Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Friday Open Thread

by afew Fri May 14th, 2010 at 10:27:25 AM EST

Keep talking


Display:
<lobs a ticking grenelle 2 into recent comments>

because it's Friday, and the countdown to the DFB Pokal nears completion, afew has graced us with an early thread.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Fri May 14th, 2010 at 10:34:25 AM EST
It's too hot for TV here - 27 C in the shade. I'm running in from the patio to cool down ;-) sweat - post - sweat - post - repeat as required.

You can't be me, I'm taken
by Sven Triloqvist on Fri May 14th, 2010 at 10:40:31 AM EST
[ Parent ]
No more than 10° here, and raining all the time.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 14th, 2010 at 10:59:37 AM EST
[ Parent ]
For 2 weeks now, temperatures have been consistently below the mean.

And I went to check on this. Using the website of the KNMI, I estimate that during the past 13 days, we've had a mean deviation of the mean temperatures 3.9 degrees.

Yesterday was 6.5 degrees colder than May generally is. Today is not much better.

I'm sitting in the sun, and am cold. Bah.

by Nomad on Fri May 14th, 2010 at 12:15:44 PM EST
[ Parent ]
Same thing around Paris; a good 5 to 8 degrees below normal for May. Return to seasonal temperatures not expected until a week from now...
by Bernard on Fri May 14th, 2010 at 12:24:12 PM EST
[ Parent ]
This is what's called the "Saints de glace" - ie there's a few days in May that seem to be quite often much colder than the norm.

wiki says it's May 11-13.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 01:41:59 PM EST
[ Parent ]
Same here - called "die Eisheiligen" - tomorrow is the last one "die kalte Sofie:

  Eisheilige - Wikipedia

  1. Mamertus - 11. Mai
  2. Pankratius - 12. Mai
  3. Servatius - 13. Mai
  4. Bonifatius - 14. Mai
  5. Sophie - 15. Mai

Es handelt sich bei den genannten Heiligen um Bischöfe und Märtyrer aus dem 4. und 5. Jahrhundert.

I sure hope that after the 'cold sofie' it is getting warmer again - the average here as been around 7°-10° and cloudy and rainy.

by Fran (fran at eurotrib dot com) on Fri May 14th, 2010 at 01:59:50 PM EST
[ Parent ]
So far, the few cold days have been from 1st to 14th.

The forecast solemnly promised today would be warm which, fleetingly, it was this morning. But then the wind got up and the cloud rolled over and we're back to march. Bah !!!

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Fri May 14th, 2010 at 02:04:14 PM EST
[ Parent ]
we're supposed to get a whole week of sun starting monday.

sure would be very welcome...

glug, glug.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri May 14th, 2010 at 06:31:46 PM EST
[ Parent ]
Global warming is bunk!

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 01:13:14 PM EST
[ Parent ]
Is this due to the volcanic ash?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 01:13:33 PM EST
[ Parent ]
i've been wondering the same thing. feeling gritty eyed for days, slightly better after rains, which are still stormy, copious and frequent.
still burning wood to keep the air in the house dry and warm water, aargh.

the combo of fits of sun and starts of rain have created a juiciness in all the forest and pasture greenery that reminds me of hawaii.

struggling to learn Logic music software, not easy for a non-geek like moi...

good rainy day passatempo.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri May 14th, 2010 at 01:32:41 PM EST
[ Parent ]
No ash here, but cold and rainy. Snow, even.

In a week, everybody will be complaining about how hot it is...

by asdf on Fri May 14th, 2010 at 10:31:40 PM EST
[ Parent ]
Nice to see that the markets are beginning to factor in the split-up of the Bundesland, as the former DDR returns to the Ruble.

/snark

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Fri May 14th, 2010 at 10:36:37 AM EST
what they think of having their currency gain 20% in value against their main competitor in just a few weeks? What will happen to the Chinese industries which see their biggest market become totally unprofitable for them, even with their low costs, because their prices have just been jacked up by 20% (or their income cut by the same)?

