Monday, September 30, 2013

Find a need, and film it

The satellite operator struck a deal with start up movie studio A24 Inc. to partner with it in acquiring independent films in exchange for rights to offer them exclusively on its video-on-demand services 30 days before they hit theaters.
The deal brings an unlikely player from the pay-TV industry into the world of indie film financing. DirecTV is making an initial commitment of about $40 million to co-finance and market independent movies under the initiative. The first picture it acquired alongside A24 is "Enemy," a thriller with Jake Gyllenhaal.
The satellite-TV provider has previously obtained rights to show some movies on its VOD service before their theatrical release on a one-off basis, but this marks the first time it is investing directly in films.
That's entertainment!

Under two dictators

Friend of Fidel Hugo Chavez or his enemy Augusto Pinochet, under whom would you choose to live if you were a South American? From beyond the grave, in Venezuela;
The policies of the late Hugo Chávez have disappeared inside their own labyrinth — and they have yet to find the Ariadne’s thread to lead them out.
The Venezuelan government is aware of the shortage of basic products affecting the country, but it prefers to tell voters that is confronting — and winning — “an economic war of the bourgeoisie,” a conclusion it has reached after assessing the workings of the country’s privately owned supermarkets.
Last week, President Nicolás Maduro condemned the supermarkets for forming part of a plot that aims to generate social breakdown. He said store managers were ordering workers not to place products on the shelves and creating long lines by not assigning staff to man checkouts. The goal, he said, was to create the feeling of bigger shortages.
When the going gets tough, the toughs get military on you;
To alleviate the situation, Hebert García Plaza, chief of the Higher Authority for the Economy, has announced he will place members of the Bolivarian militia — groups of civilians enrolled by the government and usually armed — at the checkouts. But before their presence can be finalized the government first needs to liaise with supermarkets to ensure the militia men have adequate training to understand the product codes and necessary working methods. 
Armed check out clerks!  What about Chileans, who had their Hugo Chavez ousted by General Augusto Pinochet forty years ago. How's that working out for them;
The Allianz’s World Wealth Report 2013,  released Tuesday, places the country's per capita assets at US$14,800 and per capita debt at US$5,810 — both figures are the highest in the region.
 With Latin America’s highest ratio of per capita net financial assets — the wealth possessed by a country minus its debt — Chile and Mexico are the only countries in the region to have attained the status of Middle Wealth Country (MWC), defined as net financial assets of between approximately US$6,600 and US$39,400 per capita. And according to the report, the two will probably remain the only countries in the region to attain that category for the foreseeable future.
 You can bet Venezuela won't be there.

Indian giver

They've been over into the future (since 1868)...does it work?
As people who depend on federal funding quickly learn, the government gives with one hand and takes with the other. And so it goes with the Crow Creek Tribe's education system.
In 2009, the American Recovery and Reinvestment Act provided funds for the Crow Creek Sioux Tribe to construct a new school serving kindergarten through 12th grade.
Keep a stiff upper lip;:
The Crow Creek Reservation runs along the east bank of the Missouri River in the center of the state. It occupies most of Buffalo County, which is, according to the latest census, the poorest county in the United States. This poverty leaves the tribe ill equipped to handle the automatic federal spending cuts that took effect in March. And if Congress doesn't act to stop the sequester, the county stands to become a whole lot poorer.
"But in our hearts we're actually the richest," Tribal Chairman Brandon Sazue said. He says the tribe has become accustomed to subsistence, and so the federal sequester is just another hardship in a long list.
"We survived so long without having enough funds, because the government promised us all this and they never held up to their part of the bargain," Sazue said. "They never followed the treaty. So we're used to it."
Will the rest of the naiton have to get used to it? Say, Obamacare;
"Many of the IHS [Indian Healthcare Service] facilities are on what's called 'life-or-limb care' where … the only thing that IHS will pay for is life-or-limb threatening," DeCoteau said. "Because of these cuts, many locations are having to split the life-or-limb threatening into 'Is it life-or-limb threatening today, next week, or a month from now?' You know, how life-threatening is it? And if it isn't life-threatening today, they're not going to issue a medical purchase order."
DeCoteau says the impact reverberates beyond contract health services. Congress appropriates funding for various other services, such as dental, mental health, and public health nursing, and all were cut by the same percentage.
Isn't the lesson; not to believe the Feds promises?

Sunday, September 29, 2013

Hide the Serbian women!

Or at least those working for government agencies, Dominique is in town;
BELGRADE -- Saša Radulović says it was "defined" that "a curb on the gray economy is Serbia's greatest chance and impetus for overcoming the crisis."
The Serbian minister of economy said this transpired during talks with economic expert Dominique Strauss-Kahn, who was recently appointed an adviser to the Serbian government.
Translated; we screwed up by raising taxes, now the people conduct their economic affairs 'unofficially' (under the table). So, we surrender to economic reality.
"If we manage to channel just a small part of that economy into legal flows, we will have an official increase of one-two percent in the gross domestic product (GDP) in the next two years," Radulović said at the Serbian Chamber of Commerce (PKS), where he attended a presentation of the "Top 500" publication. 
He underscored that Serbia should not repeat the mistake that it made a year ago when taxes were raised as part of the process of fiscal consolidation, which resulted in a slump in economic activity and a drop in retail trade turnover. 
"One year on, we have a smaller economy and bigger problems. We must not repeat this mistake," the minister said. 
Maybe this is the kind of 'community service' Eurocrat misbehaviorists can do more of, as penance.

Saturday, September 28, 2013

Bola del dinero

Billy Beane move over, Cuba discovers Adam Smith;
Cuban athletes are going to be allowed to keep most of their overseas prize money and sign contracts with foreign teams for the first time in decades.
....Correspondents say the measures are an attempt to prevent top athletes from defecting to other countries.
That may take a little more work;
The measures approved by the council of minister allow Cuban athletes to sign contracts with foreign clubs or teams so long as they "are present in Cuba for the fundamental competitive events of the year."
Although the exact official current wages of athletes are unknown, they are believed to be around $20 (£12) monthly.
After the reforms, an Olympic medallist will be entitled to three times that amount, the state newspaper Granma reported. 

