News Links: The perils of Mario Draghi’s €1.5 trillion blitz

News Links for 2 Feb 2012

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  • The perils of Mario Draghi’s €1.5 trillion blitz – Telegraph Blogs

    Since I have a special affection for the monetarist camp, I tilted to their view in that the ECB has indeed carried out a coup and may have pulled Europe of spiralling depression, just in the nick of time. (This does not mean it can ever save monetary union in its current structure, but that is another matter.)

  • The Aleph Blog » Blog Archive » On Junk Bonds

    If someone were to ask me my opinion on Junk Bonds at present, fool that he would be to ask me because I know real experts elsewhere, I would say this: They are good for a speculative trade, but dumb money has arrived.  Be ready to sell when the momentum fails. High yield ETFs sell at decent premiums which leads to the creation of more units.  High yield closed-end funds – 73% trade at a premium.  You could issue a new high yield CEF, and come out at a lower premium than the current average.  I think I smell smoke. I would be neutral on risk assets at presemt, but ready to be bearish if there are problems in Europe or China.

  • Treasury Considers Going Negative on T-Bills – US Business News Blog – CNBC

    The Treasury Borrowing Advisory Committee, which brings together dealers and Treasury officials, met yesterday in a closed meeting at the Hays Adams Hotel.  The committee members unanimously agreed that the Treasury should start permitting negative interest rate bids for T-bills. This would mean that you would buy a $1,000 52-week T-bill for $1,001. When it matured after a year, you would have a loss of $1. Your interest rate would be negative 0.1 percent.

  • Banks to face the RICO Act for robosigning credit cards? – Finance Addict

    The standard for violating the conspiracy provision under RICO is much more liberal and, potentially, any entity that knowingly endorses or encourages the substantive violations could be held accountable. Without actively participating in any racketeering activity, it is still "unlawful for any person to conspire to violate any of the provisions" of RICO. The conduct of the entity itself does not have to fulfill the requirements for violation of the substantive provisions. Knowledge and facilitation of the acts is sufficient to find an entity guilty of conspiracy under RICO.

  • Global PMI at 7-month High | Global Macro Monitor

    The global PMI rose to a seven-month high at the start of 2012. The PMI shows that order growth has picked up while inventory growth has slowed-a positive combination. The underlying trend in output growth is still soft, although it will be flattered in the very near-term by the post-flood bounce in Thailand and the resulting restoration of global supply chains.

  • Ron Paul demands repeal of NDAA in post-primary speech – RT

    "The purpose of all governments should be the protection of individual liberty for each and every one of us!" said Paul. "We need to reverse the trend of the attack on our civil liberties, we need to repeal the Patriot Act . . . We need to reverse the trend of the attack on our civil liberties, we need to repeal the Patriot Act . . . We need to repeal the provision that says the president can use the military to arrest any American citizen and deny them a trial!"

  • Gonzalo Lira: The Perniciousness of ZIRP

    ZIRP doesn’t eliminate the Minsky Moment-that is, the Day of Debt Reckoning. Rather, ZIRP merely postpones it-while making it a whole lot bigger. Thus the Federal Reserve’s zero interest-rate policy does not help businesses expand and thus hire more workers to restart the economy; it does not encourage banks to lend to economically productive sectors

  • Belgium first in euro zone to enter formal recession | Reuters

    Belgium became the first euro zone member formally to fall into recession in the second half of last year, data showed on Wednesday, paving the way for what is expected to be a tough contraction for the bloc as a whole in 2012.

  • O’Jays sing LOVE TRAIN & Soul Train Dancers – YouTube

    From one of the best dance shows ever than ran for over 20 years.

  • Romney, citing safety net, says he’s ‘not concerned about the very poor’ – The Washington Post

    Romney explained that he was confident that food stamps, housing vouchers, Medicaid and other assistance would keep the poor afloat – he pledged to fix holes in that safety net "if it needs repair."

  • Rogue Economist Rants: Some suggestions to improve MMT and the JG proposal

    For as long as the program as proposed goes against people’s EXISTING risk-return mindset, and discourages free initiative, it’s not ready to be at the forefront for reform.

  • Summers: "Inside Job had essentially all its facts wrong" | Felix Salmon

    It’s weird that Summers, who loves debate, generally refuses to sit down in some public forum and answer serious, informed questions about the legacy of his tenure at Treasury; it might well be that this single interview is the closest we’ll ever get. And on the basis of this interview, it’s clear that, far from apologizing for his actions, Summers is going Full Bluster, denying any culpability, and choosing instead to violently reject and belittle any suggestion that he holds any responsibility for the crisis at all.

