Sunday, April 29, 2012

- - - - - 4/28/12

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About midnight I lost power. The power was down for half a day.
This is as soon as I could get back up.

I have no financial reporting I trust.

Europe seems to be subsumed by Austrian orthodoxy.

There is no point in arguing with a religious zealot.

All that can be done is replace them.

The Euro and probably the European Union will not survive.

We have seen deflation due to a burst bubble.

The other way to deflate a currency is a tax generated surplus.

The "99%" have no surplus to tax. If they are squeezed by taxation they will disappear into the grey market. 10% off for cash.

The way to grow the economy is to put money at the bottom of the economic pyramid. It will generate demand. The top of the pyramid will just bank the money. They are already in surplus.

The place to get that money is government debt. Business will not borrow without demand for product.

If you read Krugman this is not news.

http://krugman.blogs.nytimes.com/2012/04/28/four-fiscal-charts/

"April 28, 2012, 11:00 am

Four Fiscal Charts

Here’s an exercise I did for my own edification — and to prepare for questions on book tour — but others may be interested in the results. I wanted a simple answer to the people who always insist that we must be having massive fiscal stimulus because we have a big budget deficit; my answer is that the deficit is a result of the depressed economy, but how do we show that without getting too much into the weeds?
Well, here’s a quick and dirty approach. Suppose that spending and revenues would, in the absence of the slump, have risen at 5 percent per year — roughly GDP growth plus inflation, and actually a bit slower than actual spending growth (6 percent per year) from 2000 to 2007. With this assumption, I can draw three charts for the federal government (using CBO data) and one for state and local (using FRED) that, I think, tell the story.

First, most of the surge in the federal deficit is about plunging revenue. In the figure below, the “No recession” line shows what would have happened if federal revenue had grown 5 percent per year after 2007:

That’s about an $800 billion per year shortfall.
What about spending? Well, it is higher than you would have expected in the absence of the slump, by around $300 billion:

What’s that $300 billion about? Well, they’re mainly about the category CBO calls “income security”, mainly food stamps and unemployment insurance:

Income security spending is, of course, strongly related to the state of the economy. So are some other forms of spending — Medicaid, of course, but also things like disability insurance, where people on the cusp are more likely to seek the benefits if they can’t find work.
So basically, the federal deficit is all, yes all, about the recession and aftermath.
And meanwhile, there has been austerity at the state and local level (calendar years here instead of fiscal, but that’s not crucial):

So the reality is that we have deficits because the economy is depressed, but relative to previous policy we’ve been imposing fiscal austerity, not stimulus."

http://krugman.blogs.nytimes.com/2012/04/28/where-the-productivity-went/

"April 28, 2012, 10:02 am

Where The Productivity Went

Larry Mishel has a systematic breakdown of the reasons for worker income stagnation since 1973. He starts with the familiar divergence: productivity up 80 percent, the compensation (including benefits) of the median worker up only 11 percent. Where did the productivity go?
The answer is, it’s two-thirds the inequality, stupid. One third of the difference is due to a technical issue involving price indexes. The rest, however, reflects a shift of income from labor to capital and, within that, a shift of labor income to the top and away from the middle.
What this says is that widening inequality makes a huge difference. Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared."

http://krugman.blogs.nytimes.com/2012/04/28/euro-austerity-continued/

"April 28, 2012, 9:55 am

Euro Austerity, Continued

Martin Wolf does his own version of my austerity versus growth analysis; he uses a different measure of austerity and a different time period, but the results are basically the same. Martin’s graph, which would be unreadably small in this format, is here.
To focus things a bit, here’s a reduced set of countries using the Wolf definitions of growth and austerity:

Basically, what we’re seeing is the contrast between the forced-austerity periphery and the core. Notice, also, that tales of German austerity are greatly exaggerated; the Germans haven’t actually done much real austerity, just as we here haven’t done much real stimulus.
You can try to make excuses here, but imagine what the austerians would be saying if the correlation went the other way."

http://krugman.blogs.nytimes.com/2012/04/24/austerity-and-growth-again-wonkish/

"April 24, 2012, 7:08 am

Austerity And Growth, Again (Wonkish)

