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Weekend Economists Celebrate the Season! December 18-20, 2015
And boy, do we have lots to celebrate! 
The Federal Reserve raised interest rates .25% and didn't crash the global economy.
Snow is accumulating in the West and North and Rockies again.
And the DNC has just given Bernie the opportunity of a lifetime for a career firebrand.
So, lower the lights, pour the drinks, nibble some cheese and crackers, and enjoy!
This tune was used to great effect in the first Home Alone flick which got Macaulay Culkin his phenomenal stardom.
Then, there's that other classic Xmas flick: Die Hard! which brought Brit actor Alan Rickman to the attention of millions of fan girls (to the regret of Bruce Willis, no doubt).
And the piece de resistance, the WWII Xmas nostalgia of Monuments Men:
52 replies
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= new reply since forum marked as read
http://www.reuters.com/article/us-finance-technology-blockchain-idUSKBN0U02LH20151217
Big names from the worlds of finance and technology such as Deutsche Boerse, JP Morgan, Cisco and IBM have come together to work on an open-source framework for using the "blockchain" technology that underpins the web-based cryptocurrency bitcoin. The new technology works as a huge, decentralized ledger of every bitcoin transaction ever made, which is verified and shared by a global network of computers and is therefore virtually tamper-proof. It has been drawing investment from banks and other financial players, who reckon it could save them money by making their operations faster, more efficient and more transparent.
The data that can be secured by the blockchain is not restricted to bitcoin transactions. Any two parties could use it to exchange other information, including stock deals, legal contracts and property records, within minutes and with no need for a central authority to verify it. The new project will be run by the not-for-profit Linux Foundation, and will focus on building industry-specific applications, platforms and hardware systems to support business transactions.
The initiative will include Digital Asset Holdings, the blockchain start-up run by former JP Morgan executive Blythe Masters, who has become something of an ambassador for the nascent technology. The initiative will also work with the blockchain consortium of banks run by financial technology firm R3, which on Thursday said it had added another 12 banks, including Santander and Nomura, and would soon include some of the world's biggest fund managers.
The Bank for International Settlements, the central bank for central bankers, said in a report last month that blockchain technology could reduce the role of intermediaries such as banks or other financial players. But a senior executive at German exchange operator Deutsche Boerse, one member of the new Linux initiative, told Reuters in a recent interview that it does not see itself being made irrelevant by the new technology. Deutsche Boerse is actively involved in discussions with several fintech firms and financial institutions that are developing distributed ledger technology, said Ashwin Kumar, who took up his role as global product development head at Deutsche Boerse on Sept. 1.
"The blockchain technology won't make market infrastructure providers obsolete," he said. "
But) ignoring it would be like saying: 'Why do we need email instead of regular mail?'."
He said blockchain looked promising in addressing some problems such as settlement delays but it also faced constraints such as a lack of scalability and the potential for conflict between transparency and the confidentiality of information.
Other collaborators on the new project include international payment network SWIFT, Accenture, Intel, State Street, Wells Fargo, and the London Stock Exchange.
Big names from the worlds of finance and technology such as Deutsche Boerse, JP Morgan, Cisco and IBM have come together to work on an open-source framework for using the "blockchain" technology that underpins the web-based cryptocurrency bitcoin. The new technology works as a huge, decentralized ledger of every bitcoin transaction ever made, which is verified and shared by a global network of computers and is therefore virtually tamper-proof. It has been drawing investment from banks and other financial players, who reckon it could save them money by making their operations faster, more efficient and more transparent.
The data that can be secured by the blockchain is not restricted to bitcoin transactions. Any two parties could use it to exchange other information, including stock deals, legal contracts and property records, within minutes and with no need for a central authority to verify it. The new project will be run by the not-for-profit Linux Foundation, and will focus on building industry-specific applications, platforms and hardware systems to support business transactions.
The initiative will include Digital Asset Holdings, the blockchain start-up run by former JP Morgan executive Blythe Masters, who has become something of an ambassador for the nascent technology. The initiative will also work with the blockchain consortium of banks run by financial technology firm R3, which on Thursday said it had added another 12 banks, including Santander and Nomura, and would soon include some of the world's biggest fund managers.
