Today’s Water Cooler: 2016 jockeying, Ferguson prepares, fracking, selfies with the homeless, and a wall that plays music when it rains
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Thursday, November 13, 2014
Xi Upstages Obama, Puts Another Nail in TransPacific Partnership Coffin
In the wake of the Republican trouncing of the feckless Democrats in the midterm elections, there’s been an upsurge of calls of alarm on both the right and the left that the Administration and its big business allies in both parties will try to push the toxic trade deal known as the TransPacific Partnership through. That is in part due to Administration messaging that the talks are gaining momentum, as Obama asserted a mere two days ago. But not only do the negotiations appear to be going nowhere, but the Administration appears to be losing clout in the region as China is playing a considerably shrewder trade and investment game.
Links 11/13/14
Topics: Links
Posted by Yves Smith at 6:55 am | 121 Comments »
State Street, Governor Elect Rauner Both Implicated in Pay-to-Play Scandals
The more rocks you turn over in public pension land, the more creepy crawlies you find. No wonder private equity has such a secrecy fetish. The most obvious, and most offensive to the public, are so-called pay-to-play scandals, in which public officials who are in a position to influence how funds are invested, take campaign funding from individuals or firms who are currently managing government funds or in short order get a mandate.
Topics: Investment management, Legal, Politics, Private equity, Regulations and regulators
Posted by Yves Smith at 2:49 am | 10 Comments »
IEA Warns That Pricier Oil is In Your Future
Yves here. In case you harbored any doubts, the International Energy Agency (IEA), feels compelled to remind the consuming public that our current bout of cheap oil prices won’t be with us for all that long.
Topics: Commodities, Economic fundamentals, Energy markets, Guest Post
Posted by Yves Smith at 12:55 am | 15 Comments »
Wealth of Most US Households Has Fallen Over the Last 25 Years
Yves here. This Real News Network interview on the results of the latest Survey of Consumer Finances paint a picture familiar to most readers: the rich are becoming richer while those with less wealth are falling further and further behind.
David Rosnick of CEPR makes an important observation in passing. The decline in the position of typical households is even worse the the Consumer Finances survey indicates. In 1989, many workers had pensions. Far fewer do now. The value of pensions isn’t included in these surveys due to the difficulty of determining what they are worth on a current basis. But they clearly are significant assets that relatively few working age people have now.
Topics: Economic fundamentals, Income disparity, The destruction of the middle class
Posted by Yves Smith at 12:32 am | 46 Comments »
2:00PM Water Cooler 11/12/14
Today’s Water Cooler: 2016, protests in Mexico, Hong Kong, and Ferguson, Gruber grovels, Xu Lizhi’s poems, and MH370 story revives.
Topics: Water Cooler
Posted by Lambert Strether at 1:58 pm | 37 Comments »
“ISPs Removing Their Customers’ E-mail Encryption”
Bob sent me a post from Slashdot which should serve as a wake-up call as to how difficult it is to protect yourself on the Internet if you are a mere mortal. They quote an Electronic Frontier Foundation report on how encryption is being subverted:
Topics: Surveillance state, Technology and innovation
Posted by Yves Smith at 9:26 am | 17 Comments »
AIG Bailout Trial Revelation: Morgan Stanley Told Geithner it Would File for Bankruptcy the Weekend it Became a Bank
I’m still hugely behind on the AIG bailout trial, and hope to show a ton more progress in the next week. I’m posting the transcript for days three the trial; you can find the first two days here and other key documents here.
The first week was consumed with the testimony of the painfully uncooperative Scott Alvarez, the general counsel of the Board of Governors, who Matt Stoller argued needs to be fired, and the cagier-seeming general counsel of the New York Fed, Tom Baxter. Unlike Alvarez, Baxter at least in text seemed to be far more forthcoming than Alvarez and more strategic in where he dug in his heels. But the revelations about the Morgan Stanley rescue alone are juicy. The main actors have sold a carefully concocted story for years.
Topics: Banana republic, Banking industry, Credit markets, Doomsday scenarios, Federal Reserve, Investment banks, Legal, Regulations and regulators
Posted by Yves Smith at 7:50 am | 30 Comments »
Links 11/12/14
Topics: Links
Posted by Yves Smith at 6:55 am | 96 Comments »
Joe Firestone: Elizabeth Warren – Better, But Not There Yet
Yves here. As Elizabeth Warren inches to the left on overall economic policy, one wonders if she’s actually shifting her views or responding to Hillary Clinton trying to rebrand herself as a populist. In fairness to Warren, it’s difficult not to be deeply inculcated in flawed economic thinking and thus hostage to false ideas like “We depend on China and Japan to finance our federal spending.” I look at my pre-crisis coverage and am embarrassed to see that sort of idea treated as obviously true. But if nothing else, the shift in Warren’s stance may be a sign that the Overton window is moving a smidge away from the right. After all, a big reason the Republicans so badly trounced the Dems in the midterms wasn’t just Democratic party fecklessness, but also that the Republicans kept their Tea Party extremists well out of the limelight and toned down the anti-women, anti-gay (and outside the border states) the anti-immigrant rhetoric. That actually amounts to a shift to the center, even if more for show than for real.
Topics: Economic fundamentals, Globalization, Guest Post, Macroeconomic policy, Politics, The dismal science
Posted by Yves Smith at 5:32 am | 128 Comments »
Russia to Launch New Payments System to Circumvent SWIFT Network
Many observers have become unduly excited about what they depict as efforts to break the dollar hegeomony, such as the joint effort by the so-called BRICS nations to form a development bank. While having a suite of internationals funding entities, particularly ones focused on activities that in theory increase the collective benefits of relying on a reserve currency, are seen to be important, it does not follow that launching useful new funding institutions will break dollar dominance. As much as US abuse of its position as issuer of the reserve currency is correctly resented, there isn’t a competitor waiting in the wings. The Eurozone has blown it with its failure to clean up even sicker banks than the US has, and by compounding a bad situation with its adherence to destructive austerity policies. China clearly has the potential to displace the US longer-term, but it is unwilling to run the requisite trade deficits, since that means exporting demand and hence jobs. And no country had made the transition from being a major exporter to being consumer-driven smoothly; a crisis or protracted malaise would also delay China displacing the US as currency top dog.
But not being able to get rid of the dollar any time soon does not mean that countries that the US is trying to punish by using its influence over international payments system won’t find nearer-term escape routes.
Topics: Banking industry, Currencies, Payment system, Politics, Regulations and regulators, Russia
Posted by Yves Smith at 3:53 am | 44 Comments »
2:00PM Water Cooler 11/11/14
Today’s Water Cooler: 2016 beckons, Mexico and the 43 students, Hong Kong, Ferguson, class warfare, and Veteran’s Day.
Topics: Guest Post, Water Cooler
Posted by Lambert Strether at 1:58 pm | 42 Comments »
Should We Believe the Bank of England’s “No More Bailouts” Promise?
Michael Hudson sent an article No more bailouts: BoE chief says banks won’t be saved by taxpayers and wondered if we should take it at face value.
The short answer is “almost certainly not” but it also depends on what you mean by “saved by taxpayers”.
Topics: Banking industry, Credit markets, Regulations and regulators
Posted by Yves Smith at 9:55 am | 11 Comments »
Links 11/11/14
Topics: Links
Posted by Yves Smith at 6:55 am | 70 Comments »