Ad astra per aspera
The Bank of England's monetary policy committee (MPC) is expected to extend its programme of quantitative easing (QE) by £25 billion, though there are doubts whether it will take action beyond that. The Bank has so far committed £125 billion of QE in an attempt to boost the money supply, mainly through purchases in the markets of gilts and other assets. It has permission from the Treasury for a further £25 billion of such purchases, which analysts expect to be announced this week. Beyond this, it would have to seek new approval from the Treasury, which indemnifies the Bank against losses on the scheme.
The Bank has so far committed £125 billion of QE in an attempt to boost the money supply, mainly through purchases in the markets of gilts and other assets. It has permission from the Treasury for a further £25 billion of such purchases, which analysts expect to be announced this week. Beyond this, it would have to seek new approval from the Treasury, which indemnifies the Bank against losses on the scheme.
If they were putting into the economy they'd do it some way where it didn't just end up in offshore tax free accounts, wouldn't they ? they'd embark on a capital spending programme involving improving housing and stuff. keep to the Fen Causeway
You will not be surprised to hear that this was the largest one-day ECB/Eurosystem operation ever. Even more remarkable than its scale are the terms on which the one-year funds were made available. There can be no doubt that this operation represents both a subsidy and a gift from the Eurosystem to the banks that participated in the operation. I hope to clarify the distinction between a subsidy and a gift in what follows.
It is possible for the ECB/Eurosystem to provide Euro Area banks with funds at a rate well below the rate at which the banks could have funded themselves elsewhere, without this implying a subsidy from the ECB/Eurosystem to the banks.
There is a subsidy only if the rate charged by the ECB to the banks is less than the ECB's risk-adjusted opportunity cost of funds.
Lagos -- Three African countries yesterday signed an accord to build a $10 billion trans-Saharan gas pipeline linking vast reserves in Nigeria to Europe. The project would convey gas destined for the European market more than 4,000 kilometres (2,485 miles) from the Niger Delta in Nigeria via Niger and Algeria.
The project would convey gas destined for the European market more than 4,000 kilometres (2,485 miles) from the Niger Delta in Nigeria via Niger and Algeria.
Gordon Brown has come under fresh pressure over the public finances after John Hutton, the former defence secretary, said that voters expect "honesty" about the need for cuts in Government spending.   Mr Brown is trying to frame the next election as a choice between "Tory cuts" and "Labour investment", despite predictions from independent economists that Labour's huge Government borrowing will mean that whoever wins the next election will have no choice but to cut spending.
Mr Brown is trying to frame the next election as a choice between "Tory cuts" and "Labour investment", despite predictions from independent economists that Labour's huge Government borrowing will mean that whoever wins the next election will have no choice but to cut spending.
[Murdoch Alert] Ad astra per aspera
Alistair Darling today refused to rule out a pay freeze for Britain's six million public sector workers after the head of the government's spending watchdog accused party leaders of failing to be honest with people.Steve Bundred, the chief executive of the Audit Commission, wrote in the Observer that he had not heard any politician admit that "severe pay restraint" was necessary to rebalance public finances.The chancellor insisted public sector pay must be "fair" to workers but, with inflation at its lowest level in years, appeared to open up the possibility of a freeze.
Alistair Darling today refused to rule out a pay freeze for Britain's six million public sector workers after the head of the government's spending watchdog accused party leaders of failing to be honest with people.
Steve Bundred, the chief executive of the Audit Commission, wrote in the Observer that he had not heard any politician admit that "severe pay restraint" was necessary to rebalance public finances.
The chancellor insisted public sector pay must be "fair" to workers but, with inflation at its lowest level in years, appeared to open up the possibility of a freeze.
Murdochgraph:
The Bank of England's monetary policy committee (MPC) is expected to extend its programme of quantitative easing (QE) by £25 billion.
Torygraph:
Gordon Brown has come under fresh pressure over the public finances after John Hutton, the former defence secretary, said that voters expect "honesty" about the need for cuts in Government spending.
