Friday, November 2, 2012

Today's links

1--America's Global Election, Joe Stiglitz, Project Syndicate

Romney’s proposed contractionary policies – the attempt to reduce deficits prematurely, while the US economy is still frail – will almost surely weaken America’s already anemic growth, and, if the euro crisis worsens, it could bring on another recession. At that point, with US demand shrinking, the rest of the world would indeed feel the economic effects of a Romney presidency quite directly.
...

America now has the distinction of being among the advanced countries that afford the least equality of opportunity to their citizens. And Romney’s drastic budget cutbacks, targeted at the poor and middle class, would further impede social mobility. At the same time, he would expand the military, spending more money on weapons that do not work against enemies that do not exist, enriching defense contractors like Halliburton at the expense of desperately needed public investment in infrastructure and education.
 
Bush is not on the ballot, Romney has not really distanced himself from the Bush administration’s policies. On the contrary, his campaign has featured the same advisers, the same devotion to higher military spending, the same belief that tax cuts for the rich are the solution to every economic problem, and the same fuzzy budget math.
 
 
The Labor Force Participation Rate increased to 63.8% in October (blue line. This is the percentage of the working age population in the labor force.

The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although most of the recent decline is due to demographics.
 
 
A report from a U.S. inspector general on Iraqi developments confirmed crude oil output has reached its highest level since 1990. Electricity production, meanwhile, has improved, though most Iraqis still don't have power 24 hours per day. The national economy, supported in large part by the oil sector, is bustling along at a double-digit growth rate. Nevertheless, the oil sector supports few jobs in Iraq, political divisions are problematic and al-Qaida, less than a year after U.S. combat forces left the country, is on the rise.
U.S. Special Inspector General for Iraq Reconstruction Stuart Bowen, in his quarterly report, finds that Iraq crude oil production during the third quarter of 2012 topped 3.0 million barrels for day for the first time in more than 20 years. That development was supported in part by progress made this year in settling long-standing disputes between the semiautonomous Kurdistan Regional Government and the central government in Baghdad. Early this year, the U.S. State Department had warned multinational energy companies about the political risks associated with working in the Kurdish provinces, where companies like Exxon face a backlash for deals in the north that Baghdad sees as illegal. Nevertheless, the International Energy Agency, in its Oct. 9 report, notes that Iraq could produce as much as 6.1 million bpd by 2020. While income generated from crude oil makes up about 60 percent of the country's gross domestic product, however, it supports only 1 percent of the jobs....

The report, meanwhile, found that Prime Minister Nouri al-Maliki's government has "wrestled with unresolved domestic challenges." Political divisions were strained when Maliki called for the arrest of his vice president, Tariq al-Hashimi, on charges of operating a death squad in the country. A "troubled year," said Bowen, was complicated by "corruption, resurgent violence (and) deepening ethnosectarian strains." When Hashimi was sentenced to death in absentia, Iraq suffered its bloodiest day in more than two years. Al-Qaida, meanwhile, is on the rise less than a year after U.S. combat forces pulled out for good in December 2011. Deputy leaders in Iraq told Bowen that al-Qaida was gaining strength because Iraqi intelligence officials were "unable to detect and thus prevent attacks by these organized groups." Apart from that, Bowen said, a string of U.S. civilians, military officials and diplomats were tied to everything from wire fraud to receiving illegal kickbacks from subcontractors in Iraq.
The "polarity" between the economic success story in Iraq and the "variety of politician and security impasses" is getting in the way of the country's development, the inspector general said in his report.

5--The Fed, QE3 and housing, chris whalen,  Housingwire

The entire move in MBS prices will go into profit margins,” one mortgage market veteran told the Berlin-New York-Los Angeles Mortgage Study Group recently. “FHFA has made sure that the mortgage market has oligopoly pricing and zero competition for the existing servicers. QE3 is risk-free profits for the unworthy. And we wasted 40 years and trillions of dollars fighting the USSR over the need for a free enterprise system?”
Unfortunately, since two thirds of the mortgage market cannot be refinanced, the effect of the Fed’s largesse will indeed go straight to the government-sponsored enterprises and Wall Street zombie banks. This is the key, historical error being committed by Bernanke and the rest of the FOMC. Instead of looking for ways to stoke consumer demand by restoring consumer income, the Fed is simply feeding subsidies to Wall Street. Since the Fed does not think that savers like grandparents and corporations spend money, the error is magnified....

Jeff Zervos of Jeffries is one of the key Fed cheerleaders. He writes in a research comment: “The bottom line is that the Fed is printing money, debasing the currency and devaluing debt. The policy is redistributive, regressive and reflationary. It’s a nasty business for sure, and the truth must be obfuscated from the public. But if we want to avoid a second great depression, it is the right thing to do. Good luck trading.”...

Restructuring is the necessary condition for credit expansion and job growth. Without private-sector credit growth there can be no jobs. Without justice for investors, pension funds and banks defrauded to the tune of hundreds of billions of dollars, there can be no investor confidence to support private finance. And unless the Fed and other regulators in Washington break the cartel in the U.S. housing sector led by Fannie Mae, Freddie Mac and the top four banks, there will be no meaningful economic recovery for years. Instead we will face hyperinflation and social upheaval, both care of the well-intentioned economists on the FOMC.

6--Housing Vacancy Rates Fall and No One Notices, CEPR

The reduction in the excess supply is consistent with other data showing a recovering housing market

7-Obama’s Iraq Ambassador: I Wanted Troops to Stay in Iraq, antiwar

The statement reaffirms what Obama has tried to downplay: the administration pushed to stay in Iraq

8--Are American Troops Protecting Afghan Opium?, washington's blog

U.S. Troops Patrolling Poppy Fields In Afghanistan (Photos)

 
The US has largely abdicated the throne in Syria in terms of supplying the rebels with funds and leadership. This is because Washington cannot see the end game clearly.
 
 

No comments:

Post a Comment