Why economists and sociologists are not so libertarians, and vice versa



Although a social scientist and a libertarian will often meaningfully talk to each other, sometimes agree on issues, or even struggle together for some freedom-and-justice  targets mix, their inner logic will systematically diverge. I argue here.

What follows, in Italian, is also an epistemic meditation on a generous but failed attempt to create a new libertarian movement in Italy: “Fare per fermare il declino” (Let’s do something to stop the decline).

On the one hand, even an ethically strongly motivated social scientist puts, as a MetaNorm, Science methods,  networks (visible and invisible colleges), norms and trust – on a higher rank than his own ideological preferences.

On the other hand, even the most learned and specialized libertarian as I am too in some respect (perhaps), “en tant que libertaire” (s)he would stick to axioms, beliefs she’s not ready to put into that Washing Machine. i.e.,  the scientific experimental (lab, economtric, sociometric and\or thought experiment), trial and eventually “phalsification” Popperian preconcepts-washing processes.

Then, there is the worst of contemporary “culture”:

Derrida- Foucault- US “French Theory”

(the PostModern sub-culture excluding; forgetting the only one today’s great French Philosopher, Emmanuel Levinas: even if he was a Derrida’s magister! And the #PostMoMobs read a paper on him in On Grammatology); they will object that we’re #PaleoPositivists: see Helen Pluckrose @HPluckrose and discussion on her post here:  https://areomagazine.com/2017/03/27/how-french-intellectuals-ruined-the-west-postmodernism-and-its-impact-explained/


1 François Cusset 2003, French Theory: How Foucault, Derrida, Deleuze, & Co. Transformed the Intellectual Life of the United State. La Découverte;

2 bruno latour 2004, http://www.bruno-latour.fr/sites/default/files/89-CRITICAL-INQUIRY-GB.pdf  – Why Has Critique Rub Out of Steam? …, Critical Inquiry 30 (Winter 2004)

3 Helen Pluckrose @HPluckrose. March 27, 2017 post:
How French “Intellectuals” Ruined the West: Postmodernism and Its Impact, Explained

I wrote on fb today:
Enzo Arcangeli presso Instituto de Economia da Unicamp.
1 h · San Paolo, Brasile ·

Delle sostanziali differenze tra economisti- sociologi, e liberali.

I primi, se sono serii e on fiatin Popperiani, sono laici verso qualsiasi forma-modalita’ delle istituzioni sociali possa funzionare meglio, nei diversi contesti e scopi.
As usual in Science, possono sbagliare clamorosamente, come il povero Aoki di Stanford con la sua J firm, formalizzata ok, ma gabellata per geneticamente superiore, in quanto piu’ lungimirante della M firm (proprio per il difetto della J di farsi credito da se’ e non dover fare affatto profitti di BP!), ahime’ proprio poco prima che Japan e Keiretsu arrivassero a fine corsa.

I liberali delle varie costellazioni della galassia, tendono ad ipostatizzare i mercati perfetti, e questo cum juicio ci sta [poi arrivano, se del caso, le evidenze empiriche di non contendibilita’ o cmq fallimenti].
La cosa che io trovo in loro piu’ intellett. disonesta e’ il parlare AS IF vi fosse un unico Capitalismo. Ossia, praticano il “capitalismo scientifico” proprio come i soc-dem tedeschi fecero parlare Marx morto di un ancor piu’ idiota “socialismo scientifico”. Ed il capitalismo induista del Gujarat sorto prima che in GB, come lo facciamo rientrare nel Calvinismo?

Gli economisti e sociologi partono dalle loro piu’ diverse ideologie personali (che entrano legittimamante nei Lakatosian research programmes, or Kuhnian paradigms), ma poi strada facendo si contaminano, sono stocasticamente attratti da analisi rigorose, metodologie validate ed evidenze empiriche robuste. Salvo le code di economisti troppo “di scuola”, o la VERGOGNOSA iattura dei residui marxisti in sociologia.
Ad es. il cult dei liberali, che si vede bene non lo conoscano ne’ biograficamente ne’ personalmente (io lo incontrai quando insegnammo assieme a Cargese), Coase arriva laburista negli States e proprio per questo si focalizza sul momento essenziale SOCIALISTA dell’organizzazione (opposta al mercato) che gli altri ignoravano.
Facendo cosi’ una delle 10 piu’ importanti scoperte delle scienze sociali del ‘900.

The Nature of the firm.

2nd & last (?) rally day


w post

live coverage

Posted at 2:09 PM ET, 10/14/2008

Reid Calls for More Stimulus

In a statement released moments ago by Senate Majority Leader Harry Reid (D-Nev.), he echoed calls by House Speaker Nancy Pelosi (D-Calif.) for an economic stimulus plan aimed at Main Street, now that the Wall Street bailout/rescue plan apparently is underway.

Faq 2. In a severe recession, on the verge of a decade (2010s) depression,  where are the fundamentals of profits actualisation? Likely at about 1/2 of current stock values, i.e. 2/3 down from the Autumn 2007 apex.  A different answer in the ft, by LEX (implicitly assuming we are so close to the bottom floor ?):

Time to buy?

Published: Monday 13 Oct 2008 09:55

With stock markets falling day by day, investment gurus suggest that it is time to buy – taking a 30-year view.  Certainly, there are plenty of companies across the developed world in little immediate danger and trading at eyewateringly low prices. But there is no telling how long a market recovery could take. The Dow Jones Industrial Average took 24 years to regain its pre-crash highs following the Great Depression. Japanese equities are still a quarter of what they were almost 20 years ago.

BREAKING NEWS.  -3% Nasdaq, at 2 pm ET, -4.5% at 3 pm ET



Market Index Charts


At  5pm GMT = 1pm ET (see the self-updating graphs) the Nasdaq was losing 1.35%, at 5.30: – 1.75%, at 6.00: -2.45%; on expectations of  a severe recession hitting ICT profits and consumption (on a Pepsi profit warning). DIJA  + 0.34%, then becoming negative at 5.35pm GMT (1.35 ET).

The rally is over at Wall St., and it lasted JUST 1 day.

Tokyo up a Guinness 14%. Europe on average up 3% (DJ Stoxx 600), but it might be the end of it, and the slide down continue –  although not as catastrophically as last week.


Roubini Sees Worst Recession in 40 Years, Rally’s End (Update1)

By Eric Martin and Rhonda Schaffler


Oct. 14 (Bloomberg) — Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to “sputter.”

“There are significant downside risks still to the market and the economy,” Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. “We’re going to be surprised by the severity of the recession and the severity of the financial losses.”

The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added. Treasury Secretary Henry Paulson said today he plans to use $250 billion of taxpayer funds to purchase equity in thousands of financial firms to halt a credit freeze that threatened to drive companies into bankruptcy and eliminate jobs.

“This will be the first round of recapitalization of the banks,” Roubini said. “The government has to decide to intervene much more directly in the provision of credit and the management of these companies.” (…)

“The stock market is going to stop rallying soon enough when they see the economy is really tanking right now,” Roubini added. (…)

Roubini said total credit losses resulting from the meltdown of the subprime mortgage market will be “closer to $3 trillion,” up from his previous estimate of $1 trillion to $2 trillion. The International Monetary Fund estimated $1.4 trillion estimate on Oct. 7. Financial firms have so far reported $637 billion in losses, according to data compiled by Bloomberg. 

