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  • I see you posting comments here periodically but you are doing it anonymously. You might consider creating an account (right hand column) and that will allow you to track your comments, see who replied to you and also all of the CAPTCHA (type in letters to prove you are a human) go away and a host of site features reappear.

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • as I recall and is still clinging to the "free trade" bandwagon.

    Where the theory really falls apart...trading people. These people seriously believe that trading people is great and we should have corporate controlled global migration and that will all be "good"...., uh no, That represses wages incredibly so, causes dramatic changes in domestic population, which puts massive burdens on some nations social infrastructure and others with a sudden labor shortage....I mean by the equations, by the theory itself, at least in terms of middle classes the theory shows this will lead to a "slave" class.

    I don't find anything too Progressive on that score.

    I actually heard a Harvard economist try to claim offshore outsourcing was "good" because it gave our jobs to other nations. It was pathetic. It's almost like one can put a quarter into these people and have them play the corporate talking points tape and damn any statistics, anything at all that shows the contrary is going on.

    I do agree with you that Krugman has been sounding more and more circumspect these days, looking at real evidence in the real world...

    But I fear people are putting him on the level of "God" and one needs to examine someone's track record instead of personality.

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • I don't think I've read anyone pointing out that this feed the Zombie banks is actually supply side economics and they are assuredly ignoring demand side and the realities the Zombie banks already ate the flesh of the middle class.

    I also don't think I have read that demand side economics is a more "Populist" power shift politically as well.

    Frame this comment for later use, it gives real insight into the big picture that I don't believe most "see".

    Reply to: Giethner's systemic risk plan   15 years 8 months ago
    EPer:
  • Prof. Krugman, despite his ties to the Peterson Institute and the Group of Thirty, is beginning to make more and more sense (remember, he was a big supporter of jobs offshoring!).

    Securitization (transforming debt into securities) is responsible for the super- or ultra-leveraging, with the subsequent de-leveraging we'll be sadly experiencing for many years to come. Fraud by any other name, is still fraud.

    One could accept the mini-fraud of fractional reserve banking, but as with all frauds, it was taken to the ultimate extreme, thus as that many others have stated, we end up with the "shadow banking system" leading to the predictable demise of capitalism.

    It's been a great wealth-transfer to the super-rich with the all-too-obvious leveraged buyout of America, but perhaps the citizenry will awaken before all is lost......

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • It's "THE GREAT EDUCATION MYTH".

    From Flattening the Great Education Myth:

    ... It's not that workers in these other countries are smarter, says Sheldon Steinbach of the American Council on Education. "One could be educationally competitive and easily lose out in the global economic marketplace," he told the Los Angeles Times. Why? "Because of significantly lower wages being paid elsewhere." ...

    Reply to: Obama Clueless on Offshore Outsourcing - Touts Corporate Talking Points   15 years 8 months ago
    EPer:
  • Same old thinking on the part of the Obama Administration. I expected more creative thinking. We are they going to recognize that we have an opportunity to establish a manufacturing strategy and totally transform manufacturing in this country. But we get the same race to the bottom crap that I would expect from an repuglican administration.

    Reply to: Obama Administration Assisting in Squeezing GM, Chrysler UAW workers   15 years 8 months ago
  • securitization and I don't think it is a matter of absolute right or wrong. Securitization serves a useful purpose but like every factor contributing to this crisis too much of a good thing is bad.

    The system failed on so many levels. The financial sector went hog wild with securitization and regulators and policy makers did nothing to stop it. Basic principals of diversification and risk assessment were abandoned in favor of higher returns. Accountability and responsibility were disregarded because financial conglomerates and Fannie/Freddie were making a ton of money. The quicker a mortgage could be produced the better who cared about underwriting standards because real estate prices always go up.

    The last paragraph of Prof. Krugman's article is spot on in the sense that it is misguided to make securitization the focus of any bailout strategy.

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
  • despite the mightiest efforts by governments to the contrary. The only question is, how drastic and disorderly the debt reduction will be.

    Bush/Paulson, and now Obama/Geithner, have focused solely on supply issues (getting banks to lend), and have totally ignored demand issues (consumers are so indebted that we need them to borrow less and save more). Taking care of that demand issue means shifting society's favor from plutocrats to the average citizen. As we are seeing, that is not happening even under an allegedly liberal Administration.

    Reply to: Giethner's systemic risk plan   15 years 8 months ago
  • I read Barry's post early today but did not see Hale's post. In any event, I am not a member of the investor class, so I wade into this discussion with much trepidation.