Pranab Mukherjee, Finance Secretary, has said the country needs to invite foreign supermarket chains, insurance, defence and engineering companies to help modernise agriculture, financial services and transport infrastructure. His proposed reforms would shake up the country's strictly regulated labour market, allowing companies to increase working hours and make staff redundant without government approval.
His proposed reforms would shake up the country's strictly regulated labour market, allowing companies to increase working hours and make staff redundant without government approval.
The annual Economic Survey he presented to parliament has recommended private companies be allowed to provide passenger train services on the country's nationalised railways, privatisation of the coal industry, lifting of price controls on petrol, and allow foreign supermarkets to set up stores. Ministers are particularly keen to boost rural incomes and encourage investment to stop so much Indian farm produce rotting on the road to market.
Ministers are particularly keen to boost rural incomes and encourage investment to stop so much Indian farm produce rotting on the road to market.
[Torygraph Alert]
Exporters squeezed by euro strength The strength of the euro is forcing European companies to step up cost-cutting to compete with rivals from the US and elsewhere amid fears that it could slow their recovery when demand picks up. The euro, which has risen to $1.40 from $1.25 in March, was making life "difficult", Pier Francesco Guarguaglini, chief executive of Italian defence group Finmeccanica, told the Financial Times. "We have to survive in this situation . . . We have to reduce costs and increase efficiency." Economists are concerned that, even when demand picks up, the strong currency will penalise European groups, many of them reliant on exports. "It is going to weigh on the recovery," Julian Callow, chief European economist at Barclays Capital, said.
The strength of the euro is forcing European companies to step up cost-cutting to compete with rivals from the US and elsewhere amid fears that it could slow their recovery when demand picks up.
The euro, which has risen to $1.40 from $1.25 in March, was making life "difficult", Pier Francesco Guarguaglini, chief executive of Italian defence group Finmeccanica, told the Financial Times.
"We have to survive in this situation . . . We have to reduce costs and increase efficiency."
Economists are concerned that, even when demand picks up, the strong currency will penalise European groups, many of them reliant on exports.
"It is going to weigh on the recovery," Julian Callow, chief European economist at Barclays Capital, said.
Private equity set to become a weapon of mass destruction The world of private equity seems eerily becalmed. Logic suggests a lot of companies owned by private equity must be on the point of expiring under the weight of their debt. But the bankruptcy rate, though rising, is still historically low. It is as if the insanity of the bubble years had never happened. So when will the storm finally break? Any time now, it seems. Last year, the default rate in European leveraged loans - in effect, private equity debt - was under 5 per cent. So far this year, it is about 8 per cent. But for the full year, according to industry specialists, it could be a record 15 per cent. Repeat that next year, as is expected, and a third of European companies bought in the bubble years will have gone bust - many of them in the UK. As a weapon of corporate mass destruction, private equity's place in history seems assured.
The world of private equity seems eerily becalmed. Logic suggests a lot of companies owned by private equity must be on the point of expiring under the weight of their debt. But the bankruptcy rate, though rising, is still historically low.
It is as if the insanity of the bubble years had never happened. So when will the storm finally break?
Any time now, it seems. Last year, the default rate in European leveraged loans - in effect, private equity debt - was under 5 per cent. So far this year, it is about 8 per cent. But for the full year, according to industry specialists, it could be a record 15 per cent.
Repeat that next year, as is expected, and a third of European companies bought in the bubble years will have gone bust - many of them in the UK.
As a weapon of corporate mass destruction, private equity's place in history seems assured.
During his interview with ABC's This Week on Sunday, Vice President Joe Biden made what will be a much-discussed admission in the week ahead. The Obama administration, he said, had "misread" the extent of the economic catastrophe it inherited. "The truth is, we and everyone else misread the economy," declared Biden. "The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there." "We misread how bad the economy was, but we are now only about 120 days into the recovery package," the vice president said later in the interview. "The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money."
During his interview with ABC's This Week on Sunday, Vice President Joe Biden made what will be a much-discussed admission in the week ahead. The Obama administration, he said, had "misread" the extent of the economic catastrophe it inherited.
"The truth is, we and everyone else misread the economy," declared Biden. "The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there."