SEE OUR ESTIMATE (from last Summer) in our blog title: $3 tr, IRAQ cost = SUBCRIME cost.


Disaster Averted, EU’s Recession Looms

European governments can congratulate themselves on preventing the region’s troubled financial sector from collapsing. But the focus will swiftly return to the bleak macroeconomic outlook.

Actually, we expect the Wall Street worries on the recession to spread tomorrow, Wednesday in Asia and Europe.


Worry over profit outlook halts early stock burst

Tue Oct 14, 2008 12:05pm EDT = 16.05 GMT

By Ellis Mnyandu


NEW YORK (Reuters) – The Nasdaq fell in choppy trading on Tuesday as investors sold technology shares on fears that fallout from the credit turmoil would hurt profits despite the U.S. government’s plan to invest in banks to shore up the financial system.

The Dow and S&P 500 were moderately higher after a sharp rise at the open. Concerns about the broad profit outlook overshadowed the Treasury Department’s plan to inject $250 billion in major banks to stabilize the financial system in hopes of averting further damage to the economy.

A profit miss by soft drink company PepsiCo , whose shares were down 9 percent, added to worries over how consumer spending will hold up against declines in home values, stocks and tighter credit.

On Nasdaq, shares of chip maker Intel Corp fell more than 5 percent to $16.02 before it reports quarterly results after Tuesday’s closing bell.

The semiconductor index was off nearly 4 percent, a day after Wall Street roared back from its worst week ever with one of its best single days ever on Monday.

“We may be trying to establish the floor with the credit crisis, and that’s why you had the euphoria in the last day and a half,” said Alan Lancz, president of Alan B. Lancz & Associates Inc investment advisory firm in Toledo, Ohio. “Now people are starting to look at how much damage the credit crisis has done to the economy and earnings.”

The Dow Jones industrial average rose 58.86 points, or 0.63 percent, to 9,446.47. The Standard & Poor’s 500 Index climbed 6.59 points, or 0.66 percent, to 1,009.94. The Nasdaq Composite Index slid 24.42 points, or 1.32 percent, to 1,819.83.

Shares of software maker Microsoft Corp declined more than 5 percent to $24.17. Computer maker Dell slide nearly 6 percent to $14.32.

w post

Posted at 12:03 PM ET, 10/14/2008

Crisis Hits Real Economy: Pepsi Flat


PepsiCo. which, like Coca-Cola, has long been considered a “safety stock” — in good times or bad, folks drink soda — said this morning that people actually aren’t drinking soda. Result: The company will cut 3,300 jobs in the United States.


The company’s stock is being hammered thanks to a trifecta of bad news from the soda giant this morning: Third-quarter profits fell short of Wall Street expectations, the company cut its full-year outlook and it refused to give guidance for 2009.


Nearing lunchtime, shares of PepsiCo. are trading down about 10 percent. 

ft – Global markets rally as US launches bank rescue

Asian and European (Milan closes at + 3.6%) Markets


are still in rally mood today, Tuesday Oct. 14, but Wall Street’s COLD SHOWER decelerated the European rally at end of the day.

The very short lived rally (1 day ad  a half) was an answer to the week-end instant diffusion of Gordon Brown’s pseudo-nationalisations (Plan B, after the useless Pauson’s Plan A) in US and Europe; in each country measures are undertaken, but also find a lot of social and economic opposition and discussion, A dramatic acceleration in the US where the top 9 banks are partially State owned ($250 bn): Goldman Sachs, Morgan Stanley, JP Morgan Chase, Bank of America, Merrill Lynch (also becoming controlled by Mitsubishi), Citigroup, Wells Fargo, Bank of New York Mellon, and State Street. In Italy it was observed: What about the Made in Italy, if its environment, the districts and supply chains of SMEs, are about to disappear, since they receive no credit?  A much similar question (mutatis mutandis) is posed in the US (see below). 


Dow Soars 11 Percent; Biggest Point Gain Ever
The U.S. government is dramatically escalating its response to the financial crisis by planning to invest $250 billion in the country’s banks, forcing nine of the largest to accept a Treasury stake in what amounts to a partial nationalization.


From today’s update in Section 2 of our “AAA updates on subcrimes” page:

Wall Street and the global financial system are pro tempore nationalised in US and Europe.

The stock and credit markets historical BLACK WEEK  (6-10 Oct. 2008) has wiped out Paulson’s Plan B. Europe and the US hurried up to adopt Gordon’s Brown PLAN B – and the Labour Premier from a lame duck suddenly became the prophet of Financial Socialism, Hood Robin. As Lex (Brownian Motion in Europe. FT, Oct. 13) puts it

The lugubrious British premier, out of sorts at home and seriously adrift in the polls, has been styled as a swashbuckling conductor in the Spanish press, and a “magician” in France. Europe has apparently bought into Mr Brown’s conviction that this is a severe, but transient crisis of confidence that can be overcome by piling on more and more government debt.

While the wisdom of that strategy is questionable, it is clear that there is strength in numbers. If governments all muck in together, using taxpayers’ money to recapitalise banks

What about Mean Street, the middle, lower and under classes?

There is no alternative (against the persisting risks of the severe recession to degenerate into a 2010s depression) than a Robin Hood policy for the poor and the middle class. As the historian Howard Zinn puts it, arguing in advance for an Obama New Deal (Beyond the New Deal, The Nation, April 7 – oL March 20),
We might wonder why no Democratic Party contender for the presidency has invoked the memory of the New Deal and its unprecedented series of laws aimed at helping people in need. The New Deal was tentative, cautious, bold enough to shake the pillars of the system but not to replace them. It created many jobs but left 9 million unemployed. It built public housing but not nearly enough. It helped large commercial farmers but not tenant farmers. Excluded from its programs were the poorest of the poor, especially blacks. As farm laborers, migrants or domestic workers, they didn’t qualify for unemployment insurance, a minimum wage, Social Security or farm subsidies.
Still, in today’s climate of endless war and uncontrolled greed, drawing upon the heritage of the 1930s would be a huge step forward. Perhaps the momentum of such a project could carry the nation past the limits of FDR’s reforms, especially if there were a popular upsurge that demanded it.


Low-Wage Workers
Low-wage workers have been hardest hit by the economic downturn, yet most remain hopeful about the future. 




Take On Me

By Daniel Politi

Posted Tuesday, Oct. 14, 2008, at 6:42 AM ET (our bold characters)

The U.S. government is officially switching gears. In news that almost all the papers banner across the front page, the Treasury Department will be announcing that the U.S. government plans to invest up to $250 billion in the nation’s banks in a move that will effectively translate into a partial nationalization of the financial institutions that take federal money. In addition, the government would provide insurance on all deposits in non-interest-bearing accounts and insure certain types of bank debt. The New York Times calls it the Treasury Department’s “boldest move yet” to deal with the financial crisis. The Wall Street Journal does the best job of summarizing that the move “intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses.” USA Today points out that Europe’s moves to prop up banks across the pond, “set the pattern for the U.S. plan” because if the Bush administration failed to act “in a similar fashion, investors might have moved money abroad to seek safety.”

