Subcrime-2 is paneuropean. Attila returns!

We have this blogpost IN ITALIAN, where we reifly argue why and how a  Paneuropean Subcrime-2 is already on the move, and no one else can stop it, TOO LATE. A number of quite interesting consequences, in a von Hayek Angel sense:

an Angel comes to make you pay your wrongdoings, and also those of the Prime and Finance Ministers, or CEO that came before and believed in so called “neo-liberal” (where liberty has no room) bullshits and irresponsibility,  or “bonanzas” and bubbles.

Austria and Sweden, in the West, will be killed by the Eastern Tsunami; they earned mountains of extra-profits, “bonanza” from the transition to capitalism in their neighbour countries. Now they’ll lose everything, and much more than that.

UniCredit is already a re-nationalised Bank (a Guinness: its Credito Italiano component, will have been rescued in both Great Depressions: 1934 and 2009). Aready,  in the market expectations,  otherwise its Friday closure would not have been  but epsilon.

– Let us bet, on InTrade and elsewere, about the parity  € = $ before … (I wan’t tell you my bet date, but I already gave you here A LOT of info, and based ON FUNDAMENTALS; better: ON DYNAMIC ATTRACTORS; as for the date, monitor InTrade, ’cause I move some small capitals on those future markets, and I might make critical mass…).

INCIPIT of the last grapes-of-wrath post:

Svelato il Mistero di Scilla e Cariddi: perché non si fa il Ponte, e  non è solo colpa di Profumo.


1- TEMA.

Erano partiti, i Grandi Banchieri Oligopolisti di Austria, Italia e Svezia in testa, alla conquista dei confini est dell’Impero Europeo. Si sono fatti concorrenza oligopolistica della peggior specie  a botte di credito facile: E  FU SUBCRIME-2, quello tutto pan-europeo. Effetto Frontiera Far East Europe.
Noi lo sapevamo da anni come andava a finire, sia all’Est che nelle Banche Vetero-Fordiste e Ribollite dell’Ovest (quelle che hanno legato a quel sasso che rotola  il loro Destino), e:
1) l’incoscienza di Mr. Profumo ci ha sempre fatto tanta tenerezza (una volta ho provato  anche a dirglielo, eravamo in Assindustria a Vicenza, ma lui non mi ha capito ed ha tirato dritto);
2) l’allegria con cui TUTTA l’Europa sta precipitando nel burrone, insieme sapendolo e senza  saperlo, è molto Pirandelliana. La Merkel sta per essere sbalzata di sella solo perché c’è la crisi (il VERO motivo per cui Mc Cain non ha fermato Obama) e si comporta di conseguenza (decidendo le cose  pro domo sua). Non c’è un solo uomo politico in tutta Europa, che pensi all’Europa. NON UNO SOLO: se ora affonda, ed era comunque inevitabile date le premesse, se lo merita.
Come facevamo a saperlo?  Elementare, Engels. Da una traccia d’indagine nei racconti ironici  e divertiti di Marx, specie nelle corrispondenze con Engels sul Tribune (più vive dei suoi Ricardismi teorici, che spesso sbagliano premesse e conclusioni): di  volta in volta, Frontiere  alimentano i cicli espansivi.

Ed il sistema  più instabile che fu mai creato, funambolizza così la sua lunga durata.

Obama New Deal, phase 1

Feb. 17 update – The final stimulus bill allocates $ 790.6 bn:  the CBO estimates tax cuts will amount to $ 288.5 bn and public expenditures about $ 500 bn (wsj) for a total est. cost of $ 787 bn. Today the President signed the bill and wrote us

enzo fabio —

Today, I signed the American Recovery and Reinvestment Act into law.
This is a historic step — the first of many as we work together to climb out of this crisis — and I want to thank you for your resolve and your support. (…)
I’ve assigned a team of managers to oversee the implementation of the recovery act. We are committed to making sure no dollar is wasted. But accountability begins with you.
That’s why my administration has created, a new website where citizens can track every dollar spent and every job created. We’ll invite you and your neighbors to weigh in with comments and questions.
Our progress will also be measured by the tens of thousands of personal stories submitted by people who are struggling to make ends meet. If you haven’t already, you can read stories from families all across the country:

Your stories are the heart of this recovery plan, and that’s what I’ll focus on every day as President. With your continued support, we’ll emerge a stronger and more prosperous nation.