  • ‘Soul Train’ creator Don Cornelius dead in apparent suicide – latimes.com

    Law enforcement sources said police arrived at Cornelius’ home around 4 a.m. He apparently died of a self-inflicted gunshot wound, according to sources, who spoke on the condition of anonymity because the case was ongoing.

  • Peak oil and growth – macrobusiness.com.au | macrobusiness.com.au

    While a smooth transition to prosperity under much greater limits on energy resource inputs to the economy is theoretically possible, I don’t expect this to be our future reality. Self interested governments, businesses and the general public will react to short term shocks in unexpected ways, potentially promoting conflict, and taking the bumpy road.  But the peak of oil production itself will not stop progress altogether.

  • The European fallacy of Ireland and the Baltics – Telegraph Blogs

    Latvia, Estonia, Lithuania and Ireland prove that so-called "expansionary fiscal consolidation" works and that economies can regain external trade competitiveness (and close their trade deficits) without the help of currency devaluation. Such claims are highly misleading. Were Italy and Spain to take their advice, the implications for the European economy and the future of the euro would be devastating.

  • Euro zone manufacturing shrinks again in Jan: PMI | Reuters

    Euro zone manufacturing activity declined for a sixth straight month in January as a slight upturn in Germany failed to offset a prolonged contraction in the bloc’s smaller economies, a survey showed on Wednesday.

  • Le Figaro – International : Quand Bismarck chantait la Marseillaise

    C’est une découverte sensationnelle: le seul et unique enregistrement de la voix de Otto von Bismarck, chancelier allemand à la fin du XIXème siècle. Avec une surprise de taille pour l’auditeur, quand le vainqueur de Sedan se met à réciter l’hymne français…

  • Inequality, mobility, opportunity « Consider the Evidence

    Nations with lower income inequality tend to have more intergenerational mobility, and the association is quite strong. There are concerns about the data. But suppose the data are accurate, and suitable for testing this link. What does the association depicted in this chart tell us about the magnitude of inequality’s impact? How much would reducing income inequality in the United States help?

  • El Gobierno planea recapitalizar las cajas con préstamos del fondo de rescate | Economía | EL PAÍS

    La fórmula del FROB es similar a la usada en la primera oleada de fusiones de cajas. Economía baraja exigir una reserva del 7% por el crédito sano del sector del ladrillo. El Gobierno dará un año extra a las entidades que se fusionen para limpiar su balance. Economía estudia que la banca pueda usar provisiones genéricas como capital

  • L’Ue: no alla fusione Nyse-Francoforte "Alto rischio di monopolio" – Economia e Finanza con Bloomberg – Repubblica.it

    L’antitrust boccia l’accordo tra NYSE Euronext e la Deutsche Boerse perché costituirebbe un eccesso di concentrazione soprattutto nel mercato dei derivati, in danno della libera concorrenza. La protesta tedesca: "Un giorno nero per l’Europa". New York: "Forte dissenso"

  • United States of Europe? What it Will Take to Save the Continent from Economic Collapse | Economy | AlterNet

    The euro is a train wreck. Here’s how to solve one of our most urgent economic problems.

  • Sensationeller Fund in Amerika: Bismarcks Stimme – Gesellschaft – FAZ

    Im amerikanischen Bundesstaat New Jersey ist die wahrscheinlich einzige Tonaufnahme Otto von Bismarcks aufgetaucht. Auf FAZ.NET können Sie sich das Dokument aus dem Jahr 1889 anhören.

  • Amazon’s Sales Miss Estimates, Profit Drops 57% – Bloomberg

    Amazon.com Inc. (AMZN), the world’s largest Internet retailer, missed analysts’ fourth-quarter revenue estimates and reported a 57 percent decline in profit, dragged down by shipping costs and the money-losing Kindle Fire.

  • Austerity vs. Europe – Javier Solana – Project Syndicate

    Not only is Europe running the risk of lasting economic damage; high long-term unemployment and popular discontent threaten to weaken permanently the cohesiveness of its social fabric. And, politically, there is a real danger that citizens will stop trusting institutions, both national and European, and be tempted by populist appeals, as in the past.

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