The move represents a dramatic shift for Treasury Secretary Henry Paulson, who had previously opposed the idea of taking equity stakes in banks. The Los Angeles Times specifies that while the government still plans to go ahead with its plan to buy toxic securities, “the new strategy is likely to move that into a secondary position.” The new program will be divided into two parts. First, the government will devote $125 billion to buy a minority stake in nine of the nation’s top financial institutions and then make the other $125 billion available to thousands of banks and thrifts across the country. Executives from the nine big banks met with Paulson yesterday and while some weren’t happy with the plan, they all agreed to participate. The Washington Post says Paulson told the executives they needed to agree to it for the good of the American economy, illustrating that while “officially the program was voluntary, the banks had little choice in the matter.”

By pretty much forcing the nine big financial institutions to take government money, officials wanted to make sure there would be no stigma associated with receiving the funds, which would have made the entire plan useless. The WSJ and USAT have the full list of the nine banks that will now be partially owned by taxpayers: Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Merrill Lynch, Citigroup, Wells Fargo, Bank of New York Mellon, and State Street.

The amount of money each bank will get won’t be uniform—the WSJ has the specific numbers—but essentially the Treasury will buy up to $25 billion in preferred stock in each of the financial institutions. The stock each bank issues “will pay special dividends, at a 5 percent interest rate that will be increased to 9 percent after five years,” the NYT details. The government also added a provision that would allow taxpayers to benefit if the stock value of the financial institutions increases.

The NYT notes that while financial institutions that accept government money won’t be required to eliminate dividends or fire their chief executives, they will “be held to strict restrictions on compensation.” But the WSJ isn’t impressed and notes that the restrictions “are relatively weak compared with what congressional Democrats had wanted.” Key Democratic lawmakers emphasized yesterday that they fully expect the government to impose strict limits on compensation, signaling that a failure to do so could put in doubt whether Congress releases more of the $700 billion after Treasury officials burn through the first installment.

The LAT says that some in the banking industry “reacted with alarm” when details of the plan began appearing in news reports and they predicted the government would soon hear from hundreds of angry banks that were left out of the first phase of the program. “This worked in Sweden, where you have about 14 banks,” one “industry insider” said, adding that it’s little surprise that Paulson, a Wall Street insider, would choose to pump up big New York financial institutions first. “It’s like picking your kids,” he said. The WP notes that there is a risk the banks will use the government money “to bolster their balance sheets” instead of increasing lending, but regulators will apparently pressure the financial institutions not to let that happen.

(…) If there’s a clear winner in all this it’s the British government. Of course, that could all change if the rescue plans that are taking shape around the world fail. But as of now, Prime Minister Gordon Brown, went, in a matter of days, from lame duck to global leader as the plan he announced last week to inject billions into British banks was quickly taken up by European leaders and now the United States. “He’s the cat who got the cream,” a British historian tells the WP. “It was a gift from heaven for him to have this crisis in his field of expertise.”

For their part, investors are cheering. News that European leaders were planning to prop up banks, coupled with anticipation for a new U.S. program, sent stock prices soaring yesterday. The Dow Jones industrial average ended more than 900 points higher, the largest point gain in history, for an 11 percent gain, the biggest since 1933. As the WSJ highlights in its front page, history has shown that these quick gains can be short-lived, which is why no one was ready to say that yesterday marked a turning point in the ongoing crisis.

Black Monday degenerated into a 6-11 October BLACK WEEK

Today’s Slate cartoon, by Mike Thompson, http://cartoonbox.slate.com/mikethompson/

homeless, but not hopeless

The point on policies: great expectations on 2 world w\e meetings in Washington. 





Moment of Truth, by Paul Krugman, Commentary, NY Times:

Last month, when the U.S. Treasury Department allowed Lehman Brothers to fail, I wrote that Henry Paulson … was playing financial Russian roulette. Sure enough, there was a bullet in that chamber: Lehman’s failure caused the world financial crisis, already severe, to get much, much worse.

The consequences of Lehman’s fall were apparent within days, yet key policy players have largely wasted the past four weeks. Now they’ve reached a moment of truth: They’d better do something soon — in fact, they’d better announce a coordinated rescue plan this weekend — or the world economy may well experience its worst slump since the Great Depression.  (..)

Why this weekend? Because there happen to be two big meetings taking place in Washington: a meeting of top financial officials from the major advanced nations on Friday, then the annual International Monetary Fund/World Bank meeting Saturday and Sunday. If these meetings end without at least an agreement in principle on a global rescue plan … a golden opportunity will have been missed, and the downward spiral could easily get even worse.

What should be done? The United States and Europe should just say “Yes, prime minister.” The British plan isn’t perfect, but there’s widespread agreement among economists that it offers by far the best available template for a broader rescue effort. 

0K. Nonetheless, although Paul is a flagship Keynesian, he keeps just proposing here FINANCIAL socialism (part-time nationalisations, HOOD ROBIN), and not a Keynesian blend  – ROBIN HOOD, namely restoring a balance in income redistribution, against the rentier class, therefore attacking the current Marx-Kalecki-Keynes-Minsky node: “How to avoid a severe recession to become a decade depression”.

Another Paul, Paul Thoma, not a revolutionary socialist indeed, already got it today.  And he also quotes, in his precious blog, The Guardian’s Time to grasp the fiscal nettle, by Barry Eichengreen yesterday: A MILESTONE PAPER, moving  faster than Paul k. along neo-keynesian lines (aggressive, internationally coordinate fiscal policies; we agree 100%, and just add the redistributional dimension with more stress and with an open connection to a class struggle revival, from Milan to Mumbai and Shangai,  on technology appropriation, profits, rents and wages). Giacomo Vaciago, in today’s il Sole 24 ore edito, on the same line: the emergency now is growth, and consumer expenditure.

Don’t despair: Paul is slow in changing his mind but, when he does, he moves the public and intellectuals median opinion to the point. 

It’s a diffusion of innovations geography game: Nouriel,  Paul, then the critical mass. 


Saturday’s newspapers: Slate

Worst. Week. Ever.

By Jesse Stanchak
Posted Saturday, Oct. 11, 2008, at 6:03 AM ETThe Dow Jones Industrial Average had its most volatile day ever Friday, oscillating more than one thousand points before ending up 128 points down, capping the worst week in the Dow’s 112-year history. The index lost 18.2 percent of its value between the opening bell Monday and closing bell Friday. Amid the panic, some very somber discussions are being held and all the papers lead with some kind of reaction to the bad news.

The Washington Post leads with finance ministers from the U.S. and six other wealthy nations vowing to take “all necessary steps” to deal with the burgeoning financial crisis. The Los Angeles Times leads (at least online) with Treasury Secretary Henry Paulson coming out of that meeting and saying the U.S. government would buy non-voting stakes in financial institutions, as part of an ongoing attempt to restore market liquidity. The New York Times leads with a double billing of the international cooperation announcement and word ofpossible merger talks between General Motors and Chrysler. The Wall Street Journal devotes the top half of its front page to summing up Friday’s manic market activity; it tops its world-wide newsbox with both presidential candidates issuing new economic proposals in light of the crisis.