Don't get us started on Joan Robinson

This should go down well with the academic thought police;
Toronto literature professor and Giller prize-longlisted author David Gilmour has found himself at the eye of a literary storm after declaiming in an interview that he doesn't teach books written by women or Chinese authors, because he's only interested in "serious heterosexual guys".
....Eyeing the rows of books in his office, Gilmour said: "I'm not interested in teaching books by women. Virginia Woolf is the only writer that interests me as a woman writer, so I do teach one of her short stories. But once again, when I was given this job I said I would only teach the people that I truly, truly love. Unfortunately, none of those happen to be Chinese, or women."
He went on: "What I teach is guys. Serious heterosexual guys. F Scott Fitzgerald, Chekhov, Tolstoy. Real guy-guys. Henry Miller. Philip Roth."
Gilmour also claimed not to have encountered any Canadian writers he admired passionately enough to teach. For women, Chinese and Canadian authors he directs his students "down the hall", to other tutors.
It's foolproof;
Bestselling author Jodi Picoult wrote: "Oh, how I wish this were a joke. But by all means, keep pretending there's no discrimination against female authors."
Remind us again, Who was the female Shakespeare (or Beethoven)? And shouldn't it be part of the job description of a literature professor to be, discriminating?

Friday, September 27, 2013

Wharton the world?

Applications to the University of Pennsylvania's business school have declined 12% in the past four years, with the M.B.A. program receiving just 6,036 submissions for the class that started this fall. That was fewer than Stanford Graduate School of Business, with a class half Wharton's size.
Wharton counters that, it's the quality, not the quantity. Others disagree;
Wharton over the past century built its reputation as a training ground for Wall Street titans, but the financial crisis closed off many paths to such careers. The school in the mid-2000s regularly sent more than a quarter of its students to jobs at investment banks and brokerage firms. That figure has slid into the teens. 
So others, like Stanford and Harvard, with connections to tech and marketing sectors, are reaping the resumes;
Harvard Business School reported a 3.9% increase in applications this year, and Stanford posted a 5.8% gain. But Wharton's applications dropped 5.8%. Columbia Business School reported a 6.6% increase, recovering from a 19% decline last year. And Duke University's Fuqua School of Business stabilized after an 8.4% drop last year.
Some admissions advisers and Wharton professors say the school didn't react aggressively enough when the spigot of finance jobs was turned off and that recent moves, such as a rebranding campaign begun in the spring of last year, did little to clarify the school's profile.
It's a jungle out there.

An American in Paris...

   can be forgiven for forgetting about Gershwin, and thinking the IRS and Treasury are tone deaf, as they meet the Foreign Accounts Tax Compliance Act (Fatca). Which has induced over a thousand Americans to renounce their citizenship rather than be subject to it.
A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don't comply.
It's an attempt by the US authorities to recover an estimated $100bn a year in unpaid taxes on US citizens' assets overseas.
The inconveniences to American citizens being in the way? Screw em! 
[For 'Bridget'] It became so complicated to do her tax return that she turned to professionals, at an annual cost of nearly $2,000 (£1,250), with the prospect of Fatca raising the price to $5,000. Also, fewer tax lawyers were taking on American clients, she says, and some banks were even turning away American money.
$5,000 just to prove you don't owe the IRS any tax. And furthermore;

  • [Genevieve] Besser, who is self-employed, says her investment options are restricted, because most German banks will no longer open brokerage accounts for US citizens. She can't be joint owner of the house she shares with her German husband. Nor can she have signature authority over their retirement savings account because, she says, the bank would close the account.
  • "A property that was bought and sold at the same euro price during a period when the euro strengthened relative to the dollar would generate a 'phantom' profit - and a tax liability to the US government, even though I would have no benefit from it," she says. "Fatca is an arrogant piece of legislation that penalises US citizens for living abroad and violates the two principles of law: 'innocent until proven guilty' and 'the punishment should fit the crime'."
 And the official American reaction;
In a statement on its website, Robert Stack, deputy assistant secretary for international tax affairs, rebuts certain "myths".
"Fatca provisions impose no new obligations on US citizens living abroad... US taxpayers, including US citizens living abroad, are required to comply with US tax laws," he says​.
"Individuals that have used offshore accounts to evade tax obligations may rightly fear that Fatca will identify their illicit activities. Yet a decision to renounce US citizenship would not relieve these individuals of prior US tax obligations."
I.e., Screw the SOBs, whose money is it anyway. We can't let the troubles of a few little people amount to a hill of beans in this world.


The customer may not always be right, but he is always the customer, even in Paris; an effort to make the rude French waiter stereotype a thing of the past, the Paris Tourist Board is launching a new charm offensive.
As the world’s number one holiday destination (with 33 million international visitors a year) and half a million people working in tourism – that’s 9.5% of the region’s working population – Paris has good reason to nurture its tourist industry. The etiquette guide Do You Speak Touriste?, aimed at restaurants, hotels, shops and taxi drivers, is designed to make travellers feel more welcome in the City of Light.
And more likely to spend their money, including tipping.

Thursday, September 26, 2013

An offer he can refuse?

Jamie Dimon meets with shakedown artist Attorney General Eric Holder, who knows what Willie Sutton knew; banks are where the money is;
WASHINGTON—J.P. Morgan Chase ... & Co. Chief Executive James Dimon met with U.S. Attorney General Eric Holder on Thursday amid intensifying talks of a possible $11 billion settlement to avoid potential criminal and civil charges against the bank.
.... A person familiar with the meeting said the two men met to discuss terms of a potential deal for the bank, which is the target of multiple civil and criminal investigations.
....J.P. Morgan made an offer of $3 billion on Monday night to settle investigations of alleged past abuses in residential mortgage-backed securities—a figure that was rejected by Mr. Holder, according to people familiar with the discussions.
Just part of the political bargaining that gave us 2008's financial crisis. Calomiris and Haber, call your office.