Thank you,
President Barack Obama

On the eve of the 200-Charles Darwin Day, the US House and the Senate have finally agreed on the mega-stimulus package, which President Obama might already sign next Monday,  February the 15th, i.e. 25 days after entering the White House (1/4 of the early 100 days, when the Beauty versus the Beast – Apocalypse Now – fight will B decided upon in the short term).

Mainstream economists, with whom this time we are tempted to almost agree once (but we have other priorities, since it is not OUR problem to save Capitalisms, but their victims), converge with the great, sublime Paul Samuelson (self-defining himself a Centre-Left, moderate Keynesian), by saying that some moderation and “watering down” (in the Congress revision) of Adm. Obama’s proposals is a first best, since  -e.g. – a demand – only perspective  is balanced with less unilateral supply-side  considerations as well (on this, our friend Michele Boldrin is writing quite important and interesting, fresh things on NfA – Noise from America blog, since early this year; we will discuss them, here and on NfA at length, soon).

Let us say that this is the state-of-the-art in academic Political Economy, and it is symbiotic with what happened in these hard Congressional fights about the final compromise, during the last weeks. One day, just symbolically Sen. Mc Cain presented a  motion to cut the stimulus to half. It comes out with a great momentum, a variety of tools and targets (see the Summary below).

A HISTORIC BILL, starting the Obama New Deal long series, in the next few years.


Congress Makes a Deal

Congress Strikes $789 Billion Stimulus Deal

Historic Bill Would Spur Road Building, Give Businesses Tax Breaks, Expand Broadband Access; Final Passage Expected Soon

wsj summary table:

Focal Points of Stimulus Package

Key goals and what indicators to use to gauge success.

Business confidence
Steps: Tax breaks for businesses, appropriations.
Measurement of success: Stock market results and management surveys.

Low income/unemployment aid
Steps: Benefit checks, foodstamp increases, health insurance assistance, Medicaid.
Measurement: Benefit rates

Consumer spending
Steps: Tax breaks to workers.
Measurement: Retail spending, consumer-confidence surveys.

Job creation
Steps: Infrastructure spending, aid to states.
Measurement: Unemployment.

Economic Growth
Steps: Spending, tax breaks.
Measurement: GDP.

Please also note that:

The stimulus accord is a major win for the high-tech industry, which will receive billions of dollars in subsidies to expand broadband access to rural and other underserved areas and a huge infusion of funds to computerize health-care records.

The latter is a very important point, since it marks much more, than just Silicon Valley getting repaid for the EARLY support to “Sen. Nobody” (see on this Giuliano da Empoli 2008, already a classic and comprehensive book on Obama, in Italian; and our various, often updated  static pages on Obamology in

On the other hand, it is a strong counter-tendency, a counter-factual to the MARKET SELECTION PARADIGM – e.g., theorised in Italy by the no.1 telecom expert, prof. Enzo Pontarollo.  He argues that it is not so bad that the Schumpeterian effect (sometimes called “The Invisible Foot”) and the credit crunch crisis SELECT among very expensive digital highway plans, and allocate credit only to the more rentable ones, where effective demand will repay faster, at least a part of the infrastructure investment.

This is such a complex, multi-dimensional issue. Let us just say  this, as a complement and further qualification to the important, and  theoretically well-rooted Prof. Pontarollo’s argument.

Japan (as far as I know,  the main great and still powerful State doing this) usually doesn’t bother much about “the digital market” plans selection – perhaps also because Japan’s regional economies have been levelled-up during the last half century, and suffer much more from congestion than regional, or rural\urban imbalances. They just shape and anticipate effective market demand years, or even a decade before, laying down  futuristic cooperative-public digital highways (namely in the New Generation Networks, lately).

But if the Nippon State is  now on the defensive, such programs will be delayed for many years, and this anticipatory effect will be lost. In a strong “neo- Keynesian & neo- Schumpeterian” mixed, eclectic and PRAGMATIST (“Nudge“) approach, the Obama’s New Deal starts now doing what Japan has problems to keep up to. This is another Invisible Foot effect: not across regions but across Nations: the US just elected Obama, while the Nippon political system is in search of a “2nd Republic” trajectory since 20 years ago, with no viable, longterm solution yet.

They desperately need either a Berlusconisan, or an Obamasan.

