NEW THINGS: @12:55, 03/15/12 2 , 4

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TimesPeople recommended a video:
Mar 14, 2012

Edith Widder's New Crusade
http://www.nytimes.com/2011/12/20/science/a-pollution-fight-powered-by-bioluminescent-sea-creatures.html?_r=1

It all matters.
The oceans are far from well mixed.
I am about fifteen years away from the game. I am an interested visitor.
TimesPeople recommended a user:
Mar 14, 2012
R. Bauer
- Henry recommended a blog post:
  Mar 7, 2011
  
  Does IMF Stand for Impressive Macroeconomic Flexibility?
  So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
  
  There are several different sets of interests at work in finance.
  The grand strategy escapes me.
  The goal is to bring the financial businesses to heel without killing the national or the world economies.
TimesPeople recommended a user:
Mar 14, 2012
DB
- Henry recommended a blog post:
  Mar 7, 2011
  
  Does IMF Stand for Impressive Macroeconomic Flexibility?
  So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
  
  An obvious first step is to buy time. More time means a deeper hole to dig out of.
  Two benefits of more time.
  Speculating interests can move cash out of vulnerable assets.
  They will not fight the inevitable if they have no money at risk.
  Central banks which can issue credit arbitrarily can gather in the
  defaulting bonds. The potential losses vanish in the same way the credit to buy them appeared. The excess credit will have to be taxed out of the economies. The very rich will hate that.
  The rich really have the choice of inflation or taxes.
  The liquidity trap would hide inflation for as long as the economy is stalled. I can hope we get a big shot of cash at the bottom and start the economy and follow with high taxes to control the inflation when the economy is booming.
  I expect we will stagger on to the election. We must put the Democrats in power to get an exit. Flyers call it diving out of a spin.
  
  The tactical situation:
  
  http://krugman.blogs.nytimes.com/2012/03/15/bleeding-the-patient/
  
  "March 15, 2012, 8:48 am
  Bleeding the Patient
  Brad DeLong and Larry Summers have a paper in progress about fiscal policy in a liquidity trap; some of the analytics here. The bottom line, fleshed out with a lot of evidence, is one that others — including me and Christy Romer — have been arguing for a while: expansionary fiscal policy under these conditions doesn’t just aid the economy in the short run, it may well even improve the long-run fiscal prospect. And austerity may be self-defeating even in fiscal terms.
  If this is right (and I think it is), austerity-loving pundits and policy makers really are like medieval doctors who believed in treating illness by bleeding their patients, making the patients even sicker, leading to more bleeding."
  
  http://krugman.blogs.nytimes.com/2012/03/15/taking-stock/
  
  "March 15, 2012, 8:38 am
  
  Taking Stock
  Memories:
  Larry Kudlow:
  
  I have long believed that stock markets are the best barometer of the health, wealth and security of a nation. And today’s stock market message is an unmistakable vote of confidence for the president.[Bush]
  Mark Skousen:
  
  What’s the future for Obamanomics? The stock market’s reaction doesn’t bode well. The Dow has fallen 18 percent since the last trading day of Bush’s term. Clearly, Wall Street thinks that Obama’s tax, spend, and regulate policies will be a disaster."
  
  http://hat4uk.wordpress.com/2012/03/15/bank-of-greece-printing-its-own-euros-says-belgian-economist/
  
  "BANK OF GREECE ‘PRINTING ITS OWN EUROS’ SAYS BELGIAN ECONOMIST
  Johan Van Overtveldt
  Belgian website’s banker mole reveals stunning truth
  Yesterday, the Belgian website Trends led with an investigative article using a mole inside the Bank of Greece. The allegation – put forward by prominent economics writer Johan Van Overtveldt – is that the Bank has run out of money from other sources, and is simply printing its own euros to keep the other Greek majors afloat.
  Johan Van Overtveldt is a director of Belgium-based economics think-tank VKW Metena and a regular columnist for publications such as Knack, Trends, De Tijd and The Wall Street Journal Europe. His main areas of focus are history of economic thought, macroeconomics, industrial economics, international politics and terrorism.
  Thanks to Slogger Gemz, there is a translation of the article below:
  ‘We will call him Dimitriou, from the name on the picture of the waiter who serves us in one of the hotel restaurants in Syntagma Square. After a brief introduction Dimitriou pressed me by the the hand and informs me of the success of the Greek edition of my book.
  
