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David Frazer said this in my lj comments; it deserves its own post.

Chocolat's contracts expired in February, and Melanie has given an interview to Kpopalypse.

To summarise, they never earned any money, the CEO was useless, the staff constantly pressured them to work harder and lose weight, and Melanie became depressed and began self-harming. And after thinking up the biracial gimmick the CEO decided that Melanie was "too American" and needed to look and behave like a proper Korean girl.
The interview does speak for itself. I'll add here that Melanie's whomp of a wail of "I want it all, all or nothing" in "I Like It" — a song she felt nothing for — showed right off that she had major talent. Even before that, in her narration of the first ChoColat publicity clip she was easily alive and playful in front of the camera. So, was management entirely obtuse, given that they picked Melanie to narrate right at the get-go, and had her loud and highlighted on the second single? Also, management chose good songs every time (i.e., songs I like), which is extraordinarily rare, and for all we know the girls themselves would have chosen worse.

So, we don't know management's own view of this, or the other girls': Still, if you're choosing performers because they're different, it seems lunkheaded to then try and squash down the differences. And if your training technique is psychologically backfiring on one of your talented singers, you should try to change the technique, right? (Yes, I realize this isn't so easy or even always possible when there's more than one performer involved, with each potentially responding differently to the coaching but all more or less needing to be given the same rules. Still...)

Also — I don't know this and obviously haven't done the research — but I had the impression back in 2011 that Korea was developing a body of case law that said that if a youngster signs a 7-year contract at age 12 or 15 or something and she subsequently sues to get out of the contract, the courts will back her and invalidate the contract. Of course, having a right to sue doesn't make actually doing so emotionally or financially feasible, or protect her from getting blackballed for it.
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This long post by Steve Randy Waldman has been getting attention in the econ blogosphere and is a slamming bit of writing that's also clear and coherent and seems to explain a lot.


The two money quotes, so to speak:

With respect to Greece, the precise thing that European elites did to set the current chain of events in motion was to replace private debt with public during the 2010 first "bailout of Greece." Prior to that event, it was obvious that blame was multipolar. Here are the banks, in France, in Germany, that foolishly lent. Not just to Greece, but to Goldman's synthetic CDOs and every other piece of idiot paper they could carry with low risk-weights. In 2010, the EU, ECB, and IMF laundered a bailout of mostly French and German banks through the Greek fisc. Cash flowed into Greece only so it could flow out to rickety banks. Now, suddenly, the banks were absolved. There were very few bad loans left on the books of European lenders, everyone was clean, no bad actors at all. Except one. There were the institutions, the "troika," clearly the good guys, so "helpful" with their generous offer of funds. And then there was Greece. What had been a mudwrestling match, everybody dirty, was transformed into mass of powdered wigs accusing a single filthy penitent (or, when the people with their savings in just-rescued banks decide to be generous, a petulant misbehaving child).

For the record, my sophisticated hard-working elite European interlocutors, the term moral hazard traditionally applies to creditors. It describes the hazard to the real economy that might result if investors fail to discriminate between valuable and not-so-valuable projects when they allocate society's scarce resources as proxied by money claims. Lending to a corrupt, clientelist Greek state that squanders resources on activities unlikely to yield growth from which the debt could be serviced? That is precisely, exactly, what the term "moral hazard" exists to discourage. You did that. Yes, the Greek state was an unworthy and sometimes unscrupulous debtor. Newsflash: The world is full of unworthy and unscrupulous entities willing to take your money and call the transaction a "loan." It always will be. That is why responsibility for, and the consequences of, extending credit badly must fall upon creditors, not debtors. There is one morality tale that says the debtor must repay, or she has sinned and must be punished. There is another morality tale that says the creditor must invest wisely, or she has stewarded resources poorly and must be punished. We get to choose which morality tale we most use to make sense of the world. We do, and surely should, use both to some degree. But if we emphasize the first story, we end up in a world full of bad loans, wasted resources, and people trapped in debtors' prison, metaphorical or literal. If we emphasize the second story, we end up in a world where dumb expenditures are never financed in the first place.
There were several comments challenging his contention that "In 2010, the EU, ECB, and IMF laundered a bailout of mostly French and German banks through the Greek fisc. Cash flowed into Greece only so it could flow out to rickety banks." Here is his response:


