Monday, February 24, 2014

Brazil enters recession: the great EM mirage now obvious

There used to be serious debate about how dependent Brazil is to rising commodity prices. Now we have the answer: completely. 

Brazil's economy seen in a major downturn
http://online.wsj.com/news/articles/SB10001424052702304703804579383274090741140

(via Instapaper)



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Wednesday, February 19, 2014

C'est Le Catastrophe!

Three equal partners?  One a Chines SOE, one the French government, the third a French aristocratic family?  Making cars in Europe? Starting as #7 or 8? What insanity!

Dongfeng, French State to Take Minority Stakes in Peugeot - WSJ.com



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Sunday, February 16, 2014

Africa Launches State-Sanctioned Pogram of Gays

Nigeria and Uganda enacting laws making gays illegal, whipping up deep cultural and religious hatred of gays for political gain. Where is the condemnation and threat of sanctions from Kerry and Obama about this abomination?

Mob Attacks More Than a Dozen Gay Men in Nigeria's Capital
http://www.nytimes.com/2014/02/16/world/africa/mob-attacks-gay-men-in-nigerias-capital.html


DAKAR, Senegal — A mob attacked gay people in a neighborhood in Abuja, the capital of Nigeria, dragging young men from their homes, beating them with nail-studded clubs and whips, and shouting that they were "cleansing the community" of gays, several Nigerian activists and a witness said Saturday.

The attack took place late Wednesday night in the Gishiri neighborhood, and one victim was beaten nearly to death, the witness said. Afterward, the mob of about 50 young men dragged four of the victims to a nearby police station, where the police further beat and insulted them, said the witness, who gave his name as John. His last name is being withheld for his safety.

The attack came in the wake of a new law signed by President Goodluck Jonathan prescribing prison sentences of up to 14 years for gay people. There have been recent episodes of similar mob violence in the Muslim-dominated north of Nigeria.

In Abuja, the witness and the activists said, some in the mob were shouting, "We are working for Jonathan!"

About 14 young men were assaulted, the activists said, and no members of the mob were arrested.

"They all had weapons," John said. "Some were having wires, whips. Some had broken furniture. They said they wanted to kill. They were moving around from one person's house to another."

John said he was cowering in his apartment, extinguishing his candle and hiding as the mob tried to break down his door.

"I heard them beating one guy up," he said. "The guy was pleading with them and begging them. They beat until he could not fight back."

The violence continued at the police station. "The police were calling them names, saying, 'You guys are the ones spreading H.I.V.,' " John said. "They were slapping them and beating them."

When the attack was over, the attackers wrote on the walls of the houses that were stormed, "Homosexuals, pack and leave," according to an activist, Ifeanyi Kelly Orazulike, who went to help rescue some of the victims.

Activists said the mob violence was a sign that the new law appeared to have given mobs license to act on widespread antigay sentiment in Nigeria.

"The government has given a go-ahead authority to mob jungle justice," said Mr. Orazulike of the International Center for Advocacy on the Right to Health. "This is unacceptable. You can't attack people violently because of whom they choose to love."

Another activist, Dorothy Aken'Ova, accused the government of tacit complicity. "The leaders are just watching, and now the Nigerian social fabric is being disintegrated by acts of mob violence," she said. "Now we have this new category as a result of the new law. And the government is quiet."


(via Instapaper)



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Saturday, February 15, 2014

The Middle Class Cull = Greater Economic Cyclicality

Interesting stats in this New York Times piece showing that 60% of consumption is made by the highest 20% in income.  So the top 20% generate more consumer spending than everyone else combined – by a wide margin.  The top 5% in income generate almost 40% of consumption!

Obviously, spending for the top 5% is basically all discretionary whereas spending for the bottom 80% is majority non-discretionary.  So the wealth effect has become magnified and economic growth should experience greater variability.

Also, of course, as the article lays out, any businesses targeting the middle class are getting crushed.

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html?_r=0

 

Wednesday, February 12, 2014

Conservatives, Repeat after me: It's not Obama's fault!

This piece by William Galston in the Wall Street Journal is a terrific review of the most important issue facing this country and the world: the gutting of the middle class (what I refer to as the Second Gilded Age).  It calls for a drastic response by both conservatives and liberals.  Most of the old ideas have been rendered irrelevant by the new world order where capital and a few lucky and/or brilliant folks get all the wealth and where the "low income" category becomes the great majority of workers.  We need new ideas - but first there has to be an appreciation of the scale and importance of the issue. I appreciate his unwillingness to even mention Obama.  Yes, ACA is likely to have made things a tiny bit worse but otherwise what Obama has done or not done has had very little impact on this.

The biggest economic story of this era is the Great Decoupling of wages and benefits from economic productivity. There has been a massive shift of national output from labor to capital. With it have come stagnating household incomes and a creeping loss of confidence. Translating productivity gains into rising living standards for average families is the country's central economic challenge.

Galston points out the fact that labor recieved 2/3 of national income in 1947 and 1973 but now the figure is below 60%.  And he recognizes that this is a global issue.