The Bank for International Settlements, the central bank for central bankers, said in a report last month that blockchain technology could reduce the role of intermediaries such as banks or other financial players. But a senior executive at German exchange operator Deutsche Boerse, one member of the new Linux initiative, told Reuters in a recent interview that it does not see itself being made irrelevant by the new technology. Deutsche Boerse is actively involved in discussions with several fintech firms and financial institutions that are developing distributed ledger technology, said Ashwin Kumar, who took up his role as global product development head at Deutsche Boerse on Sept. 1.
"The blockchain technology won't make market infrastructure providers obsolete," he said. "
But) ignoring it would be like saying: 'Why do we need email instead of regular mail?'."
He said blockchain looked promising in addressing some problems such as settlement delays but it also faced constraints such as a lack of scalability and the potential for conflict between transparency and the confidentiality of information.
Other collaborators on the new project include international payment network SWIFT, Accenture, Intel, State Street, Wells Fargo, and the London Stock Exchange.
Last edited Sun Dec 20, 2015, 12:37 PM - Edit history (1)
a cubbyhole as we are safe for now, but it is only a matter of time before the stalkers come for us. I look around DU outside of this litle corner and I ask myself "Who the fuck are those people?" 
It used to be we waved to agent Mike. Now we can wave to the HRC enforcers. 
Take my friends, I have a thrist to take care of.
Some rain for the first time in two months approaching here.
Very warm, sea & air.
This part of my island is a refuge. Surfers as well as guiris (tourists) and better-off Europeans moving in, Italians especially, keep local economy underwater only up to eyeballs.
Will speak of politics when election results are in.
Saludos Proserpina and to Mom. 
also joined, but new name...bluebird
http://houseofdebt.org/2014/04/17/are-we-headed-for-a-credit-market-crash.html
In a series of speeches, Federal Reserve Governor Jeremy Stein emphasized the importance of financial stability concerns in monetary policy-making. But how does one measure whether threats to financial stability are lurking? Put differently, can we know that there is a credit bubble about to burst? In his speeches, Stein cites the work of two Harvard Business School professors, Robin Greenwood and Samuel Hanson. Their research argues that a good indicator of credit market overheating is the share of all new corporate debt issues coming from low-grade issuers. This measure is based on the quantity of credit issued, not just interest rates. Others focus exclusively on credit spreads, or the interest rate differentials between, say, junk and investment grade firms. Greenwood and Hanson argue that quantities of credit issued by low-grade versus high-grade firms add a lot of power when predicting credit market crashes.
So how big is the risk of a credit market crash today? Robin and Sam were nice enough to send us the updated data through 2013. This chart shows the high yield share of corporate debt issues. Or in other words, the fraction of all corporate debt issues by high yield (or junk) firms:
You can see right away that this variable predicts crashes pretty well. The high yield issue share peaks about two years before major meltdowns we’ve seen in credit markets. So when risky firms are issuing a ton of debt, bad things tend to happen. The high yield share in 2012 and 2013 indicates elevated risk, but not an impending disaster. For example, the 2013 high yield share is still below the peaks seen prior to other credit crashes. This may be driven in part by the fact that investment grade firms are also issuing a ton of debt. So in some sense the denominator is rising so fast that the high yield bond issues cannot keep up with it.
As mentioned above, another measure people use to predict credit market overheating is the interest spread between Baa rated-debt and Aaa rated-debt. If this spread narrows, then credit markets are willing to fund riskier firms at lower interest rates. Here is the chart showing this spread:
Looking at the long history, you can see why interest spreads don’t do as good a job predicting crashes as the high yield share. The interest spread falls before every crash, but the pattern is not nearly as stark as it is with the high yield share of debt issues above. As this chart shows, the interest spread has fallen substantially in 2012 and 2013, but remains slightly above the very low levels it reached before the 2001 recession and the Great Recession...
more
In a series of speeches, Federal Reserve Governor Jeremy Stein emphasized the importance of financial stability concerns in monetary policy-making. But how does one measure whether threats to financial stability are lurking? Put differently, can we know that there is a credit bubble about to burst? In his speeches, Stein cites the work of two Harvard Business School professors, Robin Greenwood and Samuel Hanson. Their research argues that a good indicator of credit market overheating is the share of all new corporate debt issues coming from low-grade issuers. This measure is based on the quantity of credit issued, not just interest rates. Others focus exclusively on credit spreads, or the interest rate differentials between, say, junk and investment grade firms. Greenwood and Hanson argue that quantities of credit issued by low-grade versus high-grade firms add a lot of power when predicting credit market crashes.
