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           EverNewEcoN




                        MIRRORED  HERE
         ACTUALLY MORE CURRENT 
               HERE TOO.   
         BUT I'LL BRING THIS UP-TO-DATE.
               MORE TO FOLLOW FROM THE OTHER.






ALWAYS NEW PROBATIVE, 

BUT   

ACCESSIBLE INSIGHTS AS 

TO THE 

LATEST ECONOMIC  

EVENTS AND ISSUES








        SICKO TRAILER        





CORE DEFINITION of inflation: weak currency
 CORE  DEFINITION of (discriminatory) monopolistic pricing: different price, at seller's choosing for different audiences (they get to name their price)

THE LEFT COLUMN, DEFINED BY   EverNewEcoN originality,
Re-Populating






Prof. Ravi Batra's theory as to concentration of
 wealth inducing overreliance on unqualified borrowers
 so as to keep up superior returns benefiting a small percentage
 of the population is, to me, proved.   (still selecting links)



 Wall Street Journal, 9/29/08




 While DailyBail apparently advocates abolishing
the Fed, and despite being aware of Woodrow Wilson's misgivings as to its creation, 
EverNewEcoN
 sees it as distinctly purposeful but recommends creating a new ombudsman function and more specifically replacing Mr. Bernanke, who simply advertised his policy beliefs prior to his selection, potentially now a "front" man, more than a "bag" man, with a Co-Chairpersonship consisting of Joseph Stiglitz and Elizabeth Warren.We'd then really be on our way to one hum-dinger of a fair, efficient financial system.







Recent Comments by EverNewEcoN:



EverNewEcoN:




skip quickly to items after this / academic economics is 
much ado about NEWLY discovering worthwhile aspects about
our economy

EverNewEcoN  claims being first:
The yuan is in fact (de facto / partly by design--of convenience:)
a safety valve release mechanism:
less than fully fixed to the $US,
the rest of Robert Mundell's "Impossible Trinity"
in tact and simply evolving thanks to the leadership of China's 
Communist Party trying to allow China's emergence to continue along
with its own authoritarian existence.

To Chinese visitors:  you work on your freedom.   We'll work on our
equality. 










EverNewEcoN  believes a much larger stimulus,
aimed more squarely at the middle and lower classes
should have been effected, money printing and 
the liquidity trap pushing on a string / sending 
investment abroad / cutting off at the knees those
who made good decisions in favor of those who made
bad ones / eliminating much of the incentive to lend
(academic view--no forecast value;)  essentially,
I agree with Richard Koo's more pure Keynesian 
approach particularly to this debt bubble-driven
crisis.




and here

and also there replying to UnkaWillbur:

Is this your horsy?





EverNewEcohas proposed (multiple places,)

 I believe originally,

that the go-ahead to Iceland's role in

passing capital onto securitized mortgage

instruments not only supported the

carry trade by virtue of that scheme,

BUT  THEREBY SIPHONED  OFF SOME

OF JAPAN'S RECOVERY POWER.



AND NOW, THANKS TO THE FED'S 

SOLDERING TO THE MONEY-CENTER 

BANKS, WHAT GOES AROUND, COMES

AROUND: 

THE U.S. IS TODAY ICELAND AND JAPAN

(AS WITH ITS RECOVERY SIPHONED FROM 

IN SUPPORT OF CHEAP RESERVES.)


not a pretty sight.

not a pretty sight.


And, of course, what goes around finally 

comes around for Wall Street too:

let the layoffs begin.


EverNewEcoN (American) proposes we 

fix ourselves and become good

neighbors.   Is that so difficult?



here

Seems likely just off-hand results are better correlated with
poor neighborhoods, lower property values, less property tax,
poorer schools.

The French understanding of "L'Ecole" holds a better promise
of equality.

Beyond that, some benefits may be extravagent in view of
what a corrupted system has rendered, something teachers 
themselves should have done more to prevent. 

But more generally, it's simply a matter of what kids'
futures are worth. That's one of the primary measures
of a culture's greatness or lack thereof, I think.






I'm a fan of fiscal stimulus where the middle class is debt swamped.

The government gets a functioning economy back in addition to a percentage
of everyone's take.

Our system needs a rule book and ombudsmen (cops) serving a common purpose
exactly as do the hotels on the Strip.

Negative interest rates push those who sold bubble assets to buy back
(in a forced way--generally, would-be market worshipers now enthusiastically
controlling the market for their needs) back into them where they 
otherwise would find a different unfettered clearing level, where assets
would pass from weak hands to strong hands without interference.

The evidence is many / most who sold bubble assets are not biting
(including moi.)

Meanwhile, back at the farm, Bernanke's hoping to inflate those assets so
as to raise the banks above the water line.

I've proposed a round-robin, or batch-style Chilean-style recapitalization of
banks (umpteenth time.)



while the rest of the sector gets a temporary Tier 1 requirement holiday.
They can have some safe-formula equitable solvency (cash flow solvent) reprieve
until it's their turn to be batched. 
Most Americans simply  want
a fair playing field and not being bamboozled, 
and I simply think it looks like we may need to punt.

Ultra low rates can be taken to excess. Apart from making 
retirees destitute (and it's the same banks--
how many have turned into road kill since E.F. Hutton
got folded?--who fell on their
faces that want Florida's retirees' retirement assets)
it makes lending long term fixed at current rates (NOT A FORECAST--
CLUELESS WHERE RATES ARE GOING)
look downright stupid to many, and it makes those who got
a million dollars cash from their bubble assets see their interest
income turned to doody instead of the $50,000 annually they
expected.

The only winners will be noone, cause the game will eventually 
end, this way, with the Old Boys' Network seeing "Tilt."

When you've 6 players playing Monopoly (R,) and one or 2 players
have all the money and property, whether or not they played 
fairly (and at least Monopoly (R) comes with a rule book,)
then it's game over.

Read more: 

 





Change temp and humidity and all epidemiologics, those
two things otherwise taken for granted (beats me why some
religious people see science as a threat--is God supposed to
be scientifically lame?--) are tossed into a top hat.

Actually, water itself has multiple states of matter between
gas (vapor,) liquid (water,) and solid (ice--) though those
three states are entirely taken for granted, quite in arrogant 
fashion.


EverNewEcoN’s response to Sheila Bair’s plan to

GIVE $21,000 to homeowners to take a walk.

First those who sold bubble assets and retirees give their entire

interest income from their home equities and retirement savings

to the self-important idiots at the TBTF banks, who collapsed a

planet, and now Sheila Bair says pay mortgagors to take a walk?


Talk about punting!


Bud Bundy (pointer finger springs up:)

“And by that how would our finely honed (except for the conflicts of

interest and monopolies) economy value the banks’ collateral?


Now let me think.   Oh yeah!  We let the brilliant bankers make it

up.  Fantasy land for all.  Hey, with that we can all learn to become

Ponzi artists!   


Now maybe even I’ll get-me some.”


Dear Mr. No Drama Obama:

 That pitcher’s looking tired.  Get around to making a change one of these days?

EverNewEcoN:   That m---’s up the system beyond recognition.

What retains the supply and demand dynamic but still allows for banking:

on a round-robin basis suspend Tier 1 requirements, allow for measures of

equitable solvency (even if asset-bankrupt, not cash-flow bankrupt,)

while simultaneously, also on a round-robin basis, recapitalizing banks.

    Sadly, this should have been done with the TBTF banks at the very

outset of the crisis.


This is what  EverNewEco has always said; EXCEPT:

 marking up banks' reserves only so as to support fiscal stimulus,

 not to support a Ponzi scheme and grant $Billions in bonuses for arrogant creeps who still don't realize how many

investment bank bankruptcies preceded their own era and how shady and stupid

their game was.

I hope that's what Mr. Obama's always had in mind.  It hasn't always seemed that

way.  Perhaps he paces the stress and is the "Dean Martin"  President.

(People always HAVE referred to him as “no drama Obama.”)





'Green rust' counteracts radioactive waste

newscientist, March 18, 2011

<Bo Christiansen of the University of Copenhagen in Denmark and colleagues:>

“A highly reactive form of rust could be used to contain radioactive neptunium waste from nuclear power plants....”



EverNewEcoN:

Assuming economic survival and well-being specifically for all persons are basic national aims,

EverNewEcoN

, a verifiable capitalist and believer in competition,

 which only makes sense with continuous growth for all working hand-in-hand with safety nets, believes that aim depends also on earthquake preparedness simultaneously

with economic fairness, efficiency and  “rationalization.”


On a purely economic level (the numbers--not the human value,)

Japan is actually looking at reconstruction, including building better,

not just newer.  That will always be limited by available financial resources.  


Frankly,

EverNewEcoN

believes, due to influence and corruption, the U.S.

 is at risk

of following in those footsteps.  For a start, the U.S. should

undertake analyzing areas of ill-preparedness for its own disaster

of comparable magnitude.   Influence and corruption risks the U.S.

compromising its own responsiveness.




If, say, the likelihood of a San Andreas-surcded earthquake hitting California over the next 30 years is 94% (a recently oft-quoted figure,) then that’s 3.13.% likelihood annually, not accounting for increased

probablity calculated from future points.  From now that’s a 31.3% likelihood of occurence withing the next 10 years.   If you have a health risk factor, absent assurance of ObamaCare staying on track, you cannot relocate to another state, in most cases, absent taking on health coverage exclusions as to precisely

what you need coverage for.



Glenn E.  Sjoden (Georgia Tech)  / CNN 3/12/2011, saying the radiation risk at Fukushima was minimal, trace escape of cesium being the issue, a pittance compared to what's received in a  CAT scan.  

(said “based on the information available...")


Raise Rates to Boost the Economy

Oil and wheat and commodities will see a 20%-30% drop in price as speculators run for the hills.

 This will be a de facto tax cut for consumers.

EverNewEcoN: It would also make lenders more forthcoming and begin enabling those who sold

bubble assets to help clear the former bubble sectors (real estate particularly) and return 

retirees at least to early bird dinners.











