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Archive for the ‘Economy’ Category

Some Reading on Russia

by coldwarrior ( 1 Comment › )
Filed under Academia, Economy, History, Politics, Russia, Special Report at December 19th, 2014 - 8:21 pm

As this is a special report, Please take your time and read the following article here before commenting, it is worth you effort:

 

…I thought the economic problems of Russia would be foremost on people’s minds. The plunge of the ruble, the decline in oil prices, a general slowdown in the economy and the effect of Western sanctions all appear in the West to be hammering the Russian economy. Yet this was not the conversation I was having. The decline in the ruble has affected foreign travel plans, but the public has only recently begun feeling the real impact of these factors, particularly through inflation.

But there was another reason given for the relative calm over the financial situation, and it came not only from government officials but also from private individuals and should be considered very seriously. The Russians pointed out that economic shambles was the norm for Russia, and prosperity the exception. There is always the expectation that prosperity will end and the normal constrictions of Russian poverty return….

Welcome to New York, Fun Not Allowed

by Mars ( 79 Comments › )
Filed under America, Blogmocracy, Democratic Party, Guest Post, Regulation at December 15th, 2014 - 6:00 pm

http://www.dnainfo.com/new-york/20141205/park-slope/parks-dept-puts-stop-spinning-playground-equipment-after-injuries

Parks Dept. Puts a Stop to Spinning Playground Equipment After Injuries

PARK SLOPE — The city is putting the brakes on spinning playground equipment following reports of injuries, a Parks Department spokeswoman said.

Rotating metal saucers that kids ride at two Park Slope playgrounds were recently welded into place so they can’t move, and the city has made similar modifications or removed a total of seven disks citywide “in the interest of public safety,” the spokeswoman said.

The spokeswoman declined to discuss how many injuries had been reported or other specifics.

Turning the spinning disks into statues angered Park Slope parents, who said the city was going too far to protect kids.

“I think it sucks,” said dad David Friedlander, whose 2-year-old was disappointed to find the the spinning disk at Vanderbilt Playground in Prospect Park suddenly stuck in place in late November. “I think it’s a sad commentary on how litigious and afraid we’ve become of having our children get a few boo-boos.”

Friedlander said his son had tumbled off the disk — which is about 4 feet wide and stands about 2 feet off the ground — onto the rubberized ground below, but he doesn’t consider the equipment a safety hazard. Friedlander said it should be up to parents to decide if their children can handle playing on the saucer, not the city.

“This makes me completely insane. What’s the point of even going to the playground? Better lock up the swings, too,” wrote one frustrated mom of a 3-year-old on a South Slope email list.

Parents in that neighborhood said they’re bummed a similar rotating saucer at Slope Park on Sixth Avenue and 18th Street was also recently welded so that it can’t move.

The city removed a swing at Slope Park last year after several kids broke their legs while playing on it, but parents said the spinning metal disk didn’t seem to present nearly the same risk. Parents who visit Slope Park frequently said they’ve never seen kids injured while playing at the saucer.

Though several families filed claims against the city regarding the Slope Park swing, no claims have been filed regarding the spinning disks there, according to the City Comptroller’s Office.

The Parks Department altered the following spinning disks:

► Union Square Park, Manhattan — welded stationary

► McNair Park, Manhattan — welded stationary

► Central Park, Manhattan — removed

► Utopia Park, Queens — removed

► Mullaly Park, The Bronx — removed

► Slope Park, Brooklyn — welded stationary

► Prospect Park, Brooklyn — welded stationary

A spokesman for City Councilman Carlos Menchaca, who represents the South Slope, said his office hadn’t received any complaints about the rotating saucer at Slope Park, and a spokesman for City Councilman Brad Lander said no one complained about the metal disk at Vanderbilt Playground until after it was welded into a stationary position.

Mom Rebecca Stein said both her daughters, who are 5 and nearly 2, love to play on the rotating saucers at Vanderbilt Playground and Slope Park. The equipment lets her kids test boundaries and get a feel for how their little bodies balance and move, Stein said.

“They think it’s fantastic,” Stein said. “They love the thrill of balancing and sort of playing risky. It’s being close to danger, but without any real danger.”

Stein said both her children had slipped off the saucers, but the worst that ever befell them was an extreme case of dizziness. She lamented the loss of the disks as part of a larger trend away from letting children play freely.

“Playgrounds are so sanitized now,” Stein said. “There’s no thrill. In the playgrounds of our youth you could climb and feel like you were above things and use more of your imagination. I don’t think that happens anymore.”

To be fair, this time it isn’t the government that’s out of control, this was the determination made by the judge in a law suit. Remember, the libs say we have no need for tort reform.

If anyone has noticed, this isn’t just a New York problem though. All over the country places like malls have either eliminated their playgrounds or made them into new “safe, soft” playplaces that kids just frankly don’t find fun in the least. Play areas that used to be packed by kids are now largely ignored due to the utter lack of enjoyable activities. Fortunately places like McDonalds have managed to find a middle ground with enjoyable “soft” activities that have electronic elements involved giving the kids added enjoyment.

I will, however, miss playgrounds.

OPEC, The Fed, Frac!, Debt, and Depression

by coldwarrior ( 146 Comments › )
Filed under Economy, Energy, Open thread at December 11th, 2014 - 6:00 am

Yes it is a pretty thick article and will require some effort to get through. But is is worth the read.

