A week ago is was having an argument with two educated folks who put all the blame of the mortgage and credit situation on greedy bank employees while excluding those who had borrowed beyond their means. They used the following excuse: "regular people were taken advantage of, because here nobody has any financial culture". I balked at that. Where's personal responsibility in all this? One should at least try to be informed about whatever financial products are being offered to him. I believe many people here are too used to a paternalistic state.
I've dealt with NHS - all it does is shift profit from doctors to administrators. I'm not a big fan of that. First, people who analyze companies wouldn't be expected to analyze macro events - there are other people for that. Second, Taleb's book is interesting, but it's prediction is inherently unproductive - if you can't plan for black swan events, then you can't plan for black swan events. So what do you do then? Well............Taleb's entire business model is to keep going short on everything and hope eventually he'll hit a big drop. That's not a useful strategy for almost anyone else.
I think she was more on the development side of mathematical modelling for the economy as a whole, (inside her company I mean), and the connection between that bit and individual companies but we're going back a couple of decades... I can't remember, tbh. Haven't followed his investment history particularly. It was more his overview of recent events I found interesting. I suppose all it really tells us is what we already knew... that we need governments to manage their relationship to the business cycle and creation of money because the market can't be left purely to it's own devices.
Germany Fails to Meet Its Own Austerity Goals http://www.spiegel.de/international/germany/0,1518,820828,00.html Ruh-Roh!
Given the Fed's willingness to extent swap lines to European economies behaving stupidly, I'm very glad that our economic leaders have been willing to be global citizens in this crisis.
As I think I mentioned I was at a big conference last week and some key briefings were essentially thank god for china and BB CEOs from both sides of the Atlantic seem to have come to the conclusion that the political leadership in Washington and Berlin is incompetent or no longer functioning. A myth at the heart of this is that its all about lack of demand. The key reason people identified for sitting on cash was to protect against further recession and shocks. It literally is a confidence game. There are plenty of good investment opportunities around. Indeed the cash rich operators (like the sovereign funds) are mopping up. One thing everyone is still waiting for is for all the vulture opportunities to come on stream - but the banks are sitting on lots of underwater assets. And so you come full circle to why aren't the banks functioning. We simply cannot export our way out of all this with recessionary policies
I think that's a giant red herring. The political leadership in Washington saved the banks, saved the car companies, saved Fannie and Freddy, saved AIG and has let Bernanke do whatever he wants from a policy perspective (including with Europe) without meddling. The awful trope that it's all about the long term entitlement growth (and the reason for the stupid S&P downgrade) has nothing to do with the economy's operation today. I think the Germany situation is different - Merkel is constrained by the unwillingness of much of the German public to help the rest of Europe. Of course, the rest of Europe hasn't always helped itself by doing some dumb things (Greek hairdressers retire early due to hazardous occupation???), but most of which isn't really anyone's fault (Spain's capital imbalances during the boom).
I think you'd have to be fair and say that the rest of 'Northern' does not exactly have a better track record in solidarity in today's crisis, especially when you take into account which countries have a populist right-wing-movement, and which do not. Personally I am disappointed by the lack of solidarity that exists here, too, but I think it also has to do with the unwillingness or inaptitude of most politicians to ask for this kind of solidarity, or to even stick their neck out for solidarity (like Schröder basically did with the social reforms he started). Not sure if social democrats head of states would have been more likely to act that way than the conservatives that have been in power all over ('rich') Europe, but the conservative track record so far leaves much room for improvement. On the other hand, there has just been a study that shows that one quarter of the German workforce makes a job that is considered to have very low pay (I think 7€ or below per hour, but am too lazy to look it up), so coupled with Germany failing it's own austerity goals the situation here is not all that great for most Germans. For most German CEOs, sure, and it is much much better than the situation in Greece, Spain, or Ireland, mind you, but still... I still am off the opinion that unconditional basic income for all Europeans would solve most of those problems, and should be easily financable by taxes in luxury products.
We aren't talking about 2008-10, we are talking about the year we just had and the year to come. The specifics is that there is little fiscal leadership because Congress cannot agree to get anything done. The view seems to be that there is again a weak recovery underway more despite the lack of fiscal leadership than because of anything enacted. The risk is that the US goes for Austerity. Hence the 'thank god for BB meme'. On balance I think I agree. Well again there are real problems - no one denies that - but the general view is that Austerity is a deeply flawed concept that Cameron, Merkel et al seem wedded to.
Ancient orator Cicero trying to discredit Greek witnesses at a Roman trial: "And what witnesses are they? In the first place, I will say that they are Greeks, (that is the case of them all). Not that I, for my own part, would be more inclined than others to refuse credit to that nation; for if ever there was any one of your countrymen not averse to that race of men, and proving himself so by zeal and goodwill, I think that I am that man, and that I was so even more when I had more leisure; but there are in that body many virtuous, many learned, many modest men, and they have not been brought hither to this trial. There are also many impudent, illiterate worthless persons, and those I see here, impelled by various motives. But I say this of the whole race of Greeks; I allow them learning, I allow them a knowledge of many arts; I do not deny them wit in conversation, acuteness of talents, and fluency in speaking; even if they claim praise for other sorts of ability, I will not make any objection; but a scrupulous regard to truth in giving their evidence is not a virtue that that nation has ever cultivated; they are utterly ignorant what is the meaning of that quality, they know nothing of its authority or of its weight."
We called him Schicero (from schizophrenic) in our last year of Latin when we had to translate his texts.
