Saturday, March 22, 2014

Today's Links

The power of the executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious, and the foundation of all totalitarian government whether Nazi or Communist."
~ Winston Churchill

(That's an understatement)

2--They own it all (The 1%, that is), Krugman

the concentration of income from capital in a few hands has risen sharply. Tucked deep inside the CBO report on trends in the US distribution of income are data on the concentration of various types of income; here’s the one percent’s share of capital income:
So what we’re seeing is that half the political spectrum now instinctively accords much more respect to capital than to labor, at a time when capital income is growing ever more concentrated in a few hands — and is surely on its way to being concentrated largely in the hands of people who inherited their wealth.

3---Cutting the deficits has hurt growth, NYT

developments should be seen as anything like great achievements.  The stimulus response to the Great Recession was too short-lived, and many of the program cuts in that orange pie slice above have been thoughtless slash-and-burn (sequestration) that have and will continue to make life harder for economically vulnerable families.  And from the perspective of the macroeconomy, the decline in the budget deficit from 10 percent of G.D.P. in 2009 to 3 percent in 2013 is the sharpest fall in the budget deficit since 1950. It is the source of the fiscal headwinds that have consistently held back the recovery

4--The Worst Financial Advice Ever, mark gongloff

Borrowing money against your overpriced home in order to gamble in the stock market is the sort of bananas thing people did before the housing bubble popped and the stock market crashed. But a story published on MSN Money and the financial-news website Benzinga earlier this week encouraged people to do just that.

5---Sales of Existing Homes in U.S. Fall to Lowest Since 2012 , Bloomberg

6---QE Was A Massive Gift Intended To Boost Wealth", Fed President Admits, zero hedge

7---EU-Ukraine trade pact paves way for brutal austerity, wsws
(First the coup, now the screw)

The pact, signed in Brussels, declares that the Ukrainian government must “embark swiftly on an ambitious program of structural reforms” and submit to “an agreement with the [International Monetary Fund].” The plans being drawn up are based on the “Greek model”—the savage cuts imposed on Greece by the IMF and the EU that have produced a massive growth in unemployment and poverty.
For all their claims of a “democratic revolution,” the EU leaders and Ukraine’s unelected regime of former bankers, fascists and oligarchs announced that they would delay finalizing the economic clauses of the EU association pact—and hence unveiling the austerity measures—until after elections in May

8--Housing speculators: "The low hanging fruit is gone", marketwatch

We think a lot of the big pop in housing has gone out,” Stephen Schwarzman, chief executive of Blackstone Group, which has bought at least $7 billion worth of houses, said Wednesday on CNBC. “For us an exposure in the $7-to-$8 billion range is big enough.”

9---Arnold: Abenomics' Failure Is the Global Canary, the street

Investors would be wise to avoid Japan altogether now, and probably permanently.

The essential policy tools of Abenomics are massive monetary and fiscal stimulus aimed at forcing the yen lower, which should cause exports to rise and domestic production to increase, leading to increased domestic job production and consumption: the virtuous cycle. In the process, Japan also increased sovereign debt, which must be serviced by the government. The servicing of that debt is supposed to come from an increase in tax receipts to be made available by the increased domestic production and consumption.

But it isn't working.
The failure of Abenomics to stimulate economic activity and raise tax receipts enough to pay for the stimulus is now causing the government to double back on these programs with a counter-cyclical consumer tax increase of about 3%, which will be implemented in April. In other words, Abenomics is making the real economic and fiscal situations in Japan worse, not better. They are digging a bigger sovereign debt hole and accelerating the trajectory toward insolvency. ...

the crisis is sovereign default and insolvency, which is now inevitable

10---Can Abenomics Survive Tax Hike?, the diplomat

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