Of course, as I've said often, I'm not an economist and don't have the knowledge or ability to truly evaluate such arguments. That Waldman’s explanations resonate with me is actually not a good reason to think they're right, in fact is a warning light. Not that it’s a reason to think his explanations are wrong, either. But one of the things that resonates is that the villains in Waldman’s story, the European policy and business elites, created and chose a story that resonated with them and that gave them a villain and scapegoat and simultaneously absolved themselves of the responsibility for examining what they themselves had done and for changing what they’re now doing. The psychology behind their story choice isn’t unlike mine, though I’m not an actor in this story and my self-interest is purely psychological. I’ll also quickly point out that Waldman is emphatically not saying there were no other bad actors, or, for that matter, that there was never any idealism or genuine concern mixed into the elite behavior. The sin he identifies in the elites is their refusing to acknowledge that there was a Europe-wide failure that involved many parties, and that there was a system that encouraged it.

More links )

Tsipras capitulates? )
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Emailed this to Dave and Mark the day after the election:

As for yesterday's election, it went even worse than I'd feared (though so far it looks as if the Dems held onto the governor's office in Colorado, though just barely). My only thought, which is not necessarily correct as far as winning elections goes, but:

Of the commercials I saw (mainly while trying to watch YouTube; watching, say, Spanish-language TV could've been a different story), the commercials for Mark Udall, the Democrat, and loser, in the Colorado senate race, mainly attacked his opponent on social issues (Gardner's long opposition to abortion, his confusion around birth control, etc.), while the Republican commercials, for Cory Gardner, consistently attacked Udall on his economic policy. Of course what the Repub ads said was wrong, but that's not my point. We Democrats need to be running against the Repubs on economic issues. But — this is my opinion and my wish, and I'm sure that lots of people would consider it unrealistic — this means that at some point the Dems
have to decide that a significant portion of the electorate isn't too busy or stupid to understand some basic, comprehensible, but counterintuitive principles of macroeconomics, if we're willing to take minutes at a time to teach them. Otherwise, the Dems have no good response when the Repubs simulate being responsible and thoughtful by attacking us for running up debt and deficit and accuse us of burdening the future with our current profligacy etc. etc. Of course, most Dems don't know macro either (and I hardly do, but I've got some sense from Krugman of the basic principles), and whom I mean by "Dems" and “Democrats" and "we" and "us" in this paragraph isn't altogether consistent...
This means that a significant number of Democratic leaders themselves need to understand a few core macroeconomic principles and be willing to communicate them to voters, and a significant number of us rank-and-file Democrats need to understand those principles and communicate them to other Democrats and to the independents and Republicans who are willing to listen.

I'm not claiming to understand macroeconomics enough to truly evaluate the core principles, but I think I know a few of them:

(1) If, in order to save money and pay down debt, everyone is cutting back expenditures at once, none of them will succeed in cutting their own debt. This is because your spending is my income and my spending is your income; so when a lot of people are cutting back, your and my and everyone's respective incomes will fall as far or farther than our cutbacks, we'll turn out to be worse off, and the economy will go into a depression.

(2) In these conditions, cutting taxes on private industry and the very rich will have little or no stimulating effect. This is because private industry and the rich are not going to invest in factories, goods, and services when demand is falling. Instead, they'll sock their savings away.

(3) But a government can counteract the debt spiral and the savings glut by stepping up and spending money. This will get the economy back on its feet.