EverNewEcoN:

The longer you bleed the dutifully retired and all who sold bubble assets, exactly

the opposite of the depraved from among our merchant bankers,

the more difficult it will be to actually clear the market. Actually, it's

likely already some of that damage is permanent. Persons who sold

at the top or dutifully retired with sufficient resources for the purpose

required some semblance of cash flow on the equities they

sold from the market bubble or amassed over their lives. When

that equity is tied up in home ownership the foregone interest income

is an "investment expense." That, compared to rent, is ordinarily one of

the prime own - vs. - rent determinants. Mr. Bernanke has taken that

cash flow in favor of 0% reserves extended the banks and attempting

to force people off their cash. Therefore, one may perceive that if

the real estate bubble operated in part de facto as a kind of Ponzi

action, then the Fed's actions can be interpreted as having been

drawn into an ongoing Ponzi action.




And did someone create Wall Street’s “Mini-Me?”

Sadly, that’s not as funny as Austin Powers.   Iceland was pivotal the carry trade.





EverNewEcoN:

Fair play,  rules avoiding monopoly (when a couple players have all the properties

the game is over (the U.S. doesn't have it, most obviously in health care, though

if the GOP succeeds in not funding or litigationally invalidating "ObamaCare,"

 I'd happily jump for repealing the health insurance cartel's immunity from the

anti-trust laws) and growth: as broadly and deeply and quickly as possible for

our children and children’s children--works for me.


Then be ambitious to your heart’s content.

Borders hardly matter if we (and our trading partners)

follow the above wholeheartedly.



EverNewEcoN:  What can be nervier or more stupid than advocating privatizing Social Security now in the 3rd year of Ben Bernanke ripping off retirees’ interest income in favor of 0% reserves for the money center banks that precipitated the financial crisis and to which you’ve already contributed massive amounts of your and your children’s  earnings, including in support of their lavish self-given bonuses, when any other nation would have let them get reorganized in place, their creditors left to work it out.




FALSE COMPARISONS WITH THE JFK TAX CUT (COMMENTS:)

Robert Weiner, Varun Saxena, truth-out.org, Nov. 21, 2010


Bernanke says foreign investors fuelled crisis

Robin Harding, FT.com, Feb. 18, 2011

EverNewEcoN deems this preposterous, embarrassing.   Americans should

be glad this didn’t figure more prominently in world news.




Wall Street's War

Congress looked serious about finance reform – until America's biggest banks unleashed an army of 2,000 paid lobbyists.

 Matt Taibbi, orig. published May, 2010, re-presented Feb. 24, 2011 at dailybail.com


EverNewEcoN:

Actually Barney Frank's repeal of "Reg. Q" was somewhat groundbreaking.

   It may be comparable to the Tokyo Stock Exchange making individual stock

investments by small investors incrementally more available.

EverNewEcoN: Frankly folks, the turmoil in the Gulf States may slow the

jibberish about shifting reserve currencies, though I would not

have extended huge tax cuts benefiting mainly the ultra-wealthy, borrowed

mainly from China, financed mainly by the middle class, which has failing

cylinders.



   “...It seems regardless of what the inflation data says is the overall inflation rate in the economy, QE2 gave us all the negative, anti-growth, lowered standard of living type of inflationary effects that act as a major tax and headwind for both businesses and consumers going forward, and very little of the much needed 'Record GDP Growth' and 'Eye-Popping Job Creation' bang for our costly buck.

Right Back Where We Started

          It seems we pretty much could have gotten this same level of current GDP growth and job creation without massively devaluing the dollar in the process. Sometimes a little patience goes a long way, and if the fed would have waited until the November elections where both the business climate and economic data were improving all on their own we could have had the best of both worlds with a low inflationary price stable environment, and a slow but steadily improving employment situation.

        The real fear and irony is that once the full effects of QE2 are realized in the US economy, that we start reacting to said inflationary effects both through tightening monetary policy and consumer/business behavioral changes, and the US starts giving back some of its recent economic gains, and becomes vulnerable to the very scenario that the fed was trying to avert in the first place, a double dip, deflationary downturn in the economy.”

QE2: An Unmitigated Disaster?, Dian L. Chu, econforecast.blogspot.com,  March 6, 2011





7/15/2011



excerpt from: Prof. Reich, Feb. 11, 2011:

“...The perfectly correct answer is Herbert Hoover.

Herbert Hoover didn’t deliver these words at this week’s Conservative

Political Action Convention, though. He delivered them at the Republican National Convention in Chicago on July 8, 1952.

That was almost sixty years ago.

Republicans haven’t come up with a single new idea since.

They haven’t even come up with a new theme...”




Low Income Housing                         Need DOES NOT EQUAL

Needs Skyrocket. “Worst Case                   Demand, The Case in Housing as                   
Worsens”                                                  Much as in Health Care

(Primary basis: Jann Swanson,

Mortgagenewsdaily.com, 2/2/2011)


The Fed Compounds Its Mistakes

Talk of increasing inflation to reduce unemployment is dangerous and unnecessary


Allan H. Meltzer, WSJ, Oct. 11, 2010


Bernanke says (2/3/2011) the low interest rates are aimed at

 arm-twisting people into alternatives to cash.

EverNewEcoN’s view is but for essentially ripping off the cash time value of those who made good decisions or dutifully saved for retirement, the U.S. Treasury and the states today, to repair the damage of the mortgage Ponzi experience,  could only borrow anew to pay each

other’s borrowings, just as had been done in the U.S. Confederacy.


What if simply bailing out the large banks rather than executing a Chilean-style

recapitalization scheme fails?



The Fed's Anti-Inflation Exit Strategy Will Fail

Sooner or later the pressure to lend out excess bank reserves will be unstoppable.

Allan H. Meltzer, WSJ, Oct. 11, 2010






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EverNewEcoN: Fundamentally Change General Prevaling Temperature and Humidity,
And, Actually, the Very States of Nature Of Water Are Today Understood
To Have Intermediary States, AND ALL BETS ON BOTH HUMAN ECOLOGY
AND EPIDEMIOLOGICS ARE TOSSED INTO A TOP HAT.
The changes will accelerate and compound, actually
logarithmically. 
Tea Party munchkins (I think many are misled by the
demagoguery of puppeteers, their puppets in turn )
particularly in the Central
Plains would seem to be doing everything 
possible to CAUSE grasshoppers to morph again.


The Asian Tiger Super-Mosquito Is Invading U.S. Cities

    Robert Johnson, businessinsider.com Jul. 21, 2011


Heat wave fosters toxic algae in touristy lakes

Sean Murphy, AP,  7/20/2011




End of Medicare As We Know It

C-SPAN Video / U.S. Rep’s Garamendi, Tonko







 Robert Reich, robertreich.org, 6/7/2011


Sen. Richard Blumenthal, 2/5/11 (C-SPAN VIDEO:)

(mandates in public health traditionally presumed constitutional)

EverNewEcoN: Got pre-existing risk factor but want to move to another state?

(interference with interstate commerce?)

Now you see it now you don't ongoing coverage?

(fraud?)



Repealing healthcare law would cost $210 bln: CBO

Susan Heavey, Reuters, Feb. 18, 2011



EVERYONE NOT FREE OF A HEALTH RISK FACTOR TO THE POOLS.



Nuclear Plants Need Stronger Disaster Safeguards, Panel Says
Brian Wingfield and Julie Johnsson
Bloomberg, 7/13/2011





Joseph E. Stiglitz, projectsyndicate.org, March 3, 2010



Joseph E. Stiglitz on Competitiveness, Appropriate Debt Restructuring

Project-Syndicate.org, Jan. 2, 2011



Stiglitz: The Fed Isn't Solving Anything with QE, And It's

Gregory White, businessinsider.com, 10/5/2010

Huffingtonpost.com, March 3, 2010


Stiglitz: We Have to Throw Bankers in Jail Or The Economy Won't Recover

from “George Washington (georgewashingtonblog,) by way of  businessinsider.com, 11/5/10



Joseph Stiglitz,

with Larry Kudlow,

CNBC, June 20, 2010

Why fiscal conservatism threatens the world economy

Henry Blodgett, businessinsider.com, 2/8/2010

perfectly in context: "I guess Bernanke doesn't want
the banks to lend money."


The Bailout Alternative Paths Taken Previously

by Virtually All Other Nations That Have Confronted Financial Crises Such As the

Current One In The U.S.  Wherein The Treasury Secretaries Have Instead

Simply Handed Vast Sums to the Money Center Banks.

Elizabeth Warren, by way of DailyBail.com, March 6, 2011




 Elizabeth Warren, Harvard Law Prof., TARP Congressional Oversight Panel Chair, 
                                  Feb. 9, 2010, Harvard Univ. Law School website




orig. Journal of Applied Psychology, by way of Biospace, Feb. 22, 2011

French lawmakers ban controversial shale gas drilling

Sophie Pilgrim, France24.com, 5/11/2011

EverNewEco

Discussing the fate of Fannie and Freddie, with Stephen Moore, Wall Street Journal editorial board and Robert Reich former Labor Secretary, "TIME TO PRIVATIZE FANNIE & FREDDIE?" CNBC, April 9, 2010 Reich: If no end to TBTF, it will happen all over. EverNewEcoN:  If it were a poker game, it should be put up or shut up, the pot keeps getting bigger for ALL participants.


Dr Mercedes Pascual of The University of Michigan talked about current trends in infectious diseases worldwide, and noted how these must be considered in terms of climatic, evolutionary, and socio-economic change.

She referred to the size and frequency of malaria epidemics, which have changed dramatically over the past decade in highland regions like in Kenya. Theories for these changes include drug resistance, increased exposure of non-immune populations, HIV/AIDS, land use changes, and climate change—the latter being “particularly controversial,” Dr Pascual said. She listed five points of contention relating to climate change: Is there evidence of significant trends in climate data? Do such trends result in a significant change in the disease itself? Do risk maps of suitability indices change over time? Is drug resistance a more important factor than climate change? Is climate variability—inter-annual rainfall variation—a major driver of disease dynamics? Dr Pascual reviewed a study in Kericho (Kenya), Kabale (Uganda), Gikongoro (Rwanda), and Muhanga (Burundi) indicating trends of increasing temperatures between 1950 and 2000. Temperature rise appears to affect mosquito populations, which in turn may correspond to increased malaria cases. Another study projected malaria infection rates from 1980 to the present by examining temperature change impacts on larvae life cycles in relation to human infection cycles. The study indicated increasing epidemics, but the median projected infection rate relative to temperature was smaller than actual historical observations. Temperature change could therefore explain a “significant fraction” of malaria increases in African highlands, but other factors exist, according to Dr Pascual. Citing climate change alone would be “unreasonable.” She said drug resistance is often cited as an alternative theory to climate change, but interaction between the two might also be possible. “If climate change is changing the transmission intensity, then this would also change the rate of evolution in malaria,” she said.



