Saturday, January 14, 2012

.

http://krugman.blogs.nytimes.com/2012/01/14/sp-on-europe/
"January 14, 2012, 11:31 am

S&P On Europe

S&P’s downgrade of a bunch of European sovereigns was no surprise. What was somewhat surprising — and which went unmentioned in almost all the news stories I’ve read — was why S&P has gotten so pessimistic.
From their FAQs:
We also believe that the agreement [the latest euro rescue plan] is predicated on only a partial recognition of the source of the crisis: that the current financial turmoil stems primarily from fiscal profligacy at the periphery of the eurozone. In our view, however, the financial problems facing the eurozone are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU’s core and the so-called “periphery”. As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.
And today we read about the response:
German chancellor Angela Merkel has called on eurozone governments speedily to implement tough new fiscal rules after Standard & Poor’s downgraded the credit ratings of France and Austria and seven other second-tier sovereigns.
Still barreling down the road to nowhere."

http://www.bbc.co.uk/news/business-16098582

How will the euro crisis end?

European leaders, with the exception of the UK, have backed a tax and budget pact aimed at solving the eurozone debt crisis and preventing the implosion of the single currency. This graphic helps to explain what could unfold next in a crisis that French President Nicolas Sarkozy has warned risks "disintegration" of the eurozone.
  • Good economic outcome
  • Phoenix from the ashes
  • Divorce
  • Union
  •  
  • Euro collapses
  • Euro survives
  • Unravelling
  • Inflation
  • Meltdown
  • Depression
  • Bad economic outcome
  • How this graphic works
  • INTERACTIVE

  • How this graphic works

    Click on the black circles to read more about each scenario. Moving from left to right goes from worse to better outcomes for the survival of the euro. Moving from top to bottom goes from not-so-bad to much much worse outcomes for Europe's economy.

  • Phoenix from the ashes

    The least-bad outcome, where everything goes to plan This is the scenario that Germany and France are hoping for. All eurozone governments agree and stick to the strict new borrowing rules. Italy and Spain get bailouts financed by the European Central Bank. Most importantly, confidence returns. Financial markets are willing to lend to eurozone governments and banks again. In turn, the banks start lending more. Consumers (especially German consumers) start spending again. Businesses start investing again. Europe suffers only a light recession, but then recovers, and slowly but painfully grows its way out of its debt problems.

  • Divorce

    The eurozone decides break-up is the only option Any solution that might save the euro proves impossible to agree. Irish voters would block any treaty change put to them in a referendum. Along with the southern Europeans, they want to escape the seemingly endless cycle of spending cuts, tax rises, wage freezes and recession. They are angry at the seeming lack of solidarity from the northern Europeans. Meanwhile, voters in Germany, the Netherlands, Finland and elsewhere are incensed by the spectacle of their tax money being used to rescue southern Europeans from the consequences of what they see as laziness and overspending. Governments eventually agree this cannot continue, and negotiate a controlled break-up of the eurozone - perhaps a split into northern and southern European currencies. But this will be hard to do without triggering an "unravelling" scenario.

  • Union

    The European Union turns into a political federation As the financial malaise keeps doggedly returning, so the eurozone governments call more and more summits and come up with more and more proposals for closer union. Eventually they agree a complete political union - a democratically-elected government in Brussels that can borrow with the backing of all 17 member countries, and can spend money wherever needed - rescuing banks, paying unemployment benefits, financing investment in the more recession-mired countries. The UK and other EU countries not signed up to joining the euro are asked to exit the EU altogether and join a looser free trade area, with much less political influence.

  • Who knows?

    Anyone who says they know how this will end is deluding themselves If anything is certain about this crisis, it is that nothing is certain. A big bank could suddenly fail. A government could fall, or announce a surprise referendum. Governments or central banks could conjure up a plan that might, just might restore calm (as in 2008). The economic data could turn out much better, or much worse, than expected. Public protests could explode - demanding exit from the euro, or demanding a democratically elected government in Brussels. Leaders could resign or be removed. Everything could be overshadowed by a crisis in an entirely different part of the globe (Russia? China? Iran?). Making predictions is a fool's game.

  • Unravelling

    The weaker countries drop out one-by-one Fearing exit from the euro, ordinary Greeks empty their bank accounts in droves. The European Central Bank insists that Athens freezes people's accounts, or else it will pull the plug on the Greek banks. The Greek government falls, and its replacement decides enough is enough, announces a stop to all debt payments and a unilateral exit from the euro. The newly reintroduced drachma plunges in value. With widespread anger at spending cuts and recession, there are growing calls in other, bigger, southern European countries, led by Italy's former prime minister, Silvio Berlusconi, to follow Greece's example. That sparks bank runs in the other countries, who in course do end up following Greece. At best a rump eurozone of Germany and France - and possibly Finland, the Netherlands and Austria - is all that remains. There is a risk this could lead to a "meltdown" scenario.

