Tuesday, April 26, 2011

Fed & Treasury handmaidens to the elite

On April 15 I linked to a post by Of Two Minds showing how the financial elites are about to harness the power of taxation of the American people to cover their bad debts:

For the more wonkish among you today here's a post from John Hussman redolent of intermediate macro that some of us absorbed several decades ago and have seen butchered by one charlatan political school of "economics" after another (supply side economics, free traders preaching deficits don't matter whether fiscal or trade, right wing ahats who defend inequality for inequality's sake, because taxes are so unfair...).

Hussman is saying the Fed is about to go broke and the bailout will be put upon the American taxpayers' backs.

Demand equality!  Demand redistributive taxation!  Until our elites are to tow the same line as the rest of us, they will do their utmost to take us back to a medieval feudal system within a generation.   Here's Hussman:

Monday, April 25, 2011

Links 4/25/2011

April 23 2011: Welcome to Slaughterhouse-Finance - the automatic earth

The argument for deflation.  I surmise that there is indeed an Everest of derivative exposure still off the balance sheets of the Wall Street banks that will cause another financial crisis if housing overshoots its long term mean reversion value, as it is almost certain to do.



In Equality We Trust? - Economix

More on our fraying social fabric.


Still trying to figure out how to post from the Mac....

Saturday, April 23, 2011

Richard Wilkinson on the costs of inequality

Video - must watch (Wilkinson begins at about 5:00).

I subscribe to a sort of evolutionary adaptive environment/laws written in the hearts of humankind view of this.  It is greed and hard-heartedness that is the fundamental problem with America and other highly unequal countries.  The really interesting thing is that the harm of inequality is spread among all income and status classes, and doesn't just affect those at the bottom.

The Equality Trust has summaries of the research.

Tuesday, April 12, 2011

Catastrophic system failure

No, not of the economy, but of my seven year old Windows XP machine with 150 programs installed on it, with Windows suffering from severe dementia.  I tried to rebuild the C: drive and the resulting meltdown destroyed data on not one but two backup images.  Unbelievable.

So I splurged and got a refurbished 15 inch MacBook Pro 64-bit with a dual–boot partition so I can run Windows 7 on one side (needed for econometrics software, Windows Live blogging, Band in a Box, and Condor, a soaring flight simulator), while on the other side I am getting to know Snow Leopard, the Mac operating system, and why all the physicists I’ve ever known have used Macs.  There is simply no comparison. 

So if anyone wants to make a contribution, go for it!  I will be back up blogging soon.

Monday, April 4, 2011

Links 4/4: Academic choice theory; madness in high places

  • Blacklisted Economics Professor Found Dead: NC Publishes His Last Letter - 04/04/2011 - Yves Smith
  • I was not aware of this man’s work, but it describes my own feelings as an apostate academic economist about academic economics and academic economists.  This is must read for regular readers of this blog.  A representative quote (the professor is responding to questions in a letter from a bright high school student):


    What kinds of proposals could help to minimize value destruction by academic economists? You are quite right that from the point of view of the public this issue looms large. Even in most Western democracies, more than half of the total GDP is allocated according to principles promoted by agents subject to Academic Choice dynamics, i.e. economists. One simple remedy to the large negative externalities generated through their academic entrepreneurship could be to shrink the size of the sector of academic economists.
    Another approach is indicated by the game theoretic insight that winning strategies in competitive games usually involve a random element. Following this principle, ever since antiquity trials have been decided by juries who are chosen by lot. We should therefore strongly consider periodically repopulating economics departments with people selected at random. […]

    When working in industry one needs to harmonize one’s models with empirical reality as best one can, while cognitively harmonizing the systemic context of one’s efforts in the tradition of trying to do good within the system, being part of the solution, and so on.  And trying to give money to the poor until it hurts.

    Friday, April 1, 2011

    No rate increase in sight

    Dent’s unoriginal take is that housing will behave just like Japan’s did after peaking in 1990.  Prices won’t come back for a couple of decades.

    If we get a major war in the next three years as Charles Nenner and Gerald Celente expect, we will have what I call “stagflationary deflation”:  sectoral supply-shock price increases that further squeeze nominally unchanging household budgets (at least for the bottom ninety percent).  Consumption at seventy percent of GDP is unsustainable, and what is taken out of consumption would be replaced with war spending.  Consumption would be effectively if not administratively rationed.

    “Inflation is always and everywhere a labor market phenomenon accommodated by loose monetary policies.”