Friday, September 7, 2012

23:00, 9/6/12 2

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The ECB is limited to price stability by treaty and charter.
Unlimited sovereign bond buying is outside those limits.
Germany probably lacks the power to forbid the purchases.
They can allow the purchases and destroy the legitimacy of the treaty
or they can leave the euro which will destroy the treaty.
We can date the end of the European union from today.
It will take a week or so for the world to notice.

As for Greece there is no further gesture at debt relief. 
The proposed bond purchases are to stop the catastrophic collapse of the common currency at Greece's default and exit.

http://krugman.blogs.nytimes.com/2012/09/06/draghi/  

"September 6, 2012, 6:55 pm17 Comments

Draghi

I’m still bogged down in family health-related stuff, hence limited interventions here. Still, I guess I’d better weigh in on what would, if it weren’t for the DNC, be the story of the day: the latest announcement from the European Central Bank.
What I’ve been arguing for a while is that saving the euro requires two things: (a) large ECB purchases of peripheral bonds (or at least a declared willingness to do so, to cap yields), and (b) an indication that the ECB will be willing to allow higher inflation to make adjustment possible.
It looks as if we sorta kinda got (a), although the details are hard to interpret. Nothing on (b) yet, and market indicators of inflation expectations are still too low.
So, a step in the right direction, probably enough to buy a significant amount of time, but not enough unless more follows."

Paul Krugman knows he is not a political Economist.

Politics is the foundation of economics though we pretend otherwise.

http://www.nytimes.com/2012/09/07/opinion/krugman-cleaning-up-the-economy.html?partner=rssnyt&emc=rss

"Bill Clinton’s speech at the Democratic National Convention was a remarkable combination of pretty serious wonkishness — has there ever been a convention speech with that much policy detail? — and memorable zingers. Perhaps the best of those zingers was his sarcastic summary of the Republican case for denying President Obama re-election: “We left him a total mess. He hasn’t cleaned it up fast enough. So fire him and put us back in.” Great line. But is the mess really getting cleaned up?
The answer, I would argue, is yes. The next four years are likely to be much better than the last four years — unless misguided policies create another mess.
In saying this, I’m not making excuses for the past. Job growth has been much slower and unemployment much higher than it should have been, even given the mess Mr. Obama inherited. More on that later. But, first, let’s look at what has been accomplished.
On Inauguration Day 2009, the U.S. economy faced three main problems. First, and most pressing, there was a crisis in the financial system, with many of the crucial channels of credit frozen; we were, in effect, suffering the 21st-century version of the bank runs that brought on the Great Depression. Second, the economy was taking a major hit from the collapse of a gigantic housing bubble. Third, consumer spending was being held down by high levels of household debt, much of which had been run up during the Bush-era bubble.
The first of these problems was resolved quite quickly, thanks both to lots of emergency lending by the Federal Reserve and, yes, the much maligned bank bailouts. By late 2009, measures of financial stress were more or less back to normal.
This return to financial normalcy did not, however, produce a robust recovery. Fast recoveries are almost always led by a housing boom — and given the excess home construction that took place during the bubble, that just wasn’t going to happen. Meanwhile, households were trying (or being forced by creditors) to pay down debt, which meant depressed demand. So the economy’s free fall ended, but recovery remained sluggish.
Now, you may have noticed that in telling this story about a disappointing recovery I didn’t mention any of the things that Republicans talked about last week in Tampa, Fla. — the effects of high taxes and regulation, the lack of confidence supposedly created by Mr. Obama’s failure to lavish enough praise on “job creators” (what I call the “Ma, he’s looking at me funny!” theory of our economic problems). Why the omission? Because there’s not a shred of evidence for the G.O.P. theory of what ails our economy, while there’s a lot of hard evidence for the view that a lack of demand, largely because of excessive household debt, is the real problem.
And here’s the good news: The forces that have been holding the economy back seem likely to fade away in the years ahead. Housing starts have been at extremely low levels for years, so the overhang of excess construction from the bubble years is long past — and it looks as if a housing recovery has already begun. Household debt is still high by historical standards, but the ratio of debt to G.D.P. is way down from its peak, setting the stage for stronger consumer demand looking forward.
And what about business investment? It has actually been recovering rapidly since late 2009, and there’s every reason to expect it to keep rising as businesses see rising demand for their products.
So, as I said, the odds are that barring major mistakes, the next four years will be much better than the past four years.
Does this mean that U.S. economic policy has done a good job? Not at all.
Bill Clinton said of the problems Mr. Obama confronted on taking office, “No one could have fully repaired all the damage that he found in just four years.” If, by that, he meant the overhang of debt, that’s very much the case. But we should have had strong policies to mitigate the pain while households worked down their debt, as well as policies to help reduce the debt — above all, relief for underwater homeowners.
The policies we actually got were far from adequate. Debt relief, in particular, has been a bust — and you can argue that this was, in large part, because the Obama administration never took it seriously.
But, that said, Mr. Obama did push through policies — the auto bailout and the Recovery Act — that made the slump a lot less awful than it might have been. And despite Mitt Romney’s attempt to rewrite history on the bailout, the fact is that Republicans bitterly opposed both measures, as well as everything else the president has proposed.
So Bill Clinton basically had it right: For all the pain America has suffered on his watch, Mr. Obama can fairly claim to have helped the country get through a very bad patch, from which it is starting to emerge."


This is a very politic position. 
We will see how it works out.

The next four years will have a generous coating of disasters brought on by the last twelve or more.   Thirty two?  Sixty? Sixty seven?

Obama will get his second term.

We have four years and two months to think and work on: "then what?"

We can start with the principle that government exists "to make life better for all its constituents."

This explicitly does not mean only the wealthy or any other subgroup.


Sep 6, 1:03 pm7

Live Updates From Amazon’s Press Event

By NICK BILTON
Joe Klamar/Agence France-Presse — Getty Images
At an event in Los Angeles, Amazon.com showed off new products including the Kindle Paperwhite, with a new whiter screen than its earlier black-and-white Kindles, and a new Kindle Fire HD that is a more direct competitor to the iPad than the old Kindle Fire. Here are live updates from the event. Read more…
A Tooth Fairy App? Really? | 
Here’s one for the list of tools you can probably live without, Ann Carrns writes on the Bucks blog: an app for iPhones and iPads that helps compute what the tooth fairy should leave for your child. Read more »
Home of the Future Still Years Away | 
Once again an electronics trade show tries to sell the idea of the connected home of the future, with wireless multimedia flying through the house from one device to the other. And once again, it fails to gain traction, Kevin J. O’Brien reports for The New York Times from Berlin at the Internationale Funkaustellung, the largest European consumer electronics trade fair. Read more »
Sep 6, 8:11 am4

Publishers Back African Literacy Effort With E-Books

By NICK WINGFIELD
Courtesy of Jon McCormack and Worldreader
David Risher, a former Amazon executive, has gradually found acceptance for Worldreader, the nonprofit he founded to bring e-books to Africa. Now book publishers have agreed to donate e-books to Worldreader, allowing it to triple the size of its digital library. Read more…

Sep 5, 2:28 pm14

Motorola Introduces First Phones of Its New Google Era

By BRIAN X. CHEN
After being quiet for nearly a year, Motorola Mobility, recently acquired by Google, is returning to the mobile market with three new smartphones for Verizon customers. Read more…

We will look into photovoltaic power when we have a roof.
Insurance is a must for insurable risks.
I will get it as I get the risks.
I do not have and do not want a loan.
Jewelry is always priced as art. 
It is best bought from the manufacturing jeweler.
Niel Armstrong died in bed.  He earned that.
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