Kash has a nice summary of what the new Eurostat numbers on budget balance mean. So I thought I’d do a bit more.
What Eurostat gives us are budget balances in euroland as a percentage of GDP. Kash focuses on the change from 2009 to 2011 as an indicator of austerity, although as he notes, falling GDP means that the true amount of austerity in places like Greece is much bigger than that.
Let’s run with that, and create a crude adjusted measure of austerity. I calculate the amount the budget balance “should” have changed as 0.45*(growth from 2009 to 2011 – 4). In this formula, 0.45 is the average share of government revenue in GDP in the euro area, so this is a rough measure of revenue effects of growth; I’m just assuming that 4 percent would represent normal growth for a euro country over 2 years. And I estimate austerity as the difference between the actual change in budget balance and this predicted change.
So this is a kind of Cary Brown computation. It’s also sort of what Alesina and Ardagna do, but applied to a period in which big moves in deficits are clearly driven by austerity policies, so the many objections to their work don’t have their usual force.
What do we get if we plot this estimated austerity against the actual change in real GDP 2009 to 2011?

An apparent multiplier of around 1.25, not out of line with other estimates.
It’s worth noting that this also implies that 1 euro of austerity yields only about 0.4 euros of reduced deficit, even in the short run. No wonder, then, that the whole austerity enterprise is spiraling into disaster."

One reason things are not worse economically are the military budgets of the last ten years. The production there pays people at the bottom of the pyramid.

My brother the EE sent me a copy of Legacy of Ashes.
I have not gotten deeply in to it.
My quick look at the introduction combined with my awareness of our politics has made me afraid.
My ignorance of the political "play" in the world is more profound than I believed.
I think I know more of the events than most.
I do not understand the causal relationship of the events.
Much of events seem to be the result of powerful persons acting in ignorance.

Saturday, April 28, 2012

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http://video.nytimes.com/video/2012/04/12/arts/music/100000001484180/the-ring-cycle.html?src=tp

Carbon:
You pick. We negotiate.
I can't do a named stone.
The setting should be platinum.

Au:
Simple. 14 carat. Red for choice.
I will wear one if you wish. I would rather not.
In all aspects but existence the ring is negotiable.

The place is anywhere you wish.

There is no negotiation without communication.

Sooner is better. As soon as you can is best.

AAIO posted to Twitter an article:
Jul 22, 2011

In 3M Case, Lawsuits and Intrigue Over a Medical Test
“In 3M Case, #Lawsuits and Intrigue Over a #Medical Test - http://nyti.ms/p0VUxV”

Lawyers getting paid.
AAIO posted to Twitter an article:
Jul 22, 2011

In San Francisco, Clogging of Courts Is Expected After Cuts
“In San Francisco, Clogging of #Courts Is Expected After Cuts - #legal #law #justice http://nyti.ms/nC4LGx”

"Drastic cutbacks at San Francisco Superior Court could be a boon to the expensive, for-profit dispute resolution industry, as people with the means to do so increasingly decide to pay for their own judge to resolve divorce, child custody and other legal battles. The cuts, announced Monday by Presiding Judge Katherine Feinstein to close a $13.75 million deficit, are expected to bring civil proceedings of all kinds, including sensitive family law cases, to a virtual halt. Uncontested divorces could take 18 months to complete, said Claire A. Williams, director of Unified Family Court in San Francisco. Child custody battles, which are currently settled in about six weeks, will now take more than six months, she said.
According to Erik Newton, co-chairman of the family law section of the Barristers Club in San Francisco, “Private judges are expensive, but it’s going to be the only approach to take.”
And it is “going to hit the middle class very, very hard,” Mr. Newton said.
To resolve an amicable divorce, hiring a private judge could cost $2,500 to $10,000, he said, in addition to lawyers’ fees and other costs.
But Catherine A. Gallagher, a former Santa Clara County Superior Court judge who now works at JAMS, the nation’s largest private alternative dispute resolution service, said the cutbacks could make settlements before private judges more cost-competitive.
“It’s cheaper for people who can afford to buy a judge because you’re not having your attorney sitting around for two or three hours waiting for a hearing to be held,” Ms. Gallagher said. “You’d have to pay for that time.”
Private judging is already on the rise, with JAMS currently resolving more than 10,000 civil cases a year, according to the company.
But not everyone can afford a private judge.
“Those who can’t are going to languish,” said John A. Montevideo, president of the Consumer Attorneys of California, a trial lawyers group."

