $5 bags of pretzels, and have wait-staff paid enough not to glower at you.
Not long before you’ll be asked to bring your own seats or stand all the way….
Et Tu, Ron Paul?
Victor Aguilar at Axiomatic Theory of Economics voices a silent worry I’ve been having recently (apologies if this upsets libertarians and Paul fans, among whom I still count myself):
Note: I don’t know who Aguilar is, have never heard of him, don’t endorse any of his views, since I don’t know them, and only post this because he seems to echo a recent fear of mine about the promotion of Zarlenga and Zarlenga-esque ideas in all sorts of venues, including what I always thought of as the libertarian Daily Bell.
“Stephen Zarlenga writes:
Infrastructure repair would provide quality employment throughout the nation. There is a pretense that government must either borrow or tax to get the money for such projects. But it is a well enough known, that the government can directly create the money needed and spend it into circulation for such projects, without inflationary results.
First, incorporate the Federal Reserve System into the U.S. Treasury.
Second, halt the banks privilege to create money by ending the fractional reserve system.
Third, spend new money into circulation on infrastructure, including education and healthcare.
Ron Paul (2009, pp. 204-205) writes:
While a gold standard would be a wonderful thing, we shouldn’t wait for one before we end the Fed… An end to the money-creating power and a transfer of remaining oversight authority from the Fed to the Treasury would be marvelous steps in the right direction.
Aguilar:
So we see that Ron Paul’s proposal is essentially the same as that of Stephen Zarlenga and his man in Congress, Dennis Kucinich. Like Paul, Zarlenga also believes that a gold standard is a wonderful thing, provided that it does not have to actually be implemented. Since Paul has no concrete plans for implementing a gold standard, he and Zarlenga are united in their desire to incorporate the Federal Reserve System into the U.S. Treasury as quickly as possible.
The only difference is that, once the Federal Reserve System is incorporated into the U.S. Treasury, Paul vaguely hopes that Timothy Geithner will freeze the money stock while Zarlenga hopes that Geithner will spend new money into circulation on infrastructure. If I had to guess, I would say that Geithner, once given this enormous power, is more likely to spend the money, though not necessarily on infrastructure, than to freeze the money stock.
Ron Paul (2009, 203) writes,
“In an ideal world, the Fed would be abolished forthwith and the money stock frozen in place.”
Aguilar:
Idyllic is the right word. There is no reason for Paul to think that Geithner will do this for him. The Secretary of the Treasury is appointed by the President and the President panders to the voters. And they certainly do not want the stock of money frozen. If infrastructure is the new word for pork, then they want nothing more than to get some.
“If there’s anything worse than a secret Federal Reserve, it’s Congress controlling it,” says Sen. Jim DeMint, Republican of South Carolina. I agree. I dislike the United States having a central bank (I advocate free banking) but, given the existence of the Fed, I certainly would not put it in the hands of a bunch of squirrelly politicians.
Richard C. Cook writes:
I worked with Steve [Zarlenga] on his first draft of the American Monetary Act. The time came when Steve and I began to meet with Congressman Dennis Kucinich, briefing him and others in Washington on monetary ideas.
So much has happened since then. So many more people have become aware of the evils of the debt-based monetary system. We have seen Congressman Ron Paul ignite a national wave of revulsion against the Federal Reserve System. There is now even hope that the American Monetary Act might be introduced on the floor of Congress.”
Aguilar:
As for eliminating the Fed and giving the Treasury Department free rein to print money, I have already examined Zarlenga’s proposal in my 2008 paper and I specifically spoke of Cook here. There is no need to duplicate that material here just because Ron Paul has joined them….”
My Comment:
What this tells me is that there can be collaborations with the left on civil liberties and foreign policy, but not on economic freedom, which, for me, actually precedes political freedom.
My money represents my work and my time…and my work and my time represent my life. Through them my engagement in the world unfolds. They are how I come to understand the world in the most real way.
Not in the superficial and arrogant way that one “understands” the world only to meddle in it, as someone from the political class would. To them, the world is a black-box they engineer.
Hands off my world. Hand off my money. Hands off my work. Hands off my life.
I support Ron Paul, because I believe him to stand for these things and to fight for these things. If, ultimately ,for some reason can’t…. then for me at least there is no need to endorse any one else’s platform. It would be better to forget politics, since obviously there’s no one else who’s even broaching these issues. It’s that simple.
If Aguilar turns out to be right about this, then, regretfully, I’ll have to become a “mere” libertarian. With a small ‘l’. I’d sooner look to an alliance of counter-parties to the US government to teach the banking mafia the hard lesson they need in economics and justice than follow even libertarians blindly down a dead-end.
Gerald Celente: Greece Finished, USA To Follow
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Gerald Celente interviewed by Judge Andrew Neapolitano. Central banks are bailing out the private sector all over the world.
Soros To Buy Stake In Bombay Stock Exchange, Goldman Seeks Commercial Banking License in India
Palak Shah at the Business Standard :
“US micro hedge fund legend George Soros and the world’s third biggest philanthropist George Kaiser are in the race to acquire close to 4 per cent in the Bombay Stock Exchange (BSE), Asia’s oldest stock exchange.
Soros has bid for the BSE stake, held by the embattled Dubai Financial Group LLC, through Soros Fund Management LLC, and Kaiser has done so through private equity fund, Argonaut.
Other investors who have bid for BSE stake include New York-based private equity majors J C Flowers and Caldwell Investment, promoted by Toronto investment broker Thomas Caldwell. Caldwell is a specialist investor in stock exchanges and bought 4.3 million shares of the New York Stock Exchange in 2006. Sources added that a private equity fund has bid Rs 370 for each share, valuing BSE at over Rs 3,800 crore. Avendus Capital is advisor to the deal.
Dubai Financial, part of sovereign fund Dubai Holding, holds 3.92 per cent stake in BSE, which it bought when the exchange was demutualised in 2007. BSE was then valued at Rs 3,780 crore. While BSE and Avendus could not be reached for comment, sources familiar with the developments said Dubai Financial felt the exchange deserved a higher valuation in the current situation.