(4) In the conditions I described in 1 and 2 (so, in these conditions, not in all conditions), this extra government spending isn't going to cause interest rates to rise or cause excess inflation. Now, not having studied macro, I don't claim to understand all the reasons here. But, for example (I'm quoting Paul Krugman), since the private sector has excess savings that can't be invested, government borrowing "gives some of these excess savings a place to go — and in the process expands overall demand, and hence GDP. It does NOT crowd out private spending, at least not until the excess supply of savings has been sopped up." (See here and here.)

(5) Overall (so, now not just talking about current conditions), if the economy is growing faster than interest on government debt, we're not burdening future generations by government borrowing or by deficits. (Which doesn't mean we should always run deficits. But that's a different matter.) I'm sure I'm being too simplistic in the way I've written this point. But I hope it gives a gist and that it's correct.

As I've said, I'm not claiming the expertise to evaluate the ideas I've written here (which are basically my attempts to copy what I've read). But the thing is, it isn't that Republicans and pseudo-responsible centrists have counter-arguments to these points. They don't know that the points exist.* Neither do most lawmakers, and neither does most of the populace. And neither do most of the people likely to read my livejournal, I'm guessing. (Not that many people read my livejournal.)

Anyway, while we may have the constitutional right to be ignorant, it's time we weren't. And billions of people will suffer and millions will die if we don't decide to learn something, and communicate what we know.

*There are exceptions, of course. Ben Bernanke is a Republican, for instance.
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Always meaning to post more, and also need to comment on a shitload of things (three Mark Sinker threads need more input from me — Inuit tech, Oasis, hallway-classroom [UPDATE: Sinker links added] — not to mention what I owe Mark behind the scenes). In the meantime, here are links to four five blogposts from Paul Krugman on the use of models. Krugman's saying that to understand anything about economies you have to make simplifying assumptions, simpler often being better as long as (1) the models still tell you something useful and (2) you know when life is telling you to turn 'em off or rethink 'em. Subtheme is that, according to Krugman, many conservatives do this absolutely backwards, that is, refuse to turn off the microeconomics model as the supposed source from which all macroeconomics must derive, while at the same time decrying macroeconomic models that could save billions of people suffering and millions of lives if policy makers would act on them.

Dare To Be Silly

Too Much Faith In Models, Capital Taxation Division

Economic Realism (Wonkish)

Jean Tirole and the Triumph of Calculated Silliness

The State of Macro, Six Years Later [UPDATE: Added this link here (it's the "Subtheme" link above) because Krugman states his concerns more emphatically than he had in his previous post]

The New Economic Geography, Now Middle-Aged [UPDATE: Added this link here, and here's where I originally discussed it]

Also, there was this, from me:

Neither rational nor irrational

The discussion with Mark, if I ever have time for it, would include my own justification for my simplifying assumptions (hallway-classroom, for instance; also, the Rolling Stones and call-and-response, also jocks-burnouts-and-sometimes-freaks) and where he and I need to create more of them.
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Third major security breach in a year — Target, Heartbleed,* and now CyberVor — and for this one, like Heartbleed, what consumers need to know are:

(1) What sites are potentially compromised,
(2) Of these, which sites employed a fix, and
(3) If they did, when did they employ it

— ’cause if you change your password before the fix, you'll need to change it again.

As with Heartbleed, most companies aren't going to tell you they've been compromised,** and the situation is complicated this time by the firm that uncovered the breach — Hold Security — only being willing to give this information out to companies that pay for it.***

In the case of Heartbleed, someone developed a tool allowing us to test a site ourselves, but I doubt info on that tool reached more than a miniscule portion of the people potentially affected; and the tool didn't work for all sites.

The journalists I've read are rarely clear on any of this: the info that people need and how to get it to them. What the story is. Articles on how to strengthen your password are useful but beside the point when it comes to the recent breaches: Once the hackers break into a company or site and have access to your user name and password and likely your email address, it doesn't matter how strong your password is. They've got it. It's the company's defenses that are at issue here, not yours. And there's submerged ideology in some of the reporting, the press in effect saying it's up to you, the individual, to take care of yourself, not up to the institutions or governments that, in instances like these, are the only ones who can take care of us.