There are two possibilities from my point of view.
You can pay the California Republicans their price.
You can try to transfer the proceedings to your new place of residence.
I guess that it would be best to pay for a private judge.
Knowing would be well worth a billable phone call.
Attorneys should be allowed to earn their fees.
The fees are less than airfare.

04/27/12

Sooner is better. As soon as you can is best.

I am digging through the facebook backlog.
Nothing of note so far.

Europe is in denial. The periphery is trying to bargain.

May sixth is next Sunday. Mother's birthday. Also the Greek general election.
When Europe unravels I expect the U.S. markets to dive hard.
I want to be mostly in cash for that.
I will then be looking for a bottom to start to reinvest.

Reading:
http://opinionator.blogs.nytimes.com/2012/04/24/wendell-berry-american-hero/

Reading the Bittman started me thinking about the relation between town and fields.
It has not been simple. I know more than what is presented.
Both of Jared Diamond's volumes deserve attention.
Most of agricultural development seems to have been done by large landlords. I am trying to fit the Inca into this narrative. I just have to think bigger. War implies a surplus on one side or the other.
The project is large and I will sleep.

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Friday, April 27, 2012

14:00, 4/27/12

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As you well know, the world is a distraction from what each of us want to do.

Krugman speaks of economics.
http://krugman.blogs.nytimes.com/2012/04/27/the-secret-of-our-non-success/

"April 27, 2012, 10:50 am

The Secret of Our Non-success

Disappointing GDP number — we’re not growing fast enough to make any significant headway on reducing the output gap — but hey, no need for further Fed action.
But let’s talk right now about fiscal policy. I wrote this morning about our de facto austerity. Here’s another indicator. Look at government (all levels) purchases of goods and services, that is, actually buying stuff as opposed to transfer payments like Social Security and Medicare. Here’s the past decade:

Obama, far from presiding over a huge expansion of government the way the right claims, has in fact presided over unprecedented austerity, largely driven by cuts at the state and local level. And it’s therefore an amazing triumph of misinformation the way that lackluster economic performance has been interpreted as a failure of government spending."

http://www.nytimes.com/2012/04/27/opinion/krugman-death-of-a-fairy-tale.html?ref=opinion

"This was the month the confidence fairy died.

For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.

Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.

The good news is that many influential people are finally admitting that the confidence fairy was a myth. The bad news is that despite this admission there seems to be little prospect of a near-term course change either in Europe or here in America, where we never fully embraced the doctrine, but have, nonetheless, had de facto austerity in the form of huge spending and employment cuts at the state and local level.

So, about that doctrine: appeals to the wonders of confidence are something Herbert Hoover would have found completely familiar — and faith in the confidence fairy has worked out about as well for modern Europe as it did for Hoover’s America. All around Europe’s periphery, from Spain to Latvia, austerity policies have produced Depression-level slumps and Depression-level unemployment; the confidence fairy is nowhere to be seen, not even in Britain, whose turn to austerity two years ago was greeted with loud hosannas by policy elites on both sides of the Atlantic.

None of this should come as news, since the failure of austerity policies to deliver as promised has long been obvious. Yet European leaders spent years in denial, insisting that their policies would start working any day now, and celebrating supposed triumphs on the flimsiest of evidence. Notably, the long-suffering (literally) Irish have been hailed as a success story not once but twice, in early 2010 and again in the fall of 2011. Each time the supposed success turned out to be a mirage; three years into its austerity program, Ireland has yet to show any sign of real recovery from a slump that has driven the unemployment rate to almost 15 percent.

However, something has changed in the past few weeks. Several events — the collapse of the Dutch government over proposed austerity measures, the strong showing of the vaguely anti-austerity François Hollande in the first round of France’s presidential election, and an economic report showing that Britain is doing worse in the current slump than it did in the 1930s — seem to have finally broken through the wall of denial. Suddenly, everyone is admitting that austerity isn’t working.

The question now is what they’re going to do about it. And the answer, I fear, is: not much.

For one thing, while the austerians seem to have given up on hope, they haven’t given up on fear — that is, on the claim that if we don’t slash spending, even in a depressed economy, we’ll turn into Greece, with sky-high borrowing costs.