 

Here is more from AEP on cheap oil and islam.  There is a very good video on how oil is priced at the link below.

Bank of America sees $50 oil as Opec dies

“Our biggest worry is the end of the liquidity cycle. The Fed is done. The reach for yield that we have seen since 2009 is going into reverse”, said Bank of America.

 The Opec oil cartel no longer exists in any meaningful sense and crude prices will slump to $50 a barrel over the coming months as market forces shake out the weakest producers, Bank of America has warned.

Revolutionary changes sweeping the world’s energy industry will drive down the price of liquefied natural gas (LNG), creating a “multi-year” glut and a much cheaper source of gas for Europe.

Francisco Blanch, the bank’s commodity chief, said Opec is “effectively dissolved” after it failed to stabilize prices at its last meeting. “The consequences are profound and long-lasting,“ he said.

The free market will now set the global cost of oil, leading to a new era of wild price swings and disorderly trading that benefits only the Mid-East petro-states with deepest pockets such as Saudi Arabia. If so, the weaker peripheral members such as Venezuela and Nigeria are being thrown to the wolves.

The bank said in its year-end report that at least 15pc of US shale producers are losing money at current prices, and more than half will be under water if US crude falls below $55. The high-cost producers in the Permian basin will be the first to “feel the pain” and may soon have to cut back on production.

The claims pit Bank of America against its arch-rival Citigroup, which insists that the US shale industry is far more resilent than widely supposed, with marginal costs for existing rigs nearer $40, and much of its output hedged on the futures markets.

Bank of America said the current slump will choke off shale projects in Argentina and Mexico, and will force retrenchment in Canadian oil sands and some of Russia’s remote fields. The major oil companies will have to cut back on projects with a break-even cost below $80 for Brent crude.

It will take six months or so to whittle away the 1m barrels a day of excess oil on the market – with US crude falling to $50 – given that supply and demand are both “inelastic” in the short-run. That will create the beginnings of the next shortage. “We expect a pretty sharp rebound to the high $80s or even $90 in the second half of next year,” said Sabine Schels, the bank’s energy expert.

Mrs Schels said the global market for (LNG) will “change drastically” in 2015, going into a “bear market” lasting years as a surge of supply from Australia compounds the global effects of the US gas saga.

If the forecast is correct, the LNG flood could have powerful political effects, giving Europe a source of mass supply that can undercut pipeline gas from Russia. The EU already has enough LNG terminals to cover most of its gas needs. It has not been able to use this asset as a geostrategic bargaining chip with the Kremlin because LGN itself has been in scarce supply, mostly diverted to Japan and Korea. Much of Europe may not need Russian gas at all within a couple of years.

Bank of America said the oil price crash is worth $1 trillion of stimulus for the global economy, equal to a $730bn “tax cut” in 2015. Yet the effects are complex, with winners and losers. The benefits diminish the further it falls. Academic studies suggest that oil crashes can ultimately turn negative if they trigger systemic financial crises in commodity states.

Barnaby Martin, the bank’s European credit chief, said world asset markets may face a stress test as the US Federal Reserve starts to tighten afters year of largesse. “Our biggest worry is the end of the liquidity cycle. The Fed is done and it is preparing to raise rates. The reach for yield that we have seen since 2009 is going into reverse”, he said.

Mr Martin flagged warnings by William Dudley, the head of the New York Fed, that the US authorities had tightened too gently in 2004 and might do better to adopt the strategy of 1994 when they raised rates fast and hard, sending tremors through global bond markets.

Bank of America said quantitative easing in Europe and Japan will cover just 35pc of the global stimulus lost as the Fed pulls back, creating a treacherous hiatus for markets. It warned that the full effect of Fed tapering had yet to be felt. From now on the markets cannot expect to be rescued every time there is a squall. “The threshold for the Fed to return to QE will be high. This is why we believe we are entering a phase in which bad news will be bad news and volatility will likely rise,” it said.

What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56pc of global GDP is currently supported by zero interest rates, and so are 83pc of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another.

These are astonishing figures, evidence of a 1930s-style depression, albeit one that is still contained. Nobody knows what will happen as the Fed tries to break out of the stimulus trap, including Fed officials themselves.

I do have to disagree with AEP on the future ‘wild price swings’ I am sure that American energy corporations can do a rather good job judging demand and adjust as needed.

 

We will see if this is a slow down on demand of oil globally, an overproduction globally, or a mix of the two. I’m going to bet its a bit of both and the world won’t collapse in a gloom and doom scenario as the free market is allowed to work again without the interference of the oil tick cartel. The only change I might make is to randomly make 10-20% of oil speculators actually take delivery of the amount of oil that they are betting on.  :lol:

 

More from Bloomberg. PLEASE read the article here and watch the video.

PPP, GDP, and Morons.

by coldwarrior ( 127 Comments › )
Filed under Academia, Economy, Open thread at December 5th, 2014 - 6:00 am

This article is a prime reason why journalists should not be allowed to have grown up data sets. Nor should they be alowed around Economics as a mathematical and statistical field. Yeah, I know, Dorian…Econ is VOODOO!!! It sure is, it’s the black magic, the dark and dismal science, it’ll poke your eye out! It can also make you say stupid things that prove your total ignorance in all things Economic if you aren’t careful, or are a journalist.

