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THE BEAR'S LAIR
Many more defaults coming
In the past five years, Federal Reserve chairman Ben Bernanke has allowed us a financial holiday from history, with defaults and disasters being remarkably scarce, given the severity and duration of the downturn. This is about to change. - Martin Hutchinson
(Oct 1, '13)
Airlines edge nearer greenhouse gas deal
Efforts to reach global agreement on curbing airline gas greenhouse gas emissions may bear some fruit over the next two weeks. Failure to reach even a weak deal could result in an international trade war. - Carey L Biron
(Sep 25, '13)
THE BEAR'S LAIR
WTO becoming useless
New World Trade Organization chief Roberto Azevedo may yet surprise us, but there are increasing signs that the WTO can’t do its job and may ultimately preside over a collapse in world trade. If so, the world will have only itself to blame. - Martin Hutchinson
(Sep 24, '13)
CHAN AKYA
Bernanke and the L-Word
The Federal Reserve has essentially admitted defeat in efforts to reverse quantitative easing. With that, instead of reducing longer-term financial risks and refocusing the economy on a sustainable path, Fed chairman Ben Bernanke will leave as his legacy the US economy just as he found it - fragile and heading for a crash.
(Sep 20, '13)
Armageddon looting machine
Five years on from the financial collapse precipitated by the Lehman Brothers bankruptcy the risk of another full-blown financial panic is looming large, thanks to the amount of risk being driven to unregulated lenders in the "shadow banking" sector. - Ellen Brown
(Sep 18, '13)
DISPATCHES FROM AMERICA
Our black future
A US report predicts that renewables will still be an afterthought in the world's energy mix in 2040. This would be great for the energy industry - not for the rest of us. - Michael T Klare
(Sep 17, '13)
THE BEAR'S LAIR
We're coming up on 1937
The 1930s saw three stand-out policy failures as the United States tried to come to grips with the Wall Street Crash. Not all were avoided in dealing with the most recent crisis. That will have long-term costs. - Martin Hutchinson
(Sep 17, '13)
9/11: Currency joins
insider trades claims
The US Stock Exchange Commission denies, in the face of strong evidence, that advance knowledge helped insider traders to benefit from the 9/11 terror attacks. Now currency anomalies for the same period point to similar advance knowledge. - Lars Schall
(Sep 13, '13)
Central banks and
illusions of independence
The cult of personality around central bankers is encouraged by their not having a clear and enforceable mandate - certainly in the United States. That's one reason we hardly hear about Swiss politicians or central bankers: their unique direct democracy prevents them from pursuing drastic follies. - Reuven Brenner
(Sep 12, '13)
Summers, Syria and the Fed
Larry Summers appears to be President Barack Obama's first choice as next Federal Reserve chairman. Why? He has proven he can manipulate the system to make the world - and that includes Iraq, Libya, Syria et al - safe for Wall Street. - Ellen Brown
(Sep 11, '13)
THE BEAR'S LAIR
Coase: Government hangs on
Ronald Coase's work on firm structure, taken with modern IT capabilities, suggests that large companies will over the next generation disappear. Big government will remain - for the time being. - Martin Hutchinson
(Sep 10, '13)
OBITUARY
Ronald Coase: A respectful dissent
The late economist Ronald Coase showed how individuals and firms in the private market can do a better job at most things than government regulators. But we should keep in mind that markets are never better than the people who trade in them. - Spengler
(Sep 10, '13)
CHAN AKYA
Cult vogue sucks
in central bankers
Central bankers, defying the fundamental tedium of their roles, have not escaped the enthusiasm for personality cults. Yet aiming to secure a top post can be a futile career choice - even when you have made the right choice of ''school''.
(Sep 6, '13)
THE BEAR'S LAIR
More glue in the works
Economic extortion by way of regulation will inevitably bring the economic system close to the point where it ceases to work altogether. Contingency fee lawsuits and outsize settlements further weigh down financial efficiency. Without pruning of this dead weight, US economic growth will become ever more sluggish.
- Martin Hutchinson
(Sep 4, '13)
Bernanke: Maestro of misery
The cheap money policy pursued by Barack Obama and Federal Reserve chairman Ben Bernanke offers a perfect model of chaos and misery. Any country that follows it will suffer poverty and social disorder. Unfortunately, Europe and Japan are forced into the same model.