Of course, ironically, Cicero modified his speeches for publication ex post facto. That being said, the above was probably a generous view of Greeks from a Roman perspective, who considered them lazy good for nothing overly intellectual philosophizers (when they weren't enslaving them).
So the German pirate party seems to have made it into the political circle with the election results in Berlin and Saarland, the election campaigns for Noth-Rhine-Westfalia and Schleswig Holstein, and the constant good polling (11% at the last poll). Many people say that this success partly comes down to frustration many voters feel towards the established parties, which is sort of ironic given how much better off Germany is when compared to much of the rest of Europe (even though most of the new employment after 2000 has been created in the low-wage sector, so compared to the Netherlands and Scandinavia most Germans are worse off). If you look at Spain, Greece, Italy, and the Uk though, where voter dissatisfaction is much higher it just shows that a system trading stability for easyness of access to democratic decision making makes it very hard for voters to express frustration at all, or to punish corruption (be it based on power or money). I think for Europe it is a good thing, since the Pirate Party movement is inherently internationally, much more so than the (liberal in the European sense of the word) FDP who seem to be dying at the moments.
I think phenomena like the Green party in the past or the Pirate party today that grow out of single issues like the environmental movement of the late 70s and early 80s or the online-civil-rights movement (for the lack of a better word) today are surely driven by dissatisfaction with established political powers regarding that particular issue, but as such they're more a result of prosperity than of poverty, so it's no surprise that they're flourishing in a place like Germany. Both are luxury problems if you will and I don't necessarily mean that in a negative sense (though the Greens have crosse the border to decadence long ago IMHO). It's just that when you have to fear for your livelihood, stuff like ecology or personal rights are further down the list of priorities. On top of that we have a political system that is pretty open to new parties, as opposed to places like the US or the UK with their majority voting systems. And even when it comes to financing your party, Germany is probably more accessible than most other places (though that's just a guess). At the same time, I would say that rumors of the FDP's death are a bit premature. Sure they're ailing, for two reasons: 1) Angela Merkel 2) The inability of the FDP leadership to deal with Angela Merkel It's really incredible. The FDP was in a very strong position after the last elections but they were amateurs at converting that strength into actual political capital. The only policy they got through was the tax break for hotels which is probably the one issue their voters would have preferred to do without. Other than that they have not been able to get anything through, Merkel and the CDU blocked everything while pushing through policy after policy that go against liberal convictions, making the FDP her bitch. Only now does the FDP leadership start to get this by pushing through Gauck as our new president as well as by denying a bailout for the bankrupt Schlecker drug store chain. You're right that this may be too little, too late. They're now in such a weak position that it will be more difficult than ever to get their policies past the big CDU. On the other hand, this crisis could bring forth new personnel that is finally up to the political task. I think the FDP will ultimately emerge alive and well. Though one thing is also painfully obvious: The FDP has forfeited its chance to become a major political player after its strong result at the last elections. Had they followed through by playing hardball with Merkel, they might have been able to remain that strong or even gain more. That ship has sailed for the foreseeable future. The tactical errors made by the FDP leadership have been staggering, starting from the very beginning with the coalition treaty where the CDU schooled the FDP school-boys up to the point when they reorganized their leadership after imploding at one poll after the other. For example, it was incredibly stupid to sack Westerwelle as party leader but keep him as foreign minister. Westerwelle was a great party leader where a shrill demeanor can be very helpful, but a terrible foreign minister where you have to be subtle. So if anything they should have done the opposite, keep him as party leader and give him a job back at home where he's more visible. Or if that was not an option then get rid of him completely. But the resolution the FDP got was the worst of both worlds. And his successor Rösler might just be the blandest vice Chancellor Germany has ever had (and we have had Klaus Kinkel). If the FDP and Westerwelle had been smart, they would have forfeited the foreign ministry from the very beginning. I know it always was Westerwelle's dream job, but they should have converted their strength at the election to something more relevant, like a combined ministry for finance- and economy. That not only would have played to their strength but it would also be a sign for a serious political player. Now they're in a position where their existence doesn't seem to make any difference any more, which is of course deadly for a party. But as I said, I think the FDP will eventually survive this, it's just too bad that this whole episode basically dooms the FDP to being a niche player for the foreseeable future.
I can agree with most of what you wrote. I did not mean the Pirate Parties as an answer to the problems troubling those countries at the moment, but merely as an example to show how inaccessible their systems are (though it is likely a pirate party gaining power in those countries would strive to change that, transparency and accessibility of all, to be fair). I did not write that the FDP is dead. My 'is dying' comment was meant to show that they are in a life-or-death (and by death I mean sliding into obscurity) moment. We'll see if Lindner can save them in NRW, I think he is a bit the FDP's Oskar Lafontaine, but that may be my personal antipathy speaking. They do have a much bigger supporter base than the Pirates, but so do the Freie Wähler for example.
http://economia.elpais.com/economia/2012/04/16/actualidad/1334590509_507539.html#sumario_4 Well done Argentina.
At least she acts in her own people interest...can't say the same about Spain's and especially Italy's governments. Unfortunately I now see the EU forcing member states to freeze strategic Argentinian assets on European soil...hopefully Italy, as usual when friend nations who provide us with food or oil and host Italian interests (Lybia, Iran, Syria, Russia, Kazakhistan, Venezuela) are involved, refuses to co-operate I hope Spanish people support Argentina's decision and pressure their own government into nationalizing Repsol.