A couple more thoughts:

(i) To the extent that security is up to individuals, it's just not going to happen. We can't expect people to remember multiple passwords or to choose ones that are hard to remember, or not to use the same user name and password on multiple sites, or to wait for authentication on their mobile every time they log in. It's like demanding that everyone be a tech version of a survivalist, when we've actually got other stuff to do.

(ii) I'm hardly an expert on technology and government, but (a) I fear that even firms that want to invest in the security of their sites may decide that in the short run they can't afford to, especially if their immediate competitors aren't investing, (b) even if governments and voters wanted to force them to and were willing to devote tax money to such oversight and enforcement, policing this stuff is probably a lot more complicated than inspecting a building for fire exits or demanding a bank hold assets in reserve, and (c) at times, the hackers will run ahead of the security people, no matter what. And the "if" in Point b is a very iffy if.

So, pessimism. I remember back in college a teacher saying that in the early 1900s Teddy Roosevelt's progressive agenda had the support of many big businesses, who really did think that regulation was in the best interests of their industries. We hardly seem to be in such an era now, and even if techies get behind regulation, we need businesses to do so across the board. Not to mention voters. And we need the right regulations, whatever those might be.

*The Heartbleed bug wasn't strictly speaking a breach, rather a vulnerability that may or may not have been exploited.
**Tumblr was an admirable exception, last time.
***That Hold Security is in it for the money and isn't releasing data is raising doubts and eyebrows. But the New York Times report says the paper got an independent security expert to authenticate Hold Security's list. I'm not the one to know here. The NY Times has a reputation for being careful. The paper has botched some things, but it doesn't like to.
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Say I want to understand human financial behavior. The behavior is actually complex, but if I make the following simplifying assumptions I can at least have a place to start, and can make some calculations, predictions, etc.

(1) In the financial decisions (e.g., job choice, hiring, shopping, selling, investing) all people are trying to maximize their monetary profit or "financial" value and to cut their losses.

(2) Given the available information, people go about this pretty well (e.g., this apple at this store costs $2.00 a pound, the identical apple at that store costs $3.00 a pound, both stores are equally easy to get to and I'm going to both stores anyway for other reasons, so I buy the apple at the first store not the second).

(3) When things don't turn out so well, people modify their understanding of the information and (subject to the caveat in the footnote) they seek new, better information.*

We can say that, given assumption number 1, in doing numbers 2 and 3 people are being rational and that when people don't do 2 and 3 they're being irrational. But this all rests on the simplifying assumption number 1, that in all their financial decisions they're trying to maximize income or financial value etc. But to want to maximize money and financial value in the first place is neither rational nor irrational. And we know, or ought to know, that number 1 in itself is not altogether true, that maximizing profit is not the only motive in play: we posited it as a simplifying assumption so we could get a grip on economic behavior. Motives — such as loss aversion and brand loyalty — that run counter to profit maximizing are no more irrational (or rational) than maximizing profit is, and are no more or less emotional either.**

This is on my mind for two related reasons.

First, a couple of Paul Krugman posts about the parts of macroeconomics that have no "microfoundations" but nonetheless seem to describe macro results better than the alternatives: actually, I'm as ignorant of microeconomics as macro, but I do think that micro has simplifying assumptions that include something like my numbers 1 through 3 above, and that's exactly (or maybe not exactly) why the macro that's micro-based can't explain sticky wages and so on. (I don't pretend to understand the posts to any depth, by the way. But note the word "hyperrational" in the first post and "rational expectations" in the second, which I'm guessing mean that it's taken for granted by some people that assumption number 1 is in itself rational.)