Now, claims that only austerity can pacify bond markets have proved every bit as wrong as claims that the confidence fairy will bring prosperity. Almost three years have passed since The Wall Street Journal breathlessly warned that the attack of the bond vigilantes on U.S. debt had begun; not only have borrowing costs remained low, they’ve actually fallen by half. Japan has faced dire warnings about its debt for more than a decade; as of this week, it could borrow long term at an interest rate of less than 1 percent.

And serious analysts now argue that fiscal austerity in a depressed economy is probably self-defeating: by shrinking the economy and hurting long-term revenue, austerity probably makes the debt outlook worse rather than better.

But while the confidence fairy appears to be well and truly buried, deficit scare stories remain popular. Indeed, defenders of British policies dismiss any call for a rethinking of these policies, despite their evident failure to deliver, on the grounds that any relaxation of austerity would cause borrowing costs to soar.

So we’re now living in a world of zombie economic policies — policies that should have been killed by the evidence that all of their premises are wrong, but which keep shambling along nonetheless. And it’s anyone’s guess when this reign of error will end."

This is a very different view than I have been getting from business and the European press.

I trust Krugman to get it right.

I have been thinking on "the present value of future income".
This is the accountants and business majors way setting the value of income bearing instruments.
There is a risk premium added to this value.
Miss Best, the woman who taught seventh grad math my year, had a masters in mathematics received before the first world war. In the winter of 1929 I think I remember her telling us that she burnt her doctoral project and took up teaching. A part of her syllabus was introductory finance.
She did a splendid job.

For rational people, bankers on the retail side tend to be supremely rational,
there is very little risk of a dollar disaster. U.S. government securities pay almost no risk premium.
Short term debt pays no interest.
Longer term there is a small risk of inflation.
The Ten year note pays about one point nine percent.
There is a brisk carry trade between short term and long term.
All of the banks costs come out of that 1.9%.

At these levels the perceived risk is deflation.
The same can be said of equities.
I will soon be a seller of equities.

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Thursday, April 26, 2012

@00:39, 04/26/12

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http://video.nytimes.com/video/2012/04/11/technology/100000001483891/business-day-live-focusing-on-mobile.html?src=tp

I will try facebook again. I have been getting noise from there.
But not tonight.

There was a glance at a shalegas map on pbs tonight.
That may be a problem. The fantasy was laid on very thickly.

Wind turbines have bird strikes.
Greens fighting greens is a dream of the energy business.

The behavior of the Republican party gives new depth and meaning to
"Confidence game".

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Wednesday, April 25, 2012

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I see the changes.
I will attempt action.
I hope to keep it invisible.
The courts in California and D.C. are laggard. Judges hate to change.

Nothing in that net.

Robin Wells is Mrs. Krugman.

http://www.guardian.co.uk/commentisfree/cifamerica/2012/apr/24/european-turmoil-american-collateral

Paul Krugman has a piece in the magazine.

http://www.nytimes.com/2012/04/29/magazine/chairman-bernanke-should-listen-to-professor-bernanke.html?ref=magazine

The fear of god and Goldman Saks.

Spiegel:

The World from Berlin

'Berlin Is Running Out of Allies in Euro Crisis'

SPIEGEL ONLINE - April 24, 2012 The collapse of the Dutch government, the prospect of Socialist François Hollande as next French president and the surging popularity of far-right parties shows that budget discipline is out of fashion in Europe. Chancellor Angela Merkel is looking increasingly lonely in her fight to save the euro through painful austerity measures, write German commentators. more...

Big Dame Hunting

Spanish Royalty in Crisis after King's Antics

SPIEGEL ONLINE - April 23, 2012 The Spanish royal family is in the middle of its worst crisis in years following a series of scandals, including the revelation that King Juan Carlos went on an extravagant trip to Africa despite the recession. Many people in Spain are now asking tough questions about the role of the monarchy. By Helene Zuber more... [ Forum ]

The Spanish Dilemma

Euro's Fate Hinges on Austerity in Madrid

SPIEGEL ONLINE - April 23, 2012 Spain in recent days has taken center stage in the euro crisis. The country's banks are threatened with collapse and the government in Madrid has not been successful in efforts to get the national budget under control. Will the country be forced to request aid from the euro bailout fund? By SPIEGEL Staff more... [ Forum ]

Upswing Continues

Research Institutes Predict German Economic Growth

SPIEGEL ONLINE - April 19, 2012 Germany's leading economic think tanks are expecting economic growth, an increase in new jobs and a drop in new debt in the country over the next two years. The spring report forecasts 2 percent growth by 2013. But prospects appear dimmer for many other euro-zone countries. more...