In the recent past, the valuation of the exchange saw a sudden spurt after a new management team took over in 2009.
While some stock brokers sold BSE shares at around Rs 180 a piece some six months ago, a bank auctioned 0.27 million shares at Rs 320 a couple of months ago.
Under the new management, BSE changed its derivative trading cycle to compete with the National Stock Exchange, launched a mutual fund trading platform and is upgrading its technology platform. BSE currently has a near 28 per cent share of the equity spot market in the country and has been making efforts to develop its derivative trading segment, where National Stock Exchange is a monopoly player. BSE will launch currency derivatives in May and is also in the process of increasing its stake in Central Depository Services Ltd to 51 per cent.
Currently, six foreign investors hold 25.65 per cent of BSE and five Indian institutions hold 12 per cent.
A little under 62 per cent of BSE’s shares are widely held. Among the key Indian shareholders are firms such as Bajaj Holdings and Investment, which owns 2.94 per cent, Infosys Technologies CEO and MD S. Gopalakrishnan, who owns 1.04 per cent and media major Bennett, Coleman and Co, which owns 1.04 per cent.
BSE recently announced 12 bonus shares for every share held and the exchange currently has around Rs 2,000 crore of cash reserves, which translates into cash per share of at least Rs 190.
BSE posted a net profit of Rs 55.42 crore on revenue of Rs119.21 crore for the quarter ended December 2009.”
The launching of the mutual fund platform and the upgrading of the technology and expansion of derivative trading is exactly what Goldman Sachs introduced into the New York Stock Exchange in the 1990s. And we saw what happened in the 15 years following. And Goldman is in India, currently seeking a commercial banking license to operate there.
With the same players around (Soros, Goldman Sachs etc. ), there’s no reason to believe that what’s coming up for the Bombay Stock Exchange won’t take the same direction. Before the financial crisis, the Indians had little exposure to the highly levered derivatives and toxic debt that blew up the system elsewhere. Let’s see whether this upcoming round they’ll be as lucky. With economies stagnant elsewhere, Asia and some select African countries are the only places where there’s actual economic growth occurring.
I’m afraid the same handful of corrupt players will game the system there…
More here at The Economic Times:
“His hedge fund Quantum, which was reported to have posted earnings of over 30% last year, went on a buying- spree at a time, when most funds were dumping stocks in a sliding market. On July 4, Quantum Fund bought a 3.8% equity in Jain Irrigation Systems, and close to 1% of the holding of Jai Corp for a value consideration of Rs 167 crore. Since February, the fund has made investments valued at close to Rs 600 crore, or $ 140 million, in various companies, including Indiabulls Financial Services, Indiabulls Real Estate and Kalindee Rail Nirman. Quantum’s selective stock picking comes at a time, when institutional investors have been pulling out a large chunk of money amid concerns over a combination of factors such as weak global markets, soaring global oil prices and spiraling inflation in India. “Hedge funds normally are active, when there is some momentum in the market. Quantum may be trying to do some value-buying, but one has to see how long the fund stays invested, given the prevailing uncertain market conditions,” said a stock-broker..”
Remember Formula K (or, the First Law of Kleptocracy) :
s(B) + s(G) + s(S) v. EE where ’s’ is always a positive integer
Some (s) of the big banks (B - eg. JP Morgan, Goldman Sachs, Citi etc.)
+
Some parts of government (G - eg. parts of the SEC/Treasury/Fed Reserve Chairman, IMF, World Bank etc.)
+
Some hedge-funds and speculators (S - eg. Soros, Paulson (?), Loeb, Cohen and others reportedly involved in manipulation and collusion with government)
Versus
Every one else (EE)
Obama Goes After Upper Middle-Class Savers
“Congressional leaders are raising to 3.8 percent their proposed new Medicare tax on investment income in the final health-care overhaul plan, a Democratic leadership aide said.
The rate is higher than the 2.9 percent President Barack Obama proposed in February. Under Obama’s proposal, the new tax would apply to income from interest, dividends, annuities, royalties, capital gains, and rents for individuals who earn more than $200,000 and joint filers reporting more than $250,000.
House Speaker Nancy Pelosi, asked today if the tax applied to capital gains, said it would be imposed on unearned income “whatever category it is.”
It would be the first time Medicare taxes would cover investment income. The current 2.9 percent Medicare levy currently applies only to salaries and is split evenly between workers and their employees.”
My Comment:
No redistribution of the ill-gotten loot of the corrupt mega banks and their government and speculator associates …loot that runs to billions. Instead, the administration goes after middle-class investment income. This is a first, and it sets an unholy precedent for the future. Does this government not get that we need to increase capital formation, not slow it down?
Surreal India
Daily life in India grows more surreal for the ordinary man, says writer Pritish Nandy:
“You can’t afford food? No worries, we will give you a stunning cricket extravaganza with lots of movie stars and pretty cheerleaders.
You feel insecure because Maoists are now in 20 states and have killed more people than the jihadis? Don’t bother, we will buy you a $2.35 billion refurbished old Russian warship.
Your cities are crumbling under the pressure of migration because agriculture’s no longer a sustainable profession? No stress, we will build you fancy bridges and flyovers and walkways where no one will ever walk.
You can’t find a job despite all your education? No sweat, we promise 30% reservations for women in the Lok Sabha.
Increasing terrorist strikes are scaring you? Chill yaar, we will give you the perfect Indo-US nuclear deal.
Public transportation in the cities is on the verge of collapsing? Not an issue, we are building helipads at prominent locations.”
– Pritish Nandy, “The Wonderland That’s India,” Times of India, March 15, 2010
Steve Forbes: Fannie & Freddie Must Go, DDT Must Return
Steve Forbes points out that government subsidies in the housing market weren’t needed for Canadians to become home owners:
“The Bush Administration botched an opportunity in 2008 to put these entities in receivership, with the idea of either liquidating or privatizing them. A winding down of Fannie and Freddie would have led to a birth of new players, well-capitalized and ready and willing to buy, package and sell home mortgages–and subject to failure.
