Early settlers lose.

Birmingham University blog over at circa1815.tumblr.com

 

Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the libor fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.

Barclays senior trader in New York to the bank’s libor submitter, 13 Sept. 2006

(Source: The New York Times)

Just a snapshot of how the NY Times explains the Libor scandal via this infographic.

Just a snapshot of how the NY Times explains the Libor scandal via this infographic.

Asia needs to ensure its own banks aren’t engaging in the same [Western] behavior and create a bubble. The capacity of banks to create trouble is legendary.

Jeffrey Sachs, 45th Annual Meeting of the ADB Board of Governors (3 May 2012, Manila)

Sachs: I see a recovery! Yonder!
Jolie: (unimpressed)

Sachs: I see a recovery! Yonder!

Jolie: (unimpressed)

Prices and the recession

Richard Williamson writes:

Back in November, Karl Smith made the clearest statement I have ever read of the New Keynesian explanation of a recession:

I can’t hammer this home enough. A recession is not when something bad happens. A recession is not when people are poor.

A recession is when markets fail to clear. We have workers without factories and factories without workers. We have cars without drivers and drivers without cars. We have homes without families and families without their own home.

Prices clear markets. If there is a recession, something is wrong with prices.

Right now, unemployment remains at over 8% in the UK while real wages are lower than they were 7 years ago and are continuing to fall. Yes, you read that correctly. Which immediately leads one to ask: on this explanation of a recession as expounded by Karl, how much further do real wages have to fall to eliminate disequilibrium unemployment?

(Source: shewingthefly.com)

"If spending money like water was the answer to our country’s problems, we would have no problems now. If ever a nation has spent, spent, spent and spent again, ours has. Today that dream is over."

- the real Margaret Thatcher, speaking at the Conservative Party Conference. 10 October 1980.

"If spending money like water was the answer to our country’s problems, we would have no problems now. If ever a nation has spent, spent, spent and spent again, ours has. Today that dream is over."

- the real Margaret Thatcher, speaking at the Conservative Party Conference. 10 October 1980.

On copyright

It’s true that people are continuing to produce extraordinary amounts of great pop music, probably more than ever before, even though it’s increasingly difficult to get paid for it. You could characterise this as part of a growing cultural intuition that the most valuable things in life are not part of the cash economy…We’re living in a social moment where, more than usually, money has come unglued from value.

fotojournalismus:

An anti-WEF demonstrator uses water from a puddle to wash his eyes after he was sprayed with tear gas by Swiss Riot Police during a protest against the ongoing World Economic Forum in Davos January 28, 2012.
[Credit : Miro Kuzmanovic/Reuters]

fotojournalismus:

An anti-WEF demonstrator uses water from a puddle to wash his eyes after he was sprayed with tear gas by Swiss Riot Police during a protest against the ongoing World Economic Forum in Davos January 28, 2012.

[Credit : Miro Kuzmanovic/Reuters]

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance.

FDR (via azspot)

Trade imbalance as the root of the debt crisis?

The historical precedents – and much of the commentary coming out of Germany – suggest that Germany will not take steps to reverse the trade surplus.  Countries that run large and persistent trade surpluses never seem to understand that their surpluses are mainly the consequences of domestic policies that generate additional domestic growth by absorbing foreign demand.

On the contrary, they usually insist that the surpluses are the consequences of domestic virtue, and they see no reason to give up being virtuous.  Surpluses, they seem to believe, are the way God rewards them for their enviable behavior, and as their surpluses decline – an inevitable consequence of the malaise affecting their trading counterparts – they actually try to limit the decline and do all they can do to prevent it from becoming a growing trade deficit.

But this violates simple arithmetic.  Trade deficit nations have received capital inflows for many years from surplus nations as the automatic counterpart to their deficits.  If the surplus nations ever hope to get repaid – i.e. to reverse those capital flows – then it must be obvious that the trade imbalances must also reverse. (Read on)