Who will buy?

04/25/12

The financial axe may have fallen this morning.

We seem to be living with FUD (fear, uncertainty and dread) from the political right.

"We have nothing to fear but fear itself".

See Frontline from PBS. http://video.pbs.org/video/2226666502

Tuesday, April 24, 2012

You are still leading.
I can think of no other way to work our relationship.

Economic instability is increasing.

I do not know where, beyond a high probability of the continent of Europe, the system will break next.

The news has become much more real this week.

http://www.nytimes.com/2012/04/29/magazine/chairman-bernanke-should-listen-to-professor-bernanke.html?_r=1&ref=magazine

Frontline on pbs is scaring its viewers.

Monday, April 23, 2012

The times does not allow me to look at the times people list with my present settings. I am reluctant to change them. Facebook seems to have bought timespeople.

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http://www.nytimes.com/2012/04/23/opinion/krugman-the-amnesia-candidate.html?ref=opinion

Monopoly on morality.
http://www.nytimes.com/2012/04/23/us/in-lagunitas-calif-a-fight-over-worms-and-moats.html?hp

This is far from clear to me. The place is not on the market. There is no bank loan or mortgage. No certificate of occupancy was requested. The tea business is not retail. I expect it has no employees at this site.

Setbacks may be a problem.
The grey water whine is probably otherwise groundless.
Take this mess to a mediator to start and what can't be resolved by good communication can go to court.
Start by paying the neighbor. Get the fisheries people in for the creek. I expect the privy is grandfathered. 1972 was a different age.

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"en.wikipedia.org/wiki/Morality"

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http://en.wikipedia.org/wiki/Morality

"Morality (from the Latin moralitas "manner, character, proper behavior") is the differentiation of intentions, decisions, and actions between those that are good (or right) and those that are bad (or wrong). A moral code is a system of morality (for example, according to a particular philosophy, religion, culture, etc.) and a moral is any one practice or teaching within a moral code. The adjective moral is synonymous with "good" or "right." Immorality is the active opposition to morality (i.e. good or right), while amorality is variously defined as an unawareness of, indifference toward, or disbelief in any set of moral standards or principles."

The Republican Party claims a monopoly on morality.

Such a claim looks to be unethical.

I would like to close this trap before the Republican contention further damages our democracy.

http://en.wikipedia.org/wiki/Morality#Morality_and_politics

"If morality is the answer to the question 'how ought we to live' at the individual level, politics can be seen as addressing the same question at the social level. It is therefore unsurprising that evidence has been found of a relationship between attitudes in morality and politics. Jonathan Haidt and Jesse Graham have studied the differences between liberals and conservatives, in this regard.^[28]^[29]^[30] Haidt found that Americans who identified as liberals tended to value care and fairness higher than loyalty, respect and purity. Self-identified conservative Americans valued care and fairness less and the remaining three values more. Both groups gave care the highest over-all weighting, but conservatives valued fairness the lowest, whereas liberals valued purity the lowest. Haidt also hypothesizes that the origin of this division in the United States can be traced to geohistorical factors, with conservatism strongest in closely knit, ethnically homogenous communities, in contrast to port-cities, where the cultural mix is greater, thus requiring more liberalism.
Group morality develops from shared concepts and beliefs and is often codified to regulate behavior within a culture or community. Various defined actions come to be called moral or immoral. Individuals who choose moral action are popularly held to possess "moral fiber", whereas those who indulge in immoral behavior may be labeled as socially degenerate. The continued existence of a group may depend on widespread conformity to codes of morality; an inability to adjust moral codes in response to new challenges is sometimes credited with the demise of a community (a positive example would be the function of Cistercian reform in reviving monasticism; a negative example would be the role of the Dowager Empress in the subjugation of China to European interests). Within nationalist movements, there has been some tendency to feel that a nation will not survive or prosper without acknowledging one common morality, regardless of its content. Political Morality is also relevant to the behaviour internationally of national governments, and to the support they receive from their host population. Noam Chomsky states that ^[31]^[32]

“

... if we adopt the principle of universality : if an action is right (or wrong) for others, it is right (or wrong) for us. Those who do not rise to the minimal moral level of applying to themselves the standards they apply to others—more stringent ones, in fact—plainly cannot be taken seriously when they speak of appropriateness of response; or of right and wrong, good and evil.

