Ghost Dog's Journal
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Hometown: Canary Islands Archipelago
Home country: Spain
Member since: Wed Apr 19, 2006, 01:59 PM
Number of posts: 13,284
Hometown: Canary Islands Archipelago
Home country: Spain
Member since: Wed Apr 19, 2006, 01:59 PM
Number of posts: 13,284
(Brit gone native).
Center-left Bavarian newspaper Süddeutsche Zeitung writes:
"This drastic infringement of property rights was possible due to the unique constellation in Cyprus: Cyprus is the third-smallest country of the European Union, so its political weight isn't very relevant. Cyprus set up a dubious business model that attracted dubious people; they're now being punished, so the burden isn't necessarily hitting the wrong people. The expropriation satisfied the sense of justice of most Germans, and not just them."
"Thirdly, a remarkably poor set of Cypriot politicians refused to see reason for much too long, and in the last week displayed an unpleasant gambling mentality. Anyone who manages in just four days to alienate the entire euro zone, discredit the Euro Group chief, tries to involve Russia in a circumventing maneuver and welds together the German government and opposition in an election year has failed to understand a few basic rules on transparency and policymaking in Europe."
"In this unique combination, Cyprus will remain a unique case. But Europe has changed a lot as a result of this rescue drama. The readiness to show solidarity is eroding by the minute. The euro zone has long since stopped being a brotherhood for increasing prosperity and mutual stability. It has transformed itself into a school of gladiators in which everyone fights for his own advantage and his survival."
Hmm. Let's see.
The first paragraph says that the drastic infringement of property rights in Cyprus was possible because Cyprus's political weight isn't very relevant. Isn't very relevant to whom? It is certainly of primary relevance to Cypriot voters. There is a very patrician attitude on display here. Then we are presented with a logical fallacy: Just because some (but possibly not all) dubious characters participating in Cyprus's dubious financial system (not to mention, heaven forbid, some other places' financial systems one could mention) are being "punished", it is not posssible to infer that the "burden" isn't necessarily hitting some perfectly legitimate, entirely transparent, non-dubious savers as well. The "expropriation", however, satisfied the sense of justice of most Germans, we are told. Uh huh. So what? The protagonists here are Cyprus and the European Union, are they not? Stated thus, we perceive German arrogance.
The second paragraph refers to a need to "understand a few basic rules on transparency and policymaking in Europe", without specifying them beyond a reference to "seeing reason" (see above). See ref. 1 below.
Finally, in the third paragraph, we are told that "(Europe's) readiness to show solidarity is eroding by the minute." What is clear is that there is a lack of willingness amongst elites in Germany and those under their influence, fanned on by the anglo media, to respect principles of transparancy, democratic sovereignty and solidarity in the European Union where this is perceived to be detrimental to elite (sold to the 'marks' as 'national') interests.
Ref 1: Policy-Making and Diversity in Europe: Escape from Deadlock
By Adrienne Héritier, Adrienne Windhoff-Héritier
Posted by Ghost Dog | Tue Mar 26, 2013, 03:44 PM (0 replies)
These are intelligent targets, or could be, if they'd only add the vital aim of also maximising what the social & policy scientists & technicians are calling "wellbeing" - see eg. http://www.bath.ac.uk/study/pg/programmes/msc-well-pub-pol-int-dev - and emphasise that "sustainable" really must mean sustainable in the context of an already seriously fucked-up natural environment now entering a chaotic transition phase.
Posted by Ghost Dog | Tue Mar 26, 2013, 08:46 AM (0 replies)
... Monday's agreement capped a 10-day psychological drama. Cyprus's president struck an initial deal that would have seen the country raise its share of the bailout funds by requiring all account-holders in Cypriot banks to pay a tax on their deposits, only to see the plan struck down by parliament. Cyprus went hat-in-hand to Moscow for help, to no avail. Cyprus also raised eyebrows in euro-zone central banks by allowing several hundred million euros to be wired out of the country in the past week, despite an official freeze on outflows on all but a few exempt categories, such as funds for humanitarian purposes.
On Thursday morning, the European Central Bank threatened to cut off liquidity to Cypriot banks—condemning them to instant bankruptcy—if no deal was reached by Monday... In the end, this deal ended up looking like a more severe version of an early proposal floated by Germany and the International Monetary Fund to close the country's two biggest banks—a plan that had been rejected by Cypriot president Nicos Anastasiades 10 days earlier... On Friday morning, Ms. Merkel's patience was running out. She angrily briefed lawmakers from her ruling center-right coalition and told them Cyprus was trying to face Europe down, according to people present. Cypriot leaders haven't understood yet that their "business model" of outsize offshore banking has failed, she said. Europe had to stick to its principles, she added: Aid is only for countries that were prepared to reform, she said...