- Noureddine Krichene
(Aug 29, '13)
THE BEAR'S LAIR
Egypt a preview of our future
Egypt got by for centuries in reasonable contentment. Its present chaos reflects a fast-growing, mostly young, population with dismal employment prospects. Welcome to the conditions that await much of the world. - Martin Hutchinson
(Aug 27, '13)
The third carbon age
Much of the public believes renewable and ''clean'' energy sources are on the way to replacing oil - but that is not the path we are headed down. Instead, the energy industry is pouring cash into new fossil-fuel projects, taking the world into its third great carbon era. - Michael T Klare
(Aug 22, '13)
THE BEAR'S LAIR
Reckoning is due
In the last 20 years, fiscal and monetary profligacy has appeared to carry almost no cost, at least for wealthy Western economies. Thanks to the gigantic stores of wealth in a relatively few central banks, the excess money supply has been sterilized. The reckoning is overdue, and it will be a painful one. - Martin Hutchinson
(Aug 20, '13)
THE BEAR'S LAIR
Back to the wing-collar
When this latest, totally speculative, stock bubble bursts and prices collapse, traditional investment practices, with caution (and wing-collar probity) at the core and speculation on the periphery, will make a much-needed and belated come-back. - Martin Hutchinson
(Aug 13, '13)
Fracking 'silence' for life
Extreme measures being taken in the United States to suppress evidence of the effects of hydraulic fracturing, or "fracking", used to extract underground gas, include a life-time ban on a seven-year-old discussing his experiences of living near a fracking site.
(Aug 9, '13)
Kremlin's potash war picks its prisoners
Russian potash monopoly Uralkili's decision to quit its Belarus joint venture has sent producers' shares tumbling in Russia and elsewhere at the prospect of a halving of present output prices. China Investment Corp, along with Andrei Melnichenko's upstart Eurochem, should be among the big losers, but that would be too simple. - John Helmer
(Aug 8, '13)
THE BEAR'S LAIR
Forced correlations
As stock markets hold well into record-high territory, the forced correlations between bond markets, energy prices and equities become ever closer and more profitable for leveraged traders - and the real correlation with actual economic activity grows ever weaker. The outcome is inevitable. - Martin Hutchinson
(Aug 6, '13)
REUVEN BRENNER
Restoring a real middle class
President Barack Obama has correctly emphasized that upward mobility in the United States is increasingly a thing of the past. The question is: What can Washington do to remedy the situation? Regulatory and fiscal reforms would help, but longer-term measures are possible, starting in school.
(Aug 2, '13)
INTERVIEW
Energy key to our civilization
The crux of today's civilization is energy - from reserves and pipelines to geopolitics. Less energy at our disposal or higher prices can lead to civil protests and even revolt, argues energy analyst Karin Kneissl in a wide-ranging discussion with. - Lars Schall
(Aug 1, '13)
COMMENT
It has to be Yellen to head the Fed
President Barack Obama should promptly name Janet Yellen as the next head of the US Federal Reserve. Beyond her credentials as an economist, her unquestionable integrity and independence from Wall Street special interests mean any other choice will seriously tarnish Obama's name and legacy. - Hossein Askari
(Aug 1, '13)
THE BEAR'S LAIR
Wanted: a new Hamilton
A decade of US policies oriented to the short term and highly damaging in the long term means that the reverse will eventually be needed. That will require that someone with the vision of Alexander Hamilton be put in office and kept there long enough for his/her treatment to work. It seems unlikely, but one can hope. - Martin Hutchinson
(Jul 30, '13)
THE BEAR'S LAIR
Disaster the way out
A market crisis is not imminent, but one is likely within the next 12-18 months, as inflation forces its way up. Only such a crisis will force a reversal of present government policies that feature monetary madness, fiscal profligacy and regulatory overload. - Martin Hutchinson
(Jul 23, '13)
CHAN AKYA
Time to Pay (up), Pal
PayPal's admission of momentarily crediting a customer's account with some US$92 quadrillion is good entertainment, certainly more so than the Federal Reserve's handing over of trillions of dollars to global banks. Detroit's bankruptcy filing shows that Fed money isn't going to where it is actually needed.