Second, I recently got Daniel Kahneman's highly worthwhile Thinking, Fast And Slow from the library for the second time (I didn't finish it 11 months ago when it first became due), and I think if asked he would, or at least ought to, subscribe to my paragraph above beginning "We can say that..." But actually his language slips a lot, and "rational" and "emotions" sometimes float by in his text without explaining themselves. (I do believe he talks explicitly about at least one of them in the part I haven't read yet; but that doesn't mean he knows what he's doing when the words creep in earlier.)

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Footnotes )
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It's out of the U.S. headlines, but news from Cyprus keeps getting worse.

Cyprus forced to find extra €6bn for bailout

This is all a stratosphere beyond my understanding, but is there any reason whatsoever for Cyprus to stay in the eurozone?* All the banking disruption that such a move would precipitate has already happened anyway. If the country exits, it can devalue its currency and at least maybe become a real cheap destination for tourists. At least that's a theory. Otherwise, where does its economy come from? The equivalent "devaluation," if Cyprus stays in the eurozone, will be through major unemployment, and drops in wages too. Right?

By the way, if you're curious, last month I was updating my previous Cyprus thread whenever I noticed a new idea or analysis. Not that the analyses are mine. I provided links.

Meanwhile, warning flares are shining in the sky above Portugal.

*By "eurozone" I don't mean the European Union, rather just the members whose currency is the euro.
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Damned if I know.

Been online at a few U.S. and Brit papers to see if they think it merits a link on the visible Webpage. Yes: NYTimes, LATimes, Boston Globe, Washington Post, Denver Post, Telegraph, Guardian, Financial Times, The Independent, The Times. No: Chicago Tribune, Philadelphia Inquirer, Miami Herald.

I'd say that's pretty good except most of the U.S. links are just passing along the Associated Press story of Cyprus and the EU trying to figure out a way to renegotiate so the terms won't clomp down quite so hard on every depositor. And many of the Brit sheets are merely stuck on the idea that some British nationals might lose money in the next day or two. But the NYTimes, the Telegraph, the Financial Times, and the Independent got the issue that immediately jumps to mind if you're on the lookout for international financial calamities. As Paul Krugman put it in his blog:

The big problem, however, is that it's not just large foreign deposits that are taking a haircut; the haircut on small domestic deposits is a bit smaller, but still substantial. It's as if the Europeans are holding up a neon sign, written in Greek and Italian, saying "time to stage a run on your banks!"

Tomorrow and the days immediately following should be very interesting.
The Financial Times leads with, "Europe botches another rescue," and editorializes, "Like other European island states before them, the people of Cyprus are discovering who pays to keep a metastised banking sector alive."

I have no idea what this leads to, of course. Presumably European leaders (whoever they are) assure everyone, "This is just Cyprus, with its specially weird banking situation."
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Here are the first two paragraphs of an AP article by Pan Pylas and Frances D'Emilio ("Italian election inconclusive; global markets drop") on the market response to the Italian election results. I've bolded the text that I find questionable, my question being how do the writers know that what's worrying investors is that the next government won't carry on the austerity policy (as opposed to investors' worrying that the ECB won't continue to implicitly be willing to back Italian bonds in the case of a run)? The second bit of bold is for wondering how European leaders know that austerity reforms are a good way to deal with Italian debt (as opposed to such policies exacerbating the debt); and further, how do the writers know that this is what all European leaders believe?* Not that I in particular know better. Rather, I know that there are counter-explanations and counter-arguments (e.g., Paul Krugman's) that aren't mentioned in this supposedly hard-news story.

ROME (AP) — Italy emerged from elections Tuesday with no clear winner, driving markets around the world markedly lower as investors worried that one of Europe's biggest economies would be unable to build a governing coalition that can stay the course on unpopular austerity measures.