... Tensions were running high Sunday in Brussels as key officials—including IMF chief Christine Lagarde, ECB head Mario Draghi, EU President Herman Van Rompuy and other top EU officials—met Mr. Anastasiades over a lunch of lamb and baby potatoes. Mr. Anastasiades complained that his country was being treated more harshly than any of the euro zone's other bailout victims. He backtracked on an earlier agreement to wind down Cyprus Popular Bank. According to a senior Cypriot official, Mr. Anastasiades was appalled by the way he was spoken to at the lunch. The president threatened to resign. Mr. Dijsselbloem told him he didn't care about the president's political future, only the future of the euro zone, the senior official said...
... Germany's Finance Minister Wolfgang Schäuble grew particularly irascible, officials said. At one point, Ms. Lagarde went to calm him down. She also tried to raise spirits in Mr. Van Rompuy's fifth-floor suite, where top EU officials were meeting with Mr. Anastasiades. The IMF chief handed out M&Ms, as officials say she often does at late-night European negotiations... As the evening dragged on, Mr. Schäuble and French Finance Minister Pierre Moscovici consulted their respective leaders by phone. Then they conveyed a Franco-German message to the Cypriot leader: Mr. Anastasiades should give up hope that a summit of euro-zone leaders would lead to an easier deal. Even if a summit were to be called, the deal facing Cyprus would be the same one as now.
Shortly before midnight, the Cypriot president came back with a new proposal, which officials said backtracked on the closure of Cyprus Popular. At that point, the EU leaders calmly told Mr. Anastasiades "to pack up and leave" if he wasn't ready to cooperate, one official present at the meeting said. The president signed off on the broad deal—one more costly than the one its parliamentarians rejected last week. "There is no doubt in the government that the first deal was far better," said a senior Cypriot official. "We bluffed and we lost. The whole thing was a fiasco."
/Source (text)... http://online.wsj.com/article/SB10001424127887323605404578382943506534114.html?mod=wsj_share_tweet
/See also (images)... http://www.telegraph.co.uk/finance/debt-crisis-live/9953844/Cyprus-bailout-live.html , http://www.guardian.co.uk/business/2013/mar/26/eurozone-crisis-cyprus-banks
Posted by Ghost Dog | Tue Mar 26, 2013, 07:50 AM (4 replies)
... Imagine if Google or Facebook decided to install their own CCTV cameras everywhere, gathering data about our movements, recording our lives and joining up every camera in the land in one giant control room. It’s Orwellian surveillance with fluffier branding. And this isn’t just video surveillance – Glass uses audio recording too. For added impact, if you’re not content with Google analysing the data, the person can share it to social media as they see fit too.
Yet that is the reality of Google Glass. Everything you see, Google sees. You don’t own the data, you don’t control the data and you definitely don’t know what happens to the data. Put another way – what would you say if instead of it being Google Glass, it was Government Glass? A revolutionary way of improving public services, some may say. Call me a cynic, but I don’t think it’d have much success.
More importantly, who gave you permission to collect data on the person sitting opposite you on the Tube? How about collecting information on your children’s friends? There is a gaping hole in the middle of the Google Glass world and it is one where privacy is not only seen as an annoying restriction on Google’s profit, but as something that simply does not even come into the equation. Google has empowered you to ignore the privacy of other people. Bravo.
It’s already led to reactions in the US. ‘Stop the Cyborgs’ might sound like the rallying cry of the next Terminator film, but this is the start of a campaign to ensure places of work, cafes, bars and public spaces are no-go areas for Google Glass. They’ve already produced stickers to put up informing people that they should take off their Glass...
Posted by Ghost Dog | Wed Mar 20, 2013, 12:40 PM (10 replies)
Cypriots who will have up to 9.9 percent of their bank accounts seized to pay for part of the cost of the country’s bailout from international lenders will get in return bonds from natural gas earnings off the island’s coast as collateral, newly-elected President Nicos Anastasiades promised in a televised address, trying to defuse growing anger ahead of a critical vote by the Parliament whether to back the scheme...
... “In recognition of its obligations, the state will offer to those who will keep their deposits in Cyprus bonds equal to half of their contribution now, linked to the future public revenues from natural gas,” he said, adding that all this is meant to relieve future generations from the consequences of this generation’s mistakes...
NICOSIA, March 14 (Reuters) - Cyprus, urgently needing revenues from its newly found natural gas reserves, hopes to begin exports by 2018 and will target sales at fellow European Union members, its energy minister said.