This stimulus Bull hitech component, has little to do with FDR, and we are happy about that: since you know (or at least, regular blog readers do) that we fully agree from the left with the “right” critique to FDR  –  stemming from the careful Amity Shlaes historic reconstruction of what really happened during THAT New Deal 8o years ago (on this precise point, we take a small bit of distance, a degree of freedom  from Obama’s public image and self-representation). In any case, ce n’est qu’un debut.

goto subcrime social science

On Palms’ Sunday, the Fed said: back to the 1930s

More in our special report pdf (May 3 updated v.)subcrimesocialscience080503

Palms’ Sunday, we finally realised that a domino effect, potentially self-destroying for most banks and capitalisms was there, at hand and sight (had perhaps Keynes understood something even Marx had missed?). Well, but, if the ‘30s are back, the two greatest John (Steinbeck and Ford) are back as well: we’ll collect and tell the story of every single proletarian, of all the Joad and Ortiz families. Nikola Chesnais will help us to turn the films, since John Ford is his paradigm, and Ford filmed Grapes of Wrath immediately after the book (1939-40).This film was the most popular left-leaning, socialistic-themed film of pre-World War II Hollywood“. At Washington Post, BRIGIDA SCHULTE already started telling us about Gloria Ortiz and her husband: we love them now: they don’t American Dream any more; we dream to encourage and help them. The Joads, the Ortiz, and new gold rush prospectors. FT March 29, p.1: Soaring prices spark fresh rush to find Ca.’s forgotten gold.

subcrime social science is an art

subcrimesocialscience was a 20 pp. (now 30) w-in-p survey, adopting the de(e)pre(ce)ssion Political Economy paradigm (Ricardo- Marx, Keynes- Kalecki, Schumpeter- Minsky- Perez, Aglietta and Chesnais). It briefly reviews, in its early pages, what economic sciences know on ongoing:


Minsky Magic Moments, since Summer 2007

Minsky Financial Meltdown, we are on the border of

2008+ deep&long recession, endowed with a depression potential

FAQ. Might Capitalisms succeed where Socialisms failed: to help us coping with them, undermining and overthrowing them? Then it deals with policies and recession chronicle highlights. Here is a summary on economic policies.

” De(e)pre(ce)ssion 7 capital virtues: remedies for the Minsky Meltdown.

1. Minsky won the bet versus Chicago. The latter did not survive to the great Milton Friedman for longer, and finally died at dawn, Friday March 14, 2008 (on Bear Stearns’ day: p.15 here).
2. States will massively intervene, after decades of anti-State mind washing: how effectively?
3. After March 14, oil into firing debates on credit&fiscal policies: moral hazard of rewarding – again – those fucking rentiers, vampires that already gained 6-0 the early sets of the subprime match.
4. Leaders’ war. March 29 FT (Not yet time for a bail-out of banks) versus March 22 The Economist (Wall street’s crisis): both are over-Bullish, but policies clash. FT delays a bail-out fiscal policy, conditional upon sacking the rentiers (“it should do so only over the dead bodies of shareholders and management” – falling in love with FT). The Eco. advocates hyper-fiscal policies, erecting floors “either in housing, or in asset-backed securities”. FT objects housing prices must stop to a floor before, otherwise you can’t price securities. At 19th C The Eco., they found a Hegelian synthesis: neo-Leviathans will buy the open and the foreclosed apt.s: almost everything. Socialist times.
5. All this policy makers (hyper-)activism is and will be part of the process (Roudini’s blog, Feb. 8), in a self-referential crisis system (Niklas Luhman), where no one is sitting outside the system. As in an ancient Myth, financial accelerators ate Bernanke himself: their father.
6. Minsky’s call for an institutions-specific and even a capitalisms-specific analysis (note 10) might be the compass exploiting the fixed point of an endogenous institutions axiom.
7. The latter fits with self-referential systems theory, and this couple is full of well known (in their proper cognitive, policy theoretical domains), important consequences.”

On Minsky’s suggestions,

see monetary policies in:

Wray 2007; Galbraith,

Giovannoni and Russo 2007.

Please note – from the 7 points above – that we converge much with Roubini, although we get there by different arguments and ways. Knowing already, by him, the most likely end of the story (script of Grapes of Wrath 2: by H. P. Minsky).

Grapes of Wrath

GRAPES OF WRATH no.1: rent the video (you better buy it, and read again Steinbeck’s book) and take a look at
No.2 has many locations across and beyond America, e.g.:
a) subprime ones in …
b) tomatos picking by migrant people nearby Naples and in South Florida
c) rural migrants building up Shangai, Shenzen
From the new, static “ACCESS PAGE TO ALL THE SUBPRIME SCIENCE” (this is marketing), you enter a 20 pages pdf, a guide to essential knowledge, and carefully selected readings on the financial meltdown that threw US people (mainly black, but also latinos) out of home, and is about to produce  millions of unemployed and new slaves across labour markets.
Grapes of wrath no.2.