Hey, look us over!

And write us a check...if you're fat enough, because it's legal to invest again in small fry with attitudes;
This week thousands of new and small private businesses, like Rick's Picks, launched public marketing blitzes to sell shares in their companies—a tactic that securities regulators barred more than 80 years ago to protect investors from get-rich-quick scams. On Monday, the SEC lifted that ban, allowing small private companies to publicize investment offers without having to register an initial public offering—which can be a costly and burdensome requirement for those businesses—provided the sales are limited to wealthy investors.
....The public fundraising move is a central provision of the Jumpstart Our Business Startups Act, approved by Congress last year, which seeks to ease restrictions on small businesses raising cash to grow.
Douglas Penman, for instance, says he is planning to make T-shirts promoting investment opportunities in his San Francisco startup, Nukotoys Inc., which makes children's educational trading cards for mobile devices. He's hoping to have the T-shirts worn by skyscraper window washers, to catch the eye of wealthy executives inside. The company, launched in 2010, is looking to raise $2 million to expand its user base, he says.

Protection by the lowest bidder

Talking Turkey, and its decision to save a buck any way it can;
Ankara has granted a long-awaited tender for long-range missile and air defense systems to Chinese contenders, dismissing bids from major NATO allies as the United States, France and Italy.  
....Turkey presently has no long-range air-defense systems. The $4 billion program, dubbed the T-LORAMIDS, is being designed to counter both enemy aircraft and missiles. 
Let us know how that works out for ya.

No Portuguese need apply

The Constitutional Court of Portugal doesn't want there to be any hiring going on...that might necessitate some firing;
Portugal’s Constitutional Court has ruled that a number of aspects of the labor reform approved last summer by the center-right government of Prime Minister Pedro Passos Coelho are illegal.
In a ruling made public on Thursday, the Court said that some of the regulations in the reform regarding the dismissal of employees are too “vague,” and leave it up to the discretion of companies to decide on whether layoffs are justified or not.
“The law does not provide the necessary regulatory indications about the criteria that should be used by a company in deciding which jobs should be cut,” the writ said. This, it said, “opens the door for arbitrary and legally uncontrollable dismissals.” The law also frees companies of the obligation to provide workers whose jobs are to be eliminated with alternative employment if available.
Round up the usual suspects;
The Court’s latest ruling came in response to a suit filed by the Communist Party of Portugal (PCP), the Left Bloc (IU) and the Greens right after the reform was approved last year. 

Wednesday, September 25, 2013

Como la revolucion

After more than a half-century, they are determined to work at it until it works;
Council of Ministers Vice President Marino Murillo Jorge presented the National Medications Program, which he recalled has been revised and renovated on several occasions over the last few years, although its fundamental purpose has been maintained: to guarantee the people’s health and limit the effects of the economic blockade imposed by the United States government, which has had a serious impact in the medical field.
Those damn Yanquis.
He clarified that the essential concept of the program has not changed, but that some elements have been modified. He explained that the policy is directed toward developing a comprehensive program based on the complete cycle of research, development and production, prioritizing the needs defined in the Basic Health Profile for the population and the appropriate use of medications. ....
From 2014 through 2017, he said, a digital system for the management and sales of medication will be implemented, along with improvements in the infrastructure and equipment needed by community pharmacies to comply with established norms and procedures.
Got it; postpone your illnesses.
He reported results from a diagnostic study which revealed a lack of comprehensive economic planning for the development and sustainability of natural and traditional medicine, since it has not been considered a priority. Noted were shortcomings in organization, training, equipment and resources necessary to production, use and distribution, as well as little support for producers who provide raw materials used to prepare alternative medicines.
Among other difficulties, Murillo pointed out that many natural products appearing on the national market are priced too high and that production is not planned based on an analysis of health needs in different provinces. There have been no market studies and local production centers often do not have the facilities or technology to ensure a quality product, he said. 
Just asking, What happened to the guys who had been in charge before?

How are things in the non-medical sectors?
Murillo Jorge reported that 41 cooperatives have emerged from former state-run operations, while 32 are the result of self-employed individuals coming together to work cooperatively. Among the basic characteristics of the new cooperatives are that they will operate in both national currencies, CUP and CUC; they were constituted with financial contributions from the associates; they will be requesting bank credit for start-up; and prices to be charged will be determined by supply and demand.
With the approval of this new group of cooperatives, Murillo added, the principal that the state will maintain ownership of the fundamental means of production is maintained. At the same time, the state is removing itself from activities which are not considered essential to the country’s basic development.
Maybe things would go more smoothly if the state removed itself from those things essential to the country's development. Might be worth a try. You know, see if the same thing that eventuated in Chile after Fidel's pal Salvador was given the old ochenta y seis, could help Cuba.


There were fewer Russians (in the auto industry), but better Russians (producing more);
The total head count in the automobile industry has shrunk, but output has grown, a testimony to improving labor productivity in the country, a news report said Monday.
Companies that produce cars and car components have reduced their staff by 29 percent since 2008, when Russia began taking a battering from the economic crisis, according to ACM-Holding, a market research company.
The auto industry headcount now stands at 243,304 people.
During the same time, the industry has cumulatively stepped up production by 24 percent.
Fred Kite could not be reached for comment.