”

“	In fact, one of the, maybe the most, elementary of moral principles is that of universality, that is, If something's right for me, it's right for you; if it's wrong for you, it's wrong for me. Any moral code that is even worth looking at has that at its core somehow.

Sunday, April 22, 2012

14:33, 04/22/12

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http://www.nytimes.com/2012/04/22/us/to-new-england-fishermen-another-bothersome-barrier.html?ref=business

Fish like the Atlantic cod will no longer be sold by Whole Foods.

A Ban on Some Seafood Has Fishermen Fuming

By ABBY GOODNOUGH

A decision by Whole Foods to stop selling any seafood it does not consider sustainable strikes New England fishermen as just one more barrier to their livelihood.

Whole Foods does a good thing. There is no right to over fish.

These fishermen will not get to keep their boats and the banks will suffer.

The yards will not have a good year. Used boats will be cheap.

No fish is an uncomfortable reality.

http://www.afp.com/en/news

I see they have an iPad app.

Just the wire feed. Real time is not of much interest.

http://vancouverdesi.com/business/solid-growth-low-unemployment-seen-in-germany-institutes/

"Think happy thoughts."

This from Reuter:
http://vancouverdesi.com/business/global-economy-weekahead-awash-in-money-and-piles-of-debt/

Just the same gold standard claptrap.

http://www.nakedcapitalism.com/2012/04/links-earth-day-2012.html

The Earth is fascinating. Earth Day is not.

Sunday, April 22, 2012

Links Earth Day 2012

Drone Use Takes Off on the Home Front Wall Street

Journal (Lambert)
Japanese tsunami debris reaches Alaskan shores Guardian (John L)
Megaupload Trial May Never Happen, Judge Says TorrentFreak (Cap’n Magic)
‘They’re killing us’: world’s most endangered tribe cries for help Guardian (John L)
Torture claims emerge in China’s Bo Xilai scandal BBC
Dutch prime minister says government austerity talks collapse Washington Post. Weird. This is serious weekend news (from the markets’ perspective) which is not being treated as serious news if you look at the usual suspects.
IMF allows eurozone to stay in its fantasy world Telegraph
Archbishop of York victim of “naked racism”, claims ally Telegraph
Surviving In an Unstable World Using A Secret Weapon Known As Literature Slacktavist (Lambert)
Exclusive: National Security Agency Whistleblower William Binney on Growing State Surveillance Democracy Now (Thomas R)
Facts, 360 B.C.-A.D. 2012 Chicago Tribune (Lambert)
Independent and Principled? Behind the Cato Myth Mark Ames, Nation
Paul Krugman is Very, Very Wrong Ken Houghton, Angry Bear (Aquifer)
Employees, Too, Want a Say on the Boss’s Pay Gretchen Morgenson, New York Times

The growing optimism on housing is not justified Credit Writedowns
The Central Question Posed by the Great Crash masaccio, Firedoglake
Just Banking Presentation Steve Keen
Is high public debt harmful for economic growth? Ugo Panizza and Andrea F Presbitero, VoxEU
Antidote du jour:

French President Nicolas Sarkozy, left, and Francois Hollande, the Socialist Party candidate, will advance to the runoff election.

Pool photo by Eric Feferberg; pool photo by Christophe Ena

Hollande and Sarkozy Head to Runoff

By NICOLA CLARK 13 minutes ago

François Hollande, the Socialist challenger, right, won the first round of presidential elections in France, but he had a slim lead over the incumbent, Nicolas Sarkozy.