George Lakkotrypis also said gas could be sold in advance or used to help the government, which is now negotiating a multibillion-dollar bailout, to issue new debt on international markets in future.
U.S. company Noble Energy and the Cypriot government announced in 2011 that they had discovered gas deposits of around 7-8 trillion cubic feet (200 billion cubic metres), 40 percent of the EU's annual demand.
Aphrodite, as the gas field is known, has more gas than Cyprus could use in over a century, so the government hopes to boost its revenues through exports to the European Union.
"It is important to us not just economically but also geostrategically," Lakkotrypis told Reuters in an interview, referring to potential exploration partners...
NICOSIA, Cyprus (AP) February 11, 2013 — A US firm has ceded 30 percent of its rights to a gas field off Cyprus’ south coast to Israel’s Delek and its subsidiary Avner Oil Exploration.
Cypriot Commerce Minister Neoklis Sylikiotis said Monday’s agreement came after the government approved it last week.
No sums were disclosed. The field holds an estimated 5-8 trillion cubic feet (140-230 billion cubic meters) of gas.
Noble and Delek together hold a majority stake in an Israeli offshore gas field that’s more than twice the size of the Cypriot one...
Posted by Ghost Dog | Sun Mar 17, 2013, 11:52 PM (0 replies)
European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets.
Italy’s deadlocked election, France’s refusal to make deeper budget cuts and protests against the shrinking of the welfare state across southern Europe escalated the rebellion against the German-led prescription for fighting the debt crisis.
Economic strains “may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits,” European Union Economic and Monetary Commissioner Olli Rehn told reporters late yesterday after a meeting of euro- area finance ministers in Brussels...
... “The cure is not working, and there is no hope that it will -- that is, without being worse than the disease,” Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist, said in a posting on Project Syndicate (see below). “Germany has consistently rejected every policy that would provide a long- term solution. The Germans, it seems, will do everything except what is needed.” ...
Europe's protest parties on the march
The suddenness with which Grillo has emerged and taken one in four of Italian votes may have shocked the traditional governing elite across the EU, but it shows little sign of knowing how to respond or adjusting to the message being sent by voters who have sent incumbents tumbling one after the other from Greece to Finland over the past three years...
... The message to the Italians from the German government this week was "you may have kicked out our politicians, but you must not kick out their policies". That was echoed by the European commission in Brussels, while the German opposition social democrat leader, Peer Steinbrück, ventured to suggest that the Italians had voted for "clowns" .
On Thursday the outgoing Italian prime minister, Mario Monti, comprehensively trounced in the election, attended a European commission conference in Brussels where he enjoyed a standing ovation almost as if he had been the victor. The mismatch between the popular and elite verdicts was striking.
Monti said that in his 15 months in office he deliberately never told Italians that his programme of austerity, structural reforms, and tax rises was being implemented because of EU orders. Then he added: "Although of course it was true that the European Union was asking for them."
Given his failure, there may now be a slight shift to soften the edges of German-prescribed austerity while EU leaders also harp on, but do nothing, about repairing the vast gap opening up between the more integrationist policies they are pursuing and democratic accountability and legitimacy to underpin them...
(Stiglitz): The outcome of the Italian elections should send a clear message to Europe’s leaders: the austerity policies that they have pursued are being rejected by voters.
The European project, as idealistic as it was, was always a top-down endeavor. But it is another matter altogether to encourage technocrats to run countries, seemingly circumventing democratic processes, and foist upon them policies that lead to widespread public misery.
While Europe’s leaders shy away from the word, the reality is that much of the European Union is in depression. The loss of output in Italy since the beginning of the crisis is as great as it was in the 1930’s. Greece’s youth unemployment rate now exceeds 60%, and Spain’s is above 50%. With the destruction of human capital, Europe’s social fabric is tearing, and its future is being thrown into jeopardy.
The economy’s doctors say that the patient must stay the course. Political leaders who suggest otherwise are labeled as populists. The reality, though, is that the cure is not working, and there is no hope that it will – that is, without being worse than the disease. Indeed, it will take a decade or more to recover the losses incurred in this austerity process.
In short, it is neither populism nor shortsightedness that has led citizens to reject the policies that have been imposed on them. It is an understanding that these policies are deeply misguided...
/... Read more at http://www.project-syndicate.org/commentary/listening-to-european-voters--rejection-of-austerity-by-joseph-e--stiglitz#YS8dU9MT2jDKYxDM.99
Posted by Ghost Dog | Tue Mar 5, 2013, 06:39 AM (0 replies)
Source: Agence France Presse
AFP - Thousands of people demonstrated in Spanish cities on Saturday pushing for a new law to end a wave of evictions of homeowners ruined by the economic crisis.
