Cavaliere Dimezzato e Tremonti affondano l’Italia

L’ITALIA POTREBBE USCIRE DALLA CRISI ECONOMICA SOLO CON UN eventuale IMPEACHMENT DI BERLUSCONI E TREMONTI.

L’Italia e’ rimasto l’unico paese industriale in crisi a  non avere alcun piano di sostegno per l’economia reale, Mean Street. E così sarà per tutta la severissima recessione 2008-2010: nel grande paese più in ritardo d’Europa, e l’unico nell’OECD a produttività cronicamente stagnante, la recessione sarà tremenda, sia per famiglie che imprese. Si salveranno solo alcune banche, pur pagando pegno.

L’errore concettuale di Tremonti e’ stato quello di aver fatto una Finanziaria di tagli generalizzati e generici della spesa che moltiplicano e premiano gli sprechi, perche’ rimandano alle calende greche (come hanno fatto quasi tutti i Governi precedenti, di sinistra e destra: Tremonti ha già governato un tot) una riforma della PA.

Vi e’ una  continuità di governi irresponsabili che calpestano gli interessi delle prossime generazioni: da Craxi della Milano da bere degli anni ’80, al suo degno erede, il Cavaliere Dimezzato (che ad ogni conferenza stampa, anche ieri con Lula, ribadisce che Barack Obama e’ ab-Bronxato). Il risultato accumulato e’ un debito pubblico superiore al PIL, che risale ad ogni governo di destra, ed oggi ci costa uno spread dell’ 1,2% sui titoli di Stato tedeschi, corrispondente ad una aspettativa realistica (il 15% nel prossimo decennio) di possibile default,  fallimento dell’Italia come l’Argentina.

Evitando deliberatamente ogni manovra strutturale sulle entrate, le evasioni e le uscite pubbliche (e blaterando di federalismo sprecone !!!), questo governo lascia il Paese senza risorse per un deficit-spending Keynesiano,  che e’ la linea perseguita da tutti, dalla Cina agli USA.

Cosa farà la magnifica coppia nei prossimi mesi?

1. già fatto: garanzia alle banche – ma bisogna vedere come farebbero a salvare davvero  una grossa banca

2. imprese: solo qui c’e’ trippa per gatti – entro Natale vi sarà un grosso trasferimento fiscale

3. famiglie: hanno sprecato €2.4 bn togliendo l’ICI ai ceti abbienti – ora L’ITALIA E’ L’UNICO PAESE AL MONDO A  NON SOSTENERE I CONSUMI; poche briciole senza effetto, niente de-tassazione della 13.ma

4. spesa pubblica: colpisce a morte le PMI pagando i fornitori a 12-24 mesi anche in questo momento di credito inaridito; nessuna riqualificazione volta a mantenere i livelli di servizio aumentando l’efficienza; le pochissime risorse disponibili andranno ad opere pubbliche utili ed inutili. Il simbolo del Cavaliere-pensiero e’ l’inutilità assoluta ed il danno emergente di un Ponte sullo Stretto dei Terremoti.

5. fallimenti: Alitalia e Tirrenia continuano ad essere macchine mangia-soldi pubblici, senza via d’uscita in vista. Alitalia non decolla,  non ha ancora un partner straniero, e costerà all’erario alcuni miliardi di € in più della soluzione Prodi-Air France. Tirrenia verrà privatizzata confermando l’AD che l’ha portata in deficit cronico dopo 24 anni di malgoverno.

Published in: on November 12, 2008 at 8:58 am  Comments (1)  
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No rally: full recession, fears of deflation and the spectre of Marx

happiness: http://www.freewebs.com/socialistcommonwealth/bralds_marx-s%20(2).jpg sadness: Tokyo stock exchange on another Black Friday, Oct. 24 2008 (AP)

ITALIAN SECTION

31 ottobre. BREAKING NEWS: – rottura tra CAI e piloti, l’Alitalia ad un passo dal fallimento. IN TAL CASO NON  SUBENTREREBBE NEMMENO UNA COMPAGNIA EUROPEA, ma si venderebbe a pezzi. Colannino a colloquio dal Premier (ore  7pm) – Draghi: non deve essere l’EURIBOR  il tasso di riferimento per i mutui casa

DOPO IL MASSIMO. Speriamo che me la cavo.

La riuscita manifestazione PD dei 750.000 del 25 ottobre, e successivamente lo sciopero generale della scuola,  alzano – ceteris paribus, benche’ non di molto – le chances che rinasca un’opposizione in Italia, quindi la lotta di classe possa ridurre il peso della crisi sugli oppressi, i  pensionati ed il popolo bue. La c.d. “sinistra di governo” taccia per sempre, dopo che mentre stava per crollare il capitalismo finanziario, ha cercato invano di far carte false e convincere  i lavoratori di mettere le loro liquidazioni e pensioni nei FONDI BIDONE. Anche questi Prodi ministri e sindacalisti hanno la faccia come il culo. Per fortuna c’erano i sindacati di base a fare contro-informazione.

ALAN: LA FACCIA COME IL CULO

Per la prima volta sotto il fuoco di fila del Parlamento, alla Commissione Oversight and Government Reform, Alan Greenspan (resp. No. 1 al mondo del crollo del capitale finanziario) fa finta di fare auto-critica ieri: fu “a flaw” non regolare i derivati. MA IL BANCHIERE CRIMINALE DICE PURE IL CONTRARIO:

Greenspan, responding to questions, said only “onerous” regulation would have prevented the financial crisis. Stifling rules would have suppressed growth and hurt Americans’ standards of living, he said. (source: Bloomberg)

IL BANCHIERE BASTARDO, LA FACCIA COME IL CULO, ha sostenuto ancora una ricetta auto-regolativa delle sue, che hanno governato a colpi di bubbles, e stanno portando il mondo alla fame. Quando una finanziaria emette securities, se ne deve tenere per se una certa quota, così e’ incentivata a dare il giusto prezzo al rischio.