Let's have a Hartz to Hartz

Writing just before the recent German election, Tom Krebs and Martin Scheffel confirm that Tullock and Buchanan were on the right track;
...the Hartz reforms were quite successful. Between 2005 and 2008 the unemployment rate fell from almost 11% to 7.5%, barely increased during the Great Recession, and then continued its downward trend reaching 5.5% at the end of 2012. This view is shared by many economists in Germany and confirmed in our recent macroeconomic study of the Hartz reforms based on a calibrated search model (Krebs and Scheffel 2013). Specifically, we find that the Hartz IV reform reduced the non-cyclical unemployment rate in Germany by 1.4 percentage points. We further find that the Hartz I-III reforms decreased the non-cyclical unemployment rate in Germany by 1.5 percentage points. Thus, our analysis suggests that the entire reform package let to a permanent reduction in the German unemployment rate by almost three percentage points!
A good thing...but not for everyone;
Hartz IV resulted in a significant cut in the unemployment benefits for the long-term unemployed, and this group therefore experienced a welfare loss. Most interestingly, the short-term unemployed also lost even though Hartz IV did not reduce their unemployment benefits, but the prospect of less insurance in the case of becoming long-term unemployed is enough to make them resist the reform. Finally, low-skilled workers with precarious jobs are in a similar position as the short-term unemployed and many of them are likely to lose as well. Indeed, our study suggests that the Hartz IV reform reduced real wages, a prediction that is consistent with the data....
But not enough losers to cost Angela Merkel the election.
The welfare losses experienced by unemployed workers and workers with precarious jobs provide a simple explanation of the unpopularity of the Hartz reforms, and in particular Hartz IV. Clearly, those who expect to lose from the reform will oppose the reform, and our quantitative welfare analysis shows that this segment of the German population is large, though not the majority. However, even if the reform losers are not the majority, it can well be that unions and politicians will support their concerns by promising to roll back the reforms. For example, if the reform losers are a clearly defined group with individually large and sometimes dramatic losses, but the reform winners are a diffuse group with only small and indirect gains for each individual, then a rational politician interested in winning elections will run on a platform that calls for reversing the reforms or not implementing them in the first place.
This time the Calculus of Consent was different.

Dutch treat

All those promises that were made to you...fuggeddahbout it;
The king traveled past waving fans in an ornate horse-drawn carriage to the 13th-century Hall of Knights in The Hague for the monarch's traditional annual address on the day the government presents its budget for the coming year. It was Willem-Alexander's first appearance on the national stage since former Queen Beatrix abdicated in April and he ascended to the throne.
"The shift to a 'participation society' is especially visible in social security and long-term care," the king said, reading out to lawmakers a speech written for him by Prime Minister Mark Rutte's government.
"The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form."
Rutte may be hoping that the pomp and ceremony surrounding the king and his popular wife, Queen Maxima, will provide a diversion from the gloomy reality of a budget full of unpopular new spending cuts he revealed later in the day.
Even a king can run out of other people's money.

When Top Guns are out-awed

The Luddites will be outraged, of course;
...a spokesman for the Campaign to Stop Killer Robots warned of the temptation to use them [unmanned F-16s] in warfare.
"I'm very concerned these could be used to target people on the ground," said Prof Noel Sharkey.
"I'm particularly worried about the high speed at which they can travel because they might not be able to distinguish their targets very clearly.
"There is every reason to believe that these so-called 'targets' could become a test bed for drone warfare, moving us closer and closer to automated killing."
Of course, 'smart bombs' are already minimizing collateral damage in warfare. Why those, flown by 'smart planes' would be worse is unexplained. That they would be safer for the pilots--sitting in an air-conditioned office thousands of miles from the mission--would be good, no?

La dolce vita a testa in giù

They're not making the Alpha Romeo like they used to;
Something else has convinced me that the reputation of Italian men as womanisers who constantly cheat on their women is unjustified. Every week I read Questioni di cuore (Matters of the heart), the advice column in La Repubblica newspaper's Friday supplement. It is entertaining but also, from a sociological perspective, somewhat enlightening. The letters are answered by Natalia Aspesi, a well-known journalist who has become an agony aunt. Many of them come from men, often sad or bitter about their treatment by cheating women.
Just last week I read one from a single lonely man who thought he had met Ms Right. She had told him that she too was single and lonely, and that her ex had moved to the US. He soon fell in love, only to discover that her ex was not an ex and that he had not moved to the US. She had been living with him all along and had just wanted a bit of extramarital excitement, leaving the letter writer disillusioned and heartbroken. My point is that letters like this come from men as well as from women.
Incidentally, among the Italian couples I know who have split up for reasons of adultery, the unfaithful partner has often been the woman.
Due per ballare il tango.

If Glass-Steagall hadn't been repealed...

We still wouldn't be in an ink and paper world where it took two weeks for a check to clear the bank on which it was written. What's a self-respecting regulator going to do in this world;
The doors were locked at 1:45 p.m., and Fed staffers handed out copies of the statement at 1:50 p.m., allowing reporters a few minutes to digest the complicated document before reporting on its contents. At 1:58 p.m. television reporters were escorted out of the room to a balcony where cameras had been positioned. The Fed's security rules dictated that television reporters were not allowed to speak before precisely 2 p.m. Print reporters were told they were allowed to open a phone line to their editors at headquarters offices a few moments in advance of the hour, but not allowed to interact with people on the other end of the line until exactly 2 p.m.
On top of those precautions, every media person entering the lockup -- including two employees of CNBC -- was required to sign an agreement that read: "I understand that I may make no public use of the documents distributed by Federal Reserve Board (FRB) staff or the information contained therein, including broadcasting, posting on the Internet or other dissemination, until the time the FRB has set for their public release."
All of the security precautions were taken to prevent the details of the Fed's decision from leaving the building before the precise deadline to make sure that editors, technicians, producers and even computer techs in media offices all over the country could not learn of the decision ahead of time.
On Wednesday, that tiny sliver of time saw a burst of trading. Nanex said as much as $600 million of assets changed hands in Chicago in the milliseconds before the rest of the market there was aware of the decision by the Fed.
Damned Gramm, Leach, Bliley!