  It is noteworthy that he immediately takes me to a table which has a clear view of the restaurant’s entrance. Dimitriou is not really nervous, but he knows that he is doing something that he ought not do. That is to say, speaking off the record with a journalist about the Bank of Greece. It is one of the central banks that form part of the system of the ECB.
  Dimitiriou describes to me his job function at the Bank of Greece. It is just under the directorate of the Bank, a high position let us say. Central to his story, is the ELA program. This stands for Emergency Liquidity Assistance, a kind of emergency program where national banks that are part of the ECB system can fall back on in case of an unexpected emergency.
  Ireland uses this mechanism a lot, and for the last few months, the Greek use of the ELA facility has grown substantially. By the end of November this amounted to some €43bn. On the 8th of March the Greek parlament voted that this utilization could go up to €90bn, and according to Dimitriou this will be used. Besides this, Greek banks have called on €73bn in liquidity from the ECB through normal channels* [*Klaus Kastner speaks of this at length].
  Dimitriou tells his story of the ELA and of the Greek bankruptcy: “The normal way of things is that banks with liquidity problems offer assets to the ECB. In exchange euros are transferred to the bank in question. This so-called collateral could be anything: bonds from the bank’s portfolio, outstanding loan packages, and so on. The ECB investigates the value of this collateral and on the basis of this will take 70% to 90% of the value into account. The problem is that Greek banks have nothing more to offer the ECB. With the €73bn already taken up by the banks, these banks are at the end of the road. Given the continued flight of capital [out of Greece] the banks are having to cough up more of their remaining liquid funds. This is now happening through the ELA mechanism.”
  Dimitriou knows that the capital flight from Greece is around €60bn, and this is the puzzling part, around a third of the Greek GDP. [!!] How does this square with the ELA mechanism? Dimitriou looks me straight in the eye and says in a soft voice “Greece is printing its own Euros. The bank of Greece credits the accounts of Greek banks that would have been shutting their doors but for the emergency funds. All Greek banks are effectively bankrupt, it is that simple. These zombie banks can only survive through these ELA injections. Within the ECB system the only collateral for the euros created within the ELA mechanism – is the guarantee of the Greek state. I do not know what you think of this, but my humble opinion is that this guarantee is as good as worthless. You can change all sorts of declarations about the whys and wherefores of these operations, but believe me, the basic fact is simple: only by allowing the Greek central bank to print euros [create euros] can you avoid the implosion of the entire Greek financial system, with all the consequences that this would have for the eurosystem as a whole”.
  The second rescue package that was given to Greece with the debt allowance of €100bn is an eye-catcher is just another fix? Dimitriou says “Yes; first and foremost: how long will this take to become fully operational. Every day the Greek banks are continuing to bleed. Secondly: more than 60% of the aid to Greece does not even come into the country, most of it goes to [private] banks in other countries. Thirdly: how does this aid package help the Greek economy to grow? I simply cannot see this, you know. It wins a little time, in my estimation six months at most and that is being optimistic. In the meantime, the instructions of the government and from the top of the Bank of Greece are quite clear: keep pumping from the ELA well!’
  ———————-
  This is the first evidence I have seen of straightforward money-printing going on. Other indirect methods are of course being used throughout the eurozone, but the imputation of this piece is that this action in Athens is either unauthorised – or Mario Draghi is turning a blind eye to it.
  It once again raises the obvious issue: as the situation in Greece is so patently hopeless – and even what the Troika has offered is a complete sham - why is the EU persevering with
  the pretence that Greece can any longer remain in the eurozone?
  And the answer – as I posted a few days back – is that (as this article confirms) Greece is running up an ever-bigger debt at the ECB; if it leaves the ezone, that will become one whopping great bad debt.
  Related: Troika keeps its options wide-open…this isn’t a bailout yet."
  
  http://hat4uk.wordpress.com/2012/03/15/credit-ratings-the-hidden-persuaders-behind-fitch/
  