Friday’s facts.

il Sole 24 ore. Borsa: l’Europa chiude un’altra seduta da brivido. Milano -7,1%

 Sui mercati prevale una situazione di estrema volatilità. Le Borse europee, appesantite dai cali registrati a Wall Street, chiudono in forte ribasso. Milano perde circa il 7 per cento. Francoforte è la peggiore e cede l’8,05 per cento. Le vendite hanno colpito l’intero listino. Attesa per misure straordinarie dal G-7 a Washington.  …» 

Friday, October 10,  3.30 pm GMT

11:32 a.m. EDT (3.32  pm GMT)  10/10/08 Major Stock Indexes (wsj

  Last   – Change  – % Chg

DJIA (Dow Jones) 8171.39 -407.80 -4.75

Nasdaq 1577.94 -67.18 -4.08

S&P 500 861.01 -48.91 -5.38

DJ Wilshire 5000 8712.03 -475.91 -5.18

Russell 2000 479.83 -19.37 -3.88

DJ World exUS 145.66 -11.31 -7.21

Japan: Nikkei Average* 8276.43 -881.06 -9.62

DJ Stoxx 50* 2090.58 -201.19 -8.78

UK: FTSE 100* 3981.70 -332.10 -7.70

Brazil: Bovespa   34246.43   -2833.87   -7.64%

China: DJ Shanghai* 204.20 -9.95 -4.65%

Bombay Sensex* 10527.85 -800.51 -7.07%

FTSE/JSE All-Share* 20595.23 -657.06 -3.09%

 * at close

CHART: S&P 500 the last 2 years: now (before closure) at 869, 1 year ago twice at 1550 (in July and October) – http://online.wsj.com/mdc/public/npage/2_3050.html?symb=&sid=3377&page=us&symbChange=aaaaa~0&time=2yr&freq=1dy&DrawChart.x=63&DrawChart.y=2&startdate=&enddate=&type=64&compidx=aaaaa~0&comp=Enter+a+symbol&ma=1&maval=100&lf=1&lf2=4&lf3=1024


This early morning in Asia


Asian stocks dive as panic erupts over financial crisis (from India Times)

10 Oct 2008, 0950 hrs IST,AGENCIES

Tokyo dived more than 11 percent as investors took fright at news that Yamato Life Insurance will file for bankruptcy protection, becoming the first Japanese insurer to go bust amid the global credit crisis.

The bloodbath quickly spread to other markets. Sydney plunged 6.5 percent, Singapore lost more than seven percent, Seoul was down 7.5 percent and Shanghai opened 3.8 percent lower. Hong Kong followed, opening down 7.7 percent.

“It’s beyond panic,” Oh Hyun-Seok at Samsung Securities told Dow Jones Newswires. “Concerns about the global economy are deepening further and there is no signs of easing in the global credit crunch.” 

Shangai is down 60% frome year start. The Nikkei ends the day almost at -10% – in its biggest one-day drop since the 1987 crash –  with a weekly fall of  -24%. Nikkei limps to 24% weekly drop.


Fearing recession, markets end sharply lower

10 Oct 2008, 1632 hrs IST,  www.economictimes.com

Bombay Stock Exchange’s Sensex closed at 10,536.69, down 791.67 points or 6.99 per cent. The index touched an intra-day low of 10239.76. 

Retired Bill is poorer and poorer

Buffett pips Bill Gates to top new Forbes list: Report
10 Oct, 2008, 1602 hrs IST, REUTERS

Warren Buffett has overtaken Bill Gates to become the richest American in Forbes list, said a media report. Young Billionaires | Top Global Brands | Richest people of US

The euro-american afternoon.

Now, at 3.00 pm GMT (Italian legal time 5.00): – 4% then – 5% NY, -6% Bovespa SP,  – 8% Paris and London; Frankfurt closing worst, at – 8.7%.

Although Milan (-7.4% Mibtel at close)  suspends all the “vendite allo scoperto”:  UniCredit at -14% (falling towards €2,  after a title suspension), Intesa SP recovering from the morning and “only” – 4.8% but at €2.9, i.e.  under  €3 per share, Mediaset suspended for excess obscillations. People laugh at today’s new Berlusconi appeal (during stock markets opening time !!! he’s just crazy and silly) to buy now undervalued shares, namely ENEL (- 7.5% today)  and ENI (-6%) –listen to the audio file – and (yesterday): don’t sell Mediaset. Telecom Italia down at €0.75. Portfolio, fund managers must sell “good” shares, and therefore contribute to diffuse the fall to energy and manufacturing industries. Berlusconi from Naples: in Europe we will rewrite all rules in a new Bretton Woods, and we might suspend markets (than he denies having said the latter); “non  siamo ad oggi in una recessione”.

He’s even more funny, stupid and unreliable than a prudent, and lately metamorphic President Bush.

BBC at 2:14 pm GMT

The Dow Jones Industrial Average dipped below 8,000 but then recovered slightly to trade down 3% at 8,321 points.

President Bush has sought to reassure traders, saying the US government was acting to resolve the crisis and restore stability to the markets. 

Wall Street has lost more than 20% of its value in the past ten trading days and is heading for one of its biggest weekly falls since the Dow was created 112 years ago. (..)

In Europe share prices falls have been much steeper. In London the FTSE 100 share index was down 6.9%, Paris was down 8.4%, and Frankfurt was down 8.9%.

Finance ministers from the G7 are to meet in Washington later.

As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington.

(…) The BBC’s business editor Robert Peston said markets were worried about Friday’s auction of insurance claims on the debts of the collapsed US investment bank, Lehman Brothers. 

Wall Street was sharply lower after a dizzying open session that saw the Dow fall more than 600 points before recovering most of its losses. London’s FTSE 100 fell 9%. European indices also tumbled. Japanese shares touched 20-year lows, leading Asia-Pacific down as fears of a global recession mounted – 14:53


Global Indexes Plunge

European stocks tumbled, with Germany losing 9.9% and the FTSE falling 9.3% to below 4000 amid heightened anxiety about the global economy and a distressed financial sector. Asian markets posted sharp losses, with the Nikkei closing down 9.6% and Sydney dropping 8.3%.

October 10, 2008 10:46 A.M.ET

Zooming back to flat
Dow industrials below 8,000 for first time in five years before bounce

With aggregate losses deep in the trillions, U.S. stocks suffer latest brutal open, picking up from Thursday’s bloodbath — and the waves of selling that ensued around the globe — but the comeback is stirring.

Morgan sits out sector turnaround
Financials rise, pacing broad-market bounce off day’s low. But Morgan Stanley remains in the grip of a damaging sell-off.


PREVIOUS PARTS OF THIS BLOG POST FOLLOW, looking at yesterday and this morning again:

Friday October 10; 9.30 am GMT

Yesterday afternoon, ice shower on markets from “champagne socialist” Strauss Kahn’s (IMF) certification of our analysis: a global recession is on, and will hit hard in 2009 even Brazil,  China, and then it will be a global stop. Wiping out all the nonsense that has been said against the mere economic reality and truth (the credit crunch monetary mechanisms of transmission into a severe real recession).

il cavalier Pinocchioni

But imbeciles are still in power:  yesterday’s Guinness of PINOCCHIO-of-the-day goes to Cav. Berlusconi (waiting for today’s Bush speech), recommending Italian people to hold stocks, since in the long run they will re-evaluate. Not saying that in the short run, on average they will lose another 50%: stock capitalisations are now 1/3 down from  1 year ago’s maxima. In a few months the will be grosso modo another 50% down, to 1/3 of their maxima: only then a floor will be in sight. This is a rough estimation of fundamentals, in the middle of the hardest world recession of the last 80 years.

