November, 2012 Archives

13
Nov

A Few Informative Links

by admin in Uncategorized

 

 The day after the election Dr. E-Erian from PIMCO wrote an open letter to President Obama offering some ideas – see the open letter here: http://finance.fortune.cnn.com/2012/11/07/mohamed-el-erian/.

Here is a post by Tim Duy about the state of consumer sentiment in the US: http://economistsview.typepad.com/timduy/.

Here is a video interview with Anastasia Nesvetailova from City University London on the question why financial crises seem to occur again and again: http://www.youtube.com/watch?v=A3aWnDr5W7A.

7
Nov

And We Voted – What Now?

by Riaan Nel in News

 

Now that the election is over I ask myself What now?  A total of $6 billion was spent on the election (Presidential and Congressional elections combined), and we basically end up with the same result we had yesterday.  A Republican controlled House of Representatives, with an intransigent Tea Party contingent and an equally ideologically naive Progressive wing of the Democratic Party.  We have the same Democrat controlled Senate, which will be dysfunctional by the misuse of the filibuster rule.  And we have Barack.  When I dropped off my ballot yesterday I finished listening to the last sentence of Bob Woodward’s audio book “The Price of Politics” detailing the negotiations around the nation’s debt ceiling increase last year – or should I say the fiasco around the debt ceiling debate.  The book is a brilliant piece of modern political history, and I want to urge everyone to read it. 

The bottom line for me, based on my read of the book, is that neither Obama nor Boehner were particularly good at rising above partisan politics to negotiate a ‘grand bargain’ to address the country’s unsustainable finances.  Many will focus on the intransigence of the Tea Party, and the Republican obsession with not raising taxes; however, it is clear to me that the left wing of the Democratic Party is just as much to blame for their willful ignorance of the reality that America’s demographic trends will crush the current structure of our entitlement system.  There has to be deep structural reforms.  There is just not enough wealthy people to tax to pay for it all!

I am a centrist with a libertarian streak.  I prefer devolution over centralization.  I love this country because it is a free republic – people should be free to pursue their happiness in any way they see fit.  The collective has no place in defining social issues for free citizens.  When it comes to social issues like abortion, gay rights, religion, drug use etc. I am philosophically a staunch libertarian – these issues have nothing to do with governments.  For me freedom necessitates personal responsibility.  Freedom presupposes that some people will make bad choices and should live with the consequences.  This notwithstanding, I believe as a society we have to take care of the poor, the marginalized, and the unfortunate amongst us.  As humans we have a moral obligation to care for one-another.  Although I lean more toward private welfare, there is a role for government.  Don’t get me wrong, I don’t believe in a small government.  I don’t believe in a big government either.  I believe in an efficient government.  I believe in competitive free markets and entrepreneurial capitalism; however, government has a critical role to play in establishing the regulatory framework of the economy.  Lastly, I believe there is a time to spend and a time to save – sometimes we’ll have budget surpluses and sometimes we’ll need deficits. 

In sharing these views on society and politics it should be clear that I am neither a Republican nor a Democrat.  My beliefs though are guideposts to the things I hope the newly elected Congress and President will do.  I also believe my views represent the center of American politics (well most of them anyway).  Back to Woodward’s book and the failure of Obama and Boehner to reach a deal.  For the record, I blame both.  Also, for the record, I like both, and it is obvious to me they both had the best intentions, and really wanted a workable deal.  They both had integrity.  And they both were prepared to make compromises to reach a deal.  What they lacked were leadership and courage, and in Obama’s case experience.  Read the rest of this entry »

4
Nov

Time To Vote!

by admin in News

 

 
Here is Bill Gross’ latest piece regarding the election on Tuesday.  I decided to post it in its entirety.  Here is the link directly to PIMCO’s site: http://www.pimco.com/EN/Insights/Pages/Time-To-Vote.aspx.
 
By William Gross
 
So I pulled out my magic lamp that for some reason works only every October 22nd, and rubbed until the Genie appeared in his red and white checkered cloak with a 10-inch diameter Flavor Flav clock hanging ceremoniously around his neck. Being a rather forward, although not disrespectful Genie, he immediately said, “Mr. G, instead of the yield on the 10-year Treasury, perhaps this year you should wish to know who is going to win the Presidential election?” After some thought I replied, “Nah, I need some breaking news, Mr. Genie, something that will make a difference, something that will shock the world, like when does the iPhone 6 come out?” Obama/Romney, Romney/Obama – the most important election of our lifetime? Fact is they’re all the same – bought and paid for with the same money. Ours is a country of the SuperPAC, by the SuperPAC, and for the SuperPAC. The “people” are merely election-day pawns, pulling a Democratic or Republican lever that will deliver the same results every four years. “Change you can believe in?” I bought that one hook, line and sinker in 2008 during the last vestige of my disappearing middle age optimism. We got a more intelligent President, but we hardly got change. Healthcare dominated by corporate interests – what’s new? Financial regulation dominated by Wall Street – what’s new? Continuing pointless foreign wars – what’s new?

I’ll tell you what isn’t new. Our two-party system continues to play ping pong with the American people, and the electorate is that white little ball going back and forth over the net. This side’s better – no, that one looks best. Elephants/Donkeys, Donkeys/Elephants. Perhaps the most farcical aspect of it all is that the choice between the two seems to occupy most of our time. Instead of digging in and digging out of this mess on a community level, we sit in front of our flat screens and watch endless debates about red and blue state theologies or listen to demagogues like Rush Limbaugh or his ex-cable counterpart Keith Olbermann. To express my discontent, Genie, along with my continuing patriotism, I’ve created a modern-day version of our Pledge of Allegiance. Place your hand over your clock and recite after me:

 

I pledge allegiance to the flag of
the fragmented state of America,
and to the plutocracy for which now it stands,
a red and blue nation,
under financial gods
indistinguishable,
with liberty and justice for the 1(%).

 

“Well,” said the Genie, with a little bit less respect in his voice, “you sound a little discouraged Mr. G – a tad cranky perhaps and showing all of your 68 years.” I suppose, I agreed. But during all those years, I’ve liked Ike and despised Bush Junior, been enraptured with Kennedy and enraged by Johnson, been put to sleep by both Ford and Carter and then invigorated by Reagan. And now – well, we’ve got the best government that money can buy, but I ain’t buying it. Now get back in your lamp and come up with something meaningful I can use this time come October 2013. And don’t fake me out with a picture of a skinnier but faster iPhone 6. I’m still trying to buy the “5” with the .01% interest on my money market account.

Read the rest of this entry »