Fears grow as study shows genetically modified crops 'can cause liver and kidney damage'


DAVID DERBYSHIRE , DailyMail, Jan. 21, 2010



Nearly all fish contain trace amounts of methylmercury.

U.S. Public Broadcasting System, Jan. 25, 2010

EverNewEcoN

 once again concurs with David Goldman: CNBC, Larry Kudlow interviewing, April 11, 2011. These comments are also particularly consistent with this. 


Memo to Deficit Hawks: Let’s Get the Facts Right

Henry C.K. Liu, new deal20.org, June 9, 2010


Florida Governor’s Plan:

Video from MSNBC, Feb. 8, 2011



Richard Koo, Nomura Research Chief Economist, April, 2010,
by way of businessinsider.com

Four Deformations of the Apocalypse

David Stockman, New York Times.com, July 31, 2010
(defective Republican custodialship)



Ryan The Ridiculous

Paul Krugman, NY Times Blog, April 5, 2011

(Ryan assumes 2.8% unemployment)

(quoting the N.Y. Times:)

“‘...Levels of iodine 131 entering the air can be very diluted, but if the iodine is deposited on grass eaten by cows, the cows will reconcentrate it in their milk by a factor of 1,000. This is mainly a concern with fresh milk, not for dairy products that are stored before consumption....’”

from Fukushima Fallout: Low Levels of Radiation in U.S. Milk,

Contaminated Marine Life in Japan

Kristina Chew, Care2.com, April 1, 2011



Radioactivity imparted on California crops measured by the University

of California, Berkeley Department of Nuclear Engineering

Beware of Bernake's Fed?

David Goldman, Asteri Capital/First Things Magazine and Donald Luskin,Trend Macro interviewed by Larry Kudlow, CNBC, April 4, 2011

EverNewEcoN substantially agrees with Mr. Goldman.


Ankara maintains its nuclear projects in earthquake zone

 



EverNewEcoN recommended:

Credit Bubbles Always End The Same Way

Ilargi, theautomaticearth,blogspot.com, April 4, 2011

Super-tacular piece on Bernanke / credit expansion

(compensation) efforts.

I see it as surrendering to past lack of oversight such that it

is tantamount to feeding a Ponzi scheme.  I also am concerned

it cannot work.  For whatever silliness it’s worth, I’ve

proposed this round-robin recapitalization plan as an

alternative.





Barclays may be too big but Britain cannot throw in the sponge

The government must not be cowed into copying the US by banks' threats

Nils Pratley, Guardian (U.K.,) March 29, 2011

EverNewEcoN:  Dear Mr. Pratley: You are greatly needed here in the former colonies.



Marine Le Pen is in Bernanke's Economic (Viewpoint) Company

"'...If we return to a national currency, we can once again have the central bank of France issuing loans to the Treasury without interest.

That would enable us to get out of this spiral of debt in which we’ve been living for several years....'"

EverNewEcoN:   Dear Ms. Le Pen: There's still no free lunch to be found that way.

  It's either more debt (tied to the reserves)

 or more dilution ultimately (outside those possibilities it's

 reserves parked in bank account entries for no purpose other 

than making people nervous,)

 the same dilemma the public company Finance VP confronts every day.

  However, thanks to you

Americans are no longer last to know.







Schakowsky Introduces Bill to Tax Millionaires and Billionaires


"Miracle on Hudson" Co-Pilot Is Now Co-Pilot in Fight Against Disgusting, Economically Unjustified Arrogance and Greed



Walker’s Two-Year Budget Shows Repair Bill to Be Trojan Horse

David Dayen, Firedoglake.com, March 2, 2011




Bernanke Chose Printing “Reserves” Rather Than

Tapping Americans’ Savings Up Front, Hoping To

Simply Borrow More Intensely From Abroad, or

Letting the Money Center Banks’ Stakeholders Take

Their Own Losses, Their Creditors then SImply To

Work It Out.   The Last Option Had Been Presented

As Risking Dire Consequences To The System

      Prof. Harvey Campbell, Duke Univ., Feb. 10, 2009





             


An informed economist can be dramatically more effective than can a famous one who acts on unsettled theory benefiting only wrongdoers for a fact.



What if the Fed were a Bank?

Bob Eisenbeis, David R. Kotok, Ritholtz.com, July 7, 2009




France to scrap tax cap for the rich

France's premier says government will scrap a tax cap aimed at reducing tax burden on wealthy

Associated Press, March 3, 2011


Bailing Out the Rich

J. Taylor, tsxgold.com, April 4, 2010



How bailing out the rich created the Depression

                                    Ian Welsh, ianwelsh.net, June 29, 2010




The Sixteen States That are Killing Their Pensions

Charles B. Stockdale, Douglas A. McIntyre, Michael B. Sauter, 247wallst.com, March 4, 2011





Bill Would Ban Photos At Accident Scenes

CBS Chicago, March 4, 2011

EverNewEcoN: You're not supposed to see blood.  That would encourage displacing some of the car culture with mass transit.



"Austerity" Comes to America

Richard D. Wolff, Prof. Emeritus U. Mass., Amherst, Visiting Prof.,

New School Univ., by way of truth-out.org, Feb. 14, 2011



(see as to 

EverNewEcoN

)

Capitalism Hits the Fan

(Click on Preview the Movie--No

Financial Relation with EverNewEcoN )




Compare: California Governor Jerry Brown--Part 1

                        Part 2 (includes some Calif. chauvinism)



Maureen Downey, Atlanta Journal-Costitution blogs, Feb. 23, 2011

<citing Michael Moore, a professor  at Georgia Southern University:>

Only five states do not have collective bargaining for educators and have deemed it illegal.

Those states and their ACT/SAT rankings are as follows:

South Carolina – 50th

North Carolina – 49th

Georgia – 48th

Texas – 47th

Virginia – 44th

If you are wondering, Wisconsin, with its collective bargaining for teachers, is ranked 2nd in the country.




Did Scott Walker Get Crank-Call Pwned? (AUDIO) UPDATE: YES

Adam Weinstein, Mother Jones blogs, Feb. 23, 2011

The Buffalo Beast site, which organized the prank, is down, but you can hear the call <here--bottom of page.>



Intermediate Macro Exercise: How to Construct a Maximally Contractionary Budget Deficit Reduction

Menzie Chinn, Univ. of Wisconsin, who co-maintains econbrowser with

James Hamilton (Univ.Calif., San Diego,) here at roubini.com, Feb. 16, 2011

<assumes excess capacity, which describes the U.S. currently>

“...for a given improvement in the budget balance, a tax rate increase will have a smaller negative impact on output than a given cut in government spending on goods and services....”


EverNewEcoN:  

Of course, the U.S. just extended lavish tax cuts for the ultra wealthy,

financed mainly by China, which the middle class’ children will be paying for.


EverNewEcoN: That directly relates to the following:

China launches yuan options to support FX flexibility

Kevin Yao and Zhou Xin, Reuters, Feb. 16, 2011



Speaker Boehner’s Math

Menzie Chinn, econbrowser, Feb. 17, 2011

“Recently, Speaker of the House John Boehner asserted: ‘...the federal government has added 200,000 new federal jobs since President Obama took office....’”

“...More research on the world of Boehner-math, where 1+1=3, here and here....”

“...it is interesting to observe that employment in the public sector is now below what it was at the beginning of the last recession, in 2007M12....”

“...Aggregate government consumption and investment has only risen by 5% relative to 2007Q3.”


Analogy Watch: "Cairo Has Come to Wisconsin"?

Menzie Chinn, by way of roubini.com, Feb. 17, 2011

Using the March 2010 CPS data, regression analysis controlling demographic characteristics (full-time, education, years of economic experience, gender, race, citizenship, and organizational size) confirms that total hourly compensation for Wisconsin public sector workers is 4.8% lower than for private sector


The Individual Mandate in the Health Care Bill: Why We Should Trade Broccoli and Asparagus for Hot Dogs and Apple Pie

RobertReich.org, Feb. 4, 2011



House Republicans Aim to Cut Funds for EPA, Energy

Catherine Dodge and Brian Faler, Bloomberg, Feb. 10, 2011


Goldman sees danger in US budget cuts

James Politi, Staphanie Kirchgaessne, Financial Times by way of CNBC, Feb. 24, 2011


Their Own Private Europe

linking from Prof. Paul Krugman’s personal blog to NYTimes.com, Jan. 27, 2011

<takes to task Rep. Paul Ryan’s GOP redux of Europe being socially spendthrift, inadequately

enterprising, ostensibly pitfalls the U.S. should avoid; Krugman:>

American conservatives have long had their own private Europe of the imagination — a place of economic stagnation and terrible health care, a collapsing society groaning under the weight of Big Government. The fact that Europe isn’t actually like that — did you know that adults in their prime working years are more likely to be employed in Europe than they are in the United States? — hasn’t deterred them. So we shouldn’t be surprised by similar tall tales about European debt problems....

Let’s talk about what really happened in Ireland and Britain.

On the eve of the financial crisis, conservatives had nothing but praise for Ireland, a low-tax, low-spending country by European standards. The Heritage Foundation’s Index of Economic Freedom ranked it above every other Western nation. In 2006, George Osborne, now Britain’s chancellor of the Exchequer, declared Ireland “a shining example of the art of the possible in long-term economic policy making.” And the truth was that in 2006-2007 Ireland was running a budget surplus, and had one of the lowest debt levels in the advanced world.

So what went wrong? The answer is: out-of-control banks; Irish banks ran wild during the good years, creating a huge property bubble. When the bubble burst, revenue collapsed, causing the deficit to surge, while public debt exploded because the government ended up taking over bank debts. And harsh spending cuts, while they have led to huge job losses, have failed to restore confidence....”