A day after polling ended, a few seats in Parliament based on Italians' voting abroad still remained to be decided, but their numbers won't ease the gridlock. European leaders pleaded with politicians in Italy to quickly form a government to continue to enact reforms to lower Italy's critically high debt and spare Europe another spike in its four-year financial crisis.
In contrast, David Jolly in the New York Times assigns the market reaction to uncertainty, without specifying or speculating on what the market wants Italy's policies to be, though he quotes some foreign government figures on what they want the policies to be.

*In fairness to Pylas and D'Emilio, when they write "European leaders pleaded..." they don't explicitly say that all European leaders are on-board with the pleading; and Jolly uses the same "European leaders" trope that Pylas and D'Emilio do. But in both pieces, there's no hint that Europe's leaders might not be of one mind on this topic. (My impression from reading Krugman and DeLong is that the IMF — or at least some key players in the IMF — are in dissent on austerity, though I haven't read the IMF reports.)

My thought here (not knowing anything more about Pylas and D'Emilio, but guessing e.g. that they're college grads or at least people who've read up on and tried to understand economics) — and this applies pretty much in general, not just to reporting of economics — is that people trained to think don't actually know how to think. Or their thinking hits a wall, without their being aware that they're at a wall, and have crashed to stillness.
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In endorsing the work of this guy (though Krugman probably has a stronger technical basis in economics for his endorsement):

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I just posted these Krugman links on the "Persuade An Atheist" thread, where they're tangential. Krugman is quoting and floating ideas about technological advances making workers superfluous in some areas and thereby increasing income inequality. I decided this needed more attention — that is, Krugman says it needs attention ("it's important stuff"!), and presumably he's right.


Additional factors or explanations cited:


More detailed explanation, potential scenarios:


What's happening right now is that we are seeing a significant shift of income away from labor at the same time that we're seeing new technologies that look, on a cursory overview, as if they're capital-biased.
Supporting evidence:

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Another one! Nate Silver cites Kuhn in a footnote, Silver probably** being unaware that his own passage (Nate Silver, The Signal And The Noise, p. 260) not only runs opposite to a couple of Kuhn's major ideas, and not only isn't in the same ballpark as Kuhn, it's barely in the same sport. Again, I'm not giving you the answer, this being a quiz:

The notion of scientific consensus is tricky, but the idea is that the opinion of the scientific community converges toward the truth as ideas are debated and new evidence is uncovered. Just as in the stock market, the steps are not always forward or smooth. The scientific community is often too conservative about adapting its paradigms to new evidence,64 although there have certainly also been times when it was too quick to jump on the bandwagon. Still, provided that everyone is on the Bayesian train,* even incorrect beliefs and quite wrong priors are revised toward the truth in the end.

*And that they don't hold priors that they believe to be exactly 100 percent true or exactly 0 percent true; these will not and cannot change under Bayes's theorem.

64. Thomas S. Kuhn,
The Structure of Scientific Revolutions (Chicago: University of Chicago Press, Kindle edition).
A couple of hints:

(1) Incommensurability
(2) Darwin

But this passage is a botch in whole hunks of other ways as well, e.g., the word "the" in the phrase "the scientific community."

Look, I've read enough philosophy to know that Kuhn is not hard, though he vagues out too much and he leaves some difficult problems in his wake. That near everybody gets him wrong isn't due to a fundamental ideological barrier or to any drastic unfamiliarity/novelty in his concepts. More griping )

**"Probably," since I don't know how much of Structure he read, and I myself had only read about half my nephew's copy of the Silver book, skipping around, before it was time to fly back to Denver.
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 photo tin can lid open.jpg

David McHugh of the Associated Press ("After 3 bumpy years, Europe turns corner on crisis"):

The worst of Europe's financial crisis appears to be over.

European leaders have taken steps to ease the panic that has plagued the region for three turbulent years. Financial markets are no longer in a state of emergency over Europe's high government debts and weak banks. And this gives politicians from the 17 countries that use the euro breathing room to fix their remaining problems.
McHugh does go on to say that Europe's economy is likely to get worse before it gets better, then quotes Holger Schmieding, chief economist at Berenberg Bank in London, as saying "coming waves of turmoil will be less severe." (Article seems to be conflating the receding fear of imminent defaults and a Eurozone breakup, on the one hand, and nonimmediate prospects on the other.)

