Tag: Capitalism

Greenspan being quite remarkable!

Fingers crossed this becomes a key political statement.

I am indebted to Baseline Scenario for drawing my attention to a recent article in Bloomberg.  Greenspan is voicing what many regard as so obvious we wonder why the present US Government haven’t been pushing for this for some time. (And if you want the answer to that question, read this)

Anyway, in the Bloomberg story Greenspan says:

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil — so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

Breathtaking!

And Greenspan goes on to say:

“Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those greenspanwho should be shrinking, it undermines growing standards of living and can even bring them down.”

Amen to that!

By Paul Handover

Insulting us?

Is this, in the end, how our Governments are treating us?

Yves Smith runs the incredibly successful Blog, Naked Capitalism.  Frankly, I have no idea where she finds the time to put together her Posts, many of which are constructed on the back of in-depth research.

On Friday, 16th October there was a Post which has huge implications.  It is all about Access Journalism.  It needs to be read.  Here’s an extract.

Let us start with the cheerleading in the media over Wall Street, and in particular, Goldman earnings. Matt Taibbi, in “Good News on Wall Street Means… What Exactly?,” tells us why this is so distorted:

It’s literally amazing to me that our press corps hasn’t yet managed to draw a distinction between good news on Wall Street for companies like Goldman, and good news in reality.

I watched carefully the reporting of the Dow breaking 10,000 the other day and not anywhere did I see a major news organization include a paragraph of the “On the other hand, so fucking what?” sort, one that might point out that unemployment is still at a staggering high, foreclosures are racing along at a terrifying clip, and real people are struggling more than ever. In fact the dichotomy between the economic health of ordinary people and the traditional “market indicators” is not merely a non-story, it is a sort of taboo — unmentionable in major news coverage.

The press has been on a downslope for at least a decade, as a result of strained budgets and vastly more effective government and business spin control (and it was already pretty good at that, see the BBC series, The Century of the Self, via Google video, for a real eye-opener). I met a reporter who had been overseas for six years, opening an important foreign office for the Wall Street Journal. He was stunned when he came back in 1999 to see how much reporting had changed in his absence. He said it was impossible to get to the bottom of most stories in a normal news cycle because companies had become very sophisticated in controlling their message and access.

As I said, please read the Post in full.  Oh, and I see Baseline Scenario picked up on this as well.

By Paul Handover

Insulting us, postscript

Just a few figures that underline reality.

US rent indexes declined in September. Last time this happened was 1992.

US Consumer Price Index fell 1.3%, year on year, in September 2009. Note that it bottomed at -2.1% y/y in July 2009, making it the largest annual contraction since 1949.

September’s US food prices fell (-0.2%) in September, the first annual decline in over 40 years.

US industrial production, as of August, was down (-10.7%) compared to August 2008.

Just a US problem?

Japanese industrial production, as of August, was down (-22.7%) compared to August 2008.

Britain’s industrial production, as of August, was down (-9.3%) compared to August 2008.

Eurozone area industrial production, as of August, was down (-15.9%) compared to August 2008.

Meanwhile the banks steam ahead reporting huge profits ……

Crazy world!

By Paul Handover

Remarkable people: Guy Watson

Down to earth integrity!

GUY-WATSONBrought up on a farm, working as a management consultant and returning to farming, Guy Watson brought something from outside and applied it to a “field” in which he had a passion.

After starting an organic farming business from nothing, and after many trials and tribulations, he latched onto distribution by delivering food boxes directly to customers. The business grew until he was personally delivering boxes weekly to 800 customers; nowadays the business serves 40,000 customers weekly through a network of co-operating growers and franchised distributors and has revenues over £30 million ($45m) per year.

Read more about Guy Watson

The truth about this crisis – and it isn’t pretty!

The coincidence of events

Today started like most days in that after a breakfast with Jean it was time to switch on the PC and review the news that had come in over night and think about what material might be appropriate for the Blog.  But that’s as far as it went for a normal day.