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 11:35:36 AM EST
[ Parent ]
A good question, and strangely, I asked that of a Shanghai banker (hedge fund #57) yesterday regarding a discussion of wind machine exports.  She thought they would raise prices and cut wages some if necessary, but she said they could underwrite low margins for a while.

the kool-aid tastes so sweet at first.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Fri May 14th, 2010 at 11:48:49 AM EST
[ Parent ]
Ahem, cut prices and cut wages.  stay on the ball, CH.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri May 14th, 2010 at 01:02:24 PM EST
[ Parent ]
Argh, right the first time.  Perhaps it's best to comment in one thread at a time.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri May 14th, 2010 at 01:11:00 PM EST
[ Parent ]
The Chinese are pretty adept at running this cut the wages show, but they've been forced to move further inland from the coast to get "workers."  Turns out that there's a "shortage" of people willing to travel thousands of kilometers from home, live in decrepit factory housing, be treated like shit, and work 80+ hours a week for the pittance these bastards have the gall to call a wage.

Late in 2008, early 2009, there was some very effective labor organizing in Guangdong, but firms have been closing factories there and moving further inland, or out to Vietnam.  The latest trick to prevent labor organization in Southern China has been hiring ethnic minorities from the West, bringing them in to factories, and stirring up ethnic conflict to cast worker's eyes away from class issues. It's Rosa Luxembourg on the Pearl River.  The explosion of ethnic violence against Uighurs that occurred in Shaoguang in Guangdong, and was reciprocated by them to Han victims in Xinjiang got its start on the shop floor.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri May 14th, 2010 at 02:52:24 PM EST
[ Parent ]
However, its not so much that the market becomes entirely unprofitable as that the market does not at the one hand underwrite rapid capital expansion while one the other hand offer substantial opportunities for growing market share through price competition.

Without market share expansion, the Chinese are stuck with the rate of economic growth of the target market, and that's an unappealing thing to be stuck with at the moment.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri May 14th, 2010 at 12:40:09 PM EST
[ Parent ]
By Tommaso Padoa-Schioppa in the FT: The euro remains on the right side of history


Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 11:33:28 AM EST
FT.com / Comment / Opinion - Euro remains on the right side of history
The crisis came and the army advanced. Its battalions were thousands of dealing rooms, connected into a global network acting round the clock. Its targets were selected by the intelligence of three rating agencies. Its morale was sustained by an unwavering faith: that we, the market, are those who know best.

What they did not understand was that, in our era, the dynamics of history consist precisely of the search - largely unguided, often painful but inexorable - for an optimal distribution of power along the scale of ever-wider human aggregations, which are tied by common interests more than by tribal identity. The optimality can be gauged with a simple criterion: the consistency between the span of government and the "common good" entrusted to it, be this a public garden in the city, the administration of justice in the state, or climate change on the planet. Seen in this light, the advent of the euro is just an episode - a most significant one - in the building of a post-Westphalian order.



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Fri May 14th, 2010 at 12:05:42 PM EST
[ Parent ]
University of Puerto Rico:
An overwhelming majority of University of Puerto Rico Río Piedras campus students ratified in a general assembly Thursday the indefinite strike vote that has kept the state-run academic institution shut for 23 consecutive days.

The assembly, which had been endorsed by UPR President José R. De la Torre, Río Piedras campus Chancellor Ana R. Guadalupe and Board of Trustees president Ygrí Rivera, was initially questioned by the striking students who considered it a "desperate attempt" by university administrators to coerce the students into lifting the strike without considering their demands.

"They tried to ambush us. Today we went to their assembly, at a place of their choosing, in their own terms, and we won. This clearly demonstrates our strength," Student Negotiating Committee member Giovanni Roberto said.

"They should negotiate. They should stop being so intransigent," added the student leader.



"Beware of the man who does not talk, and the dog that does not bark." Cheyenne
by maracatu on Fri May 14th, 2010 at 11:46:26 AM EST
From Google translate:

Those who in recent weeks have talked about the University of Puerto Rico since the absolute misinformation and especially to those who may think that the University of Puerto Rico is a burden for the country, I present the Rio Piedras Campus University of Puerto Rico, the University of the unspoken, the university where he studied and where I work 20 years ago.