<British non-confirmation follows, as does:>

“... the revelation that he <Ryan> literally doesn’t know the first thing about the debt crises currently in progress is, as I said, interesting — and not in a good way....”




The Betrayal of Public Workers

Robert Pollin and Jeffrey Thompson, TheNation, Feb. 16, 2011




Why Do "Free Traders" Never Talk About Free Trade When the Losers Are Likely to Be People Like Them?

Dean Baker, Center for Economic and Policy Research, Feb. 19, 2011


WSJ Asserts That Deficit Hawks Are Actually Just Hoping To Get High-Paying Lobbying Jobs

Dean Baker, CEPR by way of businessinsider.com, Feb. 19, 2011

Congress fails to see QE2 has already raised interest rates and inflation

Arabianmoney.net, Feb. 10, 2011

EverNewEcoN: Actually, Mr. Bernanke has clearly wanted a steepened yield curve, and

   may already be successful in obtaining that.

EverNewEcoN, nonetheless,  believes there should have been greater fiscal stimulus ( view

at least traditionally associated with Christina Romer) but otherwise the Fed’s

monetary policy has been substantially “pushing on a string,” absent help for the middle class,

in support of ill-led banks in fact at the expense of those who made good decisions, simply

responsible decisions, plus retirees particularly.


Troubled banks rise to highest level in 18 years

CBS News, Feb. 23, 2011

The number of banks at risk of failing made up nearly 12 percent of all federally insured banks in the final three months of 2010, the highest level in 18 years

“...Only a small fraction of the 7,657 federally insured banks about 1.4 percent with assets of more than $10 billion are driving the bulk of the earnings growth. They are the largest banks, including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co.

The big banks accounted for about $20.6 billion of the industry earnings of $21.7 billion in the fourth quarter....”




The Games Banks Play

John M. Mason, at iStockAnalyst.com, Feb. 8, 2011


“...In my mind, not only are bankers attempting to fool the regulators and the investment community…they are trying as hard as they can to fool themselves....”

Mason recommends reading


Inflationary Expectations, the Dollar, and the 10-year Government Bond Yield

John M. Mason, Maseportfolio.blogspot.com, Feb. 9, 2011



Warren Buffet Was Wrong When He Said No One Saw The Housing Bubble

Coming

Dean Baker, CEPR by way of businessinsider.com, Feb. 17, 2011



Germany, France push reforms to tackle crisis

Merkel, Sarkozy propose 'pact for competitiveness' to move Europe past debt woes

Assoc.Press, by way of yahoo.com, Feb. 4, 2011

“...German and French officials indicate the pact could include calls for putting debt limits in national constitutions, raising retirement ages to match increased life expectancy, and getting rid of salary increases tied to inflation.

They also want countries to set up orderly ways to handle bank failures and agree on a common base for figuring corporate taxation....”



Nobel Economist Hints NYT Propaganda Against Public Pensions Can’t Be Trusted

scarecrow, firedoglake.com, Jan. 22, 2011


Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Create Unnecessary Alarm

Misconceptions Also Divert Attention from Needed Structural Reforms

Iris J. Lav and Elizabeth McNichol, Center on Budget and Policy Priorities, 1/20/2011



A Path Is Sought for States to Escape Their Debt Burdens

Mary Williams Walsh, NYTimes.com, Jan. 20, 2011



"The FCC and the Department of Justice have signed off on the Comcast/NBC merger, paving the way for a single enormous media conglomerate to obtain unprecedented control over the flow of information in our country.I’ll be candid with you: This is an awful development for those of us who care about media consolidation. It will restrict your freedom of choice and raise your cable and Internet bills. And it could pave the way for even more media mergers and even less room for independent voices in the media.But the fight’s not over. We’re building a grassroots movement to stand up to the special interests and stand up for middle class consumers. And every time an American learns more about what’s at stake in this fight, our movement grows stronger."

Al Franken, United States Senator



Economy Facing Major Headwinds From Housing

Comstock Partners, Feb. 10, 2011



                       Figuring Out What a

                           Dollar is Worth

                           Paul Krugman by way of truth-out, Jan. 6 2011


China's currency, the yuan begins trading in the U.S.

Paula Duffy, Huliq.com, Jan. 12, 2011

“...At the same time as it is taking small steps in the U.S., China has issued stricter regulations on Hong Kong banks who would like to trade on the yuan in foreign exchange markets. Financial market managers understand that the Chinese are skittish about speculation in its currency which could prove disruptive to the country's economic growth....”



France's Lagarde Says Euro Is Victim

William Horobin, WSJ, Feb. 7, 2011


EverNewEcoN:

Trop fort pour la compétition, trop instables pour être dévalué. Que peut faire un ministre des Finances?




French Report Suggests Creating European Treasury

Reuters, by way of CNBC, Jan. 7, 2011



It's a BAD morning: Treasury appropriates RBS bonus pool while Sarkozy gloats

Sarah Butcher, eFinancialCareers.lu, Dec. 2, 2009



Latham, Kramer Levin Representing Ernst & Young in Suit Over Lehman Failure

Brian Baxter, TheAmericanLawyer, by way of Law.com

(The Legal Intelligencer,) designated publ. date: Jan. 21, 2011




Health Care Reform: Eight Alternatives To This Individual

Mandate

Jon Walker, Firedoglake.com, Dec. 15, 2010






Biting winters driven by global warming: scientists

Agence France-Presse by way of France24.com, Dec. 21, 2010



Secrets Beneath the Ice

U.S. Public Broadcasting System

EverNewEcoN: Long ago achieved its directive but then started to amaze.



According to an international team of climate scientists, warming continues to shrink the snow

and ice cover that defines the Arctic, signaling the region's shift

Lauren Morello and ClimateWire,
ScientificAmerican.com, Oct. 22, 2010


Why Democrats Should Disregard Bill Clinton’s Endorsement of Obama 


Tax Deal

Robert Reich, robertreich.org, Dec. 11, 2010

EverNewEcoN: Excerpts not in Prof. Reich’s original narrative order so that

the portions alone will best preserve the message.



Why the Obama Tax Deal Confirms the Republican Worldview


Robert Reich, by way of huffingiotnpost.com, Dec. 8, 2010



You'll Never Guess Whose Taxes Are Going To Go Up Because Of The 


Tax Cut 'Compromise'


Jason Linkins, Huffingtonpost.com,  Dec. 8, 2010


Secret GOP plan: Push states to declare bankruptcy and smash unions


James Pethokoukis, blog.reuters.com, Dec. 7, 2010


Bernie Sanders On Tax Cuts: GOP Wants To Grow National Debt, Then 


Slash Social Security


Lucia Graves,Huffingtonpost.com, Dec. 7, 2010




The Deal

Paul Krugman, NY Times Op-Ed, Dec. 7, 2010

“...we have the two-year extension of the Bush tax cuts.  As I pointed out yesterday <linked at source,> the CBO estimated that such an extension would reduce unemployment relative to what it would have been otherwise by 0.1 to 0.3 percentage points in 2011, twice that in 2012.

To this, the deal added $120 billion in a payroll tax cut; $56 billion in extended unemployment benefits; about $40 billion in extension of other tax credit. Also, expensing of business investment.

I’d discount the last item: we’re awash in excess capacity, and likely to stay that way for years, so I don’t expect business investment to be noticeably affected by tax breaks that give an incentive to move spending up in time. The rest is about $220 billion, or about 0.75 percent of GDP over the two-year period. What’s the multiplier on that? Pretty high on UI, which will get spent; less on the rest. Overall, probably less than 1. So let’s say that this raises GDP by 0.7 percent relative to otherwise; rule of thumb is that one point on GDP is half a point on unemployment, so add 0.35 points to the CBO numbers....”

Millions of new jobs? Millions? Not by my arithmetic.

So, was this worth it? I’d still say no...

It still greatly increases the chances of the Bush tax cuts being made permanent — especially because the front-loading of the stimulative stuff actually worsens Obama’s 2012 electoral prospects....”



What Inflation Means To You: A Deep Dive Into What's Inside The CPI

Doug Short, DShort.com, Dec. 6, 2010

EverNewEcoN:  This article implies that among the most impacted by the (supposed) 

concomitant inflation from Mr. Bernanke's

virtually 0% reserves ($US Trillions) extended to the banks whose managements

acted stupidly, irresponsibly and /or shadily, and his preferred liquidity trap

policy,  will be retirees, often dependent on tax-locked income contracts.




Nassim Taleb, NYU, CNBC, Dec. 2, 2010

Mr. Bernanke has bailed out the wrongdoers,

bad decision makers on the backs of retirees and those

who made good decisions (who subsidize the

nominal rates extended the banks receiving the

$US Trillions in reserves)

EverNewEcoN: Windfall Profits Tax Anyone?



Joe Klein: I Was Wrong On Social Security

Joe Klein, Huffingtonpost.com, Nov. 26, 2010, (orig., Time, Nov. 24, 2010)

“But I think we'd learn more if we took a look at one of my goofs: I supported George W. Bush's idea of partially privatizing Social Security, which he tried to enact after he was re-elected in 2004. This was a close call for me at the time; it seems positively idiotic now that we've experienced the Great Recession -- and the idea of private investment has finally regained proper perspective. Investment is about risk; Social Security is about certainty...”

(VIDEO:) Eric Kingson, Prof., Syracuse Univ., Social Security Works, and David John, Heritage Foundation, CNBC, Nov. 30, 2010

Raise the Payment Income Level Cap?  Cut the COLA?  Cut Benefits?  Raise Retirement Age?  Privatize?


Social Security Works


Nancy J. Altman links


Welcome to Griftopia – with Author Matt Taibbi

Damien Hoffman, wallstcheatsheet.com, Nov. 5, 2010

<Matt Taibbi interviewed:> “...The Grifters have been getting people to support Wall Street’s political agenda by seducing them with a [Ann] Randian and pseudo-libertarian ideology. It’s always been around, but it’s just reaching a fever pitch now. And it’s the only way ordinary people can be convinced to endorse a deregulatory agenda....”)