Because a number of items came together in a way that left me reeling.  Not because it was necessarily new information but because together they represent the most compelling evidence as to why this economic crisis happened and, more importantly, the terrible likelihood that our leaders aren’t go to fix it and that the future will bring an even worse calamity.

Read more about this critically important subject

Health Care vs. Health Insurance

Being clear about the terms Care and Insurance when it comes to US health.

The issue for the day is the distinction between health CARE and health INSURANCE.

As we all know, they are not the same thing.  But, as we all have noticed, the two are often confused and the distinctions ignored by many, if not most, in the media, Congress, and the White House.

Health Care and Health Insurance are certainly interdependent. But it helps first to separate the two and take each in turn.

Let’s start with health insurance.  And let’s think of it first as just any “insurance,” like a policy on your house or car.

What is insurance?  It’s a contract that you buy to limit your losses if a bad event happens, even though the likelihood of the bad event occurring is usually very low.

Read more about this important issue

Very few really saw this crisis coming; are we still in the dark?

Who really understood the forces of destruction building up in the global economy?

(This Post is longer than usual but doesn’t lend itself to being divided into multiple Posts – trust it is worth the read.)

Part One – How investing in the 80s was so hit and miss.

My education with respect to the sound management of one’s wealth came from a propitious mistake by a global insurance company, one of Britain’s largest insurance companies as it happens.  Here’s the story.

Read the rest of this Post

Another one of the few who saw the crisis coming.

Steve Keen – Associate Professor of Economics & Finance at the University of Western Sydney.

I know didly squat about economics.  I know a lot about the effect of economics in the sense of government policies, of inflation and debt, international trade and much more only in how they have impacted me over a lifetime of working, buying homes, raising a family, running a couple of businesses and now contemplating retirement.  I can sum up my personal strategy – LUCK!  I have been lucky.  The other Post out today shows an example of that luck.

Frankly, economists haven’t figured widely in my role call of people that I admired, probably because I don’t really understand what they are talking about.  (That’s why this Blog has a real live economist as part of the team, to help educate me and all the rest of the readers who come to this Blog!)

The other Post on this subject spoke of David Kauders, who clearly saw it coming.  Now here’s an economist who also saw it coming, Steve Keen.

Read more about Steve Keen

Chancellor Angela Merkel

Important lessons from former East Germans.

Have you ever noticed how the most ardent supporters of capitalism and free markets are those who’ve experienced a world without them?

How those who speak out most poignantly against health care reform in the U.S. are those who’ve experienced nationalized health care?  No?

Angela Merkel
Angela Merkel

If you can, then, take a moment and think back to the coverage, the news, the sound bites.  Take a look, perhaps a second look, behind the headlines and I venture that you will find endless examples of this phenomenon.    It is those who have done without freedom of choice, free markets, and self-determination who treasure it most, who most understand its value, who’ve lived with the consequences of its absence.

We need look no further than Chancellor Angela Merkel and her recent victory in Germany’s national election.

Chancellor Merkel grew up in communist East Germany and is now leading Germany out of recession with tax cuts and reduced government spending.

We should be listening to what the world is telling us.  Very hard, and very quickly.  We don’t want to have to lose it before we appreciate what we have.

By Sherry Jarrell

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The smallest hint of oil surplus leads to a real fall in oil prices

The fragility of the economy shows in many areas.

Last Thursday, the mere hint of a fairly insignificant surplus in U.S. oil reserves pushed down current oil prices and energy-related futures and other speculative plays.

Oil prices have fallen sharply as weak US home sales data and high US oil inventories prompted doubts about a potential recovery in fuel demand. Source: BBC News, 24th September.

Can you imagine the reaction to an announcement of a new source of U.S. oil reserves?  Or of renewed off-shore drilling capacity?  Relaxed EPA standards? Additional refinery capacity?Oil field

Our energy prices would be cut in half and we’d be so much less likely to war with oil-rich nations on whom we now depend for the functioning of our economy and who, indirectly or not, limit our economic and personal freedoms.

By Sherry Jarrell