This columnist claims that China is #1 and America is #2 in the global economy. He proves that he has no clue. Notice that he does not give any Bona Fides besides some award that no one ever heard of and that he worked for an accountancy that no one ever heard of. Any formal rigorous Economic training? None listed.

If the above were presented as a serious Economic Paper in an Econ course, the student’s professor would be led away in shackles and the author would be forced to read World Bank Country databases out loud for a year as punishment for being a moron,. This particular J-schooler would have to wear eye protection though, so as not to put his eye out. Yes, China is a huge exporter who also cheats on data, exchange rates, debt, must import massive amounts of food, is running out of clean water, and is systemically corrupt. The reality on the ground is that they are on par with Albania. Albania and China have the same per capita income, but China has more capita.

——/

Now, here is an article, written by a real economist, who actually shows some data, understands the dynamics or global economics, refutes the above article on multiple levels, and well, just gets it. Please Read Here.

The ICP data compare countries’ gross domestic product using purchasing-power-parity (PPP) exchange rates, rather than market rates. This is the right thing to do when looking at real (inflation-adjusted) income per capita in order to measure people’s living standards. But it is the wrong thing to do when looking at national income in order to measure the country’s weight in the global economy.

The bottom line is that, by either criterion — per capita income (at PPP exchange rates) or aggregate GDP (at market rates) — the day when China surpasses the U.S. remains in the future. This in no way detracts from the country’s impressive growth record, which, at about 10% per year for three decades, constitutes a historical miracle.

At market exchange rates, the American economy is still almost double the size of China’s (83% larger, to be precise). If the Chinese economy’s annual growth rate remains five percentage points higher than that of the U.S., with no significant change in the exchange rate, it will take another 12 years to catch up in total size. If the differential is eight percentage points — for example, because the renminbi appreciates at 3% a year in real terms — China will surpass the U.S. within eight years.

The PPP-versus-market-exchange-rate issue is familiar to international economists. This annoying but unavoidable technical problem arises because China’s output is measured in renminbi USDCNY, -0.10%  , while US income is measured in dollars DXY, +0.11%  . How, then, should one translate the numbers so that they are comparable?

The obvious solution is to use the contemporaneous exchange rate — that is, multiply China’s renminbi-measured GDP by the dollar-per-renminbi exchange rate, so that the comparison is expressed in dollars. But then someone points out that if you want to measure Chinese citizens’ standard of living, you have to take into account that many goods and services are cheaper there. A renminbi spent in China goes further than a renminbi spent abroad.

For this reason, if you want to compare per capita income across countries, you need to measure local purchasing power, as the ICP does. The PPP measure is useful for many purposes, such as knowing which governments have succeeded in raising their citizens’ standard of living.

Looking at per capita income, even by the PPP measure, China is still a relatively poor country. Though it has come very far in a short time, its per capita income is now about the same as Albania’s — that is, in the middle of the distribution of 199 countries.

But Albania’s economy, unlike China’s, is not often in the headlines. That is not only because China has such a dynamic economy, but also because it has the world’s largest population. Multiplying a middling per capita income by more than 1.3 billion “capita” yields a big number. The combination of a large population and a medium income gives it economic power, and also political power.

Similarly, we consider the U.S. the No. 1 incumbent power not just because it is rich. If per capita income were the criterion by which to judge, Monaco, Qatar, Luxembourg, Brunei, Liechtenstein, Kuwait, Norway, and Singapore would all rank ahead of the U.S. (For the purposes of this comparison, it does not matter much whether one uses market exchange rates or PPP rates.) If you are shopping for citizenship, you might want to consider one of those countries.

But we do not consider Monaco, Brunei, and Liechtenstein to be among the world’s “leading economic powers,” because they are so small. What makes the U.S. the world’s leading economic power is the combination of its large population and high per capita income.

It is this combination that explains the widespread fascination with how China’s economic size or power compares to America’s, and especially with the question of whether the challenger has now displaced the long-reigning champion. But PPP exchange rates are not the best tool to use to answer that question.

The reason is that when we talk about an economy’s size or power, we are talking about a broad range of questions — and a broad range of interlocutors.

From the viewpoint of multinational corporations, how big is the Chinese market? From the viewpoint of global financial markets, will the renminbi challenge the dollar as an international currency? From the viewpoint of the International Monetary Fund and other multilateral agencies, how much money can China contribute, and how much voting power should it get in return? From the viewpoint of countries with rival claims in the South China Sea, how many ships can its military buy?

For these questions, and most others involving total economic heft, the indicator to use is GDP at market exchange rates, because what we want to know is how much the renminbi can buy on world markets, not how many haircuts or other local goods it can buy back home. And the answer to that question is that China can buy more than any other country in the world – except the U.S.

 

I’ll try to pop my head in and answer questions if needed.

Terms like PPP, and PPP exchange rates, et cetera are easily googled.

 

 

Petro-War!

by coldwarrior ( 90 Comments › )
Filed under Economy, Energy, Islam, Open thread at December 2nd, 2014 - 6:00 am

Cheap oil can be both a blessing and a curse as AEP explains in this analysis:

Saudi Arabia and the core Opec states are taking an immense political gamble by letting crude oil prices crash to $66 a barrel, if their aim is to shake out the weakest shale producers in the US. A deep slump in prices might equally heighten geostrategic turmoil across the broader Middle East and boomerang against the Gulf’s petro-sheikhdoms before it inflicts a knock-out blow on US rivals.