    I have been commenting on various blogs the past few days that I think Krugman is actually a reluctant crusader against the status quo. Consequently, I think he has been holding back on his criticism of the administration's moves simply because he has the "conscience of a liberal". He sees Obama as an ally, or compatriot, or at least a last best hope and therefore is hesitant to be seen as a detractor to any "progressive cause". But I think Krugman is now questioning whether Obama, and his programs, are progressive at all. To me, the most interesting part of the reference article is:

    Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the ... administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.

    To be fair, officials are calling for more regulation. ... But the underlying vision remains that of a financial system more or less the same..., albeit somewhat tamed by new rules.

    As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good.

    The emphasis is mine and it highlights what I think is Krugman's questioning of the integrity of, not just our financial system, but our capitalist system in general. He is reluctant to condemn it now, in totality, simply because it is too radical a position to take at this juncture of congenial discourse.

    Coincidentally, I read a blog earlier today discussing the consequences of reaching "peak capitalism". The following chart was presented which signifies the paradox of our capitalism in recent years.

    http://www.theoildrum.com/files/wolff_real_wages.jpg".
    Real Wages (CPI adjusted) vs Real Productivity (GDP Deflator Adjusted) 1830-2007
    -Source: Professor Richard Wolff - U Mass - Amherst

    While there are many explanations for the increase in worker productivity, the stagnation and decline of real wages over the same timeframe is more remarkable. The gap between real wages and productivity gains is PROFIT and this is what corporations and banks have exploited to their advantage. In other words, this is a graphical depiction of the transfer of wealth from the workers (i.e. the producers of real assets) to the rentier class. I believe this is unsustainable and I'm pretty sure Krugman thinks so too.

    At this juncture in history however, this is a blatantly Marxian view and therefore is not "ready for prime time". I am free to call for dramatic changes to the system, including diminishing the effect of "the market". I can call for monumental changes and risk little blowback but a public figure like Krugman is more exposed to criticism. We need a paradigm change, and I believe Krugman thinks so too. I am free to say it out loud, Krugman can't(at least for now).

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • India is a mess. It's that simple, but it's also quite complicated. I'll start with what I think are India's four major problems--the four most preventing India from becoming a developing nation--and then move to some of the ancillary ones.

    First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don't know how cultural the filth is, but it's really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump. Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi, Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India. Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight. Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one's health, not how good it is. People casually throw trash in the streets, on the roads. The only two cities that could be considered sanitary in my journey were Trivandrum--the capital of Kerala--and Calicut. I don't know why this is. But I can assure you that at some point this pollution will cut into India's productivity, if it already hasn't. The pollution will hobble India's growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small 'c' sense.)

    More after the jump.

    The second issue, infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India. Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls. The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand, much less Western Europe or America. And I covered fully two thirds of the country during my visit. There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older. Everyone in India, or who travels in India raves about the railway system. Rubbish. It's awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses. At least fifty million people use the trains a day in India. 50 million people! Not surprising that waitlists of 500 or more people are common now. The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit. Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia, Israel and the US I guess.

    The last major problem in India is an old problem and can be divided into two parts that've been two sides of the same coin since government was invented: bureaucracy and corruption. It take triplicates to register into a hotel. To get a SIM card for one's phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service. Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India. The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don't have the time, manpower, money or interest in doing their job. Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.

    I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don't think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way. Mumbai, India's financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam, or Indonesia--and being more polluted than Medan, in Sumatra is no easy task. The biggest rats I have ever seen were in Medan!

    One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn't produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing. The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It's a shame. Indians and India have many wonderful things to offer the world, but I'm far from sanguine that India will amount to much in my lifetime.

    Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I've been there. I've done it. And I've seen 50 other countries on this planet and none, not even Ethiopia, have as long and gargantuan a laundry list of problems as India does. And the bottom line is, I don't think India really cares.

    Reply to: Obama's CIO Vivek Kundra Previous Close Employees Arrested for Fraud, Bribery   15 years 8 months ago
    EPer:
  • NDD, I think you're getting to the heart of the matter, and making clear the two apparent policy dilemmas facing Obama and Geithner: use the neoclassical approach of stimulus via increased debt (per Keynes); or take an approach more along the lines of Fisher, which I suspect is more akin to what Steve Keen might advocate, which is a serious debt reduction strategy, either by modified bankruptcies for these large systemic institutions, or by converting much of their debt to equity. See Bill Moyer's interview with William Greider: http://www.pbs.org/moyers/journal/index-flash.html

    Reply to: Giethner's systemic risk plan   15 years 8 months ago
    EPer:
  • They are gambling with tax payers fund. They have nothing to lose. If they lose, they will be bailed out anyway. If they win big, then they hope to get of this mess and pay the handsome rewards to the traders who bet this right, and label this as "retaining the talents" that create the shareholder vlaue