Several thousand marched yelling to the din of drums and horns in central Madrid, waving banners reading "Stop evictions" and yelling "We have no homes!"
Similar protests were called in Barcelona and 50 other Spanish cities, the latest of months of demonstrations driven by anger at Spain's recession and the conservative government, which is imposing austere economic reforms.
Campaigners passed a rare milestone on Tuesday when the Spanish parliament agreed to debate a popular bill of measures to protect poor homeowners, backed by a petition that received more than 1.4 million signatures. The organisation that brought that petition, the Platform for Mortgage Victims (PAH), called Saturday's nationwide protests to pressure lawmakers to follow through and vote it into law quickly.
Read more: http://www.france24.com/en/all-wire
See also (Spanish): http://politica.elpais.com/politica/2013/02/16/actualidad/1361001933_478565.html
Posted by Ghost Dog | Sat Feb 16, 2013, 03:57 PM (3 replies)
As the world’s advanced economies grow at half the speed of the pre-crisis years amid persistently high unemployment, governments are turning to a new set of monetary-policy makers who in word -- and they hope deed -- are more aggressive than their predecessors.
A revolution that began with the arrival in November 2011 of Mario Draghi at the European Central Bank now is gathering speed as Canada’s Mark Carney joins the Bank of England and the Bank of Japan awaits a new governor. The shift could culminate a year from now if Federal Reserve Chairman Ben S. Bernanke is succeeded by someone even bolder. The changing of the guard reflects both a need for central banks to offset fiscal paralysis and a bet that monetary policy remains a potent force. At the same time, investors are increasingly weighing the costs and benefits of quantitative easing, while suggesting too much is expected of central banks.
The appointments of activists “reflect the case that economies are still struggling to sustain solid recoveries and there’s pressure from political quarters to be more stimulative,” said Nathan Sheets, a former adviser to Bernanke and now global head of international economics at Citigroup Inc. in New York. “Central banks have stuff in the bag, but it’s largely untried and may generate unwelcome side effects.” ...
... “Central bankers have begun to redefine what their role is, moving away from inflation targeting toward sustaining the health of the financial system, indeed the wider economy,” said Milligan. “New policy makers may bring in new tools, ones which global investors will need to understand quickly.” ... “What we have now is a monetary problem, so it’s time for a monetary solution,” said Gabay, a former Bank of England official. “It’s tough to make monetary policy effective, but it’s the only way.”
The appeal for governments of appointing activists is that they have run out of room to ease fiscal policy and would prefer that central banks go for growth, even if it means a pickup in prices, said Rob Carnell, chief international economist at ING Group NV in London. Central bankers in some countries already are indicating a willingness to tolerate above-target inflation despite their mandates... “Governments think they don’t need to worry about inflation and wouldn’t even mind if some came along, so they’re putting people in who share that cause,” Carnell said. “It’s all about growth.” ...
Posted by Ghost Dog | Thu Feb 14, 2013, 11:32 AM (0 replies)
Wednesday night may have marked the “emperor’s new clothes” moment of the Great Recession, in which the world suddenly realizes its rulers are suffering from a delusion that doesn’t have to be humored. That delusion today is economic fatalism: the idea that nothing can be done to break the paralysis in the global economy and therefore that a “new normal” of mass unemployment and declining living standards is inevitable for years or decades to come.
That such economic fatalism is nonsensical is the key message of a truly historic speech delivered on Wednesday by Adair Turner, chairman of Britain’s Financial Services Authority and one of the most influential financial policymakers in the world. Turner argues that a virtually surefire method of stimulating economic activity exists today and that politicians and central bankers can no longer treat it as taboo: Newly created money should be handed out to the citizens or governments of countries that are mired in stagnation and such monetary financing of tax cuts or government spending should continue until economic activity revives...
The Adair Turner lecture:
<cut>... Even to mention the possibility of overt monetary finance is however close to breaking a taboo. When some comments of mine last autumn were interpreted as suggesting that OMF should be considered, some press articles argued that this would inevitably lead to hyper inflation. And in the Eurozone, the need utterly to eschew monetary finance of public debt is the absolute core of inherited Bundesbank philosophy.
To print money to finance deficits indeed has the status of a moral sin – a work of the devil – as much as a technical error. In a speech last September, Jens Weidmann, President of the Bundesbank, cited the story of Part 2 of Goethe’s Faust, in which Mephistopheles, agent of the devil, tempts the Emperor to distribute paper money, increasing spending power, writing off state debts, and fuelling an upswing which however “degenerates into inflation, destroying the monetary system” (Weidmann 2012).