Tim Duy, on his blog Tim Duy's Fed Watch ("Europe's Back In The Spotlight"):

We are now looking at another year of dismal growth in the Eurozone. This crisis seems to have no end in sight.

To be sure, a little relief today as the Greek parliament pushed through the latest austerity package, throwing the bailout back to the Troika. But the relief was short-lived....

I am guessing that the Troika increasingly sees no way out for the Greek economy, at least under the current policy path. Does anyone really expect this to be anything more than just another effort to kick the can down the road? Everything to date has simply intensified what Ambrose Evans-Pritchard described as the "Greek death spiral."

Spain too )
To be precise, Duy isn't predicting a default or breakup, just another year that's worse than the last, with unemployment that's already depression-size in Greece and Spain getting worse.

My understanding (or not) )
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Of the top fifty songs on last Thursday's Billboard K-pop chart, seven of them have been charting for ten weeks or longer. Here they are, in ascending number of weeks:

Busker Busker "It's Hard To Face You" 10 weeks
Verbal Jint "Good Morning" 10 weeks
Juniel "Illa Illa" 10 weeks
Wonder Girls "Like This" 11 weeks
Big Bang "Monster" 11 weeks
Kim Tae Woo "High High" 12 weeks
Shinyoo "Hands Of The Clock" 51 weeks

51 weeks doesn't mean that "Hands Of The Clock" began its run 51 weeks ago. It just means that the Billboard K-pop chart is only 51 weeks old, and that's when they started counting. The track could be years old, for all I know. Maybe decades old. The singer looks a couple of decades younger than I am, but I'm more youthful at heart. Here's a live version that was uploaded to YouTube in December 2009:

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It's currently at 32, the highest it's been in the Billboard K-pop era.*

We've talked about it before. Me: "In the olden days, this would have been my stereotype of what Asian pop sounds like." Also, "Presumably, it's old people who listen to this. I'm an old person, and I like it." (Probably like it somewhere between 4 and 6 points, but let's not quibble.) [livejournal.com profile] arbitrary_greay: "Holy cow that sounds like some generic Chinese karaoke staple. I can hear the color change scrolling through the karaoke captions on a flickering blue screen." [livejournal.com profile] davidfrazer: "You might enjoy Bret's visit to the noraebang from Flight of the Conchords."

T-ara holding nearly steady )

My opinion of Ferguson-Krugman dustup substantially final, despite my investigation being desultory )
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Or not.

Dueling headlines, both from the Associated Press:

ECB's Draghi: Bank may intervene on bonds (this is the one that claims a clear message)

Draghi authority tarnished as Germany blocks plan

(Top piece by David McHugh, bottom by Colleen Barry.)
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Paul Krugman can't make up his mind ("EMU Gets Ostrichized"):

Or maybe head in the sand isn't the right metaphor — maybe it's deer in the headlights, with policy makers paralyzed as it all goes wrong. Anyway, I'm with Tim Duy: I'm losing confidence in European leaders, which is hard because I had hardly any confidence to start with.
And if you click Krugman's Tim Duy link, you get Duy saying:

The devastating train that is the debt crisis keeps rolling right along, currently crashing through Spain's economy.
— which of course is an allusion to the venerable Slow-Motion Train Wreck.

But fortunately I'm not running into Kicking The Can Down The Road this time, not where I'm looking; that was always a problematic metaphor anyway. Not that it's never apt, but the tendency is for it to be appropriated by Fake Adults who look and feel mature when they're ignorantly demanding that we need to ward off inflation NOW, and solve debt problems by immediately cutting spending, etc.

Whatever it takes )
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"'Europe has become incapacitated,' said Alessandro Leipold, a former deputy director at the International Monetary Fund."