The Obama Administration won’t formally nationalize the current Fannie and Freddie because that would swell the official budget deficit. And it certainly won’t countenance the idea of privatizing them. That will have to wait until we have a Republican President. Fortunately, this individual will have a Congress with enough new members who won’t have been corrupted by Fannie and Freddie the way previous occupants on Capitol Hill were. Certainly public opinion will back privatization. In fact, the two companies should be recapitalized, broken up into at least a half-dozen entities and sent out into the real world, with no ties to Washington.
Studies have conclusively shown that Fannie and Freddie did virtually nothing to boost home ownership. Canada, for instance, has almost none of the props for housing that the U.S. has had, yet the proportion of its population owning homes wasn’t much different from that of the U.S. before the bubble.”
The article then ranges widely, moving from Michael Crichton (best-known, outside his fiction, for his skepticism about anthropogenic global warming) to the ban on DDT, which Forbes blames for a resurgence in malaria world-wide:
“Not only is malaria on the rise because we won’t use DDT to kill mosquitoes but so are other insect-borne diseases, such as dengue fever. “
My Comment:
On the GSE’s I agree with Forbes. But not on DDT, where his argument is one that activists in the field hotly rebut. Water-borne diseases, especially, are largely a product of poor sanitation. And filthy water, they say, is also to blame for the return of malaria.
Forbes then makes the argument that DDT, properly used, doesn’t have the bad effects attributed to it by Rachel Carson, in her seminal book, “Silent Spring.”
The operative word here is “properly used.”
(You could, after all, say as much about Credit Default Swaps. Properly used, they aren’t harmful either).
Anything can be “improperly used.” So where do you draw the line? What’s the proper use of DDT?
Experts say it should be confined to dusting the insides of homes, instead of the large-scale crop-dusting that had a toxic effect on the environment earlier. That sounds fairly reasonable, if the DDT is used along with more sustainable, local practices - draining and cleaning stagnant water and sewers, and, most important of all, improving public hygiene. Without that, chemicals are pointless in the long term.
More than half of India (to take an example) lacks access to toilets and defecates in public. Surely that fact, as well as the problem of wet waste, takes precedence in any discussion of health. That means the root of most diseases in India, including malaria, is poverty and bad habits, the solution to which really isn’t DDT, but economic development and cultural reform.
I did a piece on this called, “Cleaning House” (Alternet, Feb 5, 2004), where I discussed the phenomenon of Not In My Back Yard that prevents community best practices from being implemented on a larger scale.
“When I walk over to my nephew’s house, only a mile and a half away in a rural campus, my journey has a Victorian arduousness to it. I have to pick my way gingerly through the dusty path cutting across the field, alert for dozing vipers, lantana thorns, cantankerous goats tethered to the bushes, and random puddings of animal and human excreta. At first, it is a mystery where these come from because the villages are a good bit away. But distance does not dim the force of the NIMBY (not in my backyard) sentiment, which until recent years has been the motto of Indian civic life.”
Beyond poverty and flawed culture (and often driving them), there’s also the government.
The filth in public spaces is one of the tragedies of the commons. When everyone owns something, no one cares for it. That’s the fate of public space in India, socialist since independence in 1947, with a bureaucracy fattened by years of being a poster-child for poverty on the international aid circuit.
At least in the cases of Africa and Asia, then, the social and political context is absolutely crucial in arguments about economic liberty and technology. And the perspective from the ground, in the case of malaria and other tropical diseases, suggests a different kind of technology from bio-tech, one in which regulation isn’t much of an issue at all.
Jason Gale, Bloomberg, May 2007:
“Nair says modern sewers aren’t the answer for India. The country can’t afford to waste water by flushing it down a latrine. Instead, she’s encouraging airplane-style commodes that are vacuum cleared or toilets that are attached to contained pits rather than systems that pipe the effluent miles away for treatment. In Nair’s world, recycling human excrement for use as fertilizer is preferable.
“We need to invent our own devices which are cost- effective, environmentally sustainable and go with our people,” she says. “We cannot afford the things which are simply things that some civil engineer learned somewhere.”
Converting excreta that have been properly dried for 6-24 months into plant food uses less water than traditional sewage systems and is less likely to pollute waterways, Payden says.
Bartram says composted sewage that’s been handled correctly can be used in agriculture and for other beneficial purposes with negligible risk to human health. The challenge is to sanitize it so that disease-carrying organisms are eliminated.”
If cleaning the streets is more important than spraying DDT, in long-term control of malaria in India, then we’ve by-passed the regulatory problems associated with the chemical altogether.
In this case, as in others, activities that have a direct effect on the eco-system or the human organism (DDT) and activities that don’t (housing subsidies) can’t really be yoked together in analysis without problems. I tend to think that using the same model of reasoning for both, then, doesn’t yield correct answers, because it’s a function of a certain degree of ideological fundamentalism or literalism.
Everything is always a matter of interpretation.
Update:
In much the same way, I’d argue that the corrupt culture in Wall Street has to change before bans on this or that financial instrument are considered (that is, if one were to even concede that bans were necessary). Which is why the market-reform movement and the prosecution of crime come first, before changes in regulation.
Update:
The government of India’s rather optimistic schedule is to achieve its sanitation goals by 2010 and it’s using economic incentives to get there. ($48 for each installed toilet in Haryana).* It isn’t likely to get there that fast, but the program does suggest one area in which you can invest confidently - sanitation technology.
*I’m not endorsing this or any other government program, I’m merely noting it.
Vatican Moves Away from Frankenfoods
The head of the Pontifical Council for Justice and Peace, Cardinal Peter Turkson, has moved away from his predecessor’s support for developing genetically modified food to alleviate hunger in poor countries. Instead, he argues that adoption of the “precautionary principle” is warranted:
“There are a lot of claims that are disputed (like) that GMOs never call for the use of pesticides or insecticides or anything because they are resistant,” he said. Such claims have been challenged, he said, and some say “at a certain point (these crops) require insecticides whose chemicals break up later in the soil and render the soil less fertile.”
Given the disputed claims and doubts, “I think that we should go easy and probably satisfy all of these objections to the full satisfaction of those who raise these objections,” he said.
