Thursday, May 14, 2015

Some morning newsbits

Here's stuff to read:

FT Alphaville - banks in glass houses. Seems the Europeans have gotten into this new fad of banks carrying financial products that are so complex that it's impossible to explain them to their shareholders to meet disclosure requirements. And they blame it on the regulators because communism.

WSJ RTE - first quarter casts shadow over spring. I sincerely doubt we're going to see a recession, but if it's in WSJ that means white-ass honkies are thinking it, and you should position accordingly, I guess. I personally find it funny that people have suddenly discovered the Atlanta Fed's GDPNow report but haven't yet figured out that it's only a coincident reading.

Barkley Rosser - never enough, Greek style. Mister Abusing puts the boots to the neocons' call for more Greek austerity:
So, what are these demands that the mass media reporters pass on from the European VSPs as so important that Greece must kowtow and do them Or Else? Details are not given, but they apparently involve pension cuts and labor market "reforms." On the former, without doubt, cutting pensions reduces budgetary layouts, thus reducing fiscal pressures in the short run (although by leading to reduced spending by pensioneers down the road, this contributes to an economy-depressing austerity down the road that may make it harder to lower that debt/GDP ratio). The details of the labor market reforms are not reported on, but let me say here that these do not have a direct effect on the budgetary pressure, and only may have some longer run effect, although, frankly, the scholarly studies on this topic are not nearly as clearcut as those demanding these changes think they are.

Something completely not mentioned in any of these stories that I have seen is that Greece has already engaged in exactly these kinds of policies, notably in 2012 in the wake of the crisis set off by the Greek government admitting that it had been misrepresenting the size of its budget deficit for many years. The pension cuts exceeded $4 billion, and there were changes in labor market policies. These were followed by substantial declines in Greek GDP, leading to this round of further demands of More of the Same, Never Enough.
Far as I'm concerned, it's been easily a year since Schauble and the other clowns lost their credibility on Greece reform - they're not even trying to hide the fact that they're simply following a neocon agenda anymore. What did I say about Germans being bull-headed and completely unable to admit when they're wrong?

Vox EU - determinants of slowing growth in emerging markets. Kinda above my head, but still sorta supports the idea of a secular bear market in EMs.

Perth Mint - dark gold. Your "stocks and flows" framework for the gold price? Doesn't work because most of the world's gold is off-market. - Eric Coffin's opinions. He notes among other things that there is an insanely high flow into inflation-protected bonds, which means the white-ass Manhattan honkies have found a new fad.

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