Friday morning Tokyo opened at  -4.5%, Mumbai closed at – 7% (see above); in Europe, markets were opening from  -6% to – 10%, then they were correcting upwards during the morning, but only slightly, with Frankfurt still at – 7.8% (now, at 9 am GMT) and Milan’s MIB – 6%. UniCredit is losing 12%, Intesa SP 10%, Italy’s Telecom 9% down to €0.75 (our target price: €0.25). 


A review of some top oL pages today, in the European morning:


Equities plunged after a dramatic late sell-off in New York. London’s FTSE 100 opened 10% down before recovering somewhat to stand 5% lower. Japanese shares touched 20-year lows, leading Asia-Pacific down as fears deepened that the world economy was heading for recession. Overnight, Wall Street suffered its biggest fall since the 1987 crash – 09:37 (London time)



European Markets Open With A Crash


It was bad enough that the Nikkei traded down over 9% today and most of the rest of Asia fell 6% to 8%. But the opening of European markets is a dramatic vertical trajectory down: DJ Stoxx 50 down 8.3%, FTSE down over 10% in five minutes, now down a comparatively modest 9.23% Dax 30 down 9.8% CAC 40 down 9.8% The yen is at 98 to the dollar, Brent crude is at $79 a gallon, gold is $926 an ounce. …


Markets in Europe and Asia Plunge

Global stocks plummeted, with selling momentum accelerating after a Japanese insurance company was driven out of business. In Tokyo, the Nikkei fell 9.6 percent.


Fears of Recession Deepen Rout

Fear and foreboding took hold on Wall Street yesterday, as the stock market again plunged and investors became convinced that the nation is on the verge of a deep and prolonged recession. The rout continued in Japan, where stocks plummeted in early…

3 hours ago in The Washington Post


Global Indexes Plunge

European stocks tumbled, tracking a global stock market rout, amid heightened anxiety about the global economy and a distressed financial sector. Asian markets posted sharp losses, with the Nikkei closing down 9.6% and Sydney dropping 8.3%.

Blue Chips Slide 678.91 Points, or 7.3%

The Dow industrials plunged 678.91 points, or 7.3%, to 8579.19, falling for the seventh straight day, or more than 20% over that stretch. An early rally morphed into a broad-based selloff that picked up speed near the end of trading.…

5 hours ago in http://online.wsj.com

On Wall Street yesterday (Detroit’s capitalisation was sinking, GM in a moment was at -33%), also:


The US stock market suffered its largest loss since the crash of 1987 on Thursday (our bold) amid panic over General Motors, Morgan Stanley and several big insurance companies. The market collapse heightened speculation that the US would unveil a bank recapitalisation plan in the coming days. More…

This was – by contrast – the sunny picture yesterday morning in Europe, when markets were still quiet (after and before the storms), before IMF ice shower:

Thursday October 9, 12 am GMT

After 3 days  underwater, starting from Tokyo and Hongkong, today stock exchanges are actually taking a breath and a holiday finally,  – e.g. – UniCredit was even gaining +8% at mid-day, some fresh air.

But, read below in previous posts (and in AAA updates … page, our always longer and longer selection of economic facts) what we were reading just 1 week ago from Roubini. At the wsj live blogging, Oct. 2, at the FAQ “What if Paulson plan fails ?”, the answer was: nationalisation. Lead by the socialist premier Gordon Brown, even Amerika is fast moving into that dramatic direction of fully fledged bourgeois, financial socialism (reverse Robin Hood, people call it  


stealing from poor taxpayers to guarantee and save the rich rentier).

A symptom is Technorati percolation temperature now: in the news the no.1 percolating news is this one:


U.S. May Take Ownership Stake in Banks

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash into banks that request it.…

1 day ago in The New York Times
JUST PAULSON’s DICTATORSHIP from now to Obama taking power in January. The voted plan said exactly the opposite: we buy toxic derivatives; the day after they moved into commercial papers, and  now to FINANCIAL SOCIALISM. Because markets discounted already the failure of Paulson’s Plan A.
Finally, this quasi-news is becoming now a critical mass news,  getting  on screen top in the wsj oL:

U.S. Mulls Stakes in Banks

The U.S. Treasury is considering ways to inject capital directly into banks, possibly by taking equity stakes.

U.S. officials are discussing temporarily backing all U.S. bank deposits if economic conditions continue to worsen, a move that would mark another unprecedented step.

U.S. Mulls Direct Capital Infusions

The U.S. Treasury is considering ways to inject capital directly into banks, possibly by taking equity stakes.

Deal Journal: The World’s Biggest Hedge Fund

The NYT is adding on Friday that

    The United States and Britain appear to be converging on a similar blueprint for stemming the financial chaos sweeping the world, one day before a crucial meeting of leaders begins in Washington that the White House hopes will result in a more coordinated response.

    The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans….

Of course, Yves Smith   at Naked Capitalism is unhappy, arguing that banks shareholders took their risks and should face them. He concludes Friday morning, at 12.44 am:

Dear God, Rome is burning, and the Treasury Department is hung up on niceties like executive comp and the standing of existing shareholders. If the bank needs capital, current sharedholder WILL be diluted. The fact that this is coming up in discussions about how to keep the financial system from imploding is deeply troubling. 

Among comments to Yves:

    October 10, 2008 2:46 AM 

baychev said…

    The FDIC has coverage for only 0.8% of all deposits, now the gov’t will back debt that probably exceeds GDP. How is this going to soothe any sane investor?

    And what happens to the CDSs written on this debt? Cancelled, default is triggered, or the protection sellers get a free ride from the gov’t?

    October 10, 2008 1:08 AM 
LJR said…
    I think a stake has been driven through the heart of the Republican party’s penchant for deregulation. There’s a bright side to everything that happens.


YESTERDAY WE MADE a good point (nationalisations in the US) but at the same time such A BIIIG MISTAKE, when we predicted that this step would have perhaps occurred in January. It started to get critical mass the day after. It is difficult, BUT NECESSARY, t otake the exact pace of the HYPER-CRITICAL MASS global village ( markets, media, web 2.0 and word of mouth) where phenomena and meta-phenomena happen. That is: the crisis itself, and all the related class struggles,  game powers,  ideologies, narrations and self-fulfilling “news”. No immaterial economy, ON THE CONTRARY: a word of mouth becomes so quickly a Material Tsunami, with megatons of economic power shifting hands in a few hours.

At  the  moment, Paulson has more power than a G8 enlarged to China. FAQ 1: Will he keep it intact until January?

FAQ 2: Is Obama socialist? At the moment, only the far right believes it. 


quoted by Technorati,  argues that 12 years ago, the young lawyer was a member of the “New Party”:

What was the “New Party”? It was a far-left “workers’ party” fighting for:

full employmenta shorter work week

a guaranteed minimum income for all adults and a universal “social wage”

full public financing of elections with universal voter registration

“the democratization of banking and financial systems”, which included public control and regulation of banking

a more progressive tax system

reductions in military spending and an end to unilateral military interventions.