Tuesday, September 24, 2013

This will just fries you

The way to a fast food man's heart, is a healthier french fry. At least that's what Burger King hopes;
Burger King gave the new fries a crinkle cut to "mitigate confusion" with its classic fries, which have a straight cut, Mr. Hirschhorn said. They will sell for about 25 cents more than Burger King's classic fries except in kids' meals.
The move is the latest in the high-margin, fast-food fries war, where tinkering with a beloved food can be risky. In the late '90s, Burger King reworked its french fry recipe, hoping to grab customers from McDonald's, only to see that version flop. It tinkered with the formula again in 2001. In 2011, Burger King changed its classic fries recipe yet again, making them slightly thicker and less salty. The year before, Wendy's replaced its fries with "Natural-Cut" fries with sea salt and potato skin left on.
Which is why capitalist nations don't have famines. That only happens where governments take control of feeding the people. In the Nation of Fast Food the customer is treated as a king. His every wish treated as a command.

Because, contrary to Willie Sutton, that's where the money is. Unless you're the Millenium Village idiot with a pipeline to George Soros. Watch Nina Munk and ask, Who has the better idea for helping the poor, Jeffrey and George or the greedy capitalists at Burger King?

Owed to a Grecian Earn

Bet the Greeks miss the days of searching for the Golden Mean, because today it's about the ruins;
Greek public sector workers went on strike for the second time in a week on Tuesday, shutting schools and leaving hospitals with skeleton staff, as inspectors from Greece's foreign lenders checked whether the country was meeting its bailout targets.
Hiring in the civil service has long been considered driven by political patronage and Greece's creditors have said they will not dole out any more money unless Athens reforms a state apparatus accused of being spendthrift and corrupt.
....ADEDY, the public sector umbrella union which organised the walkout, said government efforts to reduce the 600,000-strong civil service at the behest of the EU and IMF bailing out Greece was «the most merciless plan» to eliminate worker rights.
Let's crunch the numbers;
The administrative reform ministry must put a total of 25,000 workers in the mobility pool by the end of the year.
Not, fire them, but put them into a group where they have to take a lower paying job (the 'mobility pool').

The stakes are somewhat high;
The latest review by the lenders, who have propped up Greece with over 240 billion euros ($323.82 billion), will decide the size of a third bailout to see it through the crisis and is expected to last at least until the end of next month.
600,000 workers propped up by $324 billion (so far, with more needed) is only a little more than half a million dollars per worker.

Monday, September 23, 2013

Bad money driven out by...

Poor inventory control, says Mulligan Mint president Rob Gray. He doesn't know where all the silver went, but his heart is pure...unalloyed;
Some of the mint’s coins are used by Native American tribes or associations that want commemorative coins. It has also sold coins for what are called “community currencies”—an alternative money system adopted by small groups of people.
“We were a business that set out to do something important for the world and that was to create a complementary currency system for communities that are overlooked by mainstream banking and finance,” Mr. Gray said.
Mulligan Mint’s customers, for example, have included those who take the view thatTexas is its own nation, having never properly turned over its land rights. The group’s coins, which depict the Alamo, were once advertised on Mulligan Mint’s website as “not regulated or manipulated by the U.S. government and retains its true value permanently.”
But now it's a question for the bankruptcy court;
Mulligan Mint’s bankruptcy stops Republic Metals, which has sued the mint, from taking any more of the plant’s property. The county’s sheriff already took $200,000 worth of silver and gold amid the dispute, which Mulligan Mint wants back.
“What began as a business dispute and an unpaid debt…now escalated due to the seizures [of the company’s] property into a life and death struggle for what is otherwise a sound and potentially highly profitable business,” Mulligan Mint’s attorneys wrote in papers filed with the U.S. Bankruptcy Court in Dallas.
A lawyer for Republic Metals declined to comment about Mulligan Mint’s bankruptcy.
No word yet on rumors the mint will relocate to Gresham, Oregon.

C'est la REI

What's the favorite sport of the great outdoorsy; returning merchandise, with novel excuses;
Chad Thomas, a longtime REI customer who has returned used items, put it another way: "Some people think I'm a scumbag," he says.
Perish the thought;
Earlier this year, Mr. Thomas, says he returned a backpack he bought in 2004, which he had hauled up the tallest mountain in Yosemite National Park and hundreds of miles across a number of states. But it "was getting old and dirty, and I didn't like it anymore," he says.
Mr. Thomas returned the nine-year-old backpack to the REI store near his home in San Ramon, Calif. REI gave him a brand-new backpack plus $17 in cash—the difference between his purchase price and the item's new low cost. He later returned that one, too, when he realized there was a newer model.
His justification: Since he bought hundreds of REI products over the years, he says, the retailer still has made a healthy overall profit on his purchases.
Others have come up with;
...a customer recently returned a pair of women's sandals, designed for hiking and wading in rivers.The problem? According to the tag, "not sexy enough." 
In a bin by a window, an unraveling scarf is marked "too fuzzy." On the next rack over, a well-worn man's shirt has "buttons that are too clangy on hard surfaces."
And nearby, a pair of child's sandals that are coming apart at the soles. The complaint on the tag: The sandals are "not good for mud wrestling." 

Would you like a side of ideology with that

You'll get one, whether you like it or not, when you break bread at this Pittsburgh restaurant;
"We started naming cuisines that we could serve in Pittsburgh," Weleski said. "Since the Pittsburgh culinary landscape isn't so diverse, we thought we could serve Cuban, Venezuelan, Iranian and Afghan cuisine, and we realized we were naming all these cuisines from countries with which the US government is in conflict. That's how Conflict Kitchen got started."
Maybe they should serve cheeseburgers and Coca Cola. They might learn something about America and capitalism (where no one starves, because there are no Food Ministries).
Upcoming culinary themes look at border conflicts between people: North and South Koreans, and Palestinians and Israelis. Conflict Kitchen has already started talking with South Korean chefs and North Korean refugees, trying to find out what they think about the US, what they like to cook and what food means to them.
[Owner Dawn] Weleski [a former art student who runs the place with her professor, Jon Rubin] recently returned from an exploratory trip to South Korea, where the team learned to make - and eat - dumplings. "We were able not only to share a plate of food with locals, but at the same time share something that could be very sensitive - for example, information about a North Korean defecting into China and then South Korea," she said.
Defecting because there's nothing to eat in North Korea, but tree bark and insects--if one is lucky enough. Now there's food for thought.