"Beware of the man who does not talk, and the dog that does not bark." Cheyenne
by maracatu on Fri May 14th, 2010 at 11:58:15 AM EST
[ Parent ]
For some reason - and I suspect a malicious conspiracy of clients - I have about a week's worth of work to get done before Monday evening.

Including a redesign of a site that hasn't even been launched yet. Which we discovered we had to do when the client emailed us a new logo they'd had designed ...

by Colman (colman at eurotrib.com) on Fri May 14th, 2010 at 11:47:45 AM EST
Consulting is FUN!

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri May 14th, 2010 at 11:49:34 AM EST
[ Parent ]
Yeah.
by Colman (colman at eurotrib.com) on Fri May 14th, 2010 at 12:00:17 PM EST
[ Parent ]
ahh.

your client's father's brother's nephew's cousin's former roommate had a dream.

Diversity is the key to economic and political evolution.

by Cat on Fri May 14th, 2010 at 12:18:59 PM EST
[ Parent ]
Ah. Product Engineering!  How I miss thee!

not

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri May 14th, 2010 at 03:40:32 PM EST
[ Parent ]
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 11:54:29 AM EST
All just a drop in the ocean

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Fri May 14th, 2010 at 02:10:22 PM EST
[ Parent ]
Flow now estimated at 70,000 barrels per day. At that rate, it has already put out half of what the Ixtoc did in 9 months.

And apparently the methane gas freezes when it comes out of the pipe, so the oil doesn't have the buoyancy to get to the surface. The visible spill is therefore only a tiny fraction of what is really going on. Since deep water currents are slow (about 1/10 of surface current speed), it will take months before the full effect becomes visible. The west coast of Florida is probably in big trouble.

Too bad for the 10,000,000 British tourists that haunt Tampa.

by asdf on Fri May 14th, 2010 at 10:37:06 PM EST
[ Parent ]
I thought it was 1,000... no, wait... 5,000... no, wait, 25,000?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Sat May 15th, 2010 at 02:43:59 AM EST
[ Parent ]

A gameplan for getting to 100% renewables

Switching to renweable power, as we frequently hear, is difficult. It's unreliable, expensive, requires complicated changes to infrastructure, regularly falls foul of nimby-ism, and somewhat ironically, environmental problems.

At the same time, fossil fuels are not looking like being an easy option forever. Even if one overlooks climate change, other problems of pricing, supply, and geopolitics are increasingly apparent.

And now PriceWaterhouseCoopers has come up with a sketch [PDF] of how Europe and North Africa could get 100 per cent of their electricity from renewable energy by 2050.



Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 12:06:37 PM EST
144pp "sketch", granted half of that is appendices

Three objectives currently underlie European energy policy --competitiveness, security, and decarbonisation. They form the starting point for our 2050 vision. An ambitious move to renewables would be a huge and dramatic way of fulfilling the goal of decarbonising the power sector. If we are to deliver competitiveness then all customers must be able to continue to access as much electricity, at affordable prices, as they need. Given constraints in the land area available in Europe for renewable energy, in order to ensure competitiveness, a vision of 100% renewablew will require Europe to import some of its renewable power from North Africa and, therefore, the development of substantial renewable supply from North Africa is a key part of our vision....

The current power systemes of Europe and North Africa are very different in most respects, mainly due to the large differences in economic development and the abundance of oil and gas in North Africa. European power consumption is 3300 TWh/a, whereas the five north African countries have a cumulatied power demand of 180 TWh/a, of which almost 100 TWh/a is consumed and produced in Egypt. North Africa, excluding Egypt, thus has a power consumption that is lower than the consumption in the Netherland alone...

2010: total 3480 TWh/a EU-NA, of which 5% North Africa

In 2050, we envisage that the EU-NA power system will have a total electricity consumption of at least 5000 TWh/a, with approximately 25% of this demand in North Africa and the remainer in Europe. In total, only 60% (3000 TWh/a) of the system-wide electricity supply is produced in Europe, whereas 40% (2000 TWh/a) is produced in North Africa. Thus, a large fraction --20%-- of European electricity is produced in North Africa....

2050: total 1250 TWh/a consumption by North Africa, representing an 594% increase over the next forty years.

