Ad astra per aspera
The Swedish EU presidency has indicated that it favours pay restrictions for hedge fund and private equity managers similar to those currently being debated for European bankers. The plans will be contained in the latest package of proposed amendments to the draft Directive on Alternative Investment Fund Managers (AIFM), and could be released as soon as this week.
The Swedish EU presidency has indicated that it favours pay restrictions for hedge fund and private equity managers similar to those currently being debated for European bankers.
The plans will be contained in the latest package of proposed amendments to the draft Directive on Alternative Investment Fund Managers (AIFM), and could be released as soon as this week.
Who can say. But there is a time of uncertainly in stores of wealth and currency coming. Below is a news article from earlier this year about a European economist named Buiter, who is predicting that the US dollar will collapse. That is because the US dollar is contingent on the actions of the Obama Administration, the Congress, and the Federal Reserve. And gold is not, unless the US begins to emulate Herr Hitler. "Gold is not necessary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money." And Willem, if you do not understand that, the principle of the contingency of fiat money, you understand nothing of economics. But I think you do understand it. Perhaps you are merely grumpy and out of sorts today, having eaten a bad sausage, with a case of dyspepsia. It does happen, off days and intemperate remarks, but not to eminent Financial Times columnists and distinguished professors when they wish to be heard on important matters. It seems as though Mr. Buiter just doesn't like what gold is doing right now, rising in price, and the real story may lie in why he and the brotherhood of western central bankers are so concerned about it. "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K." Eddie George, Governor Bank of England, in a conversation with CEO of Lonmin, September 1999.
And gold is not, unless the US begins to emulate Herr Hitler. "Gold is not necessary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money."
And Willem, if you do not understand that, the principle of the contingency of fiat money, you understand nothing of economics. But I think you do understand it. Perhaps you are merely grumpy and out of sorts today, having eaten a bad sausage, with a case of dyspepsia. It does happen, off days and intemperate remarks, but not to eminent Financial Times columnists and distinguished professors when they wish to be heard on important matters.
It seems as though Mr. Buiter just doesn't like what gold is doing right now, rising in price, and the real story may lie in why he and the brotherhood of western central bankers are so concerned about it.
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K." Eddie George, Governor Bank of England, in a conversation with CEO of Lonmin, September 1999.
I don't want to argue with a 6000-year old bubble. It may well be good for another 6000 years. Its value may go from $1,100 per fine ounce to $1,500 or $5,000 for all I know. But I would not invest more than a sliver of my wealth into something without intrinsic value, something whose positive value is based on nothing more than a set of self-confirming beliefs. (Jesse's bold.)
US and European negotiators have completed a draft agreement that would give American law enforcement access to Europeans' financial data to combat terrorism. The deal has consumer and privacy advocates up in arms. According to a draft seen by Deutsche Welle, financial records stored by the SWIFT financial data system including "name, account number, address, national identification number, and other personal data", can be shared with American authorities if there is a suspicion that the person is in any way involved with terrorist activity. The system manages international and sometimes domestic bank transfers in more than 200 countries
According to a draft seen by Deutsche Welle, financial records stored by the SWIFT financial data system including "name, account number, address, national identification number, and other personal data", can be shared with American authorities if there is a suspicion that the person is in any way involved with terrorist activity. The system manages international and sometimes domestic bank transfers in more than 200 countries
Current or former heads of government, European commissioners, national energy company chiefs -- in Brussels, the Russian energy giant has fielded a formidable team of lobbyists to defend its interests and projects, which are not always compatible with European initiatives. In Brussels, they call them the "Gazprommers" -- the heavy hitting group of lobbyists who for diverse reasons ensure that the interests of the Russian gas monopoly Gazprom are well defended in the European Union. The line-up includes current and former political leaders -- like Gemany's ex-chancellor Gerhard Schröder, and Italy's Prime Minister Silvio Berlusconi -- whose countries have major contracts with Gazprom, EU bigwigs like Energy Commissioner Andris Piebalgs, and the influential CEOs of Italian, German, Dutch and French national energy companies -- which already have multimillion dollar contracts with the Russians, or are planning to conclude deals soon. The Gazprommers' influence on European politics extends to issues that have nothing to do with gas. Brussels' climate package is a case in point. Some of the ambitious proposals that feature in the package, which are supposed to make Europe a world leader in the campaign against climate change, are a gift for the Gazprommers. Among the technologies destined to replace coal power generation, natural gas, Gazprom's main product, appears to be the cheapest and the easiest to use.