So how big is the risk of a credit market crash today? Robin and Sam were nice enough to send us the updated data through 2013. This chart shows the high yield share of corporate debt issues. Or in other words, the fraction of all corporate debt issues by high yield (or junk) firms:
You can see right away that this variable predicts crashes pretty well. The high yield issue share peaks about two years before major meltdowns we’ve seen in credit markets. So when risky firms are issuing a ton of debt, bad things tend to happen. The high yield share in 2012 and 2013 indicates elevated risk, but not an impending disaster. For example, the 2013 high yield share is still below the peaks seen prior to other credit crashes. This may be driven in part by the fact that investment grade firms are also issuing a ton of debt. So in some sense the denominator is rising so fast that the high yield bond issues cannot keep up with it.
As mentioned above, another measure people use to predict credit market overheating is the interest spread between Baa rated-debt and Aaa rated-debt. If this spread narrows, then credit markets are willing to fund riskier firms at lower interest rates. Here is the chart showing this spread:
Looking at the long history, you can see why interest spreads don’t do as good a job predicting crashes as the high yield share. The interest spread falls before every crash, but the pattern is not nearly as stark as it is with the high yield share of debt issues above. As this chart shows, the interest spread has fallen substantially in 2012 and 2013, but remains slightly above the very low levels it reached before the 2001 recession and the Great Recession...
more
http://www.bloombergview.com/articles/2015-12-18/imf-reform-is-too-little-way-too-late
Provided the U.S. Congress passes the 2016 appropriations bill on Friday, a major reform of the International Monetary Fund can proceed. But the five-year delay since the changes, meant to give more power to big emerging economies, were proposed makes them less useful in bolstering the IMF's role as the world's most important international financial institution.
In a changing world, governance of the lender of last resort needed modernizing. Leaders of the Group of 20 agreed in 2010 that individual IMF quotas and voting rights needed to better reflect its members' standing in the world economy. That meant reducing the role of advanced European countries and Gulf states, and increasing that of emerging nations, particularly China:
The reform required U.S. approval of an amendment to make all of the fund's executive directors elected (some are currently appointed). The U.S. wanted to safeguard its standing as the fund's dominant voice; doubling all quotas would achieve that. The changes wouldn't cost the U.S. more money; its commitment would remain at about $170 billion, with the quota increase coming from the extra funds it, like many other countries, provided to the IMF after the global financial crisis of 2008. Congress just needed to approve moving some of that commitment to the quota -- a mere technicality.
IMF critics in Congress, however, opposed the fund's decision to lend to Greece despite grave doubts about its repayment abilities. The IMF had invoked a rule that allowed such lending if a failing country threatened international contagion. To U.S. conservatives, that wasn't their problem; U.S. financial institutions had much less exposure to toxic Greek assets than European ones did, and Europe should take care of its own.
Indeed, Europe has benefited disproportionately from IMF lending in recent years:
Those U.S. objections make little sense now. Greece's latest bailout has proceeded without IMF participation: The fund still doubts that the country can repay its debt, but Greece no longer poses a systemic risk. The European Union turned out to be rich enough to fund Greece's 85 billion euro ($92 billion) rescue package. Besides, a political deal has been struck: The appropriations bill calls on the U.S. representative to the IMF to use his voting power for the repeal of the "systemic exception," which allowed IMF participation in Greece's previous bailout. So the long-delayed rearrangement -- which former IMF Managing Director Dominique Strauss-Kahn called "the most important reform in the governance of the institution since its creation" -- should now go smoothly. It'll be useful to bailout recipients; the doubled quotas will make it easier for the IMF to lend them more, on shorter notice and under more flexible requirements. Yet the changes are probably too little, too late by now. For one thing, the new distribution of voting shares still doesn't do justice to China. Though the U.S., too, has a smaller say than its share of the world economy warrants, the gap between China's economic might and its IMF influence is bigger:
The power redistribution will, no doubt, please China -- an added bonus after the IMF decision to designate the yuan as a reserve currency next year -- but it won't deter Beijing from building alternative institutions such as the Asian Infrastructure Investment Bank. China, huge as it is, cannot afford to put all its eggs in the U.S.-dominated basket. Nor can other big emerging nations, such as India, Russia, Brazil and South Africa. They, with China, have already set up an IMF alternative -- the so-called New Development Bank. It's not going to be particularly important in the coming years, given the economic weakening of Russia and Brazil. Still, the desire for a lending pool independent of the West isn't going away.
