Monday, March 30, 2015

Letter to friends...

...I wrote this short note to some friends as we were waxing philosophically about the future of the world and this republic.

The power accumulated in the past 2 decades by our G has caused some sort of shift away from justifications of Rule based on the Scotch and English (Locke, Burke, Hobbes) philosophers who informed our Constitution.  Namely, that the State is some temporary Lessee of power with the people as Lessor, with the lease itself subject to immediate revocation.

So its fascinating to me that the SCOTUS, comments by our Congress, POTUS, etc. have gravitated towards framing the G as permanent "protector" with its power deriving from a modern version of the Divine Right of Kings (the modern version being rooted in location and surveillance technology)...a much more Germanic perception of sovereignity in that the people are presumed subordinate.

And of course, I have to remind myself that the notion of competition between Nation States is a temporary shuffling of the cards.

Empires are about to make a comeback here.  Perhaps they already have.

Tuesday, March 17, 2015

If at first you don't succeed...

...try, try, try, try, try, try, try, try, try and try some more...again.

Governor Haruhiko Kuroda said he couldn’t rule out the risk of consumer prices falling in Japan after the central bank on Tuesday maintained record monetary stimulus.

The BOJ kept a pledge to expand the monetary base at an annual pace of 80 trillion yen ($660 billion

The good news.

The Recapitulator (despite some crass attempts to appropirate my blog by certain spiritually based entities) is an unaplogetic classic liberal steeped in the history of individual rights contrasted to the powers ceded to central governmental authority.

Thus, it is with great satisfaction that the manly arts remain a source of curiosity, expertise, and fulfullment to another generation of men and women who believe that action is the corrollary of a useful mind.

Monday, March 16, 2015

Worth watching.

I have criticized the NCAA on previous occassions as it clear there is a cartel and/or monoploy on Football and Bastketball players which leads to absurd results perverse incentives.

This video from popular (and funny!) social critic Mr. John Oliver is worth watching as it explores most of the issues in an entertaining (if albeit profane) way.

The lack of a market for obviously valuable services has created one of the most rediculous web of regulations regarding social interactions in the history of man.  The NCAA handbook on player behavior with respect to gifts, money, favors, etc. is nearly 500 pages long.

And as a student of propaganda, I especially enjoyed NCAA President Mark Emmert's assumption of his own conclusion with this gem:

"Converting a student to a paid employee is something entirely antithetical to the whole principle of intercollegiate completely changes the entire notion of what college sports is about."

Note especially that this simply assumes away the value argument of the players services by referencing this silly notion of the virtue of amateurism, when the most cursory examination of the control exhibited by the Universities and their agents over the players demonstrates otherwise.

What a wonderful example of how far afield fairness and decency can derail once the accountability of the market is taken away.

The One Ring.

The article implies that U.S. financing is dependent on foreign purchases of U.S. debt, which we know is a misconception.  However, this is not all about yields.  The global utopia of ONE fungible currency is not feasible...the Dollar is the global unit of price.  And, despite all the silly alarmist notions to the contrary ("the dollar could lose 90% of its value overnight, inflation!  Doom! Eschatology!  Buy Gold!) remains the One Ring that guides the global economy.

One of the recurrent themes of this blog is reminding the reader that displays and demonstration of power supercede accumulations of accounting units.  The value of the dollar is derived from the United State's absolute monopoly on security services for the world.  No other nation comes close to providing these services.  No other nation that spends a significant portion of its GDP on weapons has as peaceful a domestic population.

It is remarkable that some Economists still fear weaker nations can "bankrupt" the U.S. by selling Treasuries in some catastrophe scenario that would remove the variable of global security from their analysis.

Japan has since built a stake of $1.23 trillion, making it America’s second-largest overseas creditor, just behind China’s $1.24 trillion.
For the U.S. government, maintaining Japanese demand in the $12.6 trillion market for Treasuries is more important than ever, particularly after China pared its own holdings last year by the most on record and as the Fed prepares to raise rates.
The good news is that Japanese purchases are poised to accelerate. Of the $500 billion that investors will pull from Japan’s debt market to put abroad through 2017, about 60 percent will flow into Treasuries, said Andre de Silva, HSBC’s Hong Kong-based head of global emerging-markets rates research.
Much of the allure has to do with the U.S. tightening monetary policy at a time when more than a dozen nations around the world are cutting rates or increasing stimulus to boost growth. The European Central Bank this month followed Japan in buying government bonds to pump money into its economy.

The balance sheet...

...of the world on display in the news.  Arms deals are always and everwhere a political statement.  In this case the Middle Kingdom is duplicating the tried and true method of providing weapons with political considerations attached...on both sides of the transaction.

This balance is exemplified by Saudi Arabia, a country with the population of Texas, becoming the 2nd largest importer of large arms in the world.  They don't need the arms.  They need the alliances that purchasing the arms pays for.

China’s exports of weapons rose by a 143% between 2010 and 2014, making the world’s second largest economy the third largest arms exporter behind Russia and top dog the U.S.
The Asian superpower rose above Germany, which had held third place until 2010 but saw its exports reduce by 43% over the same period, according to a report Monday from the Stockholm International Peace Research Institute.
China also remains one of the top 10 importers of arms, but saw that number decrease by 42% over the past decade, the report said. The most significant jump in arms exports came among nations in the Gulf and the Middle East, with Saudi Arabia becoming the second largest importer of major weapons worldwide.

Monday, March 09, 2015

The palliative that is QE.

This entire excercise in signalling QE and framing it as "the tool" to solve the myriad EU banking problems is bordering on comedy.

When policy makers resolved last week to start purchases of 60 billion euros ($65 billion) a month in sovereign debt and other assets, they failed to agree on how to share losses from buying bonds with negative yields, according to three euro-zone central bank officials. National central banks might try to avoid such securities for now, according to one of the people, who asked not to be identified because the talks are private.

Tuesday, March 03, 2015

The Falcon pays homage to the Falconer...

WASHINGTON (MarketWatch) — Presidents should get the power to declare economic emergencies along the lines to declare war, said former Federal Reserve Chairman Ben Bernanke on Monday.
While the Fed retains the authority it needs to respond to another financial crisis, financial crises “tend to have a certain chaotic element to them,” that no one can predict, Bernanke said during a panel discussion sponsored by The Hutchins Center on Fiscal and Monetary Policy.
In light of this, it might make sense to give “the president some ability to declare emergencies or take extraordinary actions and not put that all on the Fed,” Bernanke said at a conference. “The constitution gives the president significant flexibility to respond to military situations,” in part because they are chaotic, he noted.
“I am sure it is not politically possible, but it would be worth thinking about,” the former Fed chairman said.

All opposition...

...pushed through the floor.

A leading Russian opposition politician, former Deputy Prime Minister Boris Nemtsov, has been shot dead in Moscow, Russian officials say.
An unidentified attacker in a car shot Mr Nemtsov four times in the back as he crossed a bridge in view of the Kremlin, police say.
He died hours after appealing for support for a march on Sunday in Moscow against the war in Ukraine.
Russian President Vladimir Putin has condemned the murder, the Kremlin says.
President Putin has assumed "personal control" of the investigation into the killing, said his spokesman Dmitry Peskov.
Investigators said the murder could have been "a provocation aimed at destabilising the country".