                                    Ben Bernake’s:   Deflation: Making Sure "It" Doesn't Happen 


Financial Reform Endgame

Paul Krugman, New York Times, Feb. 28, 2010



Charles Hugh Smith’s U.S. Wealth-Income Pyramid and Recession-


Poverty And Energy Prices Soaring In Tandem In California


Gregor MacDonald, Gregor.us, Nov. 23, 2010


“...As previous readers of this blog understand, it’s useful to look at the car

dependent regions of southern California

as they are emblematic of the state’s post peak-oil, economic breakdown. After all the food stamp program is

really a food and energy program, which frees up household cash for gasoline....”

EverNewEcoN: This is a replay of how the National Highway Users’ Committee’s campaign

to rip out mass transit systems contributed to the Depression of the ‘30’s, except today the

threatened repeal of, or denial of funding of, “ObamaCare” has a parallel effect, additionally.

The chasing away of migrant workers also contributes to the current challenge.



from nasdaq.com, by way of DowJonesNewswires, reportedly from AgenceFrance-Presse 11/11/2010

SEOUL (AFP)--Brazilian President Luiz Inacio Lula da Silva said Thursday the world economy was headed for "bankruptcy" unless rich nations raise consumer demand rather than relying on exports to power recovery.

‘If they don't consume, and they just bet on exports, the world will go into bankruptcy,’ he told reporters as leaders at the Group of 20 industrial and developing nations headed into a two-day summit in the South Korean capital.




Bowles-Simpson Outline Cuts Pay, Raises Health Care Costs for Soldiers

   David Dayen, columnist, Firedoglake(blog,) Nov. 11, 2010



Why Aren’t Business Leaders Standing Up to The Tea Party?

Robert Reich.org, Oct. 29, 2010

“...GE’s Mr. Immelt may be unhappy with President Obama, but he’ll be far unhappier if the tea party takes over the GOP. Tom Borelli, director of the Free Enterprise Project of the National Center for Public Policy Research, a conservative think tank and vocal supporter of the tea party movement, has demanded Mr. Immelt’s resignation, calling GE an “opportunistic parasite feeding on the expansion of government.” Among Mr. Immelt’s alleged sins: taking federal subsidies for clean energy. In a press release last week, the National Center for Public Policy Research stated clearly: “Liberal CEOs are the next target for tea party activism....”




America's Two Economies, and Why One Is Recovering and the Other 


Isn't


Robert Reich, RobertReich.org, Nov. 5, 2010



EverNewEcoN:   When you play a board game,

and a couple players rig the game,

and then they collect most the properties and money, the game is over.





The U.S. Financial System                             Roubini: QE 2, Then QE3, Then

Is Effectively Insolvent                                      QE4, None Stopping Calamity

There is a grave risk of a                                  (by way of Henry Blodgett,

global L-shaped depression.                             businessinsider.com,  Nov. 4, 2010)

Nouriel Roubini, Forbes, March 5, 2009

The Arctic Shifts to a New Climate Pattern in Which "Normal" Becomes Obsolete

According to an international team of climate scientists, warming continues to shrink the snow

and ice cover that defines the Arctic, signaling the region's shift

Lauren Morello and ClimateWire,
ScientificAmerican.com, Oct. 22, 2010

The seeming paradox of Arctic warmth sending blizzards to mid-latitudes has occurred just three times in the past 160 years, including last year. But it is likely to become more common as polar sea ice shrinks, <NOAA oceanographer Jim> Overland said.  That's due in part to a powerful feedback loop scientists call "polar amplification." Warmer Arctic springs and summers increase

the amount of sea ice that melts each summer, leaving huge swaths of dark ocean water that trap heat.  That warmth cycles back into the atmosphere each fall, when the amount of sunlight dips and sea ice re-forms.  Meanwhile, Greenland's melting accelerates sea level rise

That's driving Arctic ocean and land temperatures higher, which scientists believe helped cause the unusual weather patterns observed in mid-latitudes last winter.

Meanwhile, historic warming observed in Greenland this year has implications for sea level rise, said Jason Box, an Ohio State University glaciologist who also worked on the new report.



0 rates like pushing on a string; balance sheet repair taking priority over  
low interest rate-induced investment opportunity;  It was the Japanese Government's
lack of consistency in its commitment to 
stimulus that greatly extended the severe 
recession; 





Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism

(review by economicsnetwork (International Review of Economics Education))

George A. Akerlof and Robert J. Shiller, Princeton University Press, 2009.


As they outline flaws in widely accepted economic theories, it could seem that the

authors are arguing against capitalism. However, they make it clear in the book that

they are against unfettered capitalism. Like John Maynard Keynes, they recommend

government involvement in the economy. Specifically, they state that government

should ‘set the conditions in which our animal spirits can be harnessed creatively to

serve the greater good’ (p. 173).

column / summary statement by authors in the Wall Street Journal, 4/24/2009, p.A15




RAVI BATRA was first to empirically correlate excessive concentration of wealth and depressions per se.  He also posited that its method of operation in bringing about depressions is the wealthy rely on increasingly less qualified borrowers so as to maintain high rates of return on savings.

"'We saw an extension of credit to a much deeper socioeconomic level, and they got access to the same credit instruments as middle-class and mainstream Americans," says Ronald Mann, a Columbia University law professor....'Wall Street Journal,Oct. 10,  2009     "The 'Democratization of...
believed within context--a commentary on facts


"...It appears that both the Great Depression and the current crisis had their origins in excessive consumer debt -- especially mortgage debt -- that was transmitted into the financial sector during a sharp downturn...."
"...The hypothesis we propose is that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system. It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption binge...."

Steven Gjerstad, Vernon L. Smith, Wall Street Journal,
April 6, 2009
From Bubble to Depression?
Mr. Gjerstad is a visiting research associate at Chapman University. Mr. Smith is a professor of economics at Chapman University and the 2002 Nobel Laureate in Economics.


Tax the rich, not small business

Small business growth powers the economy. If Obama extends the tax cuts on small business owners,

will that hurt more than it helps?

David R. Francis, Christian Science Monitor, Oct. 14, 2010


"...It's even possible that not raising taxes could hurt small business in the long term, argues economist Leonard Burman,  
now teaching at Syracuse University.   Full extension of all the Bush tax cuts would contribute $3.7 trillion to the deficit 
over the next 10 years, perhaps raising interest rates, which would do far more damage to small business than a tax hike he says...."




Robert Reich, RobertReich.org, Aug. 2, 2010


Robert Reich, RobertReich.org, Oct. 18, 2010




Laura d'Andrea Tyson
Business Week
November 1, 2004

"A recent study by the bipartisan Congressional Budget Office confirms that the 2001 and 2003 Bush tax cuts have disproportionately benefited the wealthiest households. The tax cuts have boosted the after tax incomes of the top 1% of households, with average incomes in excess of $1,000,000, by 10% -- compared with a 2.3% increase for middle-income families with average incomes of $57,000 and a 1.6% increase for the bottom 20% of families, with average incomes of less than $17,000. The tax cuts for millionaires alone have reduced government revenues by $90 billion a year, more than the lost revenues from tax cuts for the 80% of families making less than $100,000. Ninety billion dollars a year is more than enough to pay for the comprehensive health-care plan proposed by John Kerry..."
(EverNewEcoN: mostly borrowed from abroad)




One factor is common globally: the central role of stimulus. Most governments have been counting 

on stimulus to resuscitate their economies. As I have argued many times before, an economy tends 

to have a major misalignment of supply and demand after a big bubble phase.

An adjustment takes time.   

Trying to regenerate high growth through stimulus, rather than patiently 

waiting for a market realignment, leads to rising inflation rates. When inflation sparks panic, rapid

tightening becomes inevitable. And that triggers another crisis. I'm afraid this is exactly what's in store for 2012.



Banksters Lash Out as Wall Street Comes to Realization About Their Exposure

David Dayen, Firedoglake.com, Oct. 15, 2010


Charles High Smith, oftwominds.com, Oct. 13, 2010

"...Michael Lewis documents this runaway feedback loop of cultural self-destruction in a Vanity Fair article on Greece: Beware of Greeks Bearing Bonds...."
"...<A>s I noted yesterday in Imagining A Middle Class Does Not Create One, the open hatred of the productive private-sector class for their State/Elite Overlords may be reaching positive-feedback status, and thus diverting or distracting this rancorous understanding of how things really work is becoming more difficult.  "...These two runaway feedback loops--the self-reinforcing concentration of wealth/power and the erosion of trust, honesty and accountability  in a culture of entitlement and gaming-the-system--are also reinforcing each other. The more that citizens see the Power Elites getting away with financial thievery, the greater their own temptation to sell their own soul for a piece of the swag.  That's how you get stories like this: Gonzalo Lira On The Coming Middle-Class Anarchy (Zero Hedge)  Runaway feedback loops do not end well. As they gather momentum, then the unpredictability of the system also rises quickly. Those claiming that it will all pan out just fine cannot know that; their confidence/faith is itself a higher-order deception/delusion. We have a living example of what happens when these runaway feedback loops finally smack into reality: Greece."

The Mortgage Morass

Paul Krugman, NY Times, Oct. 14, 2010

"...True to form, the Obama administration’s response <bank recklessness / mis/ (potential) malfeasance> 

 has been to oppose any action that might upset the banks,  

like a temporary moratorium on foreclosures

while some of the issues are resolved. Instead, it is asking the banks,

 ve

ry nicely, to behave better and clean

up their act.   I mean, that’s worked so well in the past, right?   

The response from the right is, however, even worse.  Republicans in Congress are lying low, but conservative commentators 

 like those at The Wall Street Journal’s editorial page have come out dismissing the lack of proper documents as a triviality.  

 In effect, they’re saying that if a bank says it owns your house, we should just take its word.  To me, this evokes the days when

 noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts.   But then, I suspect 

 that some people regard those as the good old days.

What should be happening? The excesses of the bubble years have created a legal morass, in which property rights are ill  

defined because nobody has proper documentation. And where no clear property rights exist, it’s the government’s job to create them.   

That won’t be easy, but there are good ideas out there.  For example, the Center for American Progress has proposed giving

 mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing  

unless appealed by the mortgage servicer.   This would do a lot to clarify matters and help extract us from the morass.  

One thing is for sure:  What we’re doing now isn’t working. And pretending that things are O.K. won’t convince anyone...."