(Jul 18, '13)
Berlusconi shadow hangs over Europe
Falling demand for Italian bonds, a credit downgrade and increased risk of default is bad news for Italy, for Europe and for the world. As the danger rises of a renewed global financial crisis, the shadow of disgraced premier Silvio Berlusconi hangs over all. - Francesco Sisci
(Jul 18, '13)
Green fund still an empty promise
The Green Climate Fund, a centerpiece of the international climate finance regime, designed to fund climate mitigation projects in the developing world, chose an apt center for its operations - the still-under-development international business center of Songdo, a short drive from Seoul. Both show great ambition but are still empty. - Oscar Reyes
(Jul 18, '13)
Misdirected QE is mere sleight of hand
Japan this year joined other leading economies in adopting the desperate measure of quantitative easing (QE) to stimulate its economy. Yet unless QE money is targeted directly on creating new employment to restore consumer demand, it is merely a monetarist maneuver. - Henry C K Liu
(Jul 17, '13)
THE BEAR'S LAIR
Europe's missing pieces
Croatia's entry to the European Union leaves six Balkan countries outside the trade bloc. Economically their integration is problematic for varied reasons, including the EU's unattractive economic policies, though membership would complete the geographical union of Europe. - Martin Hutchinson
(Jul 16, '13)
Unjust Muslim rulers mask economic folly
A person's religion should be almost always be a private matter, unless that person is head of state and professes a religious belief and especially when he runs a country where there is no separation of religion and state. Across the Middle East, professed "Muslim" leaders are abusing divisions within the religion to maintain their own power and to distract from and justify the economic mess that impoverishes their people. - Hossein Askari
(Jul 15, '13)
US, China break new ground on climate
The United States and China have agreed on potentially far-reaching initiatives intended to cut greenhouse gas emissions in talks considered among the most positive on climate change yet held, raising the prospect of real progress at a global summit two years hence. - Carey L Biron
(Jul 12, '13)
A new Bretton Woods
The world has yet to take steps to avoid a repeat of the global financial crisis. Initiatives such as reining in the large volumes of speculative capital flows will, in effect, require a new Bretton Woods, one that gives greater voice to developing nations in international financial institutions. - Supachai Panitchpakdi
(Jul 10, '13)
US starts EU trade talks
The United States and the European Union this week started talks aimed at securing a trade and investment pact that could boost their economic output by US$100 billion annually. Industrial giants from Airbus to Google and US steelmakers are making sure their voices are heard. - Ron Synovitz
(Jul 9, '13)
THE BEAR'S LAIR
Giant cities not the future
Once interest rates return to normal levels, much urban real estate will become completely unaffordable as capital gains will turn into losses. In wealthy countries at least, big cities will suffer a loss of population and status similar to London in 1939-91 - and the world will be a happier place. - Martin Hutchinson
(Jul 2, '13)
America's Edward Snowden problem
Whimpering arguments from Washington that Edward Snowden is a traitor seeking refuge in bastions of repression aim to shift the global focus from "US persecution of whistleblower" to "creepy tyrannies flouting international law". There's still time to reel Snowden in and give him a fair hearing, but that looks unlikely; the Obama administration is betting it can get Americans to stop caring about his awkward revelations. - Peter Lee
(Jun 28, '13)
Google eats the world
From aiding secret surveillance to tax avoidance on a vast scale, Silicon Valley is now a front row seat on the world's most powerful corporations and the people who run them. They are not your friends and their vision is not your vision, but your data is their data, and your communications are in their hands, and no one has yet figured out what we can do about it. - Rebecca Solnit
(Jun 26, '13)
THE BEAR'S LAIR
China's rise to hegemony
US economic, military and foreign policy blunders make China's global dominance appear entirely realistic, and for many observers inevitable. The key question is what sort of China will emerge in such a position? - Martin Hutchinson
(Jun 25, '13)
Snowden and the three wise NSA men
Treatment of three past National Security Agency staff who took the legal route when "whistleblowing" makes surveillance leaker Edward Snowden's decision to flee the United States seem sensible, but his situation is no less precarious. However, that these men support Snowden's cause suggests Washington will struggle to paint him as a rogue analyst. - Peter Lee
(Jun 21, '13)
Euro crisis all in a name
A profound misunderstanding of the European sovereign debt crisis, infecting the thoughts of even respected analysts, arises from it being misnamed: eurozone government debts denominated in euros are not sovereign debts and that is the real reason behind the crisis and the main obstacle blocking recovery. - Henry C K Liu
(Jun 21, '13)
CHAN AKYA
QE Coyote
The Federal Reserve's signaling of an easing of its quantitative easing policy is being blamed for the sell-off in emerging markets and sales of assets ranging from US Treasuries to gold. The reality is more nuanced, as credit risk is being re-priced into the markets at an inopportune time, presenting global markets with a Roadrunner-style "QE Coyote" cliff-edge moment.
(Jun 21, '13)
Where is inflation?
The Federal Reserve's trillions of dollars in money injection and near-zero interest rates have not triggered the feared inflation - nor the hoped-for economic growth. Like the dog that did not bark, this can be disconcerting, until we consider who is measuring inflation, and how. - Noureddine Krichene
(Jun 19, '13)
THE BEAR'S LAIR
Colleges the next burst bubble
When a service's costs exceed its benefits and yet its price continues to increase faster than inflation, there can be only one outcome: a massive market correction, with widespread bankruptcies and industry capacity slashed by a large fraction. This fate lies ahead for the colleges of America. - Martin Hutchinson
(Jun 18, '13)
THE BEAR'S LAIR
Time to ditch GDP
The use of gross domestic product as a gauge of economic wealth is thoroughly misleading, not least at a time of ever-increasing government spending. A better alternative would be to ignore government altogether, and calculate a Gross Private Product. That would also help prompt eradication of many damaging economic policies. - Martin Hutchinson
(Jun 11, '13)
CHAN AKYA
'Soft' issues to the fore
China and India have been rocked recently over governance, transparency and data reliability, putting undue focus on the these countries' trustworthiness as trade counterparts while accentuating the present downturn in investor confidence in many "downstream" countries. Government focus on such "soft" issues is needed in the Asian giants for longer-term stability.