Because of the companies’ control over the patented seeds, “what is meant to alleviate hunger and poverty may actually in the hands of some people become really weapons of infliction of poverty and hunger,” Cardinal Turkson said.
Previously, opponents of GM carried the burden of proving that some harm was being inflicted. Under the PP, companies that planned on introducing genetic changes into an organism would have to bear the burden of proving that it was safe.
While this might seem counter-libertarian, I would argue it is not.
1. Since changes in genetics are impossible to regulate post facto, they cannot be subject to the usual economic arguments available to libertarians. The potential devastation is so irreparable that the principle of liberty demands that the bar be raised ahead of the event.
2. Biotechnology as an industry is concentrated in so few and such large companies, that free market conditions do not prevail at all in other respects. The companies owe their position in the market to their influence on government regulations and laws, to begin with. That suggests that there will be little in the way of normal market forces to check their natural profit-seeking from turning into rent-seeking based on preferential treatment, captive markets/monopoly, and government enforcement. PP is simply a thoughtful mechanism to prevent profit from careening into plunder.
Bottom line, PP prevents looting or theft.
That makes it libertarian.
Lawrence Reed: Lessons From the Great Depression
LESSONS FROM THE GREAT DEPRESSION - Lecture by Lawrence Reed, Nov. 2, 2009
Economic Liberty Lecture Series: Lawrence Reed from The Future of Freedom Foundation on Vimeo.
Shocks And Doctrines: WSJ Uses Quake To Critique Klein
Bret Stephens in the Wall Street Journal adds some nuance to Naomi Klein’s black-and-white picture of Milton Friedman’s contributions to the Chilean economy, noting how prosperity and effective enforcement of building codes have protected Chilean victims of the recent earthquake from the devastation that Haiti suffered:
“In left-wing mythology—notably Naomi Klein’s tedious 2007 screed “The Shock Doctrine”—the Chicago Boys weren’t just strange bedfellows to Pinochet’s dictatorship. They were complicit in its crimes. “If the pure Chicago economic theory can be carried out in Chile only at the price of repression, should its authors feel some responsibility?” wrote New York Times columnist Anthony Lewis in October 1975. In fact, Pinochet had been mostly indifferent to the Chicago Boys’ advice until the continuing economic crisis forced him to look for some policy alternatives. In March 1975, he had a 45-minute meeting with Friedman and asked him to write a letter proposing some remedies. Friedman responded a month later with an eight-point proposal that largely mirrored the themes of the Chicago Boys.
For his trouble, Friedman would spend the rest of his life being defamed as an accomplice to evil: at his Nobel Prize ceremony the following year, he was met by protests and hecklers. Friedman himself couldn’t decide whether to be amused or annoyed by the obloquies; he later wryly noted that he had given communist dictatorships the same advice he gave Pinochet, without raising leftist hackles.
As for Chile, Pinochet appointed a succession of Chicago Boys to senior economic posts. By 1990, the year he ceded power, per capita GDP had risen by 40% (in 2005 dollars) even as Peru and Argentina stagnated. Pinochet’s democratic successors—all of them nominally left-of-center—only deepened the liberalization drive. Result: Chileans have become South America’s richest people. They have the continent’s lowest level of corruption, the lowest infant-mortality rate, and the lowest number of people living below the poverty line.
Chile also has some of the world’s strictest building codes. That makes sense for a country that straddles two massive tectonic plates. But having codes is one thing, enforcing them is another. The quality and consistency of enforcement is typically correlated to the wealth of nations. The poorer the country, the likelier people are to scrimp on rebar, or use poor quality concrete, or lie about compliance. In the Sichuan earthquake of 2008, thousands of children were buried under schools also built according to code.
In “The Shock Doctrine,” Ms. Klein titles one of her sub-chapters “The Myth of the Chilean Miracle.” In her reading, the only thing Friedman and the Chicago Boys accomplished was to “hoover wealth up to the top and shock much of the middle class out of existence.” Actual Chileans of all classes—living in the aftermath of an actual shock—may take a different view of Friedman, who helped give them the wherewithal first to survive the quake, and now to build their lives anew.”
My Comment:
Friedman, was, of course, from an Austrian perspective, far from being an ideal free-marketer. In a devastating piece, “Milton Friedman Unraveled,” (1971), Rothbard even questioned his claim to be called a free marketer of any kind, listing among many sins, his advocacy of withholding taxes and of an absolute dollar standard.
All true, no doubt. But the fact remains, even if it was only in a very constrained sense that he advocated more freedom in the markets, he did advocate it. And as the article above suggests, contra Rothbard, even a limited advocacy of market freedom is better than an outright assault on it.
John Paul II On The Moral Basis Of Capitalism
Tom Woods cites Pope John Paul II on the moral basis of material prosperity:
“According to John Paul II, “The moral causes of prosperity . . . reside in a constellation of virtues: industriousness, competence, order, honesty, initiative, frugality, thrift, spirit of service, keeping one’s word, daring — in short, love for work well done. No system or social structure can resolve, as if by magic, the problem of poverty outside of these virtues.” These are precisely the virtues that the market economy fosters.
These ideas are not foreign to Catholic tradition: The Late Scholastics of the 16th and 17th centuries favored an economy very largely free of government controls, and John Paul II’s Centesimus Annus (1991) reflected an increasing appreciation for the moral and material benefits of non-coerced economic exchange.
The less heed we pay to slogans and propaganda, and the more we study the question on its merits, the more attractive does the market become.”
What China Wants
The Financial Times points out the quirks in the Chinese market that have Western companies racking their brains to stay on top of sales:
“The big spender in China, in years past and even more so today, is the state: private consumption as a percentage of gross domestic product has fallen from 60 per cent in 1968 to 36 per cent last year and could be as low as one-fifth in 2009 as the government ramps up capital investment.
In fact, the Chinese, who already have a world-beating savings rate of nearly 40 per cent of their income, tend to become more frugal when times are tough. As bank deposit rates decline, most of us spend more. The Chinese tend to stash away even greater sums to make up for the lost interest. The reason for this conservatism is the lack of a social safety net in China – citizens have to provide for their own medical care, old age and possible unemployment.