I PIFFERAI DI BREMA

Invece il nostro vituperato Cavaliere, in una delle sue 10.000 smentite aveva azzardato che si potevano chiudere i mercati: ebbene, lo dice pure – a Bloomberg – Roubini che se ne intende. Il Cavaliere, ormai lo sappiamo, vale sempre PRIMA della smentita. Il problema e’ che con lui, il geniale Brunetta  e Hood Robin Tremonti al governo vale la

LEGGE DI MURPHY

“Se qualcosa può andar storto, la catastrofe e’ assicurata”. Mentre l’ ultimo governo Prodi tergiversava, questi ci potrebbero portare dritti dritti …

CROZZA-DOLLARO

A share trader behind a false one dollar bill (much similar to the one alive, you see at Crozza Italia TV show) at the German stock exchange in Frankfurt, October 24, 2008.   REUTERS/Kai Pfaffenbach

CHRONICLES FROM A RED PLANET: MARX

Oct. 27 Reuters   Korean Confederation of Trade Union Vice-President Ju Bong-hee takes part in a protest against the ongoing meeting of the Global Forum on Migration and Development (FGMD) as he is blocked by anti-riot police in Manila, Philippines, October 27, 2008. The number of undocumented migrant workers across the world is expected to rise in the face of the global financial crisis, trade unions and business leaders warned on Monday, urging governments to respect labor rights.   MIGRANT ARE NOT COMMODITIES: REUTERS/Romeo Ranoco Oct. 24 Alphaville http://ftalphaville.ft.com/blog/2008/10/24/17413/black-hole-friday/

Recommended reading: Roubini’s latest take: We’ve reached a situation of sheer panic… There will be massive dumping of assets [and] hundreds of hedge funds are going to go bust. Systemic risk has become bigger and bigger… We’re seeing the beginning of a run on a big chunk of the hedge funds… don’t be surprised if policy makers need to close down markets for a week or two in coming days.

Here is our comment  to Fabius Maximus, http://fabiusmaximus.wordpress.com/, posted on rge http://www.rgemonitor.com/globalmacro-monitor/254129#125448

New recommendations to solve our financial crisis (and I admit that I was wrong) Fabius Maximus | Oct 23, 2008 Summary:  Please vote, and do so carefully!  This could be one of the most important elections in American history, as continued economic crisis might require a massive (and hopefully temporary) expansion of government power — unlike anything we have seen except during wars. On September 25 I sketched out A solution to our financial crisis, in three parts. (1)  Stabilize the financial system – Being attempted, probably now it’s too late. (2a)  Stabilize the economy with monetary stimulus– Rates are coming down and money printed, but probably with relatively little effect. (2b)  Stabilize the economy with fiscal stimulus — Just now being considered; will work but slow to implement and slow to have effect. (3)  Arrange long-term financing for steps #1 and #2 with our foreign creditors – Unacceptable to our leaders at this time. Parts 1 and 2 are being implemented, much as described.  Part 3 was described as necessary at some point in the future.  I said that these probably would not work over the medium to long term, but would mitigate the downturn (slow or even reduce the economic decline, and alleviate the resulting suffering). I was wrong.  The rate of decline — destabilization of the global financial system – has become so great that these measures will prove insufficient.  In my opinion (these are, of course, guesses).  Since I doubt our leaders have a Plan B, here is a suggestion. Extreme mobilization by the government of our economic resources, as we have done during wars.

Hei Fab I always read your blog and I quote it, suggest it from mines. Thanks for the self-critique, actually more convincing than Greenspan’s… I agree on a war-like mobilization for the immediate short term, a sort of OBAMA NEW DEAL or even more than that. The war metaphor is important in the US, where only military Keynesianism is allowed by the “public opinion” and pop culture. And beyond? I can’t see how this severe recession and credit meltdown might not go into sharp deflation and then depression, until wealth redistribution is taken seriously and DRASTICALLY into account. Yours Fabius Minimus Reply to this comment By enzo fabio arcangeli on 2008-10-24 03:25:21    Oct. 21.

THE FRENCH STATE entropy: from champions nationaux to no selection, saving everybody.

Sarkozy applies financial socialism and semi-nationalise 6 banks. Meltdown financial capitalism rediscovers “Partecipazioni Statali”, i.e. what Mussolini  already did in the 1930s. ft – France injects €10.5bn into top six banks

The French government’s injection in the form of subordinated loans will shore up balance sheets and maintain credit provision for consumers and businesses – 11:28 Crédit Agricole would receive €3bn, BNP Paribas €2.55bn, Société Générale €1.7bn, Crédit Mutuel €1.2bn, Caisse d’Epargne €1.1bn and Banque Populaire €0.95bn.

WE REPRODUCE HERE THE ABSTRACT OF OUR STATIC PAGE  “AAA UPDATES …”, that we strongly  recommend to our readers and students, since it develops in real time a collection and comment of economic analyses and policies. This ABSTRACT answers the historical FAQ no.1, after the Wall Street collapse.

SUMMARY

THE DEFINITIVE CRISIS OF FINANCIAL CAPITALISM? MAYBE; BUT NOT  NECESSARILY, and the game is not over yet. Its Greenspan – Reaganite standard version is certainly dead forever –  in the earthquake moved by the shadow finance meltdown. But – doing  their business as usual of collaborationists with Rentier Capital –  social-democrats “doc” à la Gordon Brown (followed willy nilly by such neophites as Bush, Merkel and Sarkò) are desperately looking for a “financial socialist” escape from this cul-de-sac, meltdown and ruins of a Glorious Years past.  Most likely, they won’t succeed: a. first of all since their analysis is wrong (it’s not based  on Keynes, Kalecki and Minsky), b. therefore their cures are just palliatives; c. they just use State muscles, not the brain (see a Lex editorial on this, on Oct. 13: Brownian Motion in Europe). We can take these two Marx-Keynesian axioms for granted. For sure: 1) By Bernd Debusmann

WASHINGTON (Reuters) – Capitalism as we used to know it is on its deathbed. And those who predicted that the old brand, the unfettered, American-promoted system, was a danger to the world, are being vindicated. They include Karl Marx … (our red-bold and underlining).