One percent is not slim. Thirty two votes is slim.

http://www.washingtonpost.com/business/reports-dutch-government-austerity-talks-collapse-possibly-paving-way-for-fresh-elections/2012/04/21/gIQARzIjXT_story.html

"Dutch prime minister says government austerity talks collapse
(Peter Dejong, File/ Associated Press ) - FILE - In this Wednesday, Feb. 15, 2012 file photo, Dutch populist politician Geert Wilders poses for a photograph following an interview in The Hague, Netherlands. Time seems to run out for the minority government as seven weeks of talks to hammer out an austerity package aimed at bringing the Dutch budget deficit back within European Union limits collapsed Saturday April 21, 2012, the prime minister said, laying the blame squarely with anti-EU lawmaker Geert Wilders. Prime Minister Mark Rutte said his minority Cabinet will hold a crisis meeting Monday April 23, 2012 to discuss what to do now. “Elections are the logical next step,” Rutte said, but he added that he wants to work with parliament to hammer out austerity measures before a poll can take place.

By Associated Press, Published: April 21

THE HAGUE, Netherlands — The ruling Dutch minority government was on the brink of collapse Saturday after anti-EU lawmaker Geert Wilders torpedoed seven weeks of austerity talks, saying he would not cave in to budget demands from “dictators in Brussels.”
New national elections that will be a referendum on the Netherlands’ relationship with Europe and its ailing single currency are now all-but-certain.

But before Prime Minister can tender his resignation — possibly as early as Monday — he must consult with allies and opposition parties on how to run a caretaker government that will have to make important economic decisions in the coming weeks and months.
“Elections are the logical next step,” Rutte said.
Opposition leader Diederik Sansom of the Labor Party joined others across the political spectrum in calling for new elections as soon as possible.
“In the meanwhile, we in parliament will take responsibility for a careful budget in 2013,” he said.""

Usually when we are told that "no does not mean no" we know there is trouble ahead.

http://vancouverdesi.com/news/investigators-end-search-for-new-york-boy-missing-since-1979/

http://krugman.blogs.nytimes.com/2012/04/22/what-we-talk-about-when-we-talk-about-qe/

"April 22, 2012, 3:04 pm

What We Talk About When We Talk About QE

Karl Smith is bemused; in two posts he asks what Wall Street thinks quantitative easing does, and apparently is getting a lot of vehemence but no coherence. (I liked this comment: “Zero hedge commentary suggests the fed manipulates our very life blood, as ordered by the lizard men, in order to create infinite debt and establish a soviet central planning regime.”)
I can’t help him here. It might, however, be helpful to have a picture of what we’re talking about here. The Cleveland Fed has a nice, continually updated chart on the Fed’s balance sheet. Here’s the story up to now:

There was a period when the Fed was lending a lot of money to banks under the TALF and all that — which is probably where the thing about giving the banks money comes from — but most of that has been repaid. These days, QE is basically purchases of long-term federal debt and bonds issued by Fannie and Freddie, which is effectively also federal debt. And these purchases have vast effects on the economy because … well, I share Karl Smith’s bemusement.
PS: Reading a few comments, I think it’s really important to emphasize that the Fed is only buying agency mortgage-backed securities — that is, the stuff that already has an implicit Federal guarantee. A lot of readers seem to think that the Fed is buying subprime MBS or something like that, handing over money for worthless paper. Not so."

"April 22, 2012, 4:56 pm

QE Or Not QE, That Is The Question

OK, some readers have asked me to react to this critique by Mike Kimel. Brief response: Kimel apparently misses the distinction between ordinary monetary policy and quantitative easing, and also misunderstands what the Fed is buying.
Ordinary monetary policy involves cutting short-term rates to fight a slump; it’s not what we’re talking about here, since it’s hard up against the zero lower bound. But the large-scale conventional expansion the Fed engaged in by getting to the zero bound has, of course, widened the spread between short and long term rates, since markets expect short rates to rise above zero eventually. So looking at the raw data on the short-long spread tells you nothing.
QE is an attempt to get traction despite those zero short-term rates by buying long-term debt, hopefully narrowing the spread and thereby boosting the economy. I don’t think it’s had a large effect, but that’s the goal.
And as for the other thing: Kimel apparently thinks the Fed is buying privately issued MBS, aka toxic waste; actually it’s only buying agency debt, which already has an implicit federal guarantee and is functionally not much different from long-term Treasuries.
Next question?"

Krugman will post his Monday column later tonight.

http://www.theolivepress.es/spain-news/category/features/business-finance/

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