And there are certainly good reasons for being very fearful of the potential to create paper or (in modern terms) electronic money. In a post-gold standard world, money is what is accepted as money: it is simply the “fiat”, the creation of the public authority. It can therefore be created in limitless nominal amounts2. But if created in excessive amounts it creates harmful inflation. And it was John Maynard Keynes who rightly argued that “there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency”.
The ability of governments to create money is a potential poison and we rightly seek to limit it within tight disciplines, with independent central banks, self-denying ordinances and clear inflation rate targets. Where these devices are not in place or are not effective, the temptation that Mephistopheles presents can indeed lead to hyper-inflation – the experience of Germany in 1923 or Zimbabwe in recent years. But before you decide from that that we should always exclude the use of money financed deficits, consider the following paradox from the history of economic thought. Milton Friedman is rightly seen as a central figure in the development of free market economics and in the definition of policies required to guard against the dangers of inflation. But Friedman argued in an article in 1948 not only that government deficits should sometimes be financed with fiat money but that they should always be financed in that fashion with, he argued, no useful role for debt finance. Under his proposal, “government expenditures would be financed entirely by tax revenues or the creation of money, that is, the use of non-interest bearing securities” (EXHIBIT 1) (Friedman, 1948). And he believed that such a system of money financed deficits could provide a surer foundation for a low inflation regime than the complex procedures of debt finance and central bank open market operations which had by that time developed.
Friedman was not alone. Henry Simons, one of the founding fathers of the Chicago school of free market economics, argued in his seminal article “Rules and Authorities in Monetary Policy” that the price level should be controlled by “expanding and contracting issues of actual money” and that therefore “the monetary rules should be implemented entirely by and in turn should largely determine fiscal policy” (Simons 1936). Irving Fisher argued exactly the same (Fisher, 1936). And the idea that pure money finance is the ultimate answer to extreme deflationary dangers is a convergence point of economic thought at which there is total agreement between Friedman and Keynes. Friedman described the potential role of “helicopter money” picked up gratis from the ground (Friedman, 1969): Keynes, surprisingly, since he was not usually a puritan, wanted people to at least have to dig up the “old bottles with bank notes” (Keynes, 1936) (EXHIBIT 2). But the prescription was the same. And Ben Bernanke, current Chairman of the Federal Reserve, argued quite explicitly in 2003 that Japan should consider “a tax cut … in effect financed by money creation” (Bernanke, 2003).
When economists of the calibre of Simons, Fisher, Friedman, Keynes and Bernanke have all explicitly argued for a potential role for overt money financed deficits, and done so while believing that the effective control of inflation is central to a well run market economy – we would be unwise to dismiss this policy option out of hand. Rather, we should consider whether there are specific circumstances in which it could play a role and/or needs to play a role, and even if not, whether exploration of the theory of money and of debt helps us better understand the problems we face, problems that may be addressed by other policy tools.
In this lecture I will therefore address both appropriate targets and appropriate tools, and will consider the full range of possible tools. But I will also stress the need for us to integrate issues of financial stability and of macroeconomic policy far more effectively than mainstream economics did ahead of the crisis... <cut>
/(.pdf 48pp)... http://www.fsa.gov.uk/static/pubs/speeches/0206-at.pdf
Posted by Ghost Dog | Thu Feb 14, 2013, 09:44 AM (1 replies)
... (H)anding out newly created money to citizens and governments could solve economic woes globally and would not lead to hyperinflation.
Government-issued money would work because it addresses the problem at its source. Today, we have no permanent money supply. People and governments are drowning in debt because our money comes into existence only as a debt to banks at interest...
... The threat of price inflation is the excuse invariably used for discouraging this sort of "irresponsible" monetary policy today, based on the Milton Friedman dictum that "inflation is everywhere and always a monetary phenomenon." When the quantity of money goes up, says the theory, more money will be chasing fewer goods, driving prices up.
What that theory overlooks is the supply side of the equation. As long as workers are sitting idle and materials are available, increased demand will put workers to work creating more supply. Supply will rise along with demand, and prices will remain stable.
True, today these additional workers might be in China, or they might be robots. But the principle still holds: if we want the increased supply necessary to satisfy the needs of the people and the economy, more money must first be injected into the economy. Demand drives supply. People must have money in their pockets before they can shop, stimulating increased production. Production doesn't need as many human workers as it once did. To get enough money in the economy to drive the needed supply, it might be time to issue a national dividend divided equally among the people...
... With the proviso that not just any kind of supply will do to meet the pent-up demand. New supply must come from economic activity healthy for the environment as well as for humanity.
Posted by Ghost Dog | Thu Feb 14, 2013, 07:15 AM (0 replies)