Nanny state

Literally.  And apparently completely oblivious to the implications;
Working parents of three and four-year-olds in England would get 25 hours of free childcare a week if Labour wins the next general election.
Shadow chancellor Ed Balls plans to raise the banking levy by £800m a year to fund the move.
Three and four-year-olds currently receive 15 hours of free care a week, but Mr Balls wants to increase this.
Meanwhile, he has asked the government's spending watchdog to review his party's economic plans.
Money would be provided for Wales, Scotland and Northern Ireland, but it would be up to the governments there to decide whether to spend it in the same way as England.
This is the attitude that came close to destroying England in the post-WWII era. It took Hard-hearted Maggie to rescue the Brits from their folly and restore prosperity. By coincidence, we just noted the cinematic genius of John Boulting in portraying the situation, circa 1959. The current Labour Party seems determined to favor Back to the Future.

[Upon further review] We're not all right, Ed (there's no such thing as free childcare);
The first rule of thumb of any offer of free childcare in England is that it is seldom totally gratis at the point of use - despite protestations to the contrary.
Unless you are lucky enough to live close to a state-maintained nursery, attached to a school or children's centre, you are more than likely going to be asked to pay an unofficial top-up fee.
They'll have to pay to let their little darlings play;
The most common technique is requiring parents to take more than the set number of free hours (currently 15 hours a week), and charging a set fee for the extra time. This extra time can be as little as 15 minutes on top of a three-hour session.
One nursery in south-west London requires parents of three- and four-year-olds to pay £28 per three-and-a-half hour morning or afternoon session. So that's £28 for the extra half an hour's care each day.
At five mornings a week that's a weekly total of £140.
There are also registration fees and one-off administration charges. It all seems a bit unfair, until you realise that the average value of the hourly Nursery Education Grant is only about £3.75 an hour.
Bait and switch, never gets old in politics.

Greeks bearing grub

To dine ala Hayek;
For Zachou, the extra money she makes from Cookisto, about 200 euros (£168) a month, goes towards the supermarket shop.
"It's not all about the money," she says. "I feel we are pulling together in the crisis. Many students are struggling to make ends meet. I've been there… fed up of eating bread and takeaways. It's nice I can provide them with food their mothers would cook and for very little."
It's all part of what Sydney-based innovation consultant Rachel Botsman calls the "revolution" of collaborative consumption, or the sharing economy. Since the global financial meltdown, "people have reverted to old market behaviours that involve trust - swapping, sharing, renting, bartering", she says.
Using the very specific knowledge available only to the participants. Someone should write a scholarly paper...Oh, wait....

Sunday, September 22, 2013

The Greatest Econ Story Ever Told

At least in a movie;

We cannot accept the principle that incompetence justifies dismissal. That is victimization.
From 1959. If you ever wondered why England turned to Margaret Thatcher twenty years later, this museum piece is a succinct explanation--near the end, Peter Sellers rummaging around the disaster that is his home's kitchen is the perfect metaphor for Britain before the Iron Lady upset the apple carts of the trade unions.

Sellers' portrayal of a Communist shop steward in a factory, is pitch perfect, and maybe the best thing he ever did. Also covered in the course of the film, in addition to the peculiar labour relations of the time; the English class system, discriminatory pricing, mercantilism, principal-agent problems, Public Choice Theory (well-focused special interests trumping the broader concerns of the average English housewife).

A film festival of rent-seeking, that if the writers weren't economists already, they should have been awarded Phds in the discipline (the Nobel prize for economic science not yet having been established).

Saturday, September 21, 2013

Scotch eggs not all in one basket

Returning to the Charles Calomiris paper The Political Foundations of Scarce and Unstable Credit presented last April in Atlanta, we answer the question, Why, since both England and Scotland were ruled by the same monarch--William of Orange--at the very end of the 17th century, did England and Scotland end up with different banking systems?
From 1694 through 1825, while England’s banking system consisted of the Bank of England and the small country banks and goldsmith banks that operated on a small scale and under restrictive regulation, a completely different sort of banking system operated nearby in Scotland. The Scottish system, in sharp contrast to the English one, was the very model of competition, innovation, accessibility of credit for the private sector, and stability. In all of those respects, Scotland’s system was a constant reminder to its neighbors in England of what a banking system could be, and what the English banking system was not.
Which must have chaffed for Englishmen, because Scotland was the backward society--which also produced the redneck culture in the American South, via exporting its people in the early 18th century.
Unlike the Bank of England, which initially operated only from its Threadneedle Street headquarters, or the small English country or goldsmith banks, Scotland’s branching banks linked urban headquarters with branches that operated in areas that could not otherwise have supported a banking presence. Scottish banking innovation went beyond branch banking; its bankers also invented interest bearing deposits, the interbank clearing of bank notes, and lines of credit (the so-called “cash credit account” invented by the Royal Bank of Scotland in 1728) that permitted borrowers to arrange for credit in advance and draw upon their accounts as needed. 
I.e., the beginning of modern finance. Made possible because in 1694-95, when the Banks of England and Scotland were founded, while sharing the same monarch, the two countries had separate parliaments. With very different incentives.
At the time that King William was hunting for a way to finance his war against France, Scotland was poor and remote. Little would be gained from creating a monopoly Scottish bank that would help to finance the Crown. At the same time, the creation of such a bank would have required negotiating with the Scottish Parliament. While they generally favored King William over the deposed James II, the Scottish Parliament was not as committed to the idea of financing the king’s imperial ambitions as the Parliament of England. In point of fact, the charter of the Bank of Scotland prohibited it from lending to the Crown without an Act of Parliament—a fact that suggests that the Scottish Parliament was quite conscious of the problems that could arise if the Bank of Scotland were turned into a vehicle of public finance. From the point of view of the British Crown, it was simply easierto adopt a policy of laissez faire with respect to the more distant Scots, and use the Bank of England (as well as other English joint stock companies) to finance the Crown’s war efforts. 
That left the Scots free to concentrate on financing productive enterprise, which they did, to the world's benefit. It wasn't until after Napoleon was defeated--after 130 years of warfare with France--in the early 19th century, that English banking, provoked by a serious banking panic in 1825 got around to what Scotland had been doing.
The English banking system began as a crony enterprise primarily serving the fiscal interests of the State and the personal interests of a small group of well-connected private citizens. By the second half of the 19th century, the political pressures that democratization and industrialization had put on the banking system, coupled with an end to the government’s need for war finance, undid that monopoly arrangement. As the result of fundamental changes in the industrial organization of the banking system (the creation of a nationwide system of branching banks), reforms in the nature of the government safety net policies for banks and borrowers, and a reduced need for the English government to rely on the banking system to finance its wars, by the late 1860s England’s and Scotland’s banking systems had converged. The newly integrated British banking system would enjoy many decades in which banking crises were absent and banks were an important source of credit for the private sector. not a prison, make