2) Giorgio Ruffolo, following but also updating Marx: “Il capitalismo ha i secoli contati (its end is a matter of centuries)”. Now Financial Capitalism might be dead. But capitalism as such will not disappear soon, not before an evolutionarily fitter “mode of production and distribution” emerges – within the same social evolution and organisation, carrying the irreversible decline of Late Capitalisms (Ernst Mandel). 3) Carlota Perez (in sintonia with Wallerstein, in a LW perspective on deflation – see also Aglietta and Berrebi): behind the financial eltdown catastrophe, there are institutional and political nodes delayed for decades. An ICT-led long wave almost aborted as a result: https://enzofabioarcangeli.files.wordpress.com/2008/06/subcrimebiosocialscience1.pdf 4) Wallerstein, the marxist historian, concludes his Oct. 15 post on  badmatthew: http://badmatthew.blogspot.com/2008/10/wallerstein-on-return-of-depression.html by saying that – 4A)  capitalism IS DEAD – a dissenting view – as a matter of decades, NOT centuries (versus Ruffolo), – 4B) and joining post-Schumpeterian Carlota’s and neo-marxist Aglietta’s regulation arguments: What happens when we reach such a point is that the system bifurcates (in the language of complexity studies). The immediate consequence is high chaotic turbulence, which our world-system is experiencing at the moment and will continue to experience for perhaps another 20-50 years. (…)  We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times. As for our immediate short-run ad interim prospects, it is clear what is happening everywhere. We have been moving into a protectionist world (forget about so-called globalization). We have been moving into a much larger direct role of government in production. Even the United States and Great Britain are partially nationalizing the banks and the dying big industries. We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms.”

ft Man in the News: John Maynard Keynes Keynes’ ideas for saving capitalism from itself look increasingly relevant, and his words are a fair assessment of the dangers we face once again – Oct-17 The cautious, prudent wsj on  Oct.18, Bernanke and the Famous Helicopter:

with even the talk of deflation on the horizon, as unlikely as the prospect may be, get ready for more caricatures of Ben Bernanke sitting in a helicopter and dropping cash from the sky.

BEHIND THE CORNER – the possibility, risk of a  SHORT-TERM ACCELERATION, CONSOLIDATION OF THE LONG-TERM DEFLATIONARY GLOBAL REGIME (analysed by Aglietta and Berrebi in their book), that is already governing the global markets (commodities, finance, money, and final products) from 15 years on.  That is, a sharp fall of prices and (consumer, investment, intermediate) demand delays, in a deadly downward spiral. The Fed is worrying about it; although they believe this risk is still low: A NEW RATE REBATE WILL FOLLOW SOON, and this signals they are worrying a lot, and planning “liquidity trap” policies (at zero real interest rates).

THE SPECTRE OF MARX

(Derrida was right)

Marx reappears after so long on top of Reuters news, with a nice picture (I told you so),  in an Oct. 15 column by  Bernd Debusmann:

Karl Marx and the world financial crisis

Those measures included buying stakes in major banks – in effect partial nationalization – and would make Marx smile if he could rise from his grave. In the Communist Manifesto he and his collaborator Friedrich Engels published in 1848, Marx listed government control of capital as one of the ten essential steps on the road to communism. Step five: “Centralization of credit in the hands of the state …” … the control center of the financial market has already begun shifting from New York to Washington. (…) Amid the gloom and anxiety of the worst financial crisis since the Great Depression, which started in the United States in 1929 and then spread to the rest of the world, there are hopes that Capitalism 2.0 (if it ever comes about) will result in a more equal society. “There is a tremendous opportunity now to narrow the income gap,” says Sam Pizzigati of the Institute for Policy Studies, a Washington think tank.

The ft certifies what markets have announced again and again, with NO rally – after the October 6-10 BLACK WEEK, and the policy answer:

a sudden and massive nationalisation of the entire Atlantic  (US-EU) credit industry.

An interesting debate was occurring in Italy between Alesina and Draghi: Why didn’t you nationalise before? According to Draghi, in August the current scenario was unthinkable.

Shall we suggest the Bank of Italy to read Roudini and de(e)pre(ce)ssion?

ft – Editorial

Saving the banks was just a first step

Published: October 17 2008 20:40 | Last updated: October 17 2008 20:40

The tide, finally, seems to have turned on the banking crisis. More financial institutions will run into trouble, but governments have moved ahead of the crisis and can – at long last – deal with it systematically. If banks now support the real economy by providing credit, more drastic steps – like full-blown nationalisation – ought not be necessary. Despite arguably the worst financial problems in a century, parallels to the Great Depression now seem hyperbolical. That is a serious step forward. We are, however, still heading into a vicious real economy slowdown. Forecasters seem to have been competing in a reverse auction to cut their expectations for growth in the next two years. A prolonged period of stagnation and recession now seems likely for the US, UK and eurozone, likely to be the worst slowdown since the early 1980s. Pain will not be confined to or concentrated in any one sector – patterns of unemployment are impossible to predict. But some industries are particularly vulnerable; makers of hefty durable goods are the first to suffer. Sales of cars, furniture and home appliances are already in free-fall. (…) Governments have, suddenly, risen to the challenges facing them, turning horrifying problems of bank confidence into manageable fiscal woes. They may even need to do the same with problems of growth by expanding public spending.

Better later than never. What is missing in the authoritative London paper, is the implicit class conflict: Hood Robin or Robin Hood? Which fiscal policy? Ask Joe the plumber… The wsj is certifying today (Oct. 18) that the LR deflation (that they ignore) is possibly giving pace to an acute, SR one, the Fed is seriously thinking and even acting about:

Threat of Deflation Looms

Policy makers navigating the U.S. through the global credit crisis may have a new concern on the horizon for 2009: deflation. The risk of deflation remains slim. But the financial shock and a faltering economy can set the stage for a deflationary environment.