Current or former heads of government, European commissioners, national energy company chiefs -- in Brussels, the Russian energy giant has fielded a formidable team of lobbyists to defend its interests and projects, which are not always compatible with European initiatives.
In Brussels, they call them the "Gazprommers" -- the heavy hitting group of lobbyists who for diverse reasons ensure that the interests of the Russian gas monopoly Gazprom are well defended in the European Union. The line-up includes current and former political leaders -- like Gemany's ex-chancellor Gerhard Schröder, and Italy's Prime Minister Silvio Berlusconi -- whose countries have major contracts with Gazprom, EU bigwigs like Energy Commissioner Andris Piebalgs, and the influential CEOs of Italian, German, Dutch and French national energy companies -- which already have multimillion dollar contracts with the Russians, or are planning to conclude deals soon.
The Gazprommers' influence on European politics extends to issues that have nothing to do with gas. Brussels' climate package is a case in point. Some of the ambitious proposals that feature in the package, which are supposed to make Europe a world leader in the campaign against climate change, are a gift for the Gazprommers. Among the technologies destined to replace coal power generation, natural gas, Gazprom's main product, appears to be the cheapest and the easiest to use.
In Brussels, they call them the "Poles for Coal".
The latest jobs report shows that the official unemployment took a huge jump to 10.2% -15.7 million jobless workers. If we add to those numbers involuntary part-time workers, plus those who have given up looking for work, the unemployment rate is 17.5%. Even that seriously undercounts those who would be willing to work if decent jobs at decent pay were readily available-a number I put at 25 to 30 million. While there has been some debate about the number of jobs created or saved by the fiscal stimulus package, it is clear that Washington's effort has fallen far short, and all plausible projections show more job losses to come. What perplexes me is that we have been here before, and we know how to solve the unemployment problem: create jobs through a new, New Deal-style jobs program. I am advocating using those same principles, but creating something both broader and permanent: a universal job guarantee available through the thick and thin of the business cycle. The federal government would ensure a job offer to anyone ready and willing to work, at the established program compensation level (including wages and a healthy benefits package). To keep it simple, the program wage could be set at the current federal minimum wage ($7.25 an hour), and then adjusted periodically as that is raised. The usual benefits would be provided, including vacation and sick leave, and contributions to Social Security. Let's call this the Job Guarantee (JG) program. The original New Deal programs included large-scale infrastructure projects with direction coming from Washington. A permanent and universal JG program should be decentralized, with projects created and administered locally-where the workers are, and for the benefit of their communities. The federal government would provide the wages, plus a portion of capital and supervisory expenses (perhaps capped at 25% of total wages paid for each JG project). Local governments and nonprofits would propose projects and cover the rest of the expenses. State unemployment offices would be converted to employment offices, helping to match workers and projects. Project proposals would be submitted to regional councils and, if approved, would be evaluated by state councils and then by a federal council. Wages and benefits would be paid directly to workers (using Social Security numbers and direct bank deposits) to minimize fraud. Organizations submitting proposals would be prevented from replacing paid workers with JG workers. For-profit business would be excluded, because the temptation to substitute would be too great. At the same time, businesses would be protected from unfair competition because all JG projects would have to demonstrate they'd fulfill unmet public purposes. If at some future date, a for-profit firm decided to provide services that a JG project is performing, the JG project could be phased out. There is neither need nor desire for the JG program to compete with the private for-profit sector.
I am advocating using those same principles, but creating something both broader and permanent: a universal job guarantee available through the thick and thin of the business cycle. The federal government would ensure a job offer to anyone ready and willing to work, at the established program compensation level (including wages and a healthy benefits package). To keep it simple, the program wage could be set at the current federal minimum wage ($7.25 an hour), and then adjusted periodically as that is raised. The usual benefits would be provided, including vacation and sick leave, and contributions to Social Security.