A pan-European, cross-Mediterranean SuperSmart Grid is the key enabling development for our vision of 100% renewable electricity generation in Europe and North Africa by 2050. The unification of the European and North African markets would require an overlay HVDC Super Grid, a strongly reinforced HVAC grid and the area-wide introduction of Smart technologies and Smart Grids. All bottlenecks at artificial obstacles, such as national or legislative borders, would need to be removed. In particular, the North African HVAC grids and interconnections would need to be expanded and all North African off-grid electrification schemes integrated into the synchronous EU-NA system (except UK and Ireland, which would still only be connected to the continent via the HDVC transmission grid).

Desertec. Resistance is futile.

Diversity is the key to economic and political evolution.

by Cat on Fri May 14th, 2010 at 01:05:22 PM EST
[ Parent ]
A government agency for Serious people.

The Serious Organised Crime Agency (SOCA) is a non-departmental public body of the United Kingdom government and a national law enforcement agency in the United Kingdom.

A consequence of the Serious Organised Crime and Police Act 2005, SOCA formally came into being on 1 April 2006 following a merger of the National Crime Squad, the National Criminal Intelligence Service (elements of which were incorporated into AVCIS), the National Hi-Tech Crime Unit (NHTCU), the investigative and intelligence sections of HM Revenue & Customs on serious drug trafficking, and the Immigration Service's responsibilities for organised immigration crime. The Serious Fraud Office remains as a separate agency.



And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri May 14th, 2010 at 02:55:56 PM EST
[ Parent ]
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri May 14th, 2010 at 03:51:01 PM EST
[ Parent ]
UPDATE 2-ECB data obscures government bond buying evidence | Reuters
FRANKFURT, May 14 (Reuters) - The European Central Bank camouflaged the evidence of its government bond buying activities on Friday, masking its actions and intentions from markets in a bid to maximise their potency. In its daily breakdown of market operations, the ECB scrambled the extent of its recent bond purchases by folding the total into its estimate of autonomous (special) factors that impact the euro zone banking system's liquidity needs.

It put the combined figure at 339.63 billion euros. That compares to the 348.8 billion estimation of autonomous factors on Thursday, and comes out roughly 12 billion euros below the 352 billion euros the figure has averaged out at since the start of the year.

"They have just made it impossible to actually say how much they have bought," said RBS economist Nick Matthews. "Some won't like the lack of transparency but it's actually a smart move. They are keeping an element of mystery to get the biggest bang for their buck, or rather euro."

From the ECB's monetary policy rules and procedures (pdf):

ANNOUNCEMENT OF BILATERAL OPERATIONS

Bilateral operations are normally not announced publicly in advance. In addition, the ECB may decide not to announce the results of bilateral operations publicly.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 14th, 2010 at 12:24:34 PM EST
And he's OUT!

Dutch minister resigns after affair scandal | Radio Netherlands Worldwide

Caretaker Deputy Defence Minister Jack de Vries has resigned. He is leaving politics and will not contest the 9 June election.

He was number 15 on the Christian Democrat list of candidates for the poll. However, his position has been compromised by recent news of an extra-marital affair with a female worker in his department.

He says "continuing media interest" has put unreasonable pressure on those around him, explaining that the scandal has led to his no longer being able to do his job properly.

This morning I was hoping he'd stay a bit longer. For kicks and an extra dose of ridicule. Shame CDA, shame.

by Nomad on Fri May 14th, 2010 at 12:25:29 PM EST
The week started with the biggest rally evah in the Spanish stock market, and it ends with the biggest drop of the year. People commenting on the news invariably use whatever the latest market movement was as evidence for their pet political economy theory.

Why can't we just acknowledge that the markets have the attention span of a ferret on crack and just ignore them for the purpose of public policy?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 01:21:07 PM EST
"La politique de la France ne se fait pas à la Corbeille"

(la Corbeille being the nickname of the Paris stock exchange)

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 01:43:42 PM EST
[ Parent ]
News flash: de Gaulle is long dead.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 01:47:46 PM EST
[ Parent ]
So are Winston Churchill and Shakespeare, but they both said a few good things in their time.