Bernanke and the Famous Helicopter

Today’s financial shock and deep economic turmoil are common preconditions for deflation. As reported in Saturday’s Wall Street Journal, however, Federal Reserve officials see a broad-based decline in prices as possible though highly unlikely.

The central bank faced the prospect of deflation five years ago, as core inflation (excluding food and energy) and the federal funds rate sat around 1%. … options to stimulate economic growth even if the federal funds rate were to drop to zero. Among them: using communications to shape public expectations about the course of interest rates; increasing the size of the central bank’s balance sheet; and changing the composition of the balance sheet to target particular areas. (The Fed is already doing some of that targeting with a balance sheet that has expanded enormously in recent weeks.)

Fed speeches and papers on deflation: Deflation: Making Sure “It” Doesn’t Happen Here (Bernanke) Conducting Monetary Policy at Very Low Short-Term Interest Rates (Bernanke and Vincent Reinhart) Monetary Policy Alternatives at the Zero Bound (Bernanke, Reinhart and Brian Sack)

La dittatura Tremonti sul bilancio e l’ideologia dell’emergenza

Il governo Berlusconi ha concluso i suoi 100 giorni salvando il premier dai procedimenti giudiziari in sospeso, come al solito, inoltre ripulendo le vie di  Napoli e modificando surrettiziamente la legge di Bilancio, nonostante la protesta del presidente Napolitano che ne ha solo bloccato la punta dispotica  più estremista (si veda ieri 5 agosto l’articolo di “Geronimo” C. Pomicino su Il Giornale, La fretta di Tremonti):

a) un piano triennale di bilancio pubblico riduce del 3% del PIL la spesa pubblica, approvato dopo appena 10′ di dibattito nel governo e PER DECRETO (!?!), con DOPPIO voto di fiducia in Parlamento;

b) nemmeno i Ministri ne conoscono i contenuti, di fatto delegati al Super Ministro Superman 3Monti, ma si stima che esso ricadrà su:

– sanità

– scuola: 100.000 insegnanti in meno; università in crisi catatonica e senza assunzione di giovani ricercatori;

– sicurezza: 3.000 soldati nelle grandi città oggi, ma 30.000 poliziotti e CC in meno nel triennio;

– Mezzogiorno e metà dei suoi territori – governati dalla criminalità organizzata (NB: Napoli ripulita SOLO dalle scoasse, NON dalla camorra, con cui continua  il patto tacito delle istituzioni): a settembre si applicherà il federalismo fiscale di Bossi = meno soldi alle regioni del Sud, così (???) li spenderanno meglio (la ricerca Bordignon ha mostrato che la Lega ha avanzato nelle Regioni in surplus fiscale):

c) a settembre la legge annuale di bilancio consisterà in una serie di tabelle di variazione di Bilancio: allora forse emergerano pro quota i tagli di 1% del PIL, e sarà bagarre tra Ministeri e gruppi di pressione. Pomicino, cit.:

E che senso avrebbe una Finanziaria che, stando alle dichiarazioni di Tremonti, dovrebbe contenere solo tabelle correttive del bilancio dello Stato se non si conosce ancora lo stesso bilancio dopo i tagli operati dalla manovra economica approvata qualche giorno fa?

d) Per opposizione della Lega, interessata a cariche e magna-magna, bloccata la liberalizzazione dei servizi pubblici locali.

e) Nulla per consolidare la ripresa strutturale dell’industria italiana di media e bassa  tecnologia, a favore di innovazione ed istruzione superiore: anzi quest’ultima indebolita, pregiudicando le generazioni prossime.

f) Per ottenere tutto questo, Tremonti ha avuto gioco facile a fare IDEOLOGIA DELL’EMERGENZA e terrorismo sulla crisi economica mondiale (che i nostri lettori ben conoscono,  ma non sta affatto precipitando: essenzialmente, oltre che per la tenuta dei consumi americani,  per il neo-socialismo pro-bancario: Banche Centrali e governi stanno bloccando l’esito di mercato del credit crunch, che avrebbe dovuto essere di circa $10 trilioni, e rimandando la recessione – che ad 1 anno dalla crisi muove ancora i primi passi, oggi ad es. è il caso della Germania ad esserne toccata con un inatteso -1% PIL 08Q2). Peccato che, se la crisi fosse ancor più precipitosa come dice Tremonti, non sarebbe affatto  il caso di ridurre la spesa pubblica, ma semmai di stimolare investimenti e consumi privati – sotto il vincolo del tremendo debito pubblico creato da Craxi, il Maestro ed inventore del Berlusconismo, e gonfiato da Berlusconi 1 e 2.

Il nostro blog CONTRO-ARGOMENTA che l’attuale recessione può essere benissimo frenata da politiche economiche inedite e massicce, adatte alla sua natura acuta e radicata nei meccanismi centrali della finanza globale. Ma ciò non farebbe che AVVICINARE IL DECENNIO DI CUPA DEPRESSIONE che è insito nei “fundamentals”: aumenta la povertà nei paesi ricchi, più che viceversa, e non c’è domanda effettiva per sorreggere la sovraccapacità; da 20 anni l’economia-mondo è in crisi di sovra-acccumulazione che, quando scoppia, farà un botto.

g) Cirino Pomicino cit., analizza col consueto acume gli aspetti istituzionali della manovra del min. Superman, vero primo Ministro ombra (altro che l’inetto Veltroni!), sia pure in un luogo inadatto e surrealistico, come “il Giornale ” scippato al povero Indro:

Una visione «semplificatoria» della politica e delle istituzioni che non troviamo né in altre democrazie parlamentari, né in quelle presidenziali del tipo americano e francese. E la stessa carta per i poveri al posto di un aumento delle pensioni più basse, come pure fece il governo Berlusconi nel 2001, dà quel tocco di paternalismo che accompagna sempre i governi di un illuminato. (..)

ed il 29 luglio, con orgoglio:

Rivendichiamo il merito di aver scritto, dalle colonne del quotidiano edito dalla famiglia Berlusconi, che alcune norme introdotte nel provvedimento economico non solo violerebbero la Costituzione, ma trasformerebbero nel profondo la nostra democrazia parlamentare come, ad esempio, la facoltà data al ministro dell’Economia di modificare gli stanziamenti di bilancio previsti dalle leggi con propri decreti amministrativi.