"We misread how bad the economy was, but we are now only about 120 days into the recovery package," the vice president said later in the interview. "The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money."
bold mine
Memeo to Washington; loads of people anticipated, you just didn't want to listen to anybody who said things you preferred not to hear. You know that and we know you know that. So enough with the bs already. People antipated but you didn't do your job. keep to the Fen Causeway
Now, Krugman, Stiglitz, De-Long, Shiller, Kuttner, Roubini, Baker, and even Wolf are the big kids of the "blog". They are the people who are considered "to know" .. all of them against the rational market Chicago-school bs,all of them warning against a huge shadow banking system, all of them supporting massive income redistribution and government intervention...
They are the serious guys... and by serious I do nto mean that the wing-nuts of the Post and edittorial page of WSJ take them seriously.. I mean that the people with money , with real money on the line look at them when they want to know if their asses will be saved. They are lsitened to when you want to know what to do to save the rich asses from a great depression.
A pleasure I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
Only, like, Krugman in his NYT op-eds?
Who are they trying to fool? A man of words and not of deeds is like a garden full of weeds; a man of deeds and not of words is like a garden full of turds — Anonymous
Paul Krugman Blog: What didn't the vice president know? (5 July 2009)
And when did he not know it? Seriously, the economy isn't doing all that much worse than a number of people warned was probable. And the whole political economy thing was, sadly, predictable
Seriously, the economy isn't doing all that much worse than a number of people warned was probable. And the whole political economy thing was, sadly, predictable
Your problem, professor Krugman, is that you're not "serious" enough. And neither are Jamie Galbraith, Dean Baker, Brad de Long, Nassim Taleb, Nouriel Roubini, Joseph Stiglitz... I mean, why does anyone need to listen to you unserious people when they can just listen to Goldman Sachs and its alumni? When Biden says "we and everyone else misread the economy" he means "we and everyone else that matters". When he says "[t]he truth of the matter was, no one anticipated, no one expected", he means "no one that matters". Get used to it - you may be the latest Bank of Sweden prize winner, a professor at Princeton and a columnist in the NYT, but you are "noone that matters".
I mean, why does anyone need to listen to you unserious people when they can just listen to Goldman Sachs and its alumni?
When Biden says "we and everyone else misread the economy" he means "we and everyone else that matters". When he says "[t]he truth of the matter was, no one anticipated, no one expected", he means "no one that matters".
Get used to it - you may be the latest Bank of Sweden prize winner, a professor at Princeton and a columnist in the NYT, but you are "noone that matters".
All of this is par for the course; the WSJ editorial page has been like this for 35 years. Nonetheless, it got me wondering: what do these people really believe? I mean, they're not stupid -- life would be a lot easier if they were. So they know they're not telling the truth. But they obviously believe that their dishonesty serves a higher truth -- one that is, in effect, told only to Inner Party members, while the Outer Party makes do with prolefeed. The question is, what is that higher truth? What do these people really believe in?
I mean, they're not stupid -- life would be a lot easier if they were. So they know they're not telling the truth. But they obviously believe that their dishonesty serves a higher truth -- one that is, in effect, told only to Inner Party members, while the Outer Party makes do with prolefeed.
The question is, what is that higher truth? What do these people really believe in?
Whenever you encounter "research" from the Heritage Foundation, you always have to bear in mind that Heritage isn't really a think tank; it's a propaganda shop. Everything it says is automatically suspect. Greg Mankiw forgets this rule, and approvingly (yes, it's obvious he approves -no wiggling out) links to a recent Heritage attempt to explain away Medicare's low administrative costs ... You should always remember: 1. Don't believe anything Heritage says. 2. If you find what Heritage is saying plausible, remember rule 1.
Whenever you encounter "research" from the Heritage Foundation, you always have to bear in mind that Heritage isn't really a think tank; it's a propaganda shop. Everything it says is automatically suspect.
Greg Mankiw forgets this rule, and approvingly (yes, it's obvious he approves -no wiggling out) links to a recent Heritage attempt to explain away Medicare's low administrative costs
...
You should always remember:
1. Don't believe anything Heritage says.
2. If you find what Heritage is saying plausible, remember rule 1.