    Reply to: Let the (Rigged) Games Begin! Reports of Citigroup, BoA Preparing to Ripoff the Taxpayer   15 years 8 months ago
    EPer:
  • The CDS and Derivatives markets are still active with various Quants and high tech traders. The market in London is still active. See: http://www.embs.com/default.asp and
    http://www.reuters.com/finance/deals. The single biggest problem Prof. Krugman is really pointing to is that unregulated securitization amounts to the creation of money
    supply qua "credit." It's almost as though overnight money has become defined as credit. Even Barney Frank this week
    said there's no turning back from securitization, but the fact is the Chinese and the American people don't have faith in the sausage machine that we call the banking system anymore.

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • I read some stuff at www.chinaeconomicscan.com the other day that's interesting in the context of this article, I mean sure time has passed, but seeing the current state of things and recent developments... the china-US relationship is fascinating, very symbiotic in terms of trade and investment, yet very tense in light of the economic and political dialect...

    Reply to: China's out-of-control Inflationary Boom   15 years 8 months ago
    EPer:
  • were included in the AIG Bailout plan. It is so very obvious whose side the Washington DC leaders are on. Screw the Workers of the United States but give everything and anything to the fat cat executives.
    The AIG bonus recipients had a contract, so did the UAW workers. Yet the government believes the UAW contract can be renegotiated since it is not as important/viable as the other. All contracts should be held as legal and should not be allowed to be altered by the government.
    Remember during the Regan administration where the air traffic controllers were having difficulty negotiating a contract, the air traffic controllers threatened striking. Though their contract gave them the right to strike, the government replaced them when they exercised their contractual right. A contract is a legal obligation and should be protected under the law

    Reply to: Obama Administration Assisting in Squeezing GM, Chrysler UAW workers   15 years 8 months ago
    EPer:
  • I don't know where this idea that securitization is dead is coming from, especially from the Obama administration.

    From what I can tell it's the ultimate "Zombie" eating away at this point the U.S. economy to the point of the ultimate risk.

    The way I read this argument, although Krugman doesn't imply it, is securitization as it's currently implemented caused fictional money, more risk, bloat in the financial sector.

    So much is based on flawed models, such as the tranches which were steaming piles of shit layered with AAA rated securities to cover up the stink.

    So, the concepts might be ok, but when implemented on flawed models, clearly fictional mathematics which doesn't even pass the smell test and as you point out, the big kauna of 40:1 leveraging...

    yeah, that all should die, but right now it seems the zombie oligarchs are brazenly winning.

    Reply to: Is Prof. Paul Krugman wrong about Securitization?   15 years 8 months ago
    EPer:
  • ... safety valve, with many "new" industries have very low profitability in Chinese markets and looking to external sales to stay afloat.

    And by pursuing neo-mercantilist policies, they have avoided the problems of external finance of productive equipment that plagued the Latin American economies in the 50's and 60's as they pursued import substitution development strategies.

    You can google neo-mercantilism, but many of the better sources seem to be behind academic journal firewalls. I'll see this weekend if I can find anything of use.

    I don't think there is anything controversial about the broad outline of the basic demographics ... the impact of nutrition and public sanitation, the impact of the Great Leap Forward, the post-GLF baby boom, and then the imposition of the One Child Policy. Googling China's Demographic Transition brings up lots of sources, and while there is of course controversy over the specifics, the political implications follow from the broad outline.

    Reply to: U.S. Urban Rail Transit requires $3.195 trillion   15 years 8 months ago
    EPer:
  • They made a study in which - they made an assumption that if a person with a foreign sounding name (non caucasian sounding) that applied for a patent that he/she is a foreigner and not American. Hello, there are Chinese Americans and Indian Americans. One of the civil liberties group's should have sued them.
    The other day there was this professor from Harvard on Lou Dobbs' show defending free trade. With the mess we are in and with millions of Americans unemployed; free trade is still the best for this professor. Maybe they don't teach common sense in Harvard.

    Reply to: Obama Asks The Same Oligarchs Who Got Us into This Mess to Get out of it   15 years 8 months ago
    EPer:
  • I don't think it is a good idea.

    Reply to: FDIC asking for comments on Legacy Loan Program   15 years 8 months ago
  • It was interesting this week that Geithner, when answering questions before the House the week, kept saying, "...your government..." to various inquiring House Reps. It's as though the U.S. now has been subverted/converted by a global financial entity that's still not totally obvious to the U.S. taxpayers.

    Reply to: The Quiet Coup - In Depth Article by Simon Johnson on the Financial Oligarchs - "Must Read"   15 years 8 months ago
    EPer:

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