Caliphate leader Abu Bakr al-Baghdadi has already opened a “second front” in North Africa, targeting Algeria and Libya – two states that live off energy exports – as well as Egypt and the Sahel as far as northern Nigeria. “The resilience of US shale may prove greater than the resilience of Opec,” said Alistair Newton, head of political risk at Nomura.

Chris Skrebowski, former editor of Petroleum Review, said the Saudis want to cut the annual growth rate of US shale output from 1m barrels per day (bpd) to 500,000 bpd to bring the market closer to balance. “They want to unnerve the shale oil model and undermine financial confidence, but they won’t stop the growth altogether,” he said.

There is no question that the US has entirely changed the global energy landscape and poses an existential threat to Opec. America has cut its net oil imports by 8.7m bpd since 2006, equal to the combined oil exports of Saudi Arabia and Nigeria.

The country had a trade deficit of $354bn in oil and gas as recently as 2011. Citigroup said this will return to balance by 2018, one of the most extraordinary turnarounds in modern economic history.

“When it comes to crude and other hydrocarbons, the US is bursting at the seams,” said Edward Morse, Citigroup’s commodities chief. “This situation is unlikely to stop, even if prevailing prices for oil fall significantly. The US should become a net exporter of crude oil and petroleum products combined by 2019, if not 2018.”

Opec has misjudged the threat. As late as last year, it was dismissing US shale as a flash in the pan. Abdalla El-Badri, the group’s secretary-general, still insists that half of all US shale output is vulnerable below $85.

This is bravado. US producers have locked in higher prices through derivatives contracts. Noble Energy and Devon Energy have both hedged over three-quarters of their output for 2015.

Pioneer Natural Resources said it has options through 2016 covering two- thirds of its likely production. “We can produce down to $50 a barrel,” said Harold Hamm, from Continental Resources. The International Energy Agency said most of North Dakota’s vast Bakken field “remains profitable at or below $42 per barrel. The break-even price in McKenzie County, the most productive county in the state, is only $28 per barrel.”

Efficiency is improving and drillers are switching to lower-cost spots, confronting Opec with a moving target. “The (price) floor is falling and may not be nearly as firm as the Saudi view assumes,” said Citigroup.

Mr Morse says the “full cycle” cost for shale production is $70 to $80, but this includes the original land grab and infrastructure. “The remaining capex required to bring on an additional well is far lower, and could be as low as the high-$30s range,” he said.

Critics of US shale may have misunderstood its economics. There is a fast decline in output from new wells but this is offset by a “long-tail phase” for a growing number of legacy wells. The Bakken field has already reached 1.1m bpd, and this is expected to double again over the next five years.

Other oil projects around the world may be more vulnerable to a price squeeze, including the North Sea, the ultra-deepwater ventures in the Atlantic off Brazil and Angola, Canadian oil sands, or Russia’s contentious plans for the Arctic in the “High North”. But the damage will be gradual.

In the meantime, oil below $70 is already playing havoc with budgets across the global petro-nexus. The fiscal break-even cost is $161 for Venezuela, $160 for Yemen, $132 for Algeria, $131 for Iran, $126 for Nigeria, and $125 for Bahrain, $111 for Iraq, and $105 for Russia, and even $98 for Saudi Arabia itself, according to Citigroup.

Opec may not be worried about countries such as Nigeria, but even there a full-blown economic and political crisis could turn the north into a Jihadi stronghold under Boko Haram.

The growing Jihadi movements in the Maghreb – combining with events in Syria and Iraq – clearly pose a first-order security threat to the Saudi regime itself.

The Libyan city of Derna is already in the hands of the Salafist group Ansar al-Shariah and has pledged allegiance to Islamic State. Terrorist movements in the Egyptian Sinai have also rallied to the black and white flag of IS, prompting Egypt’s leader Abdel al-Sisi to call last week for a “general mobilisation” of all leading Arab and Western powers to defeat the spreading movement.

The new worry is Algeria as the Bouteflika regime goes into its final agonies. “They have an entrenched terrorist problem as we saw in the seizure of the Amenas gas refinery last year. These people are aligning themselves with Islamic State as part of the franchise,” said Mr Newton.

Algeria exports 1.5m bpd of petroleum products. Its gas exports matter more but the price of liquefied natural gas shipped to Europe is indirectly linked to oil over time.

It is an open question what will happen to Algeria, Iraq, and Libya if oil prices hover at half the budget break-even costs for a year or two, given the extreme fragility of the region and political risk of cutting subsidies.

The Sunni Salafist tornado sweeping across the Middle East – so strangely like the lightning expansion of Islam in the mid-7th century – is moving to its own inner rhythms. It is not a simple function of economic welfare, let alone oil prices.

Yet Saudi Arabia’s ruling dynasty tests fate if it is betting that the Middle East’s fraying political order can withstand a regional economic shock for another two years.