This makes them “penny pinching, ruthless, suspicious shoppers”, says Tom Doctoroff, north Asia director of advertising agency JWT and a writer on Chinese consumer trends. In a recession this behaviour only grows worse. “The downturn has made people keener on finding the cheapest deal,” says Yuval Atsmon, an associate principal in McKinsey’s Shanghai office. Even when they can easily afford it, buying a PC typically involves six visits to a store, and more often than not, customers will wait six months before making their decision after consulting blogs, online comparison sites and – the most important source of information in China – friends and family. Sales of copycat mobile phones, with all the functions of top models but a lower price, have soared from 17 million units in 2006 to 62 million units last year.
Brand consciousness is high, at least in the big cities, but brand loyalty is much lower than in the west. A price cut or good in-store promotion can often sway shoppers. And for cultural reasons, appealing to an individual’s taste or personal comfort typically doesn’t work, Doctoroff points out. A purchase either has to publicly signal status or wealth, like a flashy car does. Or provide a practical benefit: the latest craze in China is chocolate with added calcium, eaten not for pleasure but for the health benefits. The growing appeal of diamonds to women is not based on romance, but as a financial signal of a man’s commitment. Trust is another key issue in a country where so many consumer products are faked. Chinese mothers, for example, will pay 30 per cent more for safe baby milk – and this should favour foreign brands.
But foreign retailers and manufacturers have to cope with vast regional differences in demographics, language and culture that make it hard to plan a single marketing strategy – indeed treating China like a single country is usually a mistake. Natives of Zhejiang on the east coast like “toilet roll as rough as sandpaper”, the former head of Wal-Mart China liked to observe, a penchant thankfully absent elsewhere. Atsmon points out that cities even an hour apart can be entirely different: in southern Shenzhen, more than four-fifths of the population consists of migrant workers, mostly under the age of 35, who speak Mandarin and drink in bars. In nearby Guangzhou, migrants number just over a quarter, more people are older, enjoy watching Cantonese TV and go out to restaurants to drink with family members. Adequately addressing such niches requires an army of local suppliers, costly infrastructure and several layers of wholesalers and intermediaries. Even then, success may remain as elusive as it always has been: “No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so,” lamented Carl Crow, an advertising executive in Shanghai and author of the original book on how to sell to the Chinese … more than 70 years ago.”
India Changing…
Jayant Bhandari in Liberty Unbound:
“Now, as I travel through India’s smaller towns and villages, I gather many impressions, both of change and of continuity.
I stay in rooms that cost me $2 a day, and purchase all-you-can-eat food for 50 cents. I pay my driver the princely sum of $7 a day. To Westerners, these prices will appear astonishingly low, but inflation of food prices in India is close to 20%. Food is very expensive for regular folks, and speculators are being blamed. I am constantly amazed that there is never any mention of the fact that the Indian government still runs one of the most efficient printing presses in the world — printing money, of course. The only thing that limits inflation is the high rate of real economic growth. Yet the Indian government is getting extremely addicted to increasing expenditures. The government’s fiscal deficit is about 12% of GDP. To me this is like addiction to heroin. What will happen if the growth rate falters?
In an isolated place, a woman sells me a 15-kilogram bag of fruit for a total of 60 cents — fruit worth about $15 in Bhopal. Her companions think she’s won a lottery. These wretched women chase me and beg me to buy some from them. I feel sorry for the little girl who had tears in her eyes. Yet I am repelled by the fact that so many Indians easily grovel and beg. The worst is when well-off people do this. A visit to a government office in India is essential if you want to understand the degradation that the Indian public accepts even today.
I meet the top management of a company constructing a major highway. The highway was deemed uneconomical, so the government and the company agreed that they would use eminent domain to confiscate a lot more land than was necessary from the farmers, at 5% of the market value. The extra land would be converted into condos or commercial space. The poor people would subsidize development. Why should they subsidize the development of the country? This is socialism in practice, although the farmers are branded communists when they rebel. Meanwhile people in the West believe there is something romantic about poverty — a view that is not only hypocritical but pathetically wrong..…”
David Tice On King World News: Trouble Ahead….
David Tice on Eric King’s King World News, December 23, 2009
- This is not another inventory recession; this is unprecedented
- There’s trouble all over the globe - Europe, China, Japan..
- Hunker down, cut back expenditures, get out of stocks, own gold
- Look for deflation followed by competitive currency devaluation, then inflation.
Adrian Ash: Here Comes Stagflation
The whole inflation-deflation debate has always struck me as misbegotten. People use the terms to mean things so varied that it’s pointless to argue. But such as it is, I’m a firm believer in the deflationary thesis on the macro level… influenced in this by the economist Antal Fekete , and his theory of how capital is destroyed in a fiat money regime.
Nonetheless, I do see consumer prices rising.
In other words, asset prices fall, industry contracts, and unemployment levels stay high, while the stuff on the shelves costs more, insurance and tuition rates climb, and living in general becomes more expensive. (more…)
The Demonic Style: Valentine On Military Historians, Avatars, and the CIA
Insight into why the revisionist media never ‘gets’ it:
“The extent to which this practice existed was revealed in 1975, when William Colby informed a congressional committee that more than 500 CIA officers were operating under cover as corporate executives and that 40 CIA officers were posing as journalists.
“When it comes to the CIA and the press, one hand washes the other. In order to have access to informed officials, reporters frequently suppress or distort stories. In return, officials leak stories to reporters to whom they owe favors.
Recession Brings Fall In Crime Rates
The recession is dealing body blows to the rationale of many great society programs, that poverty leads to crime. First, there was the unmasking of a large part of the most affluent part of the country, its financial elites, as little better than a criminal class. Now, comes news that crime rates are down as the recession continues. (more…)
Doug Valentine: CIA Killings Spell Defeat In Afghanistan (Updated)
Update (January 12): In response to criticism (in the Comments) by a US military historian, I’ve posted a review of Avatar here at MBP, on January 11.