Not walls, nor a roof over your head, in Portugal;
One afternoon, sitting inside a boarding house in Lisbon and about to be kicked out after failing to pay the rent, this unemployed man [Carlos Garcia da Mata] with health problems who lives on a monthly pension of 240 euros decided that rather than sleep on the streets, he would prefer a prison cell. So he picked up a stone, walked over to a nearby store, took aim and smashed the display window. Then, as the alarms went off, he sat down to wait for the police.
As he expected, he ended up down at the station. But the judge decided that his offense was not jail worthy, and he was freed two days later. "I'll just do something bigger," he warned.
Which he did two days later, convincing another bank teller to hand over 3,000 Euros, then made his 'getaway' in a taxi he hailed. Not too surprisingly the police managed to catch up with him before he could spend any of his loot.

Which still wasn't enough of a crime to get jail time. He was sentenced to community service, which came with a bed in a shelter.

Tales of two subcontinent cities

If the Indian policeman doesn't like the way you sip your tea, he can take that freedom away from thee (until a judge catches up with him, anyway);
When Sub-Inspector Jadhav asked what Vijav Patil was doing at a tea stall in the town of Kolhapur one mid-morning, he was unhappy with the explanation of "cutting chai" - grabbing a quick half-glass of tea - reports the Times of India. So it seems the officer arrested him under a law that allows preventative detention of someone suspected of being about to commit a crime.
However, Mr Justice Gautam Patel, at Bombay High Court, was not impressed and ordered police to drop the case. "We were unaware that the law required anyone to give an explanation for having tea, whether in the morning, noon or night. One might take tea in a variety of ways, not all of them always elegant or delicate, some of them perhaps even noisy. But we know of no way to drink tea 'suspiciously'," he's said to have ruled. 
Meanwhile, in Pakistan, one can get away with murder. After all, what could go wrong;
The BBC's Aleem Maqbool in Islamabad says releasing one of the founders of the Taliban and a mastermind of the Afghan insurgency would seem a counter-productive step for the Kabul government and the US-led coalition.
But Mullah [Abdul Ghani] Baradar has been seen as one of the few senior Taliban figures who has shown a willingness to negotiate, our correspondent says.
The government in Kabul has been pressing for him to be free.
Been seen, is believing?

Friday, September 20, 2013

We few, we happy few, we band of bankers

Unfortunately, this scepter'd isle wasn't among them according to Charles Calomiris and Stephen Haber.
In England, from 1694 to 1825, the Bank of England was the only bank that was allowed to take the joint-stock corporate form; all other banks had to be organized as partnerships, and were legally constrained to have no more than six partners, which meant that they could not grow to a sizable scale. Banks were also subject to usury laws, which discouraged them from expanding their circle of borrowers(if a bank cannot charge a new client a higher interest rate to compensate for the fact it does not know much about him, it will not lend to that client at all). The English government exempted itself from these usury laws, thereby channeling credit to itself, rather than the private sector. 
England’s repressed banking system had adverse consequences for the private sector, but it served the State well by providing a captive source of savings to fund the sovereign’s war needs. England industrialized in spite of the fact that the government had quite consciously constrained the growth of the banking system in order to favor itself through its exclusive partnership with the Bank of England. This constrained capital accumulation by the private sector during the early years of the industrial revolution, as investment was financed out the pockets of tinkerers and manufacturers, not through bank lending. 
Not only did repressive policies limit bank credit, they also made the English banking system unusually unstable. Prior to 1870 England had one of the most crisis-prone banking systems in the world. The instability of English banking reflected the limits on the size, branching and diversification of banks. The limited private access to credit and unstable structure of English banking produced public complaints, which prompted the government to pursue risk-subsidizing policies in support of the brokered bills market (administered through government pressures on the Bank of England) to make private credit cheaper. The moral-hazard consequences of these policies encouraged excessive risk taking by small banks and bill brokers, which further contributed to banking instability.
Note well those latter characteristics were present in the United States too; unit banking and the Real Bills Doctrine. However, some of England's former colonies fared better. The Happy Six being, Australia, Canada, Hong Kong, Malta, New Zealand, and Singapore. Why?
The crux of the problem is that all governments face inherent conflicts of interest when it comes to the operation of the banking system, but some types of government—most particularly democracies whose political institutions limit the influence of populist coalitions—are better able to mitigate those conflicts of interest than others. 
These inherent conflicts of interest are of three basic types: 1) Governments simultaneously supervise and regulate banks, and look to them as a source of government finance; 2) Governments enforce the credit contracts that discipline debtors on behalf of banks (and in the process assist in the seizing of debtor collateral), but they rely on those same debtors for political support; and 3) Governments allocate losses among creditors in the event of bank failures, but they may simultaneously look to the most numerically significant group of those creditors—bank depositors—for political support. 
The implication, we hope, is inescapable: the property rights system that structures banking is not a passive response to some efficiency criterion, but rather it is the product of political deals that determine which laws are passed, which groups of people have licenses to contract with whom, for what, and on what terms. These deals are guided by the logic of politics, not the logic of the market.
The Six are happy because they've largely avoided allowing the logic of politics to set the rules for their banking sectors.