  "March 15, 2012 · 12:02 pm
  ↓ Jump to Comments
  CREDIT RATINGS: THE HIDDEN PERSUADERS BEHIND FITCH
  Marc Ladreit de Lacharriere….’malign mercenary’
  Recent decisions analysed by The Slog
  Fitch was first to cast doubt upon France’s credit rating, first to upgrade Greece after last week’s debt-swap, and yesterday put Britain on negative outlook for its AAA status. Can we be sure these decisions are truly objective? One hugely notable feature of the last twelve months has been the growing campaign by indebted sovereign politicians to mouth off against the ratings agencies, but as ever this reflects only the petulance of thos who back into the spotlight of life.
  Rather, I think, we should look more closely at the monied people behind Fitch.
  The privately-owned and family controlled Hearst Corporation has spent some $1.4 billion buying into the ratings agency Fitch since March 2006. As of three weeks ago, Hearst owns 50% of it. I still don’t really understand why anyone would want a company whose decisions make or break markets to be in the hands of a media-owner, but there you are.
  The other half of it is owned by Fimalac – a French combine that is the personal fiefdom of Homme d’Affaires Marc Ladreit de Lacharriere. On selling the last of his majority in Fitch last month, de Lacharriere stipulated that he must remain Chairman of Fitch come what may until he reaches 80 years old – in nine years time. Why?
  Ladreit de Lacharriere is a founding member of the so-called Robespierre Group who were at the prestigious Ecole National d’Administration together at the end of the 1960s. A billionaire, he has been described by Le Monde as ‘the most powerful unknown quantity in France’. Influential Paris magazine Les Inrocks last week called him ‘a financier and malign mercenary’.
  M. Lacharriere is a personal friend of Jacques Chirac, and a right wing cultural philanthropist. Fitch generated over a third of Fimalac’s profits when it was wholly owned by Fimalac: the agency’s earnings having trebled during Fimalac’s ownership, but nevertheless since 2006 the French entrepreneur has sold half of it to Hearst. Why? Until February 18th this year – when the Hearst holding hit 50% – Fitch had been the only-non U.S. rating agency among the world’s three largest rating firms.
  Significantly, Lacharriere detests French President Nicolas Sarkozy.
  Let’s trace some of Fitch’s recent decisions.
  Last year it was the first ratings agency to put France on negative outlook for its sovereign credit rating. As a result of this, Sarkozy’s poll popularity slumped to 32%.
  The French banks stand to lose by far the most if Greece defaults, and Lacharriere counts most of the senior players as personal friends. Bizarrely, it upgraded Greece earlier this week – two days after an official ISDA default decision – a decision most observers found inexplicable. But then, both France and America dread an uncontrolled Greek default. And as of last month, Hearst owns 50% of Fitch.
  This later decision contrasts completely with what Reuters reported as the Fitch position last June: ‘”Fitch would regard a [Greek] debt exchange or voluntary debt rollover as a default event and would lead to the assignment of a default rating to Greece” Andrew Colquhoun, head of Asia-Pacific sovereign ratings with Fitch, said at a conference in Singapore.’
  Fitch has done an about-face. Why?
  Yesterday, it alone put the UK on warning of losing its AAA sovereign credit status. Does that have any special significance? Who knows? Because you see, we know even less about the Hearst empire than we do about Fimalac.
  120 years after its foundation and development by the notorious William Randolph Hearst, the Hearst Corporation remains one of the top ten privately, family-owned businesses in the world. It has never floated, and unlike Newscorp it does not court publicity in any way. In stark contrast to the Murdoch family and entourage, Hearst displays no political bias at all. In fact, its political contributions are scrupulously kept at 49% each for the main Parties, and 2% for minority political causes. But in excess of 300 magazine titles and 47 websites around the world are controlled by this one family firm. A firm that has invested well in excess of a billion dollars in moving towards a controlling stake in a ratings agency. Why?
  I’ve been Googling about Hearst for the last two days, and I can tell you their profile is beyond low and well into secretive. I have yet to find a single rationale, mission statement, future projection or marketing viewpoint from the company. The jobs site Vault has no – zero – insider reviews of what it’s like to work at the company. Of all the business articles I have found relating to management changes, hirings and acquisitions, not a single one contains any quote as to the game plan or why they did something, beyond the usual spin vapours about “an ever-changing media landscape” and other similar bollocks.
  “I would call them patriotic,” said a senior New York media honcho who didn’t want to be named “and that’s it. They’re the nearest thing we have over here to the Kremlin”.
  There is every sign that the Hearst Corporation is, in fact, a very traditional company and absolutely squeaky-clean. But do we think that a secretive family (descended from a man who made or broke US Presidents) and a French billionaire who wants Sarkozy out and Greece to survive, are really what one would ideally want as the owners of a global business and sovereign credit ratings company?
  Contemporary Crony Capitalism finds such questions, on the whole, naive and laughable. But they aren’t."
  
  I went looking for Hearst:
  http://en.wikipedia.org/wiki/Hearst_Corporation
  
  They have been quiet for a couple generations but are much the same.
  The people who taught Murdoch.
  
  http://en.wikipedia.org/wiki/Marc_Ladreit_de_Lacharri%C3%A8re
  
  He seems quite similar to William Randolph Hearst's patron in Boston,
  Isabella Stewart Gardner
  http://en.wikipedia.org/wiki/Isabella_Stewart_Gardner
  
  Finance thinks the Crisis has passed.
  
  I still expect revolution.