(Jun 10, '13)
Pacific Ocean's survival at tipping point
Unless the world does more to combat the pollution, overexploitation and acidification threatening the Pacific Ocean, the consequences for the economies and food security of Pacific island countries will be devastating. Deep sea mineral exploration projects are also raising temptations that could undermine the collaborative approach needed for successful future ocean management. - Catherine Wilson
(Jun 10, '13)
Mao thriving in Washington
Chinese author Yang Jisheng's award-winning history of Mao-era famine in China draws inspiration from Friedrich Hayek's The Road to Serfdom. It also serves to illustrate the similarities between the extinguished communism of Mao and the rising one in the United States created by Ben Bernanke and Barack Obama. - Noureddine Krichene
(Jun 5, '13)
THE BEAR'S LAIR
Crash this year or next?
At some time the bubble (stock markets, housing, et al) created by cheap money must burst, bringing devastation to global financial markets. The crucial question is whether the burst will be delayed into 2014 or even 2015 - or come this year ... - Martin Hutchinson
(Jun 4, '13)
THE BEAR'S LAIR
Who drives the economy?
Conventional free-market economics says that it is consumers who power an economy; others argue that it is governments, yet others that large producers are supreme. In reality, the real power belongs to marketers, opinion formers and politicians. - Martin Hutchinson
(May 29, '13)
DYSFUNCTION TRILOGY
The phase that launched
a thousand bubbles
Federal Reserve chairman Ben Bernanke has presided over a thousand economic bubbles. Rather than ushering in investors who could help turn around economies, he and his ilk have created a class of traders who roil asset prices and maximize leverage, but produce no lasting benefits. - Chan Akya (May 17, '13)
This concludes a three-part series.
Part 1: Keynes stole your ship
Part 2: Bernanke stole your pension
THE BEAR'S LAIR
Into a protectionist world
The choice of Brazil's Roberto Azevedo to lead the World Trade Organization over the reported opposition of both the European Union and the United States is an indication that protectionism is now a major global danger. The long-term outlook for the world economy has just grown much darker. - Martin Hutchinson
(May 14, '13)
DYSFUNCTION TRILOGY
Bernanke stole your pension
Government spending to offset private sector contraction is not a victimless crime. Central bankers pushing ever more quantitative easing down the throats of economies are damaging pensioners' security for decades to come. - Chan Akya
This is the second article in a three-part series.
Part 1: Keynes stole your ship
(May 10, '13)
Fed's rise to tyranny has no end in sight
The centenary of the US Federal Reserve finds the institution elevated from modest beginnings to being a power without limits, unbound by rules, and free to further enrich the wealthy while robbing the savings of non-profiteers. Only more agony and disorder lie ahead with the Fed's tyranny. - Noureddine Krichene
(May 9, '13)
THE BEAR'S LAIR
The mathematical menace
Mathematical models such as value at risk and even gross domestic product, far from being tools that increase knowledge and understanding, are tools of obfuscation. To a large extent, we should disbelieve any proposition that is bolstered by such spurious artifacts. - Martin Hutchinson
(May 7, '13)
DYSFUNCTION TRILOGY
Keynes stole your ship
The market mayhem caused by government intervention in national economies is only too evident since the global financial crisis. The shipping industry, a survivor of economic storms since ancient times, is one sector that finds itself on the rocks thanks to Keynesian policies. - Chan Akya (May 3, '13)
This is the first article of a three-part series. |
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CREDIT BUBBLE BULLETIN
Z1 and the doves
An economy on firm footing would demonstrate at least a reasonable balance within the real and financial sectors. We instead see ultra-low interest-rates and inflated incomes, corporate cash flows and earnings and a Federal Reserve struggling with even the most timid reduction of monetary inflation. (Sep 30, '13)
Doug Noland looks at the previous week's events each Monday.
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Microsoft in Hon Hai tie-up
In an effort to bolster revenue from its vast array of patents, Microsoft has signed a deal with Hon Hai, parent company of electronics maker Foxconn, allowing the Taiwanese company to legally produce devices for Android and Chrome OS using patents owned by Microsoft.
(Apr 19, '13)
Martin J Young surveys the week's developments in computing, gaming and gizmos. |
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