Much more analysis here

Marcellus Shale – SW liquids rich $24.23
Marcellus Shale – Super Rich $25.63
Utica – Wet gas $32.39
Mississippian Horizontal – East $42.15
Utica – Liquids Rich $44.04
Eagle Ford – Liquids Rich $46.05
Niobrara – Wattenberg $46.10
Wolfcamp – N. Midland (Horizontal) $53.92
Eagle Ford – Oil Window $55.29
Wolfcamp – S. Midland (Horizontal) $61.57
Mississippian Horizontal – West $64.05
Wolfberry $64.63
Bakken Shale $64.74
Wolfcamp – N. Delaware (Horizontal) $68.54
Uinta – Green River $68.77
Uinta – Wasatch (H) $72.15
Granite Wash – Liquids Rich $73.10
Horizontal
Uinta – Wasatch (V) $74.95
Barnett Shale – Southern Liquids $84.45

More From Silent Cal…

by coldwarrior ( 28 Comments › )
Filed under Economy, Elections 2016, History, Open thread at November 24th, 2014 - 7:00 am

Yeah,Norquist wrte the following article, as much as i dislike the guy because of his Muslim connections and his torpedoing of the repeal of the ethanol mandate (to keep gas prices high,yeah, THAT isn’t a tax! /), I must say…I enjoy the fact that he agrees with me. Blogmocracy ahead of the curve again! :lol:

Walker in 16? Yeah…I could vote FOR that.

 

What makes Wisconsin’s Republican Governor Scott Walker a good choice for 2016

coolidge at wash mem

After the GOP’s midterm-elections sweep, the Republican Party holds more U.S. House seats and controls more state houses than at any time since 1928. Having reached this goal, the GOP now needs to look for a 2016 presidential nominee to match this success.

President Calvin Coolidge, who sat in the Oval Office from 1923 to 1929, would be a smart model for the party. He reined in spending and reduced tax rates at a time when it was as needed as it is today. President Ronald Reagan admired Coolidge so much that he hung a portrait of the 30th president in his Cabinet Room.

One talked-about possible 2016 presidential candidate who shares many of Coolidge’s policy bona fides is Wisconsin Governor Scott Walker, who won his third statewide race in four years on Nov. 4. The two men have so much in common that it is worth seeing what Coolidge’s experience can tell us about a potential President Walker.

cal w rockefeller

Coolidge took office at an extraordinary period in U.S. history. During his presidency, America advanced from a nation in which the horse and buggy was one of the most efficient methods of travel in many places to one filled with Model T drivers honking at one another to move it. The advent and popularization of modern appliances like electric washing machines allowed women of the 1920s to get out of the house.

Coolidge rose to national prominence largely because of his actions during the 1919 Boston Police Strike. Coolidge was governor of Massachusetts, and he stood down police union bosses to put an end to the strike. He offered a sharp contrast to then-President Woodrow Wilson, silent and timid on an issue of national importance.

Coolidge’s limited-government approach made for both good policy and good politics — it fueled a stunning prosperity. Economic expansion under Coolidge was rapid, with the gross national product rising roughly 4.2 percent a year from 1920 to 1929, as Marquette University’s Gene Smiley explained in an Economic History Association report. This is impressive growth by 19th-, 20th-and 21st-century standards.

Wisconsin Republican Governor Walker addresses his supporters at a rally on election night in Milwaukee

A standoff with powerful bosses of government-employee unions is also what thrust Walker onto the national stage. The 2011 labor reforms that Walker championed and eventually signed into law sparked riotous protests in Madison. It cost $11 million to repair the damage done by union protesters at Wisconsin’s capitol building, considered to have one of the most aesthetically beautiful domes in the United States.

Republicans now have total control of 30 state legislatures — their largest advantage since Coolidge lived in the White House. The government reform and tax-relief measures enacted by Walker and other GOP governors are a big reason for this electoral success. Walker has made clear that more income tax cuts and creating a more competitive business-tax climate in the Badger State are among his top priorities for his second term. Coolidge did that at the federal level — and demonstrated the economic dividends that tax cuts can produce.

Veronique de Rugy of the Mercatus Center at George Mason University laid out the success of these Coolidge tax cuts. From a high of 73 percent, the top rate was reduced to 46 percent in 1924, and then was brought down to 24 percent by the time Coolidge left office.

coolidge signing bill

Walker has adopted the Coolidge tax model, chipping away at his state income-tax rates. He talks about eliminating Wisconsin’s income tax during his second term. He has asked his lieutenant governor, Rebecca Kleefisch, to hold tax-reform roundtables across the state. Given that tax reform is usually the most politically difficult undertaking for lawmakers, Walker is astute in getting constituent buy-in ahead of time.

The day after the 2014 midterms, the national punditry was ready to focus on the 2016 presidential contest. Coolidge’s record and how it compares to what Walker has done in Wisconsin make a strong case for his name to be on the short list of GOP contenders.

 

 

 

Schoolhouse Rock OOT

by Macker ( 19 Comments › )
Filed under Barack Obama, Entertainment, History, Immigration, OOT, The Constitution at November 23rd, 2014 - 10:00 pm

Who all here remembers Schoolhouse Rock? I’m sure we all do!
Well, the liberal folks over at SNL make a mockery of Обама’s recent act, utilizing one of the classic tunes from that series, “I’m Just A Bill“:

Too bad they didn’t depict Обама’s character in regal garb. But no matter. lobo91 is right: it would indeed be funny if it wasn’t so accurate.
It’s The Overnight Open Thread!

Canada Considers Fence On Southern Border To Stem Wave Of Illegal Immigration

by Bunk X ( 4 Comments › )
Filed under America, Canada, Elections 2010, Elections 2012, Humor, immigration, Immigration, Mexico, Politics, Russia, Satire, Special Report at November 22nd, 2014 - 10:54 pm

CAUTION

Mexico allows Central and South American immigrants to pass through her borders on 72 hour visas, and most of those people are headed for the porous southern border of the US. As these illegal immigrants pour in, local pressure builds, and now there’s another movement happening at the US – Canadian Border. Canadians don’t like it.