Let's call this the Job Guarantee (JG) program.
The original New Deal programs included large-scale infrastructure projects with direction coming from Washington. A permanent and universal JG program should be decentralized, with projects created and administered locally-where the workers are, and for the benefit of their communities. The federal government would provide the wages, plus a portion of capital and supervisory expenses (perhaps capped at 25% of total wages paid for each JG project). Local governments and nonprofits would propose projects and cover the rest of the expenses. State unemployment offices would be converted to employment offices, helping to match workers and projects.
Project proposals would be submitted to regional councils and, if approved, would be evaluated by state councils and then by a federal council. Wages and benefits would be paid directly to workers (using Social Security numbers and direct bank deposits) to minimize fraud. Organizations submitting proposals would be prevented from replacing paid workers with JG workers. For-profit business would be excluded, because the temptation to substitute would be too great. At the same time, businesses would be protected from unfair competition because all JG projects would have to demonstrate they'd fulfill unmet public purposes. If at some future date, a for-profit firm decided to provide services that a JG project is performing, the JG project could be phased out. There is neither need nor desire for the JG program to compete with the private for-profit sector.
LRB · Donald MacKenzie · All Those Arrows
Few people's reputations have been improved by the credit crisis. One is the BBC's Robert Peston; another is Vince Cable. A third is Gillian Tett, capital markets editor of the Financial Times. Prior to the crisis, she and her team were the only mainstream journalists who covered in any detail the arcane world of `credit derivatives'. Tett saw - however imperfectly - the huge risks that were accumulating unnoticed within that world, and spoke out about them. Fool's Gold begins in a conference room in Nice in spring 2005. Tett admits that at that point she was baffled by the technical language - `Gaussian copula', `attachment point', `delta hedging' - used by the participants. However, before joining the FT she had conducted fieldwork in Soviet Tajikistan for a PhD in social anthropology, and the ethnographer in her was now reawakened. The conference reminded her of a Tajik wedding. Those attending it were forging social links and celebrating a tacit world-view - in this case, one in which `it was perfectly valid to discuss money in abstract, mathematical, ultra-complex terms, without any reference to tangible human beings.' ... The core of Tett's book, which is by far the most insightful of the first wave of books on the crisis, is the story of J.P. Morgan's credit derivatives team. For all the bank's traditionalism - the door staff at its London offices wouldn't look out of place outside the Ritz - it was quietly innovative. One of the team's driving forces was a young Englishwoman, Blythe Masters; another, Terri Duhon, makes no secret of her upbringing in a trailer in Louisiana; central to its technical work was an Indian mathematician, Krishna Varikooty. Boisterousness that would have horrified John Pierpont Morgan was tolerated. At one gathering in Florida, one of the team's managers broke his nose when drunken colleagues were pushing him into a hotel swimming-pool.
Fool's Gold begins in a conference room in Nice in spring 2005. Tett admits that at that point she was baffled by the technical language - `Gaussian copula', `attachment point', `delta hedging' - used by the participants. However, before joining the FT she had conducted fieldwork in Soviet Tajikistan for a PhD in social anthropology, and the ethnographer in her was now reawakened. The conference reminded her of a Tajik wedding. Those attending it were forging social links and celebrating a tacit world-view - in this case, one in which `it was perfectly valid to discuss money in abstract, mathematical, ultra-complex terms, without any reference to tangible human beings.'
...
The core of Tett's book, which is by far the most insightful of the first wave of books on the crisis, is the story of J.P. Morgan's credit derivatives team. For all the bank's traditionalism - the door staff at its London offices wouldn't look out of place outside the Ritz - it was quietly innovative. One of the team's driving forces was a young Englishwoman, Blythe Masters; another, Terri Duhon, makes no secret of her upbringing in a trailer in Louisiana; central to its technical work was an Indian mathematician, Krishna Varikooty. Boisterousness that would have horrified John Pierpont Morgan was tolerated. At one gathering in Florida, one of the team's managers broke his nose when drunken colleagues were pushing him into a hotel swimming-pool.