Game on

And it has been on for centuries, with very different rules for different countries say Charles Calomiris and Stephen Haber. Their book--Fragile by Design: The Political Origins of Banking Crises and Scarce Credit--won't be out til next January, but maybe this paper for the FRB of Atlanta could be stuffed in your favorite economist's Christmas stocking hanging by the fireplace with care.
All modern governments rely on chartered banks as key elements of their financing arrangements. This can be a major problem for banks because governments cannot commit not to expropriate, especially under particularly trying fiscal circumstances. The risk of expropriation is especially high in autocracies, where the check of democratic approval is absent. 
Of course, it's pretty high in the United States too, as Jamie Diamond is now finding out. But, back to Calomiris;
In particular, the mutual dependency between banks and sovereigns contributes to the risk of banking crises driven by problems in state finances. Taking account of political influences that operate through the Game of Bank Bargains also gives rise to shocks that are generally not envisioned in economic approaches to bank risk.
....Of the 124 non-communist countries [we, in our forthcoming book] analyze in [our] cross-country comparison of banking fragility, 41 were crisis-free from 1970 to 2010. Sixty two countries had one crisis. Nineteen countries experienced two crises. One country underwent three crises, and another weathered no less than four crises. That is to say, countries that underwent systemic banking crises out-numbered countries with stable banking systems by two-to-one; and 17 percent of the countries in the world appear to have been preternaturally crisis prone. 
Not too surprisingly the two most crisis prone countries were Argentina--Do cry for thee!--and Congo (Heart of Darkness-land). The other bad boys being;
Chad, Nigeria, the Central African Republic, Cameroon, Kenya, the Philippines, Thailand, Turkey, Bolivia, Ecuador, Brazil, Mexico, Colombia, Costa Rica, Chile, Uruguay, Spain, Sweden, and…the United States.
But, not Canada.

Therein lies a tale...which we'll be getting to shortly.

Occupy Oregon

After you've made a fool of yourself on the street of Wall and found out most people think you're nuts, if you're a young man, you go West;
DW: Two years ago this week you were launching the Occupy Wall Street movement in New York to end the greed and corruption of the richest 1 percent of the population and start a global revolution. Now, two years later, you live in rural Oregon and Occupy Wall Street has all but vanished and according to the latest data the income gap between the 99 and the 1 percent last year reached a new record. What went wrong?
Micah White: I don't think that anything went wrong. The whole world basically had an uprising in 2011 and 2012 that revealed some fatal assumptions that the left had about political change. And one of those assumptions that we had in America was that if you build a social protest movement that had the majority of people on its side and that petitioned the government with a demand that it understood and that it was fair and just and that the government would respond with that and that it would change. But we kind of miscalculated. They weren't willing to respond to that critique. So we see that the government is more intransigent to change. We realized that protests alone won't be sufficient to correct the kind of systemic problems that we have in America. And so I think we are looking to other kinds of ways.
Have we learned anything?
You have relocated to rural Oregon, but still describe yourself as activist. What are you doing these days?
I am the founder of a boutique activist consultancy and we are trying to create the tools and tactics of the next social uprising. America has been too centered on its urban culture and what is going on in New York City, Los Angeles and these financial hubs like Seattle. But there is this much larger, rural America, the America that is really suffering under the economic situation. Where I live is one of the poorest areas in Oregon and what we are going to do is build a social movement that takes power back from this corrupt government and returns it to the people - these people being the poor and hard-working people of America. 
Maybe rural areas are poorer because they don't have enough capital?

Better late than never

Germans are finally getting around to finding a little spielraum on their own, rather than depend on government to take it for them. The world can only hope that works out for them.
Political topics have hardly made it into people's everyday life in Germany. Only one in five Germans has actively looked at the issues raised during the election campaign, according to a recent survey by the Allenbach Institute.
Political scientist Robert Verkamp finds that trend worrying. What he's most concerned about is not whether one in five or one in four Germans stay at home come election day. Germany's voter turnout is still relatively good compared to other countries in Europe or worldwide. What he sees as a big problem is that there is a certain group of people who don't cast their vote at all anymore. “The non-voters we're dealing with are people who have quit active participation in democracy for good,” he explained. He has compiled a study for the Bertelsmann Foundation, and says the results are clear: There are only very few non-voters who do not cast their ballot out of protest – as a way to make a political statement by not voting. “Those who increasingly don't make use of their right to vote tend to be socially weak and less educated.”
Verkamp says it's a dangerous trend if that share of society is not represented in the political system anymore. He is afraid that “Germany is inching towards a socially divided democracy.” Those non-voters are often not at all interested in topics, such as the NSA spying scandal or the eurozone crisis.
Nor who owns small countries, not so far away, of which they don't want to know anything? They prefer to stick their noses only into their own business?  Whew!

Don't get around Afghanistan much anymore

But before the Russkies invaded, not only did Duke Ellington, but so did other artists, including the Joffrey Ballet;
The Kabul concert was part of a longer tour sponsored by the US State Department - jazz diplomacy playing out against the backdrop of the Cold War.
As early as 1953 the American jazz giant Dave Brubeck had himself played Kabul. His visit, he said, had inspired his hit Nomad on the album Impressions of Eurasia. Ellington's tour took in Egypt, Iraq, Jordan, Iran and Lebanon, where, according to Ellington, "those cats were swinging". The band had reached Turkey on 22 November 1963 when the shocking news came that President John F Kennedy had been assassinated.
In Afghanistan the old order was changing too. This was still a poor country of farmers and herdsmen, but new ideas were in play at least among the elite. Hemlines were going up and hair was going higher. The British supermarket Marks and Spencer opened a branch in 1960. The old absolute monarchy was reforming and Kabul University was thick with factions. Islamic, communist, modernist and other groups began to crowd the growing political space, each with its own idea of what it meant to be Afghan.
Included is a short video of Duke, in which he plays Satin Doll with a house orchestra. Those were the good old days.