US Canada Border Fence

Here’s the full transcript from The Manitoba Herald 1 December 2010:

Border Fence Proposed
by Clive Runnels
The flood of American liberals sneaking across the border into Canada has intensified in the past week, sparking calls for increased patrols to stop the illegal immigration. The recent actions of the Tea Party and the fact Republicans won the Senate are prompting an exodus among left-leaning citizens who fear they’ll soon be required to hunt, pray, and to agree with Bill O’Reilly and Glenn Beck.

Canadian border farmers say it’s not uncommon to see dozens of sociology professors, animal-rights activists and Unitarians crossing their fields at night.  “I went out to milk the cows the other day, and there was a Hollywood producer huddled in the barn,” said Southern Manitoba farmer Red Greenfield, whose acreage borders North Dakota. The producer was cold,exhausted and hungry. He asked me if I could spare a latte and some free-range chicken. When I said I didn’t have any, he left before I even got a chance to show him my screenplay, eh?”

In an effort to stop the illegal aliens, Greenfield erected higher fences, but the liberals scaled them. He then installed loudspeakers that blared Rush Limbaugh across the fields. “Not real effective,” he said. “The liberals still got through and Rush annoyed the cows so much that they wouldn’t give any milk.”

Officials are particularly concerned about smugglers who meet liberals near the Canadian border, pack them into Volvo station wagons, and drive them across the border where they are simply left to fend for themselves. “A lot of these people are not prepared for our rugged conditions,” an Ontario border patrolman said. “I found one carload without a single bottle of imported drinking water. They did have a nice little Napa Valley cabernet, though.” When liberals are caught, they’re sent back across the border, often wailing loudly that they fear retribution from conservatives. Rumors have been circulating about plans being made to build re-education camps where liberals will be forced to drink domestic beer and watch NASCAR races.

In recent days, liberals have turned to ingenious ways of crossing the border. Some have been disguised as senior citizens taking a bus trip to buy cheap Canadian prescription drugs. After catching a half-dozen young vegans in powdered wig disguises, Canadian immigration authorities began stopping buses and quizzing the supposed senior-citizens about Perry Como and Rosemary Clooney to prove that they were alive in the ’50s. “If they can’t identify the accordion player on The Lawrence Welk Show, we become very suspicious about their age,” an official said.

Canadian citizens have complained that the illegal immigrants are creating an organic-broccoli shortage and are renting all the Michael Moore  movies. “I really feel sorry for American liberals, but the Canadian economy just can’t support them,” an Ottawa resident said. “How many art-history majors does one country need?”

In an effort to ease tensions between the United States and Canada, Vice President Biden met with the Canadian ambassador and pledged that the administration would take steps to reassure liberals. A source close to President Obama said, “We’re going to have some Paul McCartney and Peter, Paul & Mary concerts. And we might even put some endangered species on postage stamps. The President is determined to reach out,” he said.

The US and Canada are not the only countries experiencing an influx of illegal immigrants crossing their southern borders. Check out this image from Vladikavkaz, Russia:

illegal-immigrants-in-russia

If the Theory of Global Worming is true, there’s going to be a massive influx of people from all regions south of the Arctic Circle, judging from the current migration patterns.

Sure, Canada has Molson’s and poutine, but I’m gonna stay put and watch the parade. By the way, The Manitoba Herald folded in 1877, there is no such person named Clive Runnels, and I am not the author of the quoted satirical article. Go figger.

Do the Republicans Now Own the Coal Vote?

by Iron Fist ( 83 Comments › )
Filed under Economy, Energy at November 9th, 2014 - 7:02 am

Politico seems to think so:

The Republicans’ romp this week may have permanently turned coal country from blue to red.

Coal-heavy districts in West Virginia, Kentucky and Illinois that had been steadily moving away from Democrats in recent elections appear to have completed that shift Tuesday, when they overwhelmingly backed Republicans who vowed to oppose what they call President Barack Obama’s “war on coal.”

“This has been a growing trend in coal politics and will outlast President Obama’s tenure,” Wheeler said.

Gee, you tell people that you intend to put them out of business (and, thus, out of a job), and they’ll vote against you for it? Who could have seen that coming? In reality, it doesn’t make much sense for anyone in the entire energy sector, with the exception of “green” energy that relies on government subsidies to stay afloat, to vote for the Democrats. It isn’t just coal. The Democrats hate fracing. They hate offshore drilling, too. And they really hate nuclear and hydroelectric energy. Basically, if you are in the energy sector, the Democrats want you out of business.

Think about that for a minute. Damned near everything that we think of as “Modern Civilization” requires energy to function. It always kills me to see the hippies protesting power plants while yakking on their cell phones and surfing the web on their iPads. The anti-energy people are some of the lest self-conscious people out there. You can think of them as a human sponge (the sea creature). They sit there and take all the energy in that anyone else does, but they do it simply by virtue of being. They don’t have any real awareness of where it comes from or what is necessary to produce it (you get the same kind of thing with people that think meat comes from a grocery store).

All of this is good news for the GOP, not just for this election, but for the coming elections:

In West Virginia, once a long-time Democratic stronghold, Republicans will take control of both houses of the state legislature for the first time since 1931. Republicans picked up seven seats in the state Senate to bring the balance to 17-17, and then Democrat Daniel Hall switched parties Wednesday to give the majority to the GOP.