Update (January 12): Since this piece is so topical and sensitive, I´m taking the liberty of adding links to it, so that readers can do further reading on their own.Original Post:
“Douglas Valentine, author of the recently released account of the DEA, “The Strength of the Pack,” contributes this piece to The Mind Body Politic:
Disrupting the Accommodation: The CIA Killings Spell Defeat In Afghanistan
Why?
“Why?” The grieving family members ask. “Why did the terrorists kill our loved ones?” (more…)
Shadow Stats’ Williams Says Hunker Down For Depression
John Williams of Shadow Stats says the gig is up:
“Atlhough the hyperinflation is going to be limited largely to the U.S., the economic downturn will affect things globally. I can’t tell you how things will go with a hyperinflationary Great Depression, which is where I see things going.
It’s the type of thing that will tend to lead to significant political change. People tend to vote their pocketbooks. You could have the rise of a third party. You could even have rioting in the streets. I’m not formally predicting that — anyone can run these different scenarios. For the individual, what you need to do, from an investment standpoint, look to preserve your wealth and assets. Don’t worry about the day-to-day fluctuations in the markets. What I’m talking about here is over the long haul…
[Gold is] going to be highly volatile, as will the dollar, over the near term, but longer term, physical gold I would look at as a primary hedge for preserving the purchasing power of your wealth and assets. Maybe some physical silver. Get some assets outside the U.S. dollar. I might even look to move some assets physically outside the United States. The key here is to look at a longer range survival package, battening down the hatches, and preserving your wealth and assets during a very difficult time. Once you’re through that, you’ll have some extraordinary investment opportunities, and I can’t tell you what it’s going to be like on the other side of this crisis.”
My Comment
In response to a reader, I added my comment (Dec 28):
This is the way I see it.
1. There is asset price deflation going on (house prices falling), since the prices reflected unrealistic future projections of housing growth driven by derivatives built on the mortgages.
Now that those projections have been called into question, the derivatives have been repriced as junk, and the underlying securities, the homes, have to return to a more appropriate price leve.2. This means that all artifical economic activity associated with the housing bubble also has to decline. So there´s economic contraction. That has taken down the commodity markets with it (except for gold, which is up as a hedge against the dollar and as a speculative play right now)
3. I don´t pay too much attention to individual figures coming out on the economy that seem to indicate an improvement in things, because
a. Many of the numbers are inaccurate or deliberately misleading.
b. Economics is not a mathematical science. It´s an art. Static numbers cannot tell you about the social mood, political factors and gestalt that drive the market.Now, market prices are bit more reflective of those things because they´re dynamic, so the prices of commodities and stocks can be good indicators. But there again, which prices -the price of gold, the price of money in the US, the price of commercial borrowing?
c. There´s also market manipulation..very severe manipulation. So again, the market indicators have relevance but its upto individual analysis how to tease out the relationships.
4. That said, and despite the fact that we have a credit contraction going on (a decline in the monetary base) that doesn´t mean that at some point the money pumped into the banks won´t find ways of entering the economy….if it hasn´t already, in some disguised fashion. (I realize the word ´money´ is being used in different ways here, as it is through out the debate, which is the reason for so much confusion..but that´s a long story..)
5. It´s highly probable that as the slowdown shows its true face, governments everywhere are going to be simultaneously devaluing..leading to local inflation.
6. Searching for hard assets, funds are again going to drive prices of certain essentials upward..leading eventually to commodity prices soaring even while there is a general economic contraction
Thus you could have simultaneously a high level of inflation - perhaps not hyperinflation, I would guess around 15%’20% - as well as a depression
Social Media Machinations Of the Financial Press
A piece of Orwellian obfuscation by one Tom Sykes at Daily Kos *(see note at the bottom of this post) goes into the file, rip-roaring propaganda:
“I want to be clear on something up front. I think hedge-funds are a menace and should be outlawed. I think Goldman Sachs is a criminal conspiracy and its whole leadership should be indicted.
There are plenty of commentators, like Paul Krugman in the New York Times today and Matt Taibbi in his article in Rolling Stone, that have done great reporting on Goldman and on hedge funds.
But what we’re seeing is how a really odious character named Patrick Byrne is trying to hijack this issue…”
My Comment:
Byrne hijacked Taibbi? The liberals busted Goldman Sachs and naked short-selling and the hedge funds?
Aren’t Goldman Sachs and the hedge-funds the money men who funded the whole left-establishment..and wasn’t it people on the right libertarian side who busted them, and in fact called the whole financial crisis?
The libs were on the case only in 2008 when everyone was on the case and you’d have to have been blind not to notice.
This kind of revisionism makes me question the impetus behind the Rip Van Winkle awakening of the MSM on the financial crisis.
Either it shows that the MSM can’t see what’s going on in front of its collective nose, which argues that its working hypotheses are wrong (the kinder interpretation), or it shows rank dishonesty (the truer interpretation, likely).
I’d go with the first interpretation, only the hatchet job the press keeps doing on anyone from the other side of the political spectrum suggests that the second interpretation is the right one.
As I’ve repeated ad nauseum, Taibbi seems to have lifted my Goldman Sachs piece of 2006 (Money Week) as well as a bunch of other articles written in 2007-2008 (see ABOUT) . You can read it on the net and then go back and see what Taibbi wrote, only about three years after I did. (He probably pinched stuff from at least one other person as well). You will also see that I wrote more than half-a-dozen articles on Goldman after that in 2006 and 2007 (check this site). In 2008, everyone began writing about Goldman. I figure someone at Rolling Stone got worried that the population was beginning to wake up to which side really had the goods, and decided to co-opt the issue before their intellectual ineptness was too evident.
Otherwise, I’m hard pressed to explain why they don’t think they need to source and attribute correctly. They can’t all be such intellectual charlatans? Right?
As for naked short selling, Byrne has been waging that campaign since 2005.…and some others on the right, even before him. Even people who don’t think there’s an NSS hedge-fund-media conspiracy involved have long ago conceded that NSS is a problem (see this Motley Fool piece from 2005), and that it’s difficult to figure out what’s really going on, because the DTC/SEC, for example, won’t/can’t release the figures needed to assess the situation.