I wish a few more politicians stopped thinking that the bankster's tail should wag the economic dog.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Fri May 14th, 2010 at 02:13:27 PM EST
[ Parent ]
so are Keynes, Veblen and Minsky.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 03:29:53 PM EST
[ Parent ]
That'll teach them to think of the long run.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri May 14th, 2010 at 03:52:06 PM EST
[ Parent ]
Crackhead ferrets the world over object to comparisons with stock traders.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 02:17:03 PM EST
[ Parent ]

They're mad as hell & they won't take it any more.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri May 14th, 2010 at 03:09:30 PM EST
[ Parent ]
LOL

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 03:16:28 PM EST
[ Parent ]
If I was a ferret I wouldn't attack a grizzly either.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Fri May 14th, 2010 at 03:28:13 PM EST
[ Parent ]
Cinco Dias: DEFLATION!

The Consumer Price Index (CPI) rose 1.1% in the month of April over the previous month, which sets the year-over-year rate at 1.5%, 1 point higher than March, according to a report released today by the National Statistics Institute. In this manner, the year over year inflaction rate rose to its highest since November of 2008.  The core inflation rate (excluding energy and food items) returned to negative rates (-0.1%) for the first time since August 1986, at which time it began to be calculated.

Translation mine

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri May 14th, 2010 at 02:30:26 PM EST
[ Parent ]
If only David Cameron were a Spaniard....

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 03:16:07 PM EST
[ Parent ]
Why can't we just acknowledge that the markets have the attention span of a ferret on crack and just ignore them for the purpose of public policy?

We should make one of these, but instead of a UFO, it would have a stock chart going up.

Below it would be that pithy Galbraith quote:

However, the time had come, as in all periods of speculation, when men sought not to be persuaded of the reality of things but to find excuses for escaping into the wide new world of fantasy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri May 14th, 2010 at 04:32:02 PM EST
[ Parent ]
What was that Galbraith quote about the mystery of markets always clearing?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 05:18:35 PM EST
[ Parent ]
"Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell. October 24, 1929 showed that what is mysterious is not inevitable."

- J.K. Galbraith, The Great Crash of 1929

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri May 14th, 2010 at 05:25:13 PM EST
[ Parent ]
Debt Crisis Not Spurring More Tax

The debt crisis in Europe will not necessarily have a direct impact in Finland's public economy. According to some experts, the crisis may actually be of indirect benefit to the country. A weaker euro and low interest rates are expected to boost economic recovery.


You can't be me, I'm taken
by Sven Triloqvist on Fri May 14th, 2010 at 01:21:19 PM EST
that a weaker euro is actually a good thing?

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri May 14th, 2010 at 01:42:51 PM EST
[ Parent ]
I believe they could have read it here much earlier ;-)

There are downsides, but escalation of exports due to a weaker euro gives instant gratification on three sore issues: financial lubrication in the form of export insurance, guarantees etc, jobs retained or increased, and of course more taxes into the coffers, so fewer cuts in services and a stronger government. Not to mention the spending trickledown. Looks vin-vin to me. Celebrations all round.

You can't be me, I'm taken

by Sven Triloqvist on Fri May 14th, 2010 at 04:29:24 PM EST
[ Parent ]
Yes, more Porsches for us 'mericans.
by asdf on Fri May 14th, 2010 at 10:38:39 PM EST
[ Parent ]
According to Reuters, they've found out who triggered the US stock markets crash last week.

Reuters: Exclusive: Waddell is mystery trader in market plunge

A big mystery seller of futures contracts during the market meltdown last week was not a hedge fund or a high frequency trader as many have suspected, but money manager Waddell & Reed Financial Inc, according to a document obtained by Reuters.

Waddell sold on May 6 a large order of e-mini contracts during a 20-minute span in which U.S. equities markets plunged, briefly wiping out nearly $1 trillion in market capital, the internal document from Chicago Mercantile Exchange parent CME Group Inc said.

The e-minis are one of the most liquid futures contracts in the world, providing holders exposure to the benchmark Standard & Poor's 500 Index. The contracts can act as a directional indicator for the underlying stock index.