Paul Krugman, NY Times, Sept. 5, 2010

"...The story of 1937, of F.D.R.’s disastrous decision to heed those who said that it was time to slash the deficit, is well known. What’s
 less well known is the extent to which the public drew the wrong conclusions from the recession that followed: far from calling for a
 resumption of New Deal programs, voters lost faith in fiscal expansion.

Consider Gallup polling from March 1938. Asked whether government spending should be increased to fight the slump, 63 percent of those

polled said no. Asked whether it would be better to increase spending or to cut business taxes, only 15 percent favored spending; 63

percent favored tax cuts. And the 1938 election was a disaster for the Democrats, who lost 70 seats in the House and seven in the Senate...."

EverNewEcoN: The tax cuts financed from abroad and benefiting primarily the wealthiest

Americans were essentially already paid for by everyone else.  Mr. Obama essentially 

simply seeks a partial ending of that.


Robert Reich, Robertreich.org, Sept. 3, 2010


EverNewEcoN:
Rising interest rates rapidly bloat the Federal Reserve Bank's
liabilities, that phenomenon having taken on a new
dimension with that Bank's purchases of mortgage backed securities; they
drop the economic value of real estate (opportunity cost of ownership
is the interest income surrendered when cash is committed to buy/mortgage
cost simultaneously rising;) thirdly: U.S. debt service rises.
But, Mr. Obama inherited the freefall, comatose banks, lack of
financial wiggle room.


Dead Cat Bounce

Gina Sanchez and Christian Menegatti by way of Roubini.com, Sept. 2, 2010







Robert Reich, RobertReich.org, Aug. 8, 2010

The Flimflam Man

Paul Krugman, NY Times, Aug. 5, 2010

"...The nonpartisan Tax Policy Center...Its numbers
 indicate that the Ryan plan would reduce revenue
 by almost $4 trillion over the next decade. If you
 add these revenue losses to the numbers The <Washington> Post cites, you get a much larger
 deficit in 2020, roughly $1.3 trillion.And that’s about
 the same as the budget office’s  estimate of the 2020 deficit under the Obama administration’s plans. That is,
 Mr. Ryan may speak about the deficit in apocalyptic
 terms, but even if you believe that his proposed
 spending cuts are feasible — which you shouldn’t —
 the Roadmap wouldn’t
 reduce the deficit. All it would do is cut benefits for
 the middle class while slashing taxes on the rich. 





Paul Krugman Explains The Unmistakable Link 

Between Inequality And Financial Crises

assembled by: Joe Weisenthal, businessinsider.com,
 Jun. 28, 2010










Joe Weisenthal, businessinsider.com, Aug. 8, 2010



William G. Gale,  Washington Post (column,) August 1, 2010



Median Duration of Unemployment

Greg Mankiw's (Harvard Univ., Economics) Blog, 7/16/ 10

EverNewEcoN's intuitive response: cumulative attrition of savings
(though other inflationary dynamics may come to bear)

Myths of Austerity

Paul Krugman, New York Times, July 2, 2010

What’s the evidence for the belief that fiscal contraction is actually expansionary,
 because it improves confidence? (By the way, this is precisely the doctrine
 expounded by Herbert Hoover in 1932.)



Amanda Gengler, Money, June 7, 2010, p. 90; money.cnn.com



Amanda Gengler, Money, June 7, 2010, p. 90;  money.cnn.com



The Nevada Depression: A Look at the Harbinger of the US Economy

David Dayen, Firedoglake.com, July 28, 2010

"...At some point, corporations have to give the people some money so they can buy their wares...."
EverNewEcoN: health risk factor? Can't move till reliable high risk pool 
available?



Captive Regulators Contributed to Oil and Financial Disasters

Sen. Ted Kaufman, Huffingtonpost.com, July 27, 2010


Why Congress Must End Bush Tax Breaks for the Rich

Robert Creamer, Huffingtonpost.com, July 28, 2010


Fallen Soldiers' Families Denied Cash as Insurers Profit

David Evans, Bloomberg, July 28, 2010


Why Not Ask About Mr. Williams about
Privatizing the Profits, Socializing the Costs?
Mr. Williams also seems to shift some cost blame to
providers.  EverNewEcoN desires for providers to be
rewarded for achieving and providing brilliant skills
but feels it is to be appreciated that the demagogues
have been demagogueing end of life heroics to the 
detriment of all but the most desparately and 
uncomfortably terminal patients, who absorb a 
vastly disproportionate part of health costs.


In Your 50's?  Presenting Any Health Risk?
 Why You're Still At Risk Of Being Shaken
 Down For Years To Come
"...In a recent column for the Hartford Courant,
 Lieberman cited the rising costs of Medicare
 to justify his opposition to expanding the government's
 role in health care. But in 2000, when he was Al Gore's
 running mate, Lieberman campaigned on a platform of
 offering everyone 55 and older an option to "buy-in"
 to Medicare. That proposal—which was a central part
 of the Gore-Lieberman campaign's health care plan—
essentially would have created a robust public option
 for people aged 55 to 65...."

Bill Cummings, Newstimes.com, Dec. 19, 2010

Absent a modification of the election process,
though, it's hard imagining a winning Connecticut
Senatorial candidate not being influenced by the
insurance industry.

Governments Move to 

Cut Spending,

in 1930s Echo

David Leonhardt,
NY Times, June 30, 2010



Yi Wen, Assistant Vice President and Economist, 
Economic Synopses, St. Louis Federal Reserve Bank

Why China’s Currency Announcement is Hokum

Robert Reich, RobertReich.org, June 21, 2010



more welcome if it spurred moves to boost

Economist, June 24, 2010
"...a sharp appreciation of the yuan might result in a surge in Chinese lay-offs, not a boom in Chinese consumption.Reforms to tackle the root causes of excess saving in China are therefore needed as part of a lasting solution to global imbalances. That means more liberalisation to make it easier for small firms in labour-intensive services to challenge cosseted state-backed firms; it means better corporate governance to help unlock the cash hoarded by state-owned enterprises and spread it around the economy; and it requires a wider social-security net to persuade Chinese householders that they need not insure themselves against every catastrophe. A stronger currency is a handmaiden to these changes. But it cannot do all the work of transforming China’s economy"








Ten commandments for fiscal adjustment in advanced economies

Olivier Blanchard: Chief economist, IMF, on leave from MIT
Carlo Cottarellil: Director of the Fiscal Affairs Department, IMF
28 June 2010

Dean Baker On The Upcoming Assault On Social Security

From Contributor to firedoglake.com, June 18, 2010




Laura d'Andrea Tyson, 1/17/2005


"...The net present value of the shortfal
 in revenues over the next 75 years is
 $3.7 trillion, only about one-third of the
 net present value of the Bush tax cuts
 of 2001 and 2003 and about 0.7% of
 gross domestic product projected for
 the same period...."


Amcham Belgium, Jan 26, 2010
In order to maintain its position as an attractive country to do business
and to attract new investors Belgium
needs to, firstly, increase the older population’s activity rate which will
make a valuable contribution to
Belgium’s social and economic future. It’s necessary to modify certain schemes so that for a 55 year old it
would be more interesting to continue working. AmCham proposed the
following actions, increase early
retirement age, modify pre-pension schemes and encourage
continued training. 


Debt-heavy Belgium can't  afford political paralysis

Antonia Van de Velde, Reuters, 
June 8, 2010





Gregory White and Kamelia Angelova, Clusterstock (businessinsider.com,)  Jun. 28, 2010


The Proposed Orderly Liquidation Fund
Jennifer S. Taub's "It’s Not a Bailout — It’s a Funeral,"


Mike Konczal, newdeal2.0.com, Jun. 18, 2010








How close are we to a liquidity trap?

Paul Krugman, NY Times, March 17, 2008


And Then It Was Said, "Ben Sterilizes."



(U.S.: among least equally distributed)


Memo to Deficit Hawks: Let’s Get the Facts Right

Henry C.K. Liu, newdeal20.org, June 9, 2010


Henry C.K. Liu, henryckliu.com,
appearing roughly June, 2010

(U.S.: among highest linkages)


CLASP                       U.S. Department of Labor



Debra Haight, HeraldPalladium.com, June 12, 2010

NILES - A woman suffering from severe shoulder pain and without any health
 insurance shot herself in the
upper arm Thursday so she could get emergency room care.



"Missing Elements" of Mr. Laffer's Incomplete Story

Asha Bangalore, Northern Trust Daily Global Commentary, June 7, 2010

"...real GDP of the U.S. economy had risen 25% by the end of the expansion which stretched from March 1991 to March 2001, while the U.S. economy recorded a growth of 18% between the trough and peak of the expansion during November 2001 and December 2007.  In other words, economic growth registered during the Bush-II period is roughly 72% of the GDP gain recorded after the Clinton tax increases. ..."


Senate Offshore Drilling Hearings 1 ; 2
(Includes: Many Tourists Already Cancelling
Trips to Florida's Emerald, Gulf Coasts, Let
Alone to La's, Ala's, Miss's shores.)
C-SPAN, May 10, 2010

government - private sector balance and synbiosis
(EverNewEcoN's paraphrase;) cites: "an estimated 720,000 clean energy jobs that will be created by 2012
 from tax credits and loan guarantees in the economic stimulus law." "Carnegie Mellon Economist Allan Meltzer responded to the President’s speech: 'the huge stimulus spending has done little to reduce unemployment.
Long-term unemployment has never

been higher in the past 60 years.'" EverNewEcoN: SEE:


Here's Proof That Deficit Hawks Are Killing The Recovery

Robert Reich by way of businessinsider.com,
 May 28, 2010



Fifty-One Herbert Hoovers

Paul Krugman, NY Times, March 11, 2010



Reject the Consensus: 'V' Means Vulnerable

Behind all that upbeat data and macroeconomic noise
are pricing and inflation facts pointing to another crisis in 2012

Andy Xie, Caing.com, May 10, 2010
EverNewEcoN: I recommend reading the full article.


Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability.

Farm Labor Shortages

Rural Migration News, U.Calif.,Davis, Jan., 2006

directive credit to  
EverNewEcoN: Give $Trillions in tax breaks

to the wealthiest persons, on the U.S.' part,

all borrowed from abroad, wage wars, and adopt a drug benefit program wherein the Government 
is prohibited from seeking competitive bids, and

this is what you can expect. 