I like that sentence (New York Times, "In Euro Zone, Debt Pressure Tightens Grip") because it doesn't give enough context to explain what Leipold means, leaving one's imagination to dance in the sky. I'm guessing (but not on the basis of what Leipold said, or of anything else he's ever written, none of which I've seen, the above four words being it [except see below]) he — or someone — might say, "Hypothetically, there are steps that the European governments and the ECB can take, but politics will prevent them, as will the lack of an effective decision-making mechanism among the countries. So Europe is like a deer caught in the headlights." But as I said, that's a guess. Maybe he thinks there's nothing to be done even hypothetically.

But how do you report such a story in a way that gets people interested, a looming tragedy that seems to lack illustrative events?

Spanish Government Generic Bonds - 10 YR Note: 7.621


Jul. 19th, 2012 09:24 am
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My emotional age has risen to higher than 7!

But actually, the number up-top is the rate on Spanish Government Generic Bonds, which once more is over 7.000.

Or as Taeyang might have put it (rather pessimistically):

Oh, that Europe wasn't meant to be no, nooo
I don't wanna be without you Europe (Got me slowly dying) hey, hey
Where did we go wrong my Europe (Why can't we keep on trying)?
koganbot: (Default)
Interest on Spanish ten-year bonds is at 7.062 as of 10:00 AM my time (noon Eastern Daylight Time). People who seem to know a lot more than I do think rates this high are a big deal, and a sign of danger. (High interest rates on bonds mean that the Spanish government has to pay a lot to borrow, right?)

Explanations for the high rates tend to be some or all of the following: (1) Investors think the equivalent of a bank run is possible, the run being on the Spanish government rather than a bank; in any event, they consider the investment a high risk, so they want to get high returns if the risk pays off. (Runs don't have to be rational, or based on fundamental problems of solvency. All they need is for investors to fear that other investors are about to start calling in their debts, and for them to know or fear that no entity is prepared to back up the bank or country that's getting run on.) (2) Indications that the recent deal to bail out Spanish banks doesn't have full EU support. (3) Indications that the Spanish gov't will be forced to guarantee the bailout after all, so that the bailout will add to government debt (officials are busy denying this). (4) The deal, while significant in regard to the European banking structure, was too little too late to help Spain and Italy, which still have no credible path to prosperity as long as they're in the Euro-zone and central Europe refuses to do anything to stimulate the economy (ECB lowering rates as little or less than expected reinforces this feeling). (5) Deal will take too long to implement (almost six months). (6) Deal wasn't enough to overcome sense that ECB and the European government are fundamentally frozen in the headlights. (7) At this point, anything is too late, the missiles are launched, the armies are mobilized, the asteroid is on path to hit, the sky is plummeting, Humpty Dumpty has left the wall. (7) Other stuff I forgot or don't know about.

Colorado will furnish Christmas tree for U.S. Capitol in 2012 )

Bloomberg's ongoing updates of SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE are here:

koganbot: (Default)
My understanding of economics is so poor that statements that are immediately obvious to some people still contain unbridgeable ellipses for me. But here's a passage from Paul Krugman's End This Depression Now that I think, if I were to reread it five or six times, I may end up understanding. At least I'll post it here for reference. I know this is no substitute for understanding IS-LM curves (on the long-term lol to-do list), but at least it may give me some idea why government borrowing when we're in a liquidity trap doesn't drive up interest rates. (The block quote in the Krugman excerpt is from a May 2009 blog post of his in which he does bring up IS-LM curves.)

Loanable funds )

(Context of this is Niall Ferguson apparently assuming that if the government borrowed there'd be no buyers/lenders, so the Fed would have to do the buying itself, which would drive down the price of government bonds and drive up interest rates by the law of supply and demand, too many bonds and not enough buyers — if I'm understanding the Ferguson passage right [quoted by Krugman on p. 135], which I may not be.)


koganbot: (Default)

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