Regulators and exchange officials quickly focused on Waddell's sale of 75,000 e-mini contracts, which the document said "superficially appeared to be anomalous activity."

Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said in congressional testimony on Tuesday that it had found one sale was responsible for about 9 percent of the volume in e-minis during the sell-off in the U.S. markets.

Gensler said there was no suggestion that the trader, whom he did not identify, did anything wrong in only entering orders to sell. Gensler said data show that the trades appeared to be part of a bona fide hedging strategy.

by Magnifico on Fri May 14th, 2010 at 02:40:37 PM EST
Okay, this is my misunderstanding. This happened during the crash, not the trigger. Mind too preoccupied to post clearly. Mea culpa.
by Magnifico on Fri May 14th, 2010 at 02:42:18 PM EST
[ Parent ]
Who's gonna 'fess up to being the person who accidentally nearly kicked Western Capitalism over ?

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Fri May 14th, 2010 at 02:43:17 PM EST
[ Parent ]
Jesse's Café Américain is really blasting fiat currencies in favor of metals this week...

"a growing revulsion towards paper assets that would mark a sea-change in the world economy, and the beginning of the end for the dollar reserve currency."

I found interesting his recalling Greenspan's "Gold and Economic Freedom" 1966 essay. Here's Greenspan:

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Jesse concludes:

Given his Randian audience and the mood at the time, it is interesting that Greenspan defines the culprits in the scheme of fiat monetization as 'welfare statists.' How ironic, that over a period of time there is indeed a group of welfare statists behind the latest debasement of the currency, the US dollar, but the recipients of this welfare are the Banks and the financial elite, who through transfer payments, financial fraud, and federally sanctioned subsidies are systematically stripping the middle class of their wealth. Perhaps they decided that if you cannot beat them, beat them to the trough and take the best for themselves until the system collapses through their abuse.

It would seem the Randians, such as Greenspan, destroyed the dollar (and gunning for the euro) on purpose to 'prove' their point. Anointing Alan "fiat currency is a crock" Greenspan to the U.S. Fed, is like putting the Republican "government cannot work" Party in charge of the U.S. government -- self fulfilling prophecies.

by Magnifico on Fri May 14th, 2010 at 02:59:26 PM EST
I don't really understand his argument.  The dollar goes down against gold, therefore fiat currencies are doomed?  The whole point of fiat currency is to end the nonsensical tie to gold so that we weren't choking the economy to death with high interest rates and deflation as the Alan Greenspans of the world wish we would.

He seems to reject Greenspan while pimping many of the same ideas that lead people to Greenspan's persuasion.

I may be reading him wrong, granted, so feel free to correct me.  It just sounds a lot like the crazy libertarian "Buy gold, ammo and canned food!" thing.

Particularly among traders, there's an unhealthy obsession with gold and a lack of understanding of money.  I think reports of the death of fiat currencies -- including the dollar and euro -- are greatly exaggerated.  They surface whenever the economy is in crisis.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 03:53:46 PM EST
[ Parent ]

There are good practical reasons why buying physical gold is stupid. Just like having a public vegetable garden is stupid - if TSHTF, it makes you target number one.

So - ironically - gold is only valuable as long TSDHTF and civilisation continues to function.

But it's really not a bad investment during a cyclic meltdown.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri May 14th, 2010 at 04:15:38 PM EST
[ Parent ]
Exactly.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 04:43:54 PM EST
[ Parent ]
...adding: Although I agree entirely about the insanity of putting people in charge of entities they are opposed to the very existence of.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 04:01:00 PM EST
[ Parent ]
Seems to me that if you're going to get into the metals market, the thing to do is choose something where the majority of the market isn't made up of Indian brides buying jewelry...
by asdf on Fri May 14th, 2010 at 10:41:48 PM EST
[ Parent ]
On the contrary, there's always going to be a growing supply of Indian brides wanting to buy jewellery.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Sat May 15th, 2010 at 02:38:41 AM EST
[ Parent ]
My understanding was that there was a worrying tendency to cut the supply of Indian brides quite early, like before birth..

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Sun May 16th, 2010 at 02:44:13 PM EST
[ Parent ]


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