Since 1990, labor's share of total output has declined in almost every country. In half of them, the decline began in the 1970s and amounts to 10 percentage points or more. The U.S. is anything but an outlier. Summarizing a large body of research, a 2012 report for the Organization for Economic Cooperation and Development (with 34 member countries) attributes this development to three principal factors: the worsening position of low-education workers, changes in technology, and the globalization of production, competition and capital flows.

This great hollowing out has been masked by two trends since 1990: rising debt and the entrance of China, India, Russia, and other EMs into the global economy.

But U.S. household debt reached unsustainable levels by 2007, and the boom in developing countries—especially China, India, Brazil, South Africa and Turkey—appears to have peaked. As both Europe and the U.S. are discovering, the domestic market still matters, and weak gains in household income are bound to retard economic growth.

He discusses infrastructure spending, increasing the minimum wage, and improving public schools as things that would help but only at the margin.
But the facts push me to a more radical conclusion: We cannot expect robust, sustainable economic growth unless we can figure out how average households can participate in the fruits of that growth, as they did in the postwar period. We need nothing less than a new norm—a revised social contract—that links compensation to productivity. And because we cannot return to the conditions that once sustained that link, we need new policies to bring it about. Neither political party has come close to proposing anything of the sort, and the American people know it.

Maybe even Fox can come around to the idea that lower taxes and smaller government are pathetic responses to this ugly new paradigm.

Tuesday, February 11, 2014

Bitcoin is not a currency

Bitcoin is a commodity, not a currency.  It has some similarities to gold.  Forget all the technobabble and central bank wonky-talk.  It's not a currency because a currency is a store of value.  Does this look like a store of value?


No, it does not.  It looks rather like an old fashioned bubble.  The Finns have come to the same conclusion.

Ivy League: Built with slave money

US academia founded and built with money from slave traders and owners.  Not only that, but were often actively hostile to abolitionists!  Fascinating and previously little known story.  Excellent review in (ironically) Columbia Magazine, the monthly magazine for Columbia University alum.

Saturday, February 8, 2014

Too Many Young Black Men Are Locked Up

I'm a conservative and have been most of my adult life.  I don't believe in racial quotas and I don't believe that many Republicans are racists.  However, the War on Drugs plus grossly inequitable and manaditory sentences for drug possession (crack vs cocaine, etc.) are doing as much or more damage to low income, inner-city, largely minority communities than any other favorite cause of conservatives such as "decaying social mores", single mothers, welfare dependency, etc., etc.  It isn't possible to build stable lives and stable communities when YOUNG MEN ARE ABSENT and when they return they've been "schooled" in prison.  The idea that locking up millions of people in order to prevent crime is awesomely short-sighted.  Why?  Duh - THEY GET OUT SOMEDAY.  Ex-cons, by and large, have no future.  Having already received little education, their chances of getting a decent job are miniscule.  The cycle repeats.  When will this crime against humanity end?

What set me off were two recent stories.  One in yesterday's New York Times

As 2 Go Free, Brooklyn Conviction Challenges Keep Pouring In

And this in MarginalRevolution:

Exonerations with not even a crime: how many more should there be? - See more at: http://marginalrevolution.com/marginalrevolution/2014/02/exonerations-with-not-even-a-crime-how-many-more-should-there-be.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.0JFGI6VG.dpuf


Exonerations with not even a crime: how many more should there be? - See more at: http://marginalrevolution.com/marginalrevolution/2014/02/exonerations-with-not-even-a-crime-how-many-more-should-there-be.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.0JFGI6VG.dpuf
Exonerations with not even a crime: how many more should there be? - See more at: http://marginalrevolution.com/marginalrevolution/2014/02/exonerations-with-not-even-a-crime-how-many-more-should-there-be.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.0JFGI6VG.dpuf

Friday, February 7, 2014

Emerging Markets: Mobius says sell - so it must be time to buy!

Subject: Bloomberg: Mobius Says Emerging-Market Selloff to Deepen on Outflows

 

From Bloomberg, Feb 7, 2014, 9:47:24 AM

The worst isn't over for emerging markets after the benchmark stock index sank to a five-month low and the nations' currencies tumbled, said Templeton Emerging Markets Group's Mark Mobius.

To read the entire article, go to http://bloom.bg/1dufhwl

Thursday, February 6, 2014

The Wolf of Wall Street: not just wrong, BAD

Wolf of Wall Street - The Worst

This review takes the film to task for glorifying an animal who did serious harm to many people. Fair enough. But my review is simpler: Scorsese has made a monumentally boring, pointless, and LONG movie. Simply dreadful .





Internet Robber Barons

How Silicon Valley's most celebrated CEOs conspired to drive down 100,000 tech engineers' wages
http://pando.com/2014/01/23/the-techtopus-how-silicon-valleys-most-celebrated-ceos-conspired-to-drive-down-100000-tech-engineers-wages/

Suppressing the wages of engineers in order to earn extra billions - the largest personal fortunes ever in human history. Appalling.

Just say no! (to world domination by Big Data)


This piece is a great reminder - that Facebook account I never check anymore?  This afternoon it's going bye bye.

I AM A complicated-private-notwhollycommercial human entity, HEAR ME NOT ROAR!!!