Voters there also elected Rep. Shelley Moore Capito as their first GOP senator in 56 years, and Republicans won three congressional contests, even kicking out 38-year incumbent Rep. Nick Rahall.

[snip]

The “policies and priorities espoused by the national Democratic Party, as reflected in their platform, don’t resonate with the priorities, beliefs and feelings of the people” of West Virginia, said Evan Jenkins, the Republican who will take Rahall’s place in Congress.

“Southern West Virginia in particular has been devastated economically over this last six years in the war on coal,” he said. “It’s very difficult for West Virginia Democrats to explain to the voters why their party maintains such an anti-coal agenda.”

Now, keep in mind that this is just West Virginia. This won’t have the same impact that, say, California waking up from her slumber and recognizing what the Democrats hath wrought would have. But it is a start, and it may be the leading edge of a permanent shift (as much as anything in politics can be termed “permanent”).

While West Virginia has been trending toward the Republican Party for years, in Kentucky, where Sen. Mitch McConnell beat Grimes by 15 percentage points, Obama’s policies on coal appeared to have helped the GOP, he said.

McConnell won by the largest margins in the state’s coal-producing counties, often topping the 70 percent mark. “I’m not sure some of those counties he’s won ever,” said Bissett. The senator won 47 counties where more than 60 percent of voters are registered Democrats.

As the next Senate majority leader, McConnell says Republicans “will use the power of the purse to try to push back against this overactive bureaucracy,” pointing to the “war on coal” as a prime example.

While the new GOP majority in Congress means fossil fuels will see more support in Washington, the loss of so many Democrats from coal-heavy House districts may make it harder for Republicans to reach across the aisle on measures to benefit the industry.

With the defeats Rahall, Bill Enyart (D-Ill.) and John Barrow (D-Ga.), “it is going to be much harder crafting bipartisan legislation on energy and environmental issues in the House,” Wheeler said.

Enyart, a co-chairman of the congressional coal caucus, represented a southern Illinois district heavily reliant on coal, and Barrow and Rahall held the center on the House Energy and Commerce Committee as “go-to Democrats for sponsorship of Republican-led and industry-favored legislation and letters,” Wheeler said. “Their defeat means it will be harder to attract Democrats to such efforts.”

This is why I say it may be the leading indicator of a permanent shift. The opposition to energy badly hurt the Democrats this time around, but rather than learning from that experience and shifting their policies accordingly, it looks like instead they are going to double-down on it. If you look at a map of the United States showing the counties that voted Republican versus Democrat, you see a set of large urban areas that are extremely heavily Democrat surrounded by a sea of, well, the rest of the country, that is Republican. These large urban areas are tremendous consumers of energy, but the popular will there is decidedly against the energy sector, with the exception of “green” power. These people have no idea what it takes to keep a power grid running. Electricity is magic pixie dust that comes out of a socket on the wall. That is why you see the perennial push for “electric” cars as “green” alternatives. They never consider that you have to burn coal (or natural gas, nuclear fuel, or whatever) to produce the electricity to charge the car.

The Energy Sector is a huge sector of the economy, and it is not at all a stretch to say that it is the sector that makes most (if not all) of the other sectors of the economy possible. If you work in that sector directly, it really is foolish to vote for the Democrats. They ultimately want to put you out of a job, unless you are a windmill operator or the like. But for the rest of us, energy is a vital commodity as well. When the Democrats try to put coal out of business, they are making almost everything else more expensive. The power that you use to power the computer that you are using may very well have been produced by coal, but even if it wasn’t, the loss of the supply of coal energy will cause the price of all other supplies of energy to rise, as the Law of Supply and Demand dictates. The Democrats feel that they are above even natural laws, but when they step off the side of a building, they are going to fall just like the rest of us. With their war on energy, the Left may be taking that first fatal step right now.

The End Of QE

by coldwarrior ( 175 Comments › )
Filed under Economy, History, Open thread at October 30th, 2014 - 6:30 am

Some interesting points from Evans-Pritchard, I will have to think on them and comment later asI have to get Princesses Ilsa, Anna, and Merida’s costumes ready for tomorrow night.

The final word on quantitative easing will have to wait for historians. As the US Federal Reserve winds down QE3 we can at least conclude that the experiment was a huge success for those countries that acted quickly and with decisive force.

Yet that is not the ultimate test. The sophisticated critique – to be distinguished from hyperinflation warnings and “hard money” bluster – is that QE contaminated the rest of the world in complicated ways and may have stored up a greater crisis for the future.

What we can conclude is that extreme QE enabled the US to weather the most drastic fiscal tightening since demobilisation after the Korean War, without falling back into recession. Much the same was true for Britain.

The Fed’s $3.7 trillion of bond purchases did not drive up debt ratios, as often claimed. It reduced them.

Flow of Funds data show that total non-financial debt has dropped from a peak near 260pc of GDP in 2009 and since stabilised at 237pc of GDP. Public debt did jump, matched by falls in household and corporate debt ratios.

On cue, federal debt is now falling as well. The deficit is down to 2.8pc of GDP, low enough to erode the debt ratio in a growing economy through the magic of the denominator effect.

This is not a “pure” economic experiment, of course. There are other variables: the shale boom and the manufacturing renaissance in chemicals and plastics that it has spawned; quick action by the US authorities to clean up the banking system. Yet it is indicative.