Black Monday: 2 days after

Stock exchanges continue to plunge for the 3rd day. The WSJ oL opens with:

Central Banks Cut Rates World-Wide

The Federal Reserve, ECB and other major central banks announced coordinated cuts in target interest rates, the latest dramatic action to help stem a growing global financial crisis.

Palliative again! Of course, the liquidity and credit crisis is imploding, but policies are not changing anything. As Roubini has detected  in his Oct.3 post on the “cardiac arrest”, CIRCLATING K has almost stopped its circulation.

But no one is coordinating and harmonising ST and LT measures to regulate this hugh crisis of global capitalism. The crisis is likely precipitate  for the same reasons of its origin: an unequal distribution depressing effective demand, and behind it the weakness of the oppressed of the world, the lack of any alternative to usury capitalism, after the fall of totaliarian communism.

Actually, political power and CC.BB.  are turning around themselves, like in a Turkish Dervishi mystical dance, but never get to the point.

1) On the one hand, the “FINANCIAL K PARTY”, as well as other sections of K, push towards an EMERGENCY NATIONALISATION, along financial socialist lines: let’s make the taxpayer pay the crisis a  2nd time (foreclosures, and new taxes to save banks, sub-criminals and Wall Street). On this, as Paul Krugman notes today UK is leapfrogging the US: Paulson just buys toxic derivatives and commercial papers, Gordon Browns nationalises the whole UK banking system (except perhap HBOS). The US will get there as soon as Paulson’s plan will make its failure evident – likely at the start of Obama’s Presidence.

2) On the other hand, markets perceive how hard is the ongoing recession, forecast a deepening of the global recession in 2009, and their stocks precipitate. There is no floor in sight  for stock markets; they have already lost approx. 1/3  of their value and might fall another 50% in a few months (at 1/3 of their top). Then the expected real recession will hit harder and harder, as soon as Asia decelerates abruptly (small export-lead countres are doing it already, then it’ll ne the turn of India and China – see yesterday’s, Oct. 7 rge-monitor.com:  Are We Headed Towards a Global Recession?).

3) Without Keynesian-socialist ROBIN HOOD new  rules, fiscal and structural policies, the recession will not touch a floor until 2010, then even a depression is possible.

FINANCIAL SOCIALIST and myopic SR measures on liquidity, are leading the global economy to a historical, unprecedented disaster.


Published in: on October 8, 2008 at 1:23 pm  Leave a Comment  
Tags: , , , , ,

FF&F: Fannie, Freddie and Financial – capital socialism



As expected, the US authorities have been obliged to A HISTORICAL POLICY CHANGE, i.e. to nationalise the two semi-public agencies (so called Fannie and Freddie) that are behind most of the federal housing policies, including the subcrime disaster. It is Financial Socialism at work: since from the March bailout of Bear Stearns, the weakest of the 5 US financial banks, the Fed and the Bush administration have lead the world tide toward the socialisation of subcriminal financial losses, abandoning forever Reaganism and the Chicago ideology. As Lex suggests, this sharp move of  Bernanke – Paulsson (the initiative to the latter, this time)  towards State Socialism in the US

has in essence converted the Treasury into the US hedge fund of last resort (with the Federal Reserve as its prime broker).

IT IS IN FACT A MOVE TOWARDS STATE SOCIALISM A’ LA SCHUMPETER, much more neat than Bear Stearns: because the private initiative was missing (read Lex just below), and the credit crunch was melting down the US (and world) financial system, the US Federal State and its Federal  Reserve intervene as a last resort.

A full fledged NATIONALISATION at the service of Financial Capital: THEIR SOCIALISM.

Misery (and a lesson) to the left parties, that have abandoned since long the ideals of True Socialism, accepting 100% the Chicago – Reagan – Thatcher ideology of self-healing and supermen markets !!! 



OUR 13 JULY BLOG POST: https://enzofabioarcangeli.wordpress.com/2008/07/13/indy-fannie-and-freddie/

1. BRAD SETSER’s analysis on Sept. 2: 


2. LEX (financial times)

Fannie & Freddie: coping with crunches

Published: September 8 2008 09:32 | Last updated: September 8 2008 19:55

The sight of a finance minister caught in reporters’ lights is more usually associated with an emerging market crisis. But Hank Paulson has a lot in common with emerging markets of late. It was Yale-educated former Mexican President Ernesto Zedillo who once commented that markets overreact, so policymakers need to do so as well. Mr Paulson has taken a leaf out of that book.

Coping with the credit crunchHe has taken no chances with the bail-out of Fannie Mae and Freddie Mac. Other investors were not prepared to recapitalise them or buy sufficient amounts of their debt to bring mortgage rates down. So the government will instead. The former investment banker has in essence converted the Treasury into the US hedge fund of last resort (with the Federal Reserve as its prime broker). Oddly, Mr Paulson’s package has proved uncontroversial and been supported by both presidential candidates (although President George W. Bush has kept relatively quiet). And, paradoxically for the self-proclaimed home of democracy, it was enacted by unelected officials.


OUR COMMENT: Look at Moody’s graph. When the clouds will be over, we will know how much the US 2008-9 is approaching the 8% of GDP Guinness of Japan around year 2000, and Norway 1990-93.



3. NOURIEL ROUBINI    http://www.rgemonitor.com/roubini-monitor/253501/fannie_and_freddies_bust_and_deeply_flawed_government_bailout

    the bust and now bailout of Fannie and Freddie is no news for this author and the readers of this blog: it is one of the severe toxic collateral damages of the biggest housing and mortgage bubble and bust in US history.


   The recent New York Times Magazine long profile article of yours truly (as “Dr Doom”) reminded readers that this bust of housing, of the mortgage market and of Fannie and Freddie was predicted here exactly two years ago today’s date (September 7th, 2006)

4. RGE MONITOR’s analysis and doc – with links:

 Analysis U.S. Treasury Sep 07, 2008

OpinionsReutersSep 07, 2008
BlogsRGE Finance & Markets MonitorIngo WalterJul 16, 2008
BlogsBrad Setser’s Blog: Follow the MoneyBrad SetserSep 02, 2008   Yes, Virginia – Creditors do sometimes get a vote …
BlogsRGE Analysts’ EconoMonitorElisa Parisi-CaponeJul 14, 2008   How to Solve The GSE Crisis? Overview of Long-Term Solutions
ResearchOFHEOAndrew Leventis et alJul 2008   Mortgage Markets And The Enterprises In 2007
AnalysisOFHEOPresentation by James B. Lockhart IIIMay 2008   Lessons Learned From Mortgage Market Turmoil – Latest data on Fannie&Freddie
 RGE WritingsRGE MonitorElisa Parisi-CaponeSeptember 2006   An Analysis of the Systemic Risks Posed by Fannie Mae and Freddie Mac


The best analysis of Fre&Fan in the frame of  US housing and income-debt-wealth policies is:


Paul Jorion (2007), Vers la crise du capitalisme américain? Paris: La Découverte – MAUSS.

For updates see: http://www.ft.com/indepth/freddieandfannie


alphaville, ft

US bank exposure to Fannie and Freddie prefs

Sep 08 09:08
by Paul Murphy

The table here may be a little difficult to read, but probably worth pasting all the same – the exposure of 40 US regional banks to GSE preferred stock.