(Now, why would anyone think conspiracy when there’s stone-walling going on…)
Matt Taibbi basically borrowed Byrne’s argument. And having taken the argument, the establishment is now trying to discredit the person who made it first (see Ritholtz here and here, even before the Facebook brouhaha).
It’s not irrelevant that in coming to his conclusions, Ritholtz cites only the very same journalists whose credibility is shot by the evidence of their collusion with hedge-funds. That is certainly a bizarre way to report on a topic.
Mind you, this should not be taken to be an endorsement on my part of Byrne’s business practices or accounting, about which I know only what I have read. And that of course has mostly been written by his critics and critics of the NSS thesis, like Dow Jones reporter, Carol Remond.
But Remond, despite her reputation as a respected reporter on penny-stock scams, is seriously compromised in her reporting on this issue because of alleged collusion with hedge funds.
I say alleged, to be on the safe side, but to my eyes the evidence is convincing.
On the other hand, Overstock has repeated accounting problems that its foes argue are the real reason for its NSS campaign.
How serious these problems are is hard to say.
Of the two accountants who routinely denounce Byrne’s business practices in multiple postings that take up a remarkably (and suggestively) disproportionate space on their blogs, one, Sam Antar, has been convicted of one of the most extensive cases of embezzlement in recent history. Antar also claims the mantle of reformed felon without any evidence that restitution of the embezzled funds took place. He escaped prosecution only by turning in his own family. This is not a confidence-builder. Actually, there’s some evidence of further wrong-doing involving one Barry Minkow that’s also posted on the Deep Capture blog. Antar and Mankiw are practicing greenmail, according to this piece.
(Its author uses the term loosely. Greenmail, in recent US financial history, is what Michael Milken is infamous for - a type of corporate raid. And Milken is one of the central villains in the Deep Capture story of the corruption of Wall Street. Since I researched this period for a book I was planning to write on Goldman Sachs, I’m conversant enough with the subject to say with some confidence that Byrne is on the right track on this).
The other accountant who criticizes Byrne, Tracy Coenan, seems to be another ally of Antar and equally over- concerned with the accounting problems of Overstock, to the neglect of other companies.
Yet these are the only two accounting experts I see cited by Weiss.
Could there be other things wrong with Overstock?
Perhaps.
I have no way of knowing. But what I do know doesn’t so far make me think the problems are related in any way to the thesis of Deep Capture. The accounting errors don’t seem especially egregious, compared to the rest of what is going on in the market that the reform movement that Byrne spearheads is trying to tackle.
So is Deep Capture’s work discredited because of Byrne’s alleged and real problems?
No.
Overstock could very well be mismanaged and Byrne could be guilty of accounting shenanigans. That has nothing whatsoever to do with the extensive, indeed, mind-boggling, ties between supposedly neutral financial reporters and the hedge-funds that Deep Capture report on. The evidence the site has collected is shocking and undercuts any defense of the neutrality of the reporters in question (Bethany McLean, Remond, Weiss, Herb Greenberg, Roddy Boyd, etc).
To return to the media manipulation story.
After Taibbi put the two stories on Rolling Stone, Goldman and Penson came out and shot them down.
Taibbi, strangely, for a supposed target of Goldman and for all his righteous indignation over NSS, vanishes on the latter subject (NSS) and retracts parts of the former.
So what happens?
The entire Goldman argument gets reduced to “Goldman corrupted the regulators,” which works very well if you want more government and more regulators (and we are not fundamentalists on either subject). The good part of that from the point of view of the MSM is that that lets them displace the outrage on one or two figures (Rubin, for example), while using GS as a whipping-boy to funnel off popular rage from any effective overhaul/criminal prosecution, as well as to deflect it from the evidence of conspiratorial criminal activity.
(Yes, there are conspiracies, Virginia, and often the ones protesting loudly that they don’t exist are part of them…unwittingly or not).
Take this piece at Business Insider by Ritholtz, which sets up the boundaries of establishment discourse, with Taibbi and Gasparino at either end. What it does is to come down roughly “midway” between the two in a way that conveniently does nothing to change the centrist liberal establishment discourse.
(At least, that’s my take).
Now, Taibbi comes from a well-established media background, with a father who was an NBC TV man.
It’s hard to believe he doesn’t know the ethics and etiquette of sourcing. In fact, it’s downright impossible.
We’d have to conclude that
1. He was tasked with co-opting the stories for political or national security reasons.
2. Or lacks journalistic integrity, a deficiency fairly rampant these days….
3. Or wants to protect the left-liberal establishment on the issue….
4. Or some combination of the above.
Note:
*Tom Sykes is apparently a sock-puppet created by Gary Weiss, the former Forbes and Business Week reporter, at least, according to the considerable evidence amassed at Deep Capture.
Note: I have sent several mob/corruption-related articles to the Deep Capture team and consider myself a supporter of their research, which I’ve tried to link and forward to others, as well as to more generally publicize. I don’t think that prevents me from assessing the merits of their claims objectively. I don’t, for example, condone any social engineering attacks on social media sites like facebook, no matter what the legal status of such attacks is. Frankly, the work Deep Capture is doing on market/media corruption is too important for its members to get into such unworthy activities. Nor do I think bringing in personalities, family members, or even private networks of journalists is particularly important or even necessary. The point is not whether a journalist talks to or is friendly with another journalist….or even hedge-fund. The point is whether their work is significantly biased by the friendship and whether they disclose the friendship and attempt to correct for it. I appreciate a number of left and liberal writers, even when I disagree with them, because I find them intellectually honest and reasonably objective (complete objectivity being impossible as well as unnecessary). That’s not a very high standard to demand now, is it?
Are We All Keynesians Now?
Peter Robinson in Forbes, writing about Professor Samuelson´s death, on why we aren´t all Keynesians now:
“Question: “Everyone,” you claim, “understands … that there can be no solution without government.” Are you aware that Harvard economist Robert Barro called the Obama stimulus package “garbage?” “This is probably the worst bill,” Barro insisted, “since the 1930s.”