By contrast, the eurozone carried out its fiscal austerity without monetary stimulus to cushion the shock, lurching from crisis to crisis as a result. The region has yet to reclaim it former levels of output, a worse outcome than during the Great Depression by a wide margin. Not even the 1840s were this bad. You have to go back to the Thirty Years War in the 17th century to trump the economic devastation of EMU.

The eurozone’s public debt ratios have rocketed, yet unlike America there has no been no drop in private debt to compensate.

The latest Eurostat data are staggering. They show that Italy’s debt has jumped by 5.5pc of GDP to 133.8pc over the past year despite a primary surplus, purely because of EMU contractionary policies. The eurozone has bent every sinew to cut debt, and ended up in a worse predicament, exactly as Britain did under its infamous deflation policies in the 1920s.

At the end of it all, Euroland is again on the cusp of a triple-dip recession, with unemployment stuck at 11.5pc. It faces devastating hysteresis effects in southern Europe, where a large chunk of those under 30 have never had a permanent job. Leaving aside the social destruction, this will reduce the economic growth of these countries for two decades or more. It overwhelms the alleged benefits of EMU-imposed reforms.

The contrast with the US is so stark that there can be little argument. The US suffered broadly the same economic shock in 2008 and had a similar jobless rate in the white heat of the crisis. Its unemployment rate has since tumbled to 5.9pc. Lay-offs have dropped to a 14-year low. There is even an acute shortage of truck drivers, now able to command $40,000 a year.

Britain’s workforce has reached fresh records above 30m. Some are highly-educated refugees from the EMU victim states, a loss to them, a boon to us. The British recovery may be unhealthy in many ways – not least the current account deficit – but it is surely better for the long-term prospects of this country than the cosmic gloom gripping the Maastricht bloc.

It is true that Japan is struggling despite the most radical QE blitz ever attempted in a large economy – roughly $70bn a month since Shinzo Abe took power, and began to shake Japan out of its fatalism – but it had a bigger mountain to climb, and it has in fact weathered the shock of its sales tax rise this year. Those who say QE has failed in Japan are premature, and offer no counterfactual argument. Clearly the status quo ante was a path to ruin.

You can argue that zero rates robbed savers, and that QE robbed them a fraction more, but let it never be forgotten that the state rescued the banking system across much of the industrial world in 2008. If governments had let banks collapse – and 4,000 went under across the US in the early 1930s – savers would have lost their shirts. They were in fact bailed out by the taxpayers, and little gratitude some show for it.

What QE has done is to distribute the costs of crisis evenly between creditors and debtors, a matter of natural justice. Eurozone policies are by contrast an enforcement mechanism for creditors alone. Debtors in Spain have been reduced to servitude by a combination of medieval debt laws and the “internal devaluation” imposed by the EMU regime.

We will never know whether extreme monetary stimulus averted social and political breakdown, a slide into beer-hall thuggery and street militias, but would you ever wish to put the matter to a test? So let us give due credit to the heroes of our time – Ben Bernanke, Mervyn King and those who stood by them against the mob of howling critics.

And yet, there is a problem. The Bank for International Settlements and others such as India’s central bank governor Raghuram Rajan argue that QE is in essence a beggar-thy-neighbour ploy that shifts the burden onto others in a “Pareto sub-optimal” for the world as a whole.

They argue it led to a flood of liquidity into emerging economies and that they were not able to neutralise the effects. Most of the world has now been drawn into an all-engulfing debt trap that has left the international system more vulnerable than ever.

Debt has risen by 20 percentage points to a record 175pc of GDP in emerging markets, with China already around 250pc, according to Standard Chartered. These are unprecedented levels for countries without mature financial markets and deep layers of wealth. Morgan Stanley calculates that gross global leverage has risen from $105 trillion to $150 trillion since 2007. The BIS says the world is on a hair-trigger, at risk of “violent” effects if there is slightest loss of liquidity.

This may soon be out to the test since it is not only the Fed that is tightening, tapering QE3 from $85bn a month to zero since the start of the year. By a quirk of fate, China’s central bank has stopped accumulating foreign bonds as well, for its own reasons. Let us hope they are talking to each other.

The Chinese central bank became a net seller of Treasuries, Bunds, Gilts and French bonds in the third quarter. This is a major change of strategy. It was buying $35bn a month earlier this year, before premier Li Keqiang announced that excess reserves had become an inflationary “burden”. This shift is not exactly “reverse QE” but is analogous.

The world must deal with a double shock from the two monetary superpowers. Investors had hoped that the European Central Bank would pick up the baton in a seamless transition. This has not yet happened, and may not happen on any worthwhile scale for a long time given the “German problem”.

The ECB’s balance sheet has contracted by €150bn to just over €2 trillion since Frankfurt first unveiled its “QE-Lite” more than four months ago. The ECB bought €1.7bn of securities last week but this is a toe in the water.

It is too early to judge whether even the Anglosphere can really throw away its QE crutches. The risk of a relapse is obvious as the commodity nexus flashes global stress warnings. We may need QE4 after all.

If so, let us inject the stimulus directly into veins of the economy money next time, using it to build roads, houses and an infrastructure fit for the 21st century. Experts call that “fiscal dominance”, a dirty concept, a slippery slope towards to monetary financing of deficits. To which the condign reply in a global deflationary trap with chronic lack of demand is, all the better.