Il pronto e saggio richiamo del presidente Napolitano e l’altrettanto rapida condivisione dell’intero governo a modificare queste norme ci confortano nel continuare in un’antica pratica di libertà …

Infine, alla 7 stamane ricorda che Berlusconi governa con poco più del 40% dei voti, NON IL 51% come nei sistemi proporzionali. Se vogliono il sistema francese o inglese, si deve modificare in coerenza tutto, anche la Costituzione- ammesso che vi siano consenso e maggioranza per farlo.

US bank runs: who told a systemic meltdown is over? IT IS NOT

CAN YOU HEAR SITTING BULL’S WAR-CRY? WELL, THE LITTLE BIG HORN OF SHADOW FINANCE IS ON. After that, in Autumn non-financial co. will start going bankrupt.

Hard 2 read and 2 believe: but this is REALLY the NYT front page, day after Little Big Horn!!! Thanks the sublime NYT serivce: On this Day  (Copyright 2007 the NYT Company). 25 June 1876. Col. George A. Custer and his 7th Cavalry were wiped out by Sitting Bull’s Sioux and Cheyenne Indians in the Battle of Little Big Horn, Montana. 

FACTS, NOT FAIRY TALES!

June 18 update. Alphaville: HOT AUTUMN, banks’ bears warnings 

Deeprecession has a 1 day lead on the RBS mail, 2 days on Alphaville

Bearish analysts are out in force. Bob Janjuah [credit strategist] of RBS, in an email on Tuesday, warns of a global stock and credit crash in the next few months; with the S&P 500 likely to lose up to a quarter of its value. In credit, Janjuah sees the iTraxx soaring to 130/150 and the iTraxx Crossover to 650/700. (…) Wall Street should rally through early July before succumbing to the twin pressures of high oil and high inflation – the first painful spasms of a recession. The RBS team also point specifically to the limited range of options open to central banks. The point is taken up by analysts at Morgan Stanley. A note from last week – “1992 redux” – by the bank’s European banking team – warns of potential for a “catastrophic event” on the horizon to match the European monetary crisis of the early nineties.

MS: We find striking similarities between the transatlantic macro tensions that built up in the early 1990s and those that are accumulating again today. In both cases, monetary authorities took opposite options on both sides of the Atlantic: stabilising output in the US, and stabilising prices in Europe. Macro tensions caused a major currency crisis in Europe in 1992. Will history repeat itself? 1992 Redux - MS note

Just after this entry, posted by Sam Jones on June 18th, 2008 at 11:07,

another contemporary Alphaville post, by Robert Cookson at 13:24 adds:

Mr Janjuah’s peers at other European banks agreed it was inevitable that credit markets would deteriorate later in the year, potentially quite dramatically, when large companies started to default on their debt. However, most said that RBS was a touch aggressive in forecasting that turmoil would strike as soon as August. (According to one strategist)  many struggling companies would be able to limp along into 2009 before falling apart.

The discussion is only about time frame: dead bodies might keep walking to 2009.

Original post

FACTS, not a propaganda trying to delay the redde rationem, an always imminent RUN on US FINANCIAL BANKS  (spada di Damocle).

1) we are still, and only, in the beginning (since end 2007) of a global “subcrime” recession, rooted in historical and structural processes in the creation and appropriation of economic value:

1a) the peculiar way a Reagan-microelectronics Kondratiev Long Wave (KLW) went burst (see Carlota Perez – for full references: goto  subcrimebiosocialscience1.pdf). We mean, not just one bubble or another went burst, but a unique, entire, historical chance of sustainable progress (late capitalisms could not grasp) was missed by humanity and the Earth. For enriching the pockets of a few hundred billionaires. A Donald Duck world.

 

1b) How did such a quantum technological jump go wrong and lost? It was killed on the altar of such Medieval rites as: b1) enrich a handful of global rentiers and rape an obsolete Middle Class (no democracy to be socially enveloped any more); b2) fuck the Russian mil.-ind. complex and “ally”, more exactly link up with China; b3) tell people there is laissez faire and democracy, while MONOPOLIES RULE in thanato-political liberal régimes or tyrannies (Adam Smith and Loretta Napoleoni, Michel Foucault and Roberto Esposito). c) We live for decades to come, a generation or two, in a new (post-Reagan and MPUs) Deflationary Long Wave: a  byproduct of the Greenspan-Clinton irresponsible, witchcraft manipulations of the declining US economy in the 1990s (Aglietta-Berrebi, Chesnais). Hopefully, Bill will not come back as first lady!

2) Last episode of such a deep, structural process in value production and circulation (Marx, Capital, Book 2): the subcrime-based shadow finance, was meant to enlarge the circuits of over-accumulation in search of an outlet. The target was scientifically selected: afro-american bobos and regular Latino workers (at least $4000 of family earnings, in order to steal them 3000-3500 per month !!! see case studies in the quoted subcrime … .pdf). Systemic scope, only way to create a “growth” illusion, in a CRAZY RENTIERS WORLD sunk into deflation and depression:

2A) RAPE the first (quasi-affluent blacks) and second tier (latinos) of people still wiling to enter, via patriotic-sacre housing property, the middle class.

 

2B) From stealing their homes, hopes, lives and wages: create a fixed material point, that the fantasy of the casino economy will multiply some thousand times in  “assets” (in fact, property rights on a chain leading at the end to the real asset: Chesnais; this is why someone had to be RAPED at chain end), to be bought by the Rentiers èlite savings, out of the surplus value they expropriated from productive value chains.