The Battle Over Bank Rules at Basel III

Yalman Onaran, Simon Clark, Joseph Heaven,
BusinessWeek.com, May 27, 2010

"Higher capital requirements may cut bank
 profits, but they will help the
 system withstand the withering losses
 that led to the credit crisis."


What if the Fed were a Bank?

Bob Eisenbeis and David R. Kotok, Ritholtz.com, July 7, 2009

verNewEcoN  highly recommends reading the entire article--quick view of banking valuations, constraints, the Federal Reserves traditional
 and newly 
expanded businesses, and how its current
 constraints may impact future policy.  But See:

 "...Over half of its <Federal Reserve Bank's> outstanding loans and other asset holdings have a maturity of over one year, and over 32% have a maturity of five years or more. This means that the durations of the Fed’s assets have increased substantially during the crisis period and are likely to increase even more as its mortgage-related holdings continue to expand....
In particular, the Fed’s liabilities are now nearly half overnight reserve deposits held by member banks and half in Federal Reserve Notes. Reserve deposits have a near-zero duration, while Federal Reserve Notes have nearly an infinite duration. Thus the Fed’s liability structure is a “barbell” shape whose average portfolio duration has shortened significantly at the same time the duration of its assets has increased...."
"... if one assumed an average asset duration of five years and that duration of its liabilities shrank as low as eight years, then back-of-the-envelope calculations using McCauley duration suggest that a 1% increase in interest rates would reduce the Fed’s capital by 38% if assets were marked to market. 2 If the Fed were a bank, this would be sufficient to trigger liquidation by the FDIC...."

US money supply plunges at 1930s pace as Obama eyes fresh 

stimulus

Ambrose Evans-Pritchard, telegraph.co.uk, May 26, 2010

Mechanism Design Theory

(unequal information awareness, oversized doubts, broken system components, etc. interfere with investing for greatest returns) 


      El-Erian Warns Of Cascading 

 European Bank Failures, Says Weak 

Countries Could Take A 

"Sabbatical" From The Eurozone

Joe Weisenthal and Gregory White, businessinsider.com,  May. 6, 2010



EverNewEcoN (U.S. parallel:)

Perhaps the banks, especially the regionals, should be allowed a special accounting sabbatical based on mortgages emanating from one berzerk time frame.  The alternative may be the Obama Administration's seeing the weak euro and deciding to keep throwing more money  after bad when those who sold at the top
 are still just waiting for a fair return on the equity out and a true clearing level that accounts for the hidden delinquencies.


R.I.P., WTO
Why 2010 could mark the death of the global
trade system as we know it.







Narayana Kocherlakota, President,
Minneapolis Federal Reserve Bank,
May 10, 2010, C-SPAN



from Kevin F. Jursinski (Attorney, Real Estate Specialist)
republished, Florida Bar Journal, June, 2010



Effect of Oil Price Shocks in the U.S. for 1985-2004, using VAR, Mixed 

Dynamic and Granger Causality Approaches

Samer al-Rjoub, Economics, The Hashemite Univ., Jordan
 


Jonathon Anderson, Caixin, March 31, 2010




 New York Times, April 5, 2010

"...For every $100 the company spends on retiree drug benefits, Medicare sends it a subsidy payment of $28. On top of that, the companies got a rare double tax break. The $28 subsidy is tax-free, and the company was allowed to deduct the entire $100 as a business expense.

The new health care reform law has left the 28 percent subsidy intact and continued to exempt it from taxation. But companies will no longer be allowed to deduct the subsidy as if it were an expenditure of their own...."





The Economist, April 29, 2010 (pp.59-60)
"""ON A recent trip to America, Nicolas Sarkozy, France’s president, could not resist the temptation to needle his hosts....
Observing that America is the only wealthy country to lack universal health coverage, Mr Sarkozy sniffed: 'Welcome to the club of states who don’t turn their back on the sick and the poor.'
Europeans have long thumbed their noses at America’s bloated health-care system. It is true that parts of it are convoluted, cruel and much too costly....

For the most part, the American health system is dominated by cream-skimming health insurers and the myriad “fee for service” providers they do business with, which drive up costs by charging high prices for piece work. KP’s business model integrates fixed-price health insurance with treatment at its own hospitals and clinics. This has led to big efficiency gains, making KP one of the cheapest health-care providers in most of the regional markets in which it competes. Thanks to Mr Obama’s reforms, over 30m Americans will enter the health-insurance market over the next few years—and KP’s low prices should make it a big beneficiary.

Moreover, KP’s medical results are as good as its financial ones. By many clinical measurements, it is the best-performing health-care outfit in the regions it covers...."

Hundreds drown in Russia heatwave

AFP (French Press Agency,
 Reporting fr Moscow,) by way of
yahoo.com, July 16, 2010


10 warmest years on record all since 1995, July 15, 2010

Hundreds die in Indian heatwave

Death toll expected to rise as India faces

record temperatures of up to 122F in hottest summer on record


Jason Burke, guardian.co.uk, May 30, 2010

                                          




Allan H. Meltzer, this from American Enterprise Institute, Oct. 23, 2009


Greenspan, Summers, and Why the Economy Is So Out of Whack

RobertReich.org, April 4, 2010

The Bernanke Plan: Sacrifice Savers to Recapitalize Banks and Benefit Debtors 

TraderMark, seekingalpha.com, March 31, 2010


All High-Risk Pools Are Not Equal: Examining The Minnesota Model

Courtney Burke, Lynn Blewett, healthaffairs.org, March 19, 2010

eligibility is broader...; adequately funded...; premiums are low...; ...administration.... The program is a not-for-profit corporation governed by a board of directors and regulated by the Minnesota Department of Commerce...


The 20 Undecided Democrats Just Loaded With Health Insurance Industry Money

Gregory White, businessinsider.com, Mar. 17, 2010



More Than 90 Percent of SoCal Residents Breathe Air That Threatens Health

(work of Jane V. Hall and Victor Brajer, Calif.State Univ., Fullerton, Nov. 12, 2008)
















David M. Cutler, Harvard Economics Prof., Wall Street Journal, March 9, 2010

<Key Points Excerpted:>

• Form insurance exchanges.

• Reduce excessive prices

• Moving to value-based payment in Medicare.

• Tax generous insurance plans.

• Empower an independent Medicare advisory board.

• Combat Medicare fraud and abuse. 

• Malpractice reform

• Invest in information technology.

• Prevention.

• Create a public option.

So reform gets full credit on six of the 10 ideas, partial credit on three others, and no credit on one. The area of no credit (a public option) is because Republicans opposed the idea







RobertReich.org, April 9, 2010





Martin Feldstein, Wall Street Journal, Feb. 19, 2010, A13






businessinsider.com, March 5, 2010

The Struggle of he / she  Pre-Medicare
Eligible, With Existing Risk, Sharecroppers
to the Company Already Dictating Its 
Premium, Pulls On Recovery, Including
In Real Estate, I believe aggravating
and extending this.  This runs perfectly
parallel to the Great Depression likely having
been exacerbated in part by the 
ripping out of mass transit systems 
during the 1930's already.





Hitting the Target

Jared BernsteinChief Economic Advisor to Vice President Biden, March 02, 2010

This morning, economist Edward Glaeser <Harvard Prof.--Edward L. Glaeser's blog is straightforward--see here> wrote a blog post over at the NYT charging that Recovery Act spending isn’t going where it’s needed most.  Based on a subset of Recovery Act spending, he claims that per capita spending in a state is actually negatively correlated with the state’s unemployment rate – in other words, the higher the unemployment rate in the state, the less money it gets per person.

He’s wrong about that.  Not only does he leave out a major chunk of Recovery Act spending, but the chunk he leaves out includes the programs that are targeted most directly at unemployment.   When you put those data back in, as we do below, you get a correct sense of the extent to which the Act is effectively targeting people and places that need help.

Glaeser’s blog post is based on data reported by direct recipients of Recovery Act, which only covers certain programs—those in which the Recovery Act makes a grant or gives a contract or loan to an entity that will perform a project, like fixing a bridge.

But the chunk he leaves out includes payments that go straight to individuals in need.   Since his targeting measure is unemployment, the most important omission here is the increased Unemployment Insurance payments that the Recovery Act provided – tens of billions of dollars of aid that have provided a crucial lifeline to more than 20 million unemployed workers during this downturn.  

He also leaves out major aid to states through the Medicaid system, which has helped prevent layoffs of teachers and other public servants across the country – and which, by the way, was distributed based on a formula that explicitly considers a state’s unemployment rate (such data are publicly available here).

Lo and behold, when you actually look at the entire Recovery Act, the negative correlation Professor Glaeser complains about disappears.   This is, of course, no surprise – if you leave out the Recovery Act programs that are targeted at economic hardship, the Recovery Act will look to be poorly targeted.  And by the way, these programs account for over $120 billion in funds put to work so far, so we’re not talking small change here.

Here is the very different picture you get when you  look at these targeted programs  – expanded unemployment insurance, aid to states through the Medicaid system, food stamps, emergency grants to the Temporary Assistance for Needy family system, job training, and youth summer employment:

And then there’s another side of this story.   As the figure shows, the programs that are targeted at unemployment are doing their job.  But not every program in the Recovery Act is intended to send money the states with the highest unemployment rates. 

In fact, that’s why the package is called the American Recovery and Reinvestment Act – it’s designed not just to get aid to those who need it most, but to make investments that will help lay the foundation for robust, sustainable growth in the future.

The Recovery Act cannot meet the vision of the President and Vice President if we were to limit it solely to projects in states with higher than average unemployment.   Throughout the country, it must make key investments in infrastructure, including not just roads and bridges but transit, high-speed rail, broadband, clean energy, and the smart grid.  And even when it comes to good, old-fashioned roads and bridges, those investments have to be made where they’re needed, not just wherever unemployment is the highest. 

Glaeser raises perfectly valid and important points about making sure our investment decisions are smart ones, not driven by politics or outdated formulas.  And that’s what we’re trying to do here.  When it comes to both recovery and reinvestment, the Act is hitting the target.






