Monday, April 6, 2015

Some more quality reading

So early this morning, I was watching CNBC, where some guy named Reza Ali was failing to explain how his 20 years of experience trading derivatives gives him any qualifications whatsoever in predicting what's going to happen in Greece.

Seriously? A fucking derivatives trader is being asked for his opinions about Greece? Cuz maybe, I dunno, he went there on vacation once? Or met a Greek once? Is that it?

In contrast to that, here's some quality news for you:

Brett Steenbarger - what we can learn from options skew. If this time is like last time:

then it looks like the S&P is just about to explode higher like it did last spring, which btw also saw really poor economic data, as did every Q1 of this recovery, so quit piddling your fucking panties.

FRB Altanta blog - what seems to be holding back the recovery. The data suggests you can put it down to a lack of capital deepening - as noted by Dave Rosenberg, US capital stock is as old as it's ever been. Hey, FRB Atlanta - might that be because your government changed the fucking law to allow companies to hide trillions of dollars in overseas accounts instead of reinvesting it in US production?

Gavyn Davies - Yellen explained perfectly clearly what she's thinking but you dumbfucks weren't listening. The Fed knows exactly what it's doing, but the talking-head morons who you watch on CNBC and read at Business Insider aren't qualified to comprehend it.

Ben Bernanke - Germany's trade surplus is a problem. He explains, clearly and concisely, how Germans are cunts:
First, although the euro—the currency that Germany shares with 18 other countries—may (or may not) be at the right level for all 19 euro-zone countries as a group, it is too weak (given German wages and production costs) to be consistent with balanced German trade. In July 2014, the IMF estimated that Germany’s inflation-adjusted exchange rate was undervalued by 5-15 percent (see IMF, p. 20). Since then, the euro has fallen by an additional 20 percent relative to the dollar. The comparatively weak euro is an underappreciated benefit to Germany of its participation in the currency union. If Germany were still using the deutschemark, presumably the DM would be much stronger than the euro is today, reducing the cost advantage of German exports substantially.

Second, the German trade surplus is further increased by policies (tight fiscal policies, for example) that suppress the country’s domestic spending, including spending on imports.

In a slow-growing world that is short aggregate demand, Germany’s trade surplus is a problem. Several other members of the euro zone are in deep recession, with high unemployment and with no “fiscal space” (meaning that their fiscal situations don’t allow them to raise spending or cut taxes as a way of stimulating domestic demand). Despite signs of recovery in the United States, growth is also generally slow outside the euro zone. The fact that Germany is selling so much more than it is buying redirects demand from its neighbors (as well as from other countries around the world), reducing output and employment outside Germany at a time at which monetary policy in many countries is reaching its limits.
So firstly, the Euro currency union acts as a 25-35% subsidy on Germany's exports. And secondly, instead of spending that money, they stuff it under the mattress like the penny-pinching misers that they are. And all this happens because, instead of leaders who know anything about economics, they have Merkel the failed physics postdoc and Schauble the tax lawyer, but that's fine because they're getting regular advice from that right-wing racist news rag Bild.

BBC - the dystopian lake filled by the world's tech lust. About the economic cost of rare earth mining, which I doubt environmentalists ever factor into their cost-benefit analyses of wind power and suchlike.

Bloomberg - iron ore price collapse accelerates. This is why:
Seaborne supply will exceed demand by 55 million tons this year, rising to 184 million tons in 2018, Morgan Stanley estimates. The world’s biggest mining companies will add 310 million tons of output through 2017, Deutsche Bank said on Tuesday, forecasting that iron ore will average $51 this year.
And meanwhile, Chinese iron mines continue to produce low-quality ore at a massive loss, because the government wants the jobs. Now, what did I say 2-3 years ago about governments subsidizing loss-making mining industries in a secular commodity bear market? Hm? What did I say?

der Spargel - interview with John Cleese. Don't mention the war! He mentioned it once, but I think he got away with it.

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