 

3) 3 months ago, in March 2008 the US Bush Adm. and the Fed JOINTLY delayed a meltdown of the 5 US pure financial banks, likely spreading quickly into a global meltdown, by bailing out Bear Stearns. Now it’s Lehman last bell, death time. Third to be soldout will be Merill Lynch soon (the FT tells BofA wants it), and fourth Morgan Stanley, likely to be historically reunited in the (JP) Morgan mother house. Only Goldman Sachs will survive this Little Big Horn. We do not invent such an order: it is written in their books, leverage ratios and the premium rates they pay (see graph). Rentiers carry on telling (not believing, they are smart), and THEIR MEDIA keep echoing every day as a litany: a systemic meltdown is over. You always find this proposition in newspapers, with redundancy. Ask Roubini: he knows and tells you the answer.  

 

4) Rev. Jessie Jackson, one of the greatest living personalities, as far as we know invented “subcrime” for subprime. In a March 20 timely speech in Chicago (quoted in our .pdf, Section 4), where he accused the Govt. of moral hazard financing bankrupt banks, while ignoring foreclosures and people. As we have already discussed in this blog, in synchrony with the economic blogs community (namely: perplexity towards a NYT  op-ed by  Robert J. Shiller, on May 18), this is a delicate issue of policies; since a bailout of foreclosures (with the excuse of the poor rape victims) will always close the gap of Subcriminals. It’s the easy credit for sacred property TABOO that must be challenged, overcome, identified as a Middle Class narrative belonging to the past, while manipulation belongs to the present (see Joriot). But the US left is always in a mess, lost in between Blair-Clintonian Late  Reaganism, and a-scientific, ideological Populism. Even Obama – basically a postClintonian, on that line of evolution of neoDemocrats, but somehow divided, as it often happens to us, between his rational mind and heart. This is physiological in a country that, after Tocqueville (no democracy without religion), is so much ideological and radical, but has not declined a variety of complex ideologies (like Eurasia). They stand by the American Myth, Father of a constellation of Myths – e.g., housing, financed by the Fed. State via Freddie Mac and Fannie Mae (Joriot)- a bit like Greece before the Ionians and the Athenians. They hardly get (perhaps The Nation?) to such a Myths deconstruction (Derrida), that would engender a Real Socialist left. This is a priority area of political work, in networks of international coop – helping US progressives to make a step further. This is what we mean by “Robin Hood policies”. More on this another time. 

 

The DIAGNOSIS, from p. 5 of  subcrimebiosocialscience1.pdf

 

1. the global economy is locked in a longrun demand deficit hysteresis (requiring a drastic redistribution), and liquidity trap (making monetary and credit policies totally ineffective)

2. fiscal and income policy implication: the world badly needs an epoch-making, giant income and wealth redistribution, from the élites to impoverished masses. A Keynes-Kalecki and Ricardo-Pasinetti models classic case, calling to rebalance 25 years of counter-distribution

 

3. in fact, the “1987-2007 Rentiers’ glorious years” increased:

– both the rate of Absolute and Relative Surplus Value extraction: in each OECD country, 9% GNP shifted from wages, to gross profits and self-employment incomes; – and of its appropriation by Rentiers – see Fig. 2 of the pdf: showing that the US finance margins jumped from 35% to 50% in the “20 Glorious” 

4. such a counter-distribution dropped the global economy into a deflationary régime

 

5. a drastic improvement of world welfare, an intrinsic ICTs potential, went bust by Lewis-effects (unlimited labour supply discouraging technical change, i.e. substituting Absolute for Relative Surplus Value)

 

6. a complication: political systems do not allow such a global Keynesian-Obama New Deal

7. morale: a political hysteresis (Blair-Clinton-socialdem. PostReaganism, a follow up of “doc” Reaganism) in leading OECD countries, is blocking the road out of the economic hysteresis.

US export slow with such a low $! Come on, I can’t believe …

rge always no.1, NO DISCUSSION: another discovery by rge, the Cannibal, the eddy merckx of economic blogging. So, drawing on rge’s Setser, Naked Capitalism take the chance for a striptease of US export and trade balance: A BIG SURPRISE under the pants !!! What a surprise … US economy much  less … (ehm)  masculine than it was supposed. Delusion in the gay and nonlesbian women audience.

Naked Capitalism

Saturday, May 10, 2008

Setser: Real Export Growth Stalls

What would we do without Brad Setser to give us a hard, analytical look at trade and international funds flows? Setser tells us that the headline news on the trade deficit, namely, that it shrank in March, is misleading. When you dig deeper, and in particular pull out petroleum-related flows, it reveals that real export growth is stalling, which is not good at all, given the supposedly weak dollar.

You’d never detect that worrisome pattern from the mainstream press. It treated the trade release as entirely good news, as the WSJo illustrates:

    U.S. trade deficit narrowed more than expected in March as imports of cars and crude oil dropped amid record-high oil prices and a weak economy.

    The March deficit was smaller than Wall Street expectations. Economists surveyed by Dow Jones Newswires had estimated a $61.50 billion shortfall.

    The decrease in the trade gap followed two straight months of widening deficits, and suggests that trade contributed more to first-quarter gross domestic product than initially estimated.

rge

And, LADIES AND GENTLEMEN: here is Setser:

Be careful — real export growth looks to have slowed

 Brad Setser | May 9, 2008

Unless your family is in the wheat or beans business (wheat and soybeans exports have more than doubled when q1 08 is compared to q1 07; total food and feed exports are up 50% y/y), there actually wasn’t a lot to like in this month’s trade release

SocGen: an equity meltdown is coming

ITALY REMEMBERS TODAY, WITH PRESIDENTE ALDO MORO, ALL THE TERRORISM VICTIMS. including Italian State Terrorism italian victims (Piazza Fontana 1968, etc.).

FIRST OF ALL, COMRADE PEPPINO IMPASTATO (i 100 passi), EXECUTED BY THE BLOODY MAFIA THE VERY SAME DAY AS MORO, on the order of Tano Badalamenti.

30 years ago, on May the 9th,  1978, Washington and Moscow (as we always guessed, but now we know for sure from a vast literature)  joined together (through a Yalta-based compensation room located in Paris: Vanni Molinari’s Hyperion liaison office), commanding the Red Brigades to kill Aldo Moro. The DC leader that, with excess foresight, was about to bring Berlinguer’s PCI into a bipartisan government in Rome (but the Cold War was still on: feeding geopolitical wars, spy “faux frais” and protected markets for Military Industrial Complexes). Moro joined his fellow Enrico Mattei, the ENI CEO killed by the Mafia on behalf of the 7 Sisters: he was even more foresighted than Aldo Moro, therefore they were obliged to kill him much earlier.