  • Inflation

    The ECB prints money, prices rise, debts and savings wither away The euro plummets, making the cost of imported goods much more expensive. A strong recovery in the rest of the world pushes up the price of energy, food and raw materials even more. Meanwhile, the European Central Bank prints money to pay for one government or bank bailout after another. The ECB tolerates higher inflation - breaking its mandate - as its bankers secretly believe this is the only way to make the eurozone's enormous debts more repayable. They also want to see wages rise rapidly in Germany, so that workers in struggling southern European countries can regain a competitive edge. But governments continue to spend freely, expecting the ECB to keep lending them newly-printed euros. When a big government breaks the borrowing rules, the rules are simply abandoned. And so the inflation gets out of control.

  • Meltdown

    2008 again, but without the last-minute bailouts Financial markets lose confidence that the eurozone's problems are solvable. The eurozone's plan - stricter controls on government borrowing - is not credible. Anyway, government borrowing wasn't the real reason the euro got into trouble. It was all the private-sector borrowing that did the real damage. Workable solutions to the economic problems are not politically acceptable. And politically acceptable solutions make no economic sense. Investors stop lending to all eurozone banks and governments alike - except perhaps Germany. Banks collapse. Governments run out of money. Stock markets and the euro plummet. And the politicians run out of ideas and time. The outcome? Think of Russia in the early '90s.

  • Depression

    The eurozone stays together, but the price is years of economic hell Governments stick to their commitments, and all cut spending at the same time. This causes a deep recession. Consumers and businesses lose confidence in the economic outlook and cut back their own spending, making the recession worse. The European Central Bank cuts rates to zero, but still finds it almost impossible to stimulate the economy. The recession makes it very hard for governments to actually cut their borrowing, because they are spending more on unemployment benefits and earning less in income tax. Companies and mortgage borrowers find it harder to pay their debts, putting the banks in trouble, who cut back their lending even more, undermining the economy further. Eventually borrowers, including governments, have to write off their debts, and many banks and businesses go bust.
Europe and the American Business community are allergic to Keynes.
The syllogism they are using is: communism was fashionable union Keynes was fashionable therefor  Keynesian economics is communist.

Conditions will continue to deteriorate until the axioms of current dominant economic thought change.


http://krugman.blogs.nytimes.com/2012/01/14/things-were-supposed-to-be-quiet-about/

"January 14, 2012, 11:56 am

Things We’re Supposed To Be Quiet About

Apologists for rising inequality often argue that since most Americans’ income has risen despite rising inequality, there’s no reason to complain about inequality other than envy. So it’s worth remembering that we used to expect economic growth to deliver large increases in real income, not just a bit of a rise that’s accomplished in large part through longer working hours; and that a major reason so many have seen such small gains is that a large part of growth has been siphoned off to the very high end.
Lane Kenworthy had a nice chart illustrating both points, comparing median family income with real GDP per family (for those worried about the fine points, it was nominal GDP divided by the CPI, avoiding some technical issues):
You see the contrast: a doubling of family incomes in the post war generation compared with maybe 20 percent since, and family incomes growing in line with GDP before, lagging far behind since, with the difference basically being the rising share of the 1 percent.
This is real stuff, not some trivial envy-driven concern. But we must be very, very quiet about it, right?"