According to Goldman Sachs, the key names at risk are Westamerica and SovereignMore…

Fannie & Freddie: A tale of two Bills

Sep 08 11:38
by Tracy Alloway

So Bill Gross’s Pimco has got what he wanted – a bailout of Fannie/Freddie, all in the name of saving the world from financial meltdown.

Pimco is of course, loaded to the gills with GSE mortgage-backed securities and has been screaming for Treasury intervention, More…

Further Fannie and Freddie

Sep 08 08:08
by Paul Murphy

The latest on that bailout:

Is this the beginning of the end of capitalism? (NOTE- our answer: a sort of; but not Marx style, better Schumpeter-style: capitalism evolves naturally toward autocratic and bureaucratic socialism)

– The exit packages… – Syron gets an extra $8.8m for forfeiting “certain equity grants.”

– Cramer: “There is, for the first time, More…

US takes control of Fannie and Freddie

Sep 08 05:43
by Gwen Robinson

The US government on Sunday seized control of the troubled Fannie Mae and Freddie Mac mortgage groups in what could become the world’s biggest financial bail-out, reports the FT. While the Bush administration stopped short of using the word “nationalisation”, More…



US rescue boosts investor risk appetite

World equities markets rallied and Treasury prices tumbled after the US government seized control of Freddie Mac and Fannie Mae, which between them have outstanding liabilities of $5,400bn – 11:40


Fannie & Freddie: market reaction

Published: September 8 2008 09:29 | Last updated: September 8 2008 13:38

Investors had half the weekend to ponder the resuscitation of the toxic twins – Fannie Mae and Freddie Mac. It is fair to say, however, that nobody really knows what the implications for financial markets or the global economy will be. In baffling times, the wisdom of crowds – where the average response of many people can prove remarkably accurate – may prove a useful guide. So what are Monday’s markets telling us so far?

The conclusion seems to be that the bail-out is not a quick-fix for the credit crunch. If it were, bank stocks across the planet should have at least tripled. That share prices from Credit Suisse in Switzerland to Mizuho in Japan rose between 10 and 15 per cent was, in fact, a muted response – prices are only back to where they were mid-August. Ditto for currencies: the dollar’s rally versus the euro was short-lived while gains were surprisingly modest in the “carry-trade” currencies. If risk appetites had genuinely returned, the Aussie dollar would have bounded like a kangaroo.

THIS IS 1\4 TODAY’S COMMENTS BY LEX (another one was quoted above), they are all quite nice and they give the sense of an epochal move toward a FINANCIAL STATE “SOCIALISM”, while sticking to facts:

Fannie & Freddie: market reaction

In baffling times, the wisdom of crowds may prove a useful guide. So what are Monday’s markets telling us so far? – Sep-08

Fannie & Freddie: coping with crunches

Hank Paulson is following the theory of financial crises that markets over-react, so policymakers need to as well – Sep-08

Fannie & Freddie: effect on banks

Europe’s banks will take all the good news they can get these days. The Fannie Mae and Freddie Mac rescue does a couple of helpful things – Sep-08

Fannie and Freddie

The US’s decision to place Fannie Mae and Freddie Mac into “conservatorship” came without a specific cause but a sense they were failing to provide affordable mortgage debt – Sep-08


U.S. Takeover of Mortgage Giants Lifts Global Markets

Stocks in Asia and Europe rallied, even as the rescue of Fannie Mae and Freddie Mac reinforced concerns about the U.S. economy.

Over the years, Fannie Mae and Freddie Mac showered riches on many winners: their executives, Wall Street bankers and Washington lobbyists. Now the foundering mortgage giants are leaving some losers in their wake, notably their shareholders, rank-and-file employees and, in the worst case, American taxpayers.



wsj:  THE GOVERNMENT SEIZED Fannie Mae and Freddie Mac in its most dramatic market intervention in decades. Treasury plans to replace the companies’ CEOs and provide up to $200 billion as part of the rescue. (Complete coverage)

Morgan Stanley assigned two veterans to the prestigious task of advising the Treasury in orchestrating the takeover of Fannie Mae and Freddie Mac.

Obama New Deal on the road: Barack is the candidate, Hillary has a future behind

Illustration by Doug Chayka, The Nation 

8 june update: a superb Hillary gave by far the best speech of her life, in the neoclassic scenario of the Natural Building Museum, Washington. She took up our points below, summarised in a nice image: 18 million breaks in the upper glass to women’s career, broken forever. And finally joined Obama for the Presidentials.

She shouldn’t be sorry: Obama is her angel.

Hillary’s Presidency would have compared to Bill, like GWB to this father: unless she stroke Iran (precipitating the world in a catasrophic oil crisis), she might not have doubled in 2012 (the year the Maja calendar ends …). Angel Barack came to save her, and America first of all, from a last Reaganian-age presidency – at odds with a Great Depression requiring  absolute novelties, a political paradigm shift.

Call it Destiny Athens-style,  Providence Jerusalem’s style or Spinoza’s necessity: a synthesis of the two.

5 June UPDATE: with Primaries over, Presidentials now fully on, the Subcrime crisis takes the hegemony of the narrative and the political fight; Iraq and foreign policy in 2nd place (and also an economic issue: see our blog sub-title inspired by Joe Stiglitz). 

FIRST OF ALL: a look back to the primaries. A fine observation by Matt Bai, a brilliant pen at Sunday Times, the NYT magazine, has underlined a conflict of paradigms between the two strategist:

the Pollster (mark penn) vs the Ad Man (daniel axelrod)

No wonder the latter won: a systemic approach overweighted a piecemeal one:

Mr. Penn, on the other hand, is a pollster, and pollsters tend to look at campaigns as a series of dissectible data points that either attract voters or drive them away. Get a health care plan and an economic plan that 70 percent of people say they view favorably. Pay attention to words that move the dial in focus groups, like “real solutions for America” or “ready to lead on Day 1.”

Mrs. Clinton’s relentless focus on pragmatism and specificity, as well as her willingness to shift slogans, are not simply a result of her own personality but also of Mr. Penn’s strategic outlook, which values testable ideas and phrases over more sweeping imagery and themes.