Europeans, for their part, are also creating their own emergency infrastructure: advance notice that their role at the IMF would shrink highlighted that their needs in a serious crisis would exceed the fund's ability to help...
Provided the U.S. Congress passes the 2016 appropriations bill on Friday, a major reform of the International Monetary Fund can proceed. But the five-year delay since the changes, meant to give more power to big emerging economies, were proposed makes them less useful in bolstering the IMF's role as the world's most important international financial institution.
In a changing world, governance of the lender of last resort needed modernizing. Leaders of the Group of 20 agreed in 2010 that individual IMF quotas and voting rights needed to better reflect its members' standing in the world economy. That meant reducing the role of advanced European countries and Gulf states, and increasing that of emerging nations, particularly China:
The reform required U.S. approval of an amendment to make all of the fund's executive directors elected (some are currently appointed). The U.S. wanted to safeguard its standing as the fund's dominant voice; doubling all quotas would achieve that. The changes wouldn't cost the U.S. more money; its commitment would remain at about $170 billion, with the quota increase coming from the extra funds it, like many other countries, provided to the IMF after the global financial crisis of 2008. Congress just needed to approve moving some of that commitment to the quota -- a mere technicality.
IMF critics in Congress, however, opposed the fund's decision to lend to Greece despite grave doubts about its repayment abilities. The IMF had invoked a rule that allowed such lending if a failing country threatened international contagion. To U.S. conservatives, that wasn't their problem; U.S. financial institutions had much less exposure to toxic Greek assets than European ones did, and Europe should take care of its own.
Indeed, Europe has benefited disproportionately from IMF lending in recent years:
Those U.S. objections make little sense now. Greece's latest bailout has proceeded without IMF participation: The fund still doubts that the country can repay its debt, but Greece no longer poses a systemic risk. The European Union turned out to be rich enough to fund Greece's 85 billion euro ($92 billion) rescue package. Besides, a political deal has been struck: The appropriations bill calls on the U.S. representative to the IMF to use his voting power for the repeal of the "systemic exception," which allowed IMF participation in Greece's previous bailout. So the long-delayed rearrangement -- which former IMF Managing Director Dominique Strauss-Kahn called "the most important reform in the governance of the institution since its creation" -- should now go smoothly. It'll be useful to bailout recipients; the doubled quotas will make it easier for the IMF to lend them more, on shorter notice and under more flexible requirements. Yet the changes are probably too little, too late by now. For one thing, the new distribution of voting shares still doesn't do justice to China. Though the U.S., too, has a smaller say than its share of the world economy warrants, the gap between China's economic might and its IMF influence is bigger:
The power redistribution will, no doubt, please China -- an added bonus after the IMF decision to designate the yuan as a reserve currency next year -- but it won't deter Beijing from building alternative institutions such as the Asian Infrastructure Investment Bank. China, huge as it is, cannot afford to put all its eggs in the U.S.-dominated basket. Nor can other big emerging nations, such as India, Russia, Brazil and South Africa. They, with China, have already set up an IMF alternative -- the so-called New Development Bank. It's not going to be particularly important in the coming years, given the economic weakening of Russia and Brazil. Still, the desire for a lending pool independent of the West isn't going away.
Europeans, for their part, are also creating their own emergency infrastructure: advance notice that their role at the IMF would shrink highlighted that their needs in a serious crisis would exceed the fund's ability to help...
safe haven from the darkness and the meaness form Jonestown and the outside world. It would be awesome if we all could get together for a group hug and a peace prayer and a toast.
Did someone mention beer????
A very powerful scene. Must of had onions attached cause my eyes are a mist. For some reason it made me think of all things that I loved and held dear that I have lost. I miss my mom the most.
I had a couple of good bird dogs and a Manx tomcat that come in second.