EverNewEcoN :
though not quite the controlling cartel as in health insurance,
the property insurance industry requires better policing:


EverNewEcoN :SPECIFIC CLAIMS NOT INDEPENDENTLY VERIFIED:

The Insurance Hoax


What On Earth Is The Fed Doing? They Should Wait Another Two Years Before Tightening

Paul Krugman, NY Times, Feb. 20, 2010, by way of Businessinsider.com





soldatthetop, seekingalpha.com, Feb. 25, 2010

Economic Happy Endings: Maybe Not This Time

David Goldman, seekingalpha.com, Feb. 26, 2010

         

Faber: India's Middle Class Will Soon Be Larger Than America's

Vincent Fernando, Feb. 15, 2010, BusinessInsider.com



Lehman & Repo 105 = Goldman & Greece: The Global Finance System Has Irreversibly Failed
David Caploe, Economywatch.com, March 15, 2010

The Valukas Report on the Lehman collapse and e-discovery: Stratify and CaseLogistix win the day [UPDATED]

at JD Supra, by way of the Posse List, March 14, 2010




The Price of Rising Seas
Jeremy Van Loon and Robert Dieterich, Bloomberg Markets, March, 2010, p.20

"The insurance industry is beginning to examine the value of assets
that may be affected as coasts are inundated."






U.K. Financial Services Agency, 11/19/2009


Benjamin S. Bernanke's Essays on the Great Depression

 Reviewed by Anna J. Schwartz




Warmer Pacific Waters Off The U.S. West Coast Likely Responsible


for the Monumental Snow Storms In the Mid-Atlantic States.see at NPR

Gas Escaping From Ocean Floor May Drive Global Warming

Univ. of California, Santa Barbara    Also, generally associated with Prof. Ira Liefer: positive feedback potential from warmer oceans melting previously precipitated methyl hydrate.



Dean Baker, Feb. 8, 2010, truthout.org, The Budget Deficit Crisis Puzzle

The country faces a serious crisis in the form of a manufactured crisis over the budget deficit. This is a crisis because concerns over the size of the budget deficit are preventing the government from taking the steps needed to reduce the unemployment rate.

Stop Freaking Out About The Deficit -- It's Just More Republican Scaremongering

Paul Krugman, Feb. 6, 2010, businessinsider.com

Bernanke's Exit Strategy: Tighter Reserve Requirements

  Andy Kessler, Wall Street Journal, Feb. 3, 2010, A19

We can end bank panics forever by limiting the ability of lenders to create money out of thin air.

EverNewEcoN: With credit anecdotaly tightening for smaller borrowers and U-6 unemployment not far below  Great Depression levels, Bernanke is really going to raise bank reserve requirements?  What of banks' ability to sell collateral without busting through their requirements?

David Wessel, Wall Street Journal, Feb. 4, 2010, A2  Inaction on Health is Costly


94 Minutes With Neil Barofsky

nymag.com, Jan. 29, 2010, by Jessica Pressler

"'...I think we’re in a horribly dangerous place right now,” he says. “Step one was, we saved the banks. Step two was, we encouraged them and enabled them to become bigger than ever and more interconnected than ever. We enabled acquisitions. Banks that would have otherwise fallen were buttressed. And now we’ve let them leave the TARP program, so whatever thin leverage we could have had as shareholders is gone. Meanwhile, it’s not like they’ve all returned to profitability; you still see some of them posting billions of dollars in losses. And in case anyone out there has any question of whether we’re going to let big, large, interconnected firms hit the rocks, not only have we shown throughout this crisis that we haven’t but we now are maintaining an enormous war chest under the TARP. You’ve made it worse in trying to rescue them, you’ve let them out, and there is nothing in place to prevent 2008 from happening all over again. We have to do something, and fast....'"

by Olga Pierce, ProPublica - January 27, 2010 8:40 am 



Fed to mass transit: Drop dead


    Larry Kudlow, CNBC, Jan. 25, 2010:



Housing, depressions and credit collapses

January 24, 2010 4:00pm

Vernon L. Smith and Steven Gjerstad

Financial and economic collapses in 2007-2008 and 1929-1930 followed unprecedented residential mortgage credit expansions. Both generated household balance sheet crises that were transmitted to banks as asset prices collapsed against fixed debts. Industry suffered from declining expenditures on housing and durable goods, and income fell when production and employment declined.  Irving Fisher (1933) described this spiral in 'The debt-deflation theory of great depressions....'”

"...Expenditure patterns before and during the depression were strikingly similar to those in the current crisis. A major real estate downturn began in 1927; consumption, GNP, durables consumption and investment all grew until their 1929 peaks.  These series declined in the same order during the depression and the current recession: housing fell most, followed by investment, consumer durables, GNP and finally consumption.  (In “Housing Is the Business Cycle” Edward Leamer finds a similar pattern in eight of 10 previous post-world war two US recessions)...."

by Frank Shostak, former professor of economics and M. F. Global's chief economist,
at 24hgold.com, 2/11/2010;
original here
"...

At present, banks are finding it more attractive to sit on massive piles of cash reserves rather than lend them out. In January 2010, excess bank reserves stood at $1.063 trillion, against $793 billion in January 2009 and $1.4 billion in January 2008.

The banks are still in the process of trying to fix their balance sheets. Also, they can't find many viable borrowers, i.e., wealth generators. All this raises the likelihood that the process of wealth formation is in trouble...."

EverNewEcoN: for the factual references;

EverNewEcoN: disagrees with the Mises'ian take

on the stimulus; EverNewEcoN: jump-start was

required on jobs, current essentially corrupt

chaos (shell game) in health delivery is inefficient and perennially adds an increment of economy drop-outs, any reach in mass transit supports the $US on imports and improves

consumers' affordability measures



By
John Geanakoplos
July 2009







Sept. 2, 2007, Econbrowser (run by professors from Univ. of Calif., San Diego
and the Univ. of Wisconsin, Madison



Phil Angelides, Chair of the Financial Crisis Inquiry Commission Discusses The Hearings

Thursday, January 14, 2010
ANGELIDES: I won't comment on our ongoing inquiry except to say this. Our job is to explain as best we can to the American people what occurred here, to pursue the facts. Our primary job is not just to get a few people but in the course of our inquiry, if we come across evidence of wrong-doing we will turn it over to the authorities
<..."So far nothing has changed to prevent a recurrence...">

(Dean Baker, Center for Economic and Policy Research Chairman, on CNBC, 1/14/2010:) Weekly unemployment claims still too high for recovery;  inventories have to get bought before they get replenished again; inventories got a one-time boost; much of the inventory
growth is not being produced here, either.  We've lost a huge amount of manufacturing.



JANUARY 6, 2010,Sara Murray, Connor Daugherty Personal Bankruptcy Filings Rising Fast

Paul Krugman / NY Times blog, Jan. 4, 2009

I agree with Bernanke that Taylor-rule based criticism of the low-interest policy of 2002-2004 is off base. There were compelling reasons for low rates; saying that the rates were too low based on the coefficients John Taylor basically pulled out of thin air in 1993 gets you nowhere.

EverNewEcoN: Didn't Taylor actually simply offer a course of action more than coefficients "etched in stone?"

The Real Reason Banks Aren't Lending

Chuck Saletta, fool.com, Dec. 30, 3009

"... there's an interesting "carry trade" going on right now that only banks can access. The Federal Reserve set the Federal Funds Rate at around 0%, giving banks an opportunity to borrow at essentially no cost. But 10-year Treasury yields -- the typical proxies for mortgages -- are around 3.8%. As a result, banks can earn an essentially risk-free 3.8% borrowing from the Fed system and lending to the Treasury, rather than lending to risky borrowers like you and me....

That's easy money if you're a bank. With the Federal deficit ballooning, the Treasury is certainly offering the banks plenty of opportunity to buy government bonds, rather than take a risk on traditional lending..."

"...In fact, every time Uncle Sam dictates that lenders have to adjust the terms of their loans, or that bondholders do not deserve their seat at the table when an indebted company files bankruptcy, it threatens to weaken the debt market further. ..."


also see Rate Games 1 or Rate Games


WallStreetJournal, Sudeep Reedy, Dec. 30, 2009
The Federal Reserve on Monday proposed selling interest-bearing term deposits to banks, a move the U.S. central bank would make when it decides to drain some of the liquidity it pumped into the economy during the financial crisis.
EverNewEcoN: (using reserves extended at 0 or near-0% interest?)

see o'grady


NYTimes.com, Bob Tedeschi, December 30, 2009

Helocs, as they’re known in the industry, are typically open-ended revolving credit products, with interest rates pegged to the prime lending rate, which banks offer their best customers....

 First American CoreLogic, a mortgage industry statistical and consulting firm that tracks a wider range of lenders than Mortgagebot, said that in November 2009, Heloc originations slid to $3.8 billion, the lowest level in the last two years and far below October’s $6.6 billion.

Mark Fleming, the chief economist at First American, says that even though home prices have stabilized, fewer people have enough equity in their homes to qualify for a line of credit. He added, “Consumers are still retrenching and paying down debt, not extending debt burdens.”


The Hospital That Could Cure Health Care

Cleveland Clinic is both highly effective and fiercely efficient.

 So why are its methods so rare?

by Jerry Adler and Jeneen Interlandi

Newseek, Dec. 7, 2009 Publication pages 52-56



Michael Steinberg, SeekingAlpha.com, Dec. 23, 2009

(Syracuse University commissioned)



Larry Kudlow, CNBC, Dec. 29, 2009

The gasoline price spike in 2008 was a major
precipitator of the financial crisis.

EverNewEcoN elucidation: would've been not
  just as to affordability, but the challenge to the
  dollar's value, as the U.S. imports most its oil.


Kristen Wyatt, MyWayNews, Dec. 31, 2009
Colorado's minimum wage becomes 1st in US to drop
State minimum wage laws
http://www.bls.gov/ro7/cpiden.pdf



Household Vs. Payroll (Business) Unemployment


Near-Zero Rates Are Hurting the Economy

ALSO SEE  

Low rate expectations are pushing dollars abroad.

David Malpass, Wall Street Journal, 
December, 3, 2009, A25

With the system stabilized, the Fed hopes that artificially low interest rates and its purchases of mortgage-backed securities will spur growth. Instead they are pushing dollars abroad and wasting precious growth capital in asset and commodity bubbles.




 
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