New Socialism looks at America as a model of democracy

Comments stress that:

a) Hillary has not lost: Obama won, by charismatic leadership (aggregating a coalition external to the traditional Dem electorate, that now needs to be reunited –  a novel coalition of blacks, young people and liberal professional sorts, rather than their traditional blue-collar and TU base), and a successful funds raising machinery from ordinary people donations, based on mastering web 2.0 politics and marketing.

b) She definitely broke upper barriers to women– although not at her immediate advantage; and didn’t lose for being a woman: mostly for voting the Iraq war,  having Bill always at her side, and conducing an unimaginative campaign, that instilled many doubts about her supposed “experience” and managerial capabilities. “Hillary has always been a policy wonk, a functionary attuned to bureaucratic process, but she has never shown executive ability, which makes her quest for the presidency problematic.” (Camille Paglia, April 29, The Telegraph

c) The US are at a secular cross-road: not only far away from slavery and near-apartheid; closer in time: away from an Afro-American culture of closed identity and opposition. The one expressed by a wrong prediction, in the instant book A Bound Man: Why We Are Excited About Obama and Why He Can’t Win – by old-fashion Black intellectual Shelby Steele. “Assimilation, not blackness, is the road to success” he writes. It is worth noting that these Afro-American pundits stood on Hillary’s side, while Kenyan young professionals are now organising a web-worldwide campaign for Obama, independent form Obama’s organization (like Irish people were proud of Kennedy).

d) A LESSON FOR THE WORLD (see this week’s leader, The Economist): no other democracy choses her leaders in such an open and massively participated process, that the dual competition has stressed so much: Barack and Hillary, each one of them has often collected more votes than all the Republicans together. Hillary: no one ever arrived no. 2 in Primaries with so many votes, in % and absolute number. Compare it with all the other countries: they will look like gerontocracies (Italia: non è un paese per giovani – see our June 2 post below), mafia regimes and disguised fascisms: WHAT THEY ARE IN FACT. W AMERICA !!!

e) Deeprecession’s own comment: the new socialism has NOTHING in common with always-Zarist and monocratic Russia, or Mao and Deng’s Chinas. New Socialism looks at America as a model of democracy, with further, minor improvements towards a mix of delegated and direct democracy (Hanna Arendt), but without populism (always associated with false forms of direct democracy: see e.g. the idiot in Italy, Beppe Grillo).   


Election Won’t Lift Economic Clouds

June 5, 2008; Page A2

John McCain and Barack Obama, understandably, are focusing mainly on how to win the White House in November. But it’s none too soon for the candidates and their economic advisers to contemplate the economy that the next president will inherit in January 2009.

The article focuses on 3 issues: housing, energy and credit crunch. Our view is much more pessimistic: January 2009 will not yet be the worst point of the US crisis, even less for the global one. But this leaves room for a timely policy affecting both the crisis itself and distributive issues (Robin Hood policies).

        June 4. Barack Obama, although still unofficially, is the Dem candidate today. As more superdelegates joined him, the Illinois senator on Tuesday locked up the 2118 delegates he needs for victory at the August convention. See his mail to supporters from StPaul: barackmail_stpaul_080604 The Nation has opened an oL vote for suggesting Obama’s ticket. Until now: 21% Jim Webb equal to  Bill Richardson, 18% John Edwards,9% Hillary Clinton, Kathleen Sibelius and gen. Wesley Clark, 6% only Al Gore. Obama’s rally in St Paul, yesterday night

More than 20 000 people filled the stadium to hear Obama — its largest crowd. An additional 15 000 watched on giant television screen outside. Somewhere among the crowd in the arena as Obama spoke, Greg Adkins quietly shed a few tears.

“It was great, and it was historical, and it was really significant,” said Adkins, an engineer from the suburban town of Stillwater who is African American. “I’m a lifetime Republican, and I was touched and moved.” As the crowd filed out of the arena, he still occasionally dabbed at his eyes. “That certainly touches me that he’s African American. That really speaks deep in my heart,” he said. “I hope it speaks to the African-American community that “yes, we can’.” – guardian.co.uk © Guardian Newspapers Limited 2008

The political group we cooperate with, MoveOn.org (see picture above), joined the Obama camp on February 1, when Edwards (closer to the TUs, more representative of a traditional, old Lib politics, although presenting the better and more radical political program among the dem candidates) retired. It was a daring, good and timely decision: for the first time ever, MoveOn was taking position in Primaries. History calls, we answer. We think Obama is already the President IN PECTORE, although the battle will be hard, since:
1) America is fully into the Subcrime recession,
2) badly needs a New Deal
3) and Obama is the only man that might and will deliver it.
There is a sense of destiny and Spinozian necessity in all this. We’ll fight hard, but Obama New Deal ALREADY belongs to History, translating people’s fears and hopes into a wide-ranging set of policies to fight the Subcrime recession, and avoid its degeneration into a depression. Obama new Deal will be written in early 2009, when Subcrime will hit hard: shadow finance collapse still on (after the weakest Lehman, financial sanctuaries under attack and Fed protection challenged), dollar plunging, unemployment jumping in the US. Global crisis abating any decoupling barrier and resistance: during 2009 even Germany, then China and lately, perhaps even India will be affected.
OBAMA NEW DEAL’s first financial and fiscal proposals, will be approved by the US legislative powers in Spring 2009.
As for its international components, they must and  will include, among others:
a) a reshape of Bretton Woods institutions, that will take a few years, charging them of new tasks in order to: regulate global finance (IMF), promote a coordination of Keynesian measures prioritising the poorest and the unhealthy  (WB), counteract- discourage  “beggar your neighbour” protectionism (WTO), and coordinate carbon policies (a 4th, new World Authority: the WCO, Word Climate Organisation, with effective powers). 
b) An immediate change from  G8 to G12: inclusion of Brazil, China, India and South Africa. G12 will immediately deal with the $ fall, that Fiat’s Chairman Marchionne has just defined (in an interview at Trento’s Economics Festival) a “criminal” competitive policy.
c) Global “Robin Hood” policies, making pay the Subcrime crisis to Subcriminals. We are very happy that our


slogan, has been independently adopted by an Italian minister we usually don’t agree much with (although he recommends Marx and Gramsci!): Mr Tremonti, applying a Robin Hood Tax to Oil Companies. Actually, in this CC blog, we had copy-left, not copy-rights on Robin Hood policies !!!  
June 5 update: listened at Focus Economia (radio 24);  it seems that Tremonti oil tax will target windfall profits along the chain, and create a fund to support the hit categories: a True Robin.

Rullar di tamburi americani

Rescue Effort Overwhelms China 

[Go to article.]
Shai Oster
China quickly mobilized the largest relief operation in its modern history after the magnitude-7.9 earthquake, but, as a trek into one of the worst hit areas showed, even that effort was falling short for many victims of the vast devastation.

In a moment of catastrophe and suffering for the Chinese earthquake (40,000 dead counted as of today, plus 30,000 dispersed), the WSJ  looks forward, sees a reconstruction after the ruins. And, further on,  the same Armageddon as we do. But – once sharing this basic, commonly held scenario – such an authoritative and highly professional voice of the US right, decides for the obvious. The highly popular Early Strike meta-strategy is proposed in an op-ed by Mark Helprin.


FAQ 1:  Does this imply that capitalisms are leading NECESSARILY TO WW3?

FAQ 2: Which family of social systems might avoid imperialistic  WW3 and WW4, and how?

FAQ 3: Is it conceivable a peaceful transition from a US to a Chinese and\or an Indian Empire? Why not?

Don’t ask such question to the WSJ, feminism and socialism are not their main points. Today’s Opinion.


The Challenge From China


May 13, 2008; Page A17

Even as our hearts go out to the Chinese who have perished in the earthquake, we cannot lose sight of the fact that every day China is growing stronger. The rate and nature of its economic expansion, the character and patriotism of its youth, and its military and technical development present the United States with two essential challenges that we have failed to meet, even though they play to our traditional advantages.

The first of these challenges is economic, the second military. They are inextricably bound together, and if we do not attend to both we may eventually discover in a place above us a nation recently so impotent we cannot now convince ourselves to look at the blow it may strike. We may think we have troubles now, but imagine what they will be like were we to face an equal.

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).