New York Times
Government Prosecutes and Harasses those Who Expose Criminal Wrongdoing
Kangaroo Court Show Trials and Blatant Obstruction of Justice
- Risky Student Debt Is Starting to Sour (WSJ)
- Political scandal in Spain as PP secret accounts revealed (El Pais)
- New York Times claims Chinese hackers hijacked its systems (NYT)
- Spain's Rajoy, ruling party deny secret payment scheme (Reuters)
- Iran crude oil exports rise to highest since EU sanctions (Reuters)
- BlackBerry 10’s Debut Fizzles as U.S. Buyers Left Waiting (BBG)
- Costs drag Deutsche Bank to €2.2bn loss (FT)
- And the gaming of RWA continues - Deutsche Bank Beats Capital Goal as Jain Shrugs Off Loss (BBG)
- More fun out of London - Barclays, RBS May Pay Billions Over Improper Derivatives Sales (BBG)
- Hagel to face grilling by Senate panel on Mideast, budget (Reuters)
The quest for cheap energy and cheap labor is a conquering human urge, one that has played out with notable ferocity starting with the Industrial Revolution. The introduction of coal into British manufacturing, and the more recent outsourcing of Western manufacturing to Asia, have marked key thresholds in this ongoing progression. But despite the harvesting of additional productivity gains from the more recent revolution in information technology, the suite of macro data suggests that the rate of advancement in physical production has slowed, notably, in the past thirty years. Seen in this light, the greatest gains to global industrial production were probably enjoyed from the late 18th century (when coal extraction and use began in earnest) into the mid-20th century (when oil reached broad distribution). In contrast, computers, the Internet, and the leveraging of developing world labor might eventually be seen as the finishing touches on this great industrial wave.
Nassim Taleb sits down for a quite extensive interview based around his new book Anti-Fragile. Whether the Black Swan best-seller is philosopher or trader is up to you but the discussion is worth the time as Taleb wonders rigorously from the basic tenets of capitalism - "being more about disincentives that incentives" as failure (he believes) is critical to its success (and is clearly not allowed in our current environment) - to his intellectual influences (and total disdain for the likes of Krugman, Stiglitz, and Friedman - who all espouse grandiose and verbose work with no accountability whatsoever). His fears of large centralized states (such as the US is becoming and Europe is become) being prone to fail along with his libertarianism make for good viewing. However, his fundamental premise that TBTF banks should be nationalized and the critical importance of 'skin in the game' for a functioning financial system are all so crucial for the current 'do no harm' regime in which we live. Grab a beer (or glass of wine, it is Taleb) and watch...
Q: Can a ZIRP-driven bull market in US equities exist, side-by-side, with an economic rebound and a bullish outlook on HPA? A: "No"
If governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth? Why haven’t successive rounds of quantitative easing by the US Fed solved our economic recession? And if Fed money creation really works, and doesn’t create inflation, why haven’t Americans gotten richer as the money supply has grown? The truth is obvious to everyone. Fiat currency is not wealth, and the creation of more fiat dollars does not mean that more rice, steel, soybeans, Ipads, or Honda Accords suddenly come into existence. The creation of new fiat currency simply strengthens a fantasy balance sheet, either by adding to cash reserves or servicing debt. But this balance sheet wealth is an illusion, just as the notion we can continue to raise the debt limit and borrow money forever is an illusion.
Little-Known Secrets to Boosting Mood …
As reported previously, when Bloomberg broke the news two days ago, it now appears that the official appointment of Jack Lew as the new SecTres will take place tomorrow. From Bloomberg: "President Obama will announce tomorrow that White House Chief of Staff Jack Lew is his pick for Treasury secretary, person familiar with the matter tells Bloomberg’s Han Nichols." In other words - goodbye Timmah: best of luck writing your new book, which in the tradition of every ex-public servant who departs the government where they kept their mouths firmly shut, we assume will be all about bashing Tim Geithner.
Bloomberg is out after hours with news that was expected by many, but which was yet to be formalized, until now: namely that following today's flurry of contntious nomination by Obama, the latest and greatest is about to be unveiled - Jack Lew, Obama's current chief of staff, is likely days away from being announced as Tim Geithner's replacement as the new Treasury Secretary of the United States. In other words, Jack will be the point person whom the people who truly run the Treasury, the Treasury Borrowing Advisory Committee, chaired by JPM's Matt Zames (who just happens to also now run the notorious JPM Chief Investment Office which uses excess deposits to gamble - yes, you really can't make this up) and Goldman's Ashok Varadhan, global head of dollar-rate products and FX trading for North America (recently buying a $16 million pad at 15 CPW) will demand action from.
Cliff Asness: "Nobody, Left Or Right, Really Thinks The Math Works, No Matter What They Say In Public"Submitted by Tyler Durden on 01/07/2013 14:47 -0500
The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now, we are avoiding honest debate on this fact. The central issue of our time is the debate over the size and scope of government. Two unpleasant but undeniable mathematical truths limit the feasible policy choices. The first truth is that the current tax rates cannot support the promises made to middle-class Americans. The second truth is that you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes. Not only that, it's easy to tax middle-class assets and transactions but soaking the rich means taxing investments, and problematically, investments are the lifeblood of economic growth. The choice the country faces is simple. What we cannot have is the Life of Julia at no additional burden to 99 out of 100 of us. The way to boil the frog of freedom is slowly.
Why We Are In a Perpetual Series of Wars ...
- Obama Signs Bill Enacting Budget Deal to Avert Most Tax Hikes (BBG)
- GOP Leaders Take Political Risk With Deal (WSJ)
- Basel Becomes Babel as Conflicting Rules Undermine Safety (BBG)
- Portugal Faces Divisions Over Austerity Measures (WSJ)
- The Fiscal Cliff Deal and the Damage Done (BBG)
- Cliff deal threatens second term agenda (FT)
- Deposits stable in euro zone periphery in November (Reuters)
- Fresh Budget Fights Brewing (WSJ)
- China Poised for 2013 Rebound as Debt Risks Rise for Xi (BBG)
- Who's Afraid of Italian Elections? (WSJ)
- China services growth adds to economic revival hopes (Reuters)
- Asian Economies Show Signs of Strength (WSJ)
- Japan’s Aso Targets Myanmar Markets Amid China Rivalry (Bloomberg)
This New York Times Op Ed by Louis Michael Seidman, a constitutional law professor at Georgetown University, is one of the most absurd and dangerous articles I have read in a very long time. This guy’s incredible conclusion is that it is the Constitution of the United States itself that is causing all that ails the nation at this time. Not once did I read about the Federal Reserve, or the “war on terror,” or the banker bailouts, or the complete destruction of the rule of law in recent years. Nope, none of that. Instead, this scholar’s conclusion is that the founding document, which created the fertile breeding ground for freedom and free markets and led to tens of millions of people to flee to from all corners of the globe, is the problem.
On May 10, 2000 a GATA delegation consisting of Reg Howe, Frank Veneroso, Chris Powell and Bill Murphy met with Denny Hastert, The Speaker of the House in the United States Congress; Spencer Bachus, the Chairman of the House Subcommittee on Domestic and International Monetary Policy; and Dr. John Silvia, the Chief Economist of the Senate Banking Committee. We presented each of them our 100 page "Gold Derivative Banking Crisis" document and personally delivered it to the staff of every House and Senate Banking Committee member.