Had you noticed that Stanford economist John Taylor has warned against responding to the crisis with a government intervention? “[P]olicy makers,” Taylor wrote recently, “should rethink the idea that frequent and large government actions and interventions are the only answer to our current economic problems.”
Are you aware that nearly 300 economists signed a petition opposing a federal stimulus? “Notwithstanding reports that all economists are now Keynesians,” the petition declares, “we do not believe that more government spending is a way to improve economic performance.”
And have you happened to glance at any recent polls? According to the Rasmussen organization, more than half of Americans believe the Obama stimulus bill will either hurt the economy or have no impact.
If dozens of economists and more than half the American people are against you, then who is this “everyone” of whom you spoke?”
Rick Ackerman On the Deflationary Argument
“Our grasp of deflation’s logic began with the 1976 book, The Coming Deflation, by the late C.V. Myers, and continued with Davidson and Rees-Mogg’s The Great Reckoning. Although Myers’ work was obviously premature, the concepts it emphasized are timeless, particularly this one: “Ultimately, every penny of very debt must be paid – if not by the borrower, than by the lender.” This is the crux of the inflation vs. deflation debate, and because of the way Myers framed it, we’ve never had any doubt that the U.S. would eventually experience a catastrophic deflation. We were early in thinking the financial system would topple as a result of the allegedly “mild” recession of 1990-91 and its S&L crisis. In retrospect, it’s clear that we lacked the imagination to see that the huge amounts of Third World debt that threatened the global economy at the time were relative chump change compared to the galactic sums that Bush, Obama and the Federal Reserve have put into play in the last three years in hopes of saving the system.”
My Comment
I posted this to support my reiterated position that the recession cannot possibly be corrected as simply as advocates of the stimulus programs like to argue. It´s been in the making for more than a quarter of a century. Can a few months change everything so fast? I could be mistaken, but I don´t think so,…
I also posted the Ackerman piece to counter the establishment media spin that Nouriel Roubini was so much “ahead” of others in predicting the recession.
I call Roubini an establishment figure because of several things, including the fact that he does business with Larry Summers. Here is Roubini warning about housing in 2006...
He himself said the earliest he predicted the housing crash was in July and August 2006.
But by then, even a layman, like yours truly had already done that, and done it earlier - July 2005
And I was, at least in part, drawing on my reading of Mises. org, Lew Rockwell, and The Daily Reckoning, when I wrote the piece…which is where they spotted me on the web, and offered me a gig.
(As I said, I´m always walking into synchronicities in my life..)
Compare that with what other experts were saying in 2005, which is, there´s no housing bubble. That´s Ritholtz, by the way, who writes the excellent blog, The Big Picture (At least, Ritholtz also did say that housing was extended).
But then, in that same piece, Ritholtz also predicted that 2008 would be a good time to reenter the housing market. Oops. [Dec 12. On second thoughts, maybe oops isn´t really warranted. Housing may not have bottomed out everywhere, but I´ll bet you could have picked up good bargains in a few places in 2008]
That shows that you can have very good number-crunching skills, but then miss some of the…..dare I say it?…big picture.…because the big picture has nothing to do with number-crunching but with perspective
And that takes a knowledge of history…. and not simply economic history either. It takes a broader knowledge of the world than professional money-managers usually have.
Meanwhile, compared to Austro-libertarians (see those cited above in Ackerman´s post), Roubini was some twenty-five years late in his analysis.
Yet the media studiously ignores Austrian theory and Austrian theorists (Mark Thornton, for example, called the housing bubble exactly on time and called gold $1200 back in 2005) and stamps approval on people who were either late or wrong…and turns to them for solutions.
Why is all that important? Because it shows the intellectual dishonesty that is at the heart of the corruption of the system. Fraud and force go together, and for political and financial fraud to succeed, they need intellectual and academic fraud to cover their sins… and prep the soil.
Deep lack of trust of anyone who adheres to a rival political theory (or to a rival political party)…. and the arrogance of power…lead the establishment media to rewrite history…. and this intellectual dishonesty is the rag behind which the emperor (the state) hides his moral nudity.
Climate-Gate: Media Ignored Scientific Back-Trackers
This story back in September ought to have made a lot of headlines, but didn´t. Perhaps it will now:
“When a leading proponent for one point of view suddenly starts batting for the other side, it’s usually newsworthy.
So why was a speech last week by Prof. Mojib Latif of Germany’s Leibniz Institute not given more prominence?
Latif is one of the leading climate modellers in the world. He is the recipient of several international climate-study prizes and a lead author for the United Nations’ Intergovernmental Panel on Climate Change (IPCC). He has contributed significantly to the IPCC’s last two five-year reports that have stated unequivocally that man-made greenhouse emissions are causing the planet to warm dangerously.
Yet last week in Geneva, at the UN’s World Climate Conference — an annual gathering of the so-called “scientific consensus” on man-made climate change – Latif conceded the Earth has not warmed for nearly a decade and that we are likely entering “one or even two decades during which temperatures cool.”
The global warming theory has been based all along on the idea that the Atlantic and Pacific Oceans would absorb much of the greenhouse warming caused by a rise in man-made carbon dioxide, then they would let off that heat and warm the atmosphere and the land.
But as Latif pointed out, the Atlantic, and particularly the North Atlantic, has been cooling instead. And it looks set to continue a cooling phase for 10 to 20 more years.”
My Comment
Now why would Latif come out with this suddenly? Maybe he had a peek at some of that data the CRU scientists were trying to hide and decided to dissociate himself in advance from a scandal threatening to blow up…
More Fall Out From Dubai On Indian Market
“Segments of the economy such as consumer durable and core industrial growth that are driving the current recovery in the Indian economy are purely a function of domestic stimulus initiatives and remain to that extent relatively insulated,” HDFC Bank said in a report today.
However, areas such as exports, remittance, banking and construction as well as real estate are likely to see further damage, the report added.
Exports are going to be the most affected by Dubai woes, as the UAE region is now India’s largest export destination toppling the United States.
Besides, bullion trading in Dubai is likely to be impacted, which may have ripple effect for India as around $29 billion of gold from the country is being traded in Dubai.”
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