BUTTIAMO A MARE LE BASI AMERICANE

ASSASSINI! US imperialists still consider Italy their Mediterranean “big ship”, and Craxi was the only one with the attributes: a 100% NATO supporter, but not a Washington puppet. The fucking imperialists used and abused the DC, but didn’t like much its leaders, if they killed the two most outstanding ones (apart de Gasperi). With such a sense of impunity, as not even hiding the smoking gun. 

Edwards: “We are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger”

Someone was doing the last attempts to deny the ongoing global recession: e.g., by arguing:   “there is no such credit crunch nor Bernanke’s accelerator –  in Europe nonfinancial firms are  increasing their debts and paying the spread, since the stock market is as  thin as a fashion model”.

Crunchy credit (FT 2 days ago): “the new consensus is that the monetary easing already administered by the Federal Reserve could combine with the “stimulus” tax rebates that Americans are about to receive to create a V-shaped recovery.” Well, listen to today’s global strategy weekly  by  Albert Edwards to SocGen clients: 

–  We are trying to give our readers the strongest possible warning (ever!) that we are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger.

– We see a global recession unfolding. Nowhere and nothing will be immune.

– One of the clearest impressions that I will take away from working in this industry is how darned bullish everyone wants to be. To be sure, nobody likes to be a party-pooper but the bias towards optimism in this industry is truly staggering…

reported by Paul Murphy on alphaville 

Prof. Roubini confirms his view that there is a bifurcation behind: between either a V or U (or W) recession in the US; but he adds today that its outcomes will reverberate in Asia, Chindia (therefore – by feedback – a U shape might last even longer, and become more L-shaped).

Effects of the US recession on Asian growth

 Nouriel Roubini | May 8, 2008

Will this region decouple from the US economic contraction?

The answer depends on the severity of this recession. If the US recession is short and shallow (a V-shaped recession lasting six months) then there is enough of a domestic growth dynamics in the rest of the world and in Asia that the global economic slowdown would be very modest. But if the recession is more severe (a U-shaped recession lasting 12 to 18 months) then that US contraction, together with the sharp slowdown in the other G8 economies (…) will negatively affect growth in China and Asia.

While oil prices take the first pages going beyond $126 (but, Paolo Leon is right commenting on radio Rai3, that this does not yet bring back nuclear energy to cost effectiveness), a $ bottom is called by the FT: Europe and US unite on stronger dollar.

PARIS STYLE. A virtual guillotine at Moody’s. Their CEO and President will leave in July. WSJ:

Moody’s Investors President Steps Down

Clarkson’s Exit Marks Highest-Profile Casualty to Date

Over Role of Credit-Rating Firms in Subprime Rout

 

de(e)pre(ce)ssion

Navigators on The Nation liberal flag-site, thenation.com:

a) voted during the last 2 weeks: i.e., after

March 14 milestone = Bear Stearns bailout; death of  neo-conservatism officially declared by Wolf on the Financial Times; neo-con marketing itself as neo-liberalism, under false Adam Smith’s flags (follow our page regular updates, here on the 2nd column: access page 2 all-the-subprime-science).

b) They believe: 5/8 it’ll be depression, 3/8 just recession. A balanced and fair synthesis of state-of-the-art financial meltdown, real economy  stagflation, sincere evaluations, and feelings by experts and field operators.

c) There are still (but not for ever) wide degrees of freedom – in de(e)pre(ce)ssion evolution – as far as “il Politico” and its autonomy (Mario Tronti) are concerned, appropriate-systemic social, institutional and economic policies, both nationally and internationally. We discuss them in 2 blog sections and their next updates:

– access page to (almost) all-the-subprime-science

– SPECIAL REPORT obamanewdeal_080215.pdf 

In the recent page “Arcapedia: which are the Prozac …” we propose an original definition of DEPRESSION.

http://www.thenation.com/poll/whatsahead032608    

POLL | posted March 25, 2008 (web only)

 

What’s ahead

for the US economy?

A recession: Inflation will rise and many will lose

their jobs and homes, but it will be of relatively

short duration. 

  (829) 36%

 

The Big One: We’re on the verge of economic

disaster on par with the Great Depression 

  (1417) 63%

Published in: on April 9, 2008 at 9:39 am  Leave a Comment  
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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:

KONDRATIEV LONG WAVE (197os +)

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).

SUBPRIME SURPRISES. Today, even Paul Krugman has changed his prediction

Northern Rock branch Digg!  The world cycle has  entered a recession phase  generated in the US last summer, deeply entrenched with the highly unstable nature of current growth and institutions, money and markets (for historical reasons, plus theoretical ones Political Economy illustrated since long: the roots are in Malthus and Marx, Keynes and Kalecki).   Credit and financial markets were obviously the first ones shocked by the subprime crisis, a necessary consequence and dead end of Greenspan’s Fed easy money policy in the 1990s, again since 2003, and a “free market” social engineering experiment in enlarging financial K circulation to a new expropriation domain: stealing wealth from fresh new victims, the poor (first) and the rich all over the world, from Latin ghetto home buyers to Northern Rock clients (see 2007, Oct. 26 Krugman’s blog post A Catastrophe Foretold and my comment upon his revelations, the same day on my blog). But this was only the beginning of the Financial K “conspiracy” (K for Capital).  In October-November 2007, hyper-sensible Baltic Dry index of maritime freights (indexes do have senses, sentiments and even a soul: did you know?) got the blues, reached a cyclical peak and started to decline – you can see the weekly updated graph also by clicking here – meaning that world commodity markets and manufacturing were already affected, not just global finance.When a US report told the services sectors were also declining, Wall Street (- 3% on Tuesday Feb. 4) got also the blues, started panicking and detecting the recession, a quarter after experienced Baltic freight traders. I am not sure this might be tagged text book “globalization” and “rational expectations” alike behaviour, I suggest irrational stupidity. Mr Bernanke never thought to rebuke such irrationalities: on the contrary, he hurried up ensuring he will carry on doing the dirty-hiding dirty job for WS boyz-and-banks, everything is under control, interest rates will go further down (so what ?), after the exhibition of a mix of power-willing and sheer impotence in the base rebate 4.25 to 3. We know things are very different, no one is in control of the recession: see 2 base papers, in January 5 and 8 Prof. Nouriel Roubini’s fundamental blog, (1) and – in French – the contribution by François Chesnais in Carré Rouge – La brèche no.1, 2008, pp. 17-31. Their 3 titles carry the message:

  1. The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster.
  2. Can the Fed and Policy Makers Avoid a Systemic Financial Meltdown? Most Likely Not.
  3. Fin d’un cycle. Sur la portée et le cheminement de la crise financière (End of a cycle. On the dimension and path of the financial crisis).

 Today, even Paul Krugman is changing his prediction. Still resisting the idea, because he knows very well how devastating for the US the crisis might and perhaps will be, he admits a denti stretti that  “the double-bubble nature of the underlying problem — a housing bubble and a credit bubble combined” will be tougher than the 1980 and 1991 recessions. He even talks of a new President getting to the White House (Jan. 2009) in the middle of the storm: if you follow his NYT op-eds and blog (a must), you know that his adamantine intellectual honesty is at work. Being optimistic, I counter-argue that Ms. Clinton\Obama (or Mac Cain) will have to tackle either a long recession in her\his first term, or a full depression in both. My friend and colleague Carlota Perez started the epilogue of a very useful, almost prophetic post- Schumpeterian book by saying: “In June 2002, as this book is going to press, the world is at the turning point. The decisions being taken at this crossroads will determine how long, how deep and how widespread the current recession will be and whether what lies ahead is a depression, a gilded age or a true golden age”. We are back to that point, but the total lack of political-institutional decisions and longterm management (called for by Carlota), in such a crazy world, that it is hard to believe it is still Capitalism, stole us the golden age. Now we have choices and destiny in between a shaky cyclical recession, a decade of depression in the 2010s, and re-inventing Socialism. For empirical facts and analyses, search  my blog, or excerpts from my “blog before the blog” from summer 2007: where I report and discuss how the recession has been read in real time: e.g. by Attac in July 2007, The Economist in October, etc. You’ll perhaps come to the conclusion that Bernanke bosses, the Wall Street boyz: either they are analphabet, or they have no time to read anything, nor even economic news and bulletins. If the Fed wasn’t the Fed (a purely Keynesian matter, discussed also in some comments to Prof. Roubini’s blog) Bernanke, instead of burning billion $ in “rites of winter, then spring and summer”, should have just sent them a Xmas card with a free (0 cost) yearly subscription to: http://investmenttools.com/futures/bdi_baltic_dry_index.htm  NOTES _ (1) Prof. Roubini reached a climax when, in a creative Dostò-Shakespearian mood, he described Alan Greenspan’s decision making this way.To Raise or Not To Raise? Reading into Greenspan Hamletian Mind. Aug 29, 2004As Greenspan sips through long reams of obscure economic data (are cardboard production data a good leading indicator of economic activity?) while relaxing daily in his bathtub, he is pondering whether he should increase the Fed Funds rate at the September 21st FOMC meeting. Here is what he is mumbling in his mind, in between a bubble bath and endless wonky economic statistics:”Well, the September 21st decision will be a real tough one, the last one before the elections! I thought that the economy was perking up; and then we hit this Q2 “soft patch”! But is it really a soft patch as we have been claiming in public or the beginning of a deeper deceleration of the U.S. and global economy? Japan is also slowing down (…) and figures from Europe are the usual mixed bag with overall softness and a sub-part Q2 growth of 2%. So, I am usually as Kriptic in public as Delphi’s oracle but on this one I am a bit schizophrenic myself even in private. I haven’t really figured out what to do! I feel like Hamlet: to raise or not to raise?”

Published in: on February 10, 2008 at 4:36 am  Comments (1)  
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Will Super Tuesday somehow affect the recession path?

february 8, 2008. Click this date for a 10 pages file of this week’s (February 8 to the 1st) first entries into this baby blog: depression or recession? At the moment, we might be still before the fork, and the blog title follows. Main arguments, dictated by the quickly unfolding events after the disputed Fed’s move:
FAQ 1: What if the Fed continues to cut the rate, at a rate of 125 points a month?
FAQ 2, Super Tuesday: Prof. Roubini argues the policy maker can’t stop the financial catastrophe. He is right,  but what if  a leadership and a new political process emerge from an America fed up with the establishment  and an overwhelming, unrestricted markets power?
Feb. 8, Frankfurt: ECB on hold (already changing adjectives on € zone inflation)
Feb. 7, Yesterday’s mood in Avenida Paulista (SP) was mixed feelings
Feb.5, Just an IMS Report for another Black Tuesday? The oddness of Wall Street boyz mood
Feb. 1, US non farm employment just negative (first time since August 2003).
MORE: a) in blog page SUBPRIME SURPRISES, there is a_primer_on_subprime.pdf, a 20 pp. still provisional, very draft work-in-progress, with a Political Economy analysis of the unfolding recession\depression, with perhaps original (at least, not textbook) policy implications:1. monetary policies have now counter-intuitive and counter-willing effects:

more money&credit, lower interest rates = deeper depression

2. fiscal policies (in the countries that can afford such a luxury) might do better, wasn’t the recession rooted in long term structural processes (à la Carlota Perez);

b) in the 30 pp. long file: 080131-0707deeprecessionblog.pdf – in blog style and reverse time order, there is the legacy of my posts before this blog started: many useful analyses and comments to what happened to the world economy in the past 9 months (when I had this blog in mind, like Jupiter Minerva, and Gods were planning to strike a recession to humans on some planet).