http://www.nakedcapitalism.com/2012/01/links-11412.html

Saturday, January 14, 2012

Links 1/14/12

Lambert Strether is an old-school blogger from Corrente.
Australian man describes terrifying ordeal after vicious kangaroo attack Telegraph.
Nine Euro Nations’ Ratings Cut, Seven Affirmed by S&P Bloomberg.
VA Federal judge refuses to add Perry, Gingrich, and Huntsman to the R primary ballot after they failed to qualify. None of these campaigns are serious, for all the coverage they get in our famously free press. Can you imagine Karl Rove allowing this to happen?
America’s incredible shrinking labor force FT. Continued success for the elite faction’s policy of choice on DISemployment.
The costs of DISemployment Billy Mitchell.
Depressions are depressing Salon.
Occupy Wall Street Joins Occupy The Dream: Is It Cooptation, or Growing the Movement? Black Agenda Report. BAR has been consistently right, early, on Obama. This is their beat. Watch this one.
“Wild Old Women” Close San Francisco Bank Of America Branch CBS San Francisco. Wheelchairs, walkers. Note to the Tactical Action Commmittee: They didn’t need to break any windows.
TSA Air Marshal Arrested in Mugging of Boston Occupier Wired. Stick to mugging the passengers, please.
Citizens United video documentary to target Occupy Salon.
Direct Democracy and voters Macrobusiness. And Part I.
SOPA’s Congressional supporters ProPublica. With contact information.
SOPA sponsor Lamar Smith’s site violates Creative Commons license in its background art Suburban Guerilla.
Smith backs off domain name blocking in SOPA Variety.
The Missionary Church of Kopimism New Yorker.
Izvestia: Reporters or Stenographers? Roundup PressThink. Truth vigilantes. Dear Lord.
Google ‘improperly’ accessed Kenyan rival Mocality’s database Guardian. Evil is as evil does.
FTC Said to Expand Antitrust Probe to Add Google+ Service Bloomberg. Dittoez. I don’t want to join any service that would have me as a member.
Israeli Mossad officers recruited operatives belonging to the terrorist group Jundallah by passing themselves off as American agents Foreign Policy, “‘It’s amazing what the Israelis thought they could get away with,’ the intelligence officer said.” Shocked, shocked.
Phil Angelides joins a mortgage startup Reuters. Ask not for whom the door revolves.
Apple Opens Suppliers’ Doors to Labor Group After Foxconn Worker Suicides Bloomberg.
America isn’t a corporation Krugman. “Government should be run like a business” is a Big Lie in the same class with “Government is like a household.”
Whither India? VoxEU.
Totally drug-resistant TB emerges in India Nature.
British science needs “integrity overhaul” Nature.
Water Risk in Supply Chains Draws Investor Scrutiny Bloomberg.
Mexican tycoon breaks parking attendant’s teeth when they refuse to help him change the tire on his car McClatchy. 1%ers behaving badly.
‘The law is clear’: Judge jails 84-year-old billionaire for contempt after failing to finish Michigan-Canada bridge project Daily Mail. 1%ers behaving badly.
Goldman Sachs Mortgage exec Jeffrey Verschleiser rents 94-room hotel for a three-day tweenager party Matt Taibbi. 1%ers behaving badly.
Antidote du jour: Corrente contributor Valley Girl’s Maine coon cat, Tootsie:


44444444444444444444444



  • TimesPeople recommended a user:
    Jan 13, 2012
    blkberrycastle
    • blkberrycastle posted to Twitter a blog post:
      Dec 15, 2010
      American Internet Use Catches Up With TV Use
      “American Internet Use Catches Up With TV Use - http://nyti.ms/fhrk6M” 
      Interesting in its probable distortion.

      http://en.wikipedia.org/wiki/Forrester_Research
      Type Public (NASDAQ: FORR)
      Industry Market research
      Founded 1983 by George F. Colony
      Headquarters 60 Acorn Park Drive, Cambridge, MA
      Employees 1,068 (as of September 30, 2008)
      Website Forrester Research
      George Colony, CEO of Forrester Research
      Forrester Research is an independent technology and market research company that provides advice on existing and potential impact of technology, to its clients and the public. Its independence sets them apart from companies who perform market-research that is funded by the given client. Forrester Research has five research centers in the US: Cambridge, Massachusetts; New York, New York; San Francisco, California; Washington, D.C.; and Dallas, Texas. It also has four European research centers in Amsterdam, Frankfurt, London, and Paris. The firm has 27 sales locations worldwide. It offers a variety of services including syndicated research on technology as it relates to business, quantitative market research on consumer technology adoption as well as enterprise IT spending, research-based consulting and advisory services, events, workshops, teleconferences, and executive peer-networking programs.

      Contents

       [hide] 

      From the Times:
      "At first glance, this seems like further evidence of the much ballyhooed, if statistically suspect, trend of cord-cutting, whereby people transition from watching television to streaming online video. Pay TV subscriptions in the United States are down this year. In addition, wireless carriers like Verizon and Sprint have been encouraging the idea that faster new wireless networks could serve as a substitute for landline broadband services. So cable companies that bundle broadband access with cable television service are seeing threats on multiple fronts.
      Forrester’s survey does show a significant increase in the number of people using the Internet to watch streaming video; 33 percent of adults surveyed this year said they use the Internet to watch video, up from 18 percent in 2007.
      Yet the amount of time people spend with their televisions remains relatively stable. (By contrast, the survey found that people were spending significantly less time listening to the offline versions of radio and reading printed newspapers and magazines.)"

      This looks like Forrester needs to pay attention to the structure of their spreadsheet.
      Their business looks to be telling businesses how to distribute their advertising budgets for maximum effect.
      The statistical picture should be how populations distribute their attention.  Whether the produced content is broadcast, narrowcast or printed should make little difference to the advertiser. 
      It is vital to the advertising production business.
  • TimesPeople recommended a user:
    Jan 13, 2012
    s2
    • s2 posted to Twitter a blog post:
      Feb 24, 2011
      Why I Think Manufacturing Has a Future
      “Why I Think Manufacturing Has a Future - http://nyti.ms/dQBWhp @nytimes” 

      I have no argument with his conclusions.
      His historical reasoning is very dodgy.
      The skills we are loosing are the skills to make one of something.
      As manufacturing becomes more automated and products more integrated industry becomes less adaptable.  
      Changing conditions will destroy "buggy whip makers".  There will be no plastic molders and braid makers to fill the gaps.

      We will need something new and someone will have to make it. 

      Imperial China and Shogunate Japan thought they needed nothing new.  They have had two centuries of interregnum as a result.









.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)