Archive for the ‘Economics’ Category

Welcome to Black Monday

Monday, August 24th, 2015

If you haven’t been checking your 401K recently, now may not be the day to do it, as markets are plunging around the globe.

China’s Shanghai composite index had the largest one-day selloff since 2007.

Japan’s Nikkei average fell 4.6%, the largest drop in two years.

India’s Sensex dropped over 1,200 points, the biggest drop in seven years.

And now everyone is nervously waiting for the NYSE to open…

LinkSwarm for August 14, 2015

Friday, August 14th, 2015

Austin had a very, very wet spring, but August is shaping up in normal fashion: Bone dry and hot as hell. Try to keep cool and enjoy a Friday LinkSwarm:

  • “There is no real distinction between today’s Democrats and socialists.”
  • Democrats have an America problem.
  • The email scandal could very well sink Hillary:

    Politicized or not, the DOJ will be increasingly boxed in by the FBI and intelligence community investigations. Normally, when the intelligence community finds classified materials in unauthorized locations, it seeks felony prosecutions. Gen. David Petraeus was sunk for keeping his own personal calendars in an unlocked drawer at home. The calendars were deemed classified, even if they lacked an official stamp. President Clinton’s CIA Director, John Deutsch, lost his job and security clearance for using his portable computer at home. It had classified material on it. Those violations are trifling compared to Hillary Clinton’s exposure.

    (Hat tip: Instapundit.)

  • Longtime Hillary Clinton aide Huma Abedin may be joining her in the big house
  • Bernie Sanders up over Hillary Clinton in New Hampshire? #WhiteVotesMatter
  • Ohio Democrats continue their youth movement by recruiting 74-year old Ted Strickland for a Senate race.
  • Someone spilled millions of gallons of toxic waste into a river! Call the EPA! Oh wait, it was the EPA.
  • Islamic State executes 300 electoral civil servants in Iraq. Good thing we’ve got Nobel Prize winner Barack Obama sowing peace and stability to the Middle East rather than that warmongering bungler Bush… (Hat tip: Jihad Watch.)
  • So why did the Obama Administration pretend Taliban-head Mullah Omar was still alive when he’s probably been dead 2 years? (Hat tip: Prairie Pundit.)
  • And why is the Obama Administration siding with the terrorists and against the Americans who have already won legal judgments against them?
  • A whole bunch of gun myths debunked. (Hat tip: Borepatch.)
  • Just why did the University of Minnesota think it needed grenade launchers? (Hat tip: Say Uncle.)
  • China devalues the Yuan. This is Big Freaking News, but hard to conceptualize, since China’s economic statistics are have not even a nodding acquaintance with reality, and haven’t for at least a decade. So is China’s current bubble bad, or super mega world-shatterling bad?
  • Your guide to global black market pricing.
  • Islamic State Worse off than Greece?
  • Brazil: Super-Duper boned.
  • Great Cthulhu emerges as surprise front-runner in Labour leadership contest.”
  • Tianjin, China Blows Up Real Good.
  • Jihadis kill four, kidnap six from hotel in central Mali. That’s really going to crimp your vacation plans. (Hat tip: Jihad Watch.)
  • Cop-killing inmate dies in prison riot. Alas, my electron microscope is being recalibrated, so I won’t be able to find the proper sized violin to commemorate this sad occasion… (Hat tip: Dwight.)
  • Social Justice Warriors continue their war on comedy on campus.
  • Man arrested for shooting at police in Ferguson was completely unarmed. Except for his guns.
  • Cool World War II radio intercepts story, via Instapundit.
  • Florida Man has been busy.
  • Greece: Dispatches from the Boned

    Thursday, August 13th, 2015

    So I haven’t done a Greek update in a while, since after Greece caved into the inevitable (Newsflash: broke people generally do not have leverage over those lending them money), it was all over but the shouting. Now that Greece and its creditors supposedly have a third bailout deal inked, and Greece settles into its clearly defined misery, let’s take a look at exceptionally bankrupt Greece these days, shall we?

  • Via Zero Hedge comes former Greek finance minister Yanis Varoufakis’ detailed review of the bailout agreement. It’s a mixture of self-serving lies (trying to distance his own Syriza party from the horrific economic mess they made acutely worse) and brutal truths (about just how screwed Greece is by the agreement).
  • Speaking of Varoufakis, it looks like he’s going to be up on hacking charges…for preparing emergency plans to float the drachma.
  • Oh: He also says the latest bailout deal won’t work. He’s not wrong…
  • Greece’s economy miraculously grew in the second quarter. But that was before the full effects of the crisis were reflected…
  • Greece’s tax revenues have collapsed.
  • Greece’s manufacturing sector fell off a cliff in July. Funny how that happens when your banks are closed and you can’t pay for goods.
  • Greece faces two years of recession. That part’s probably true. But that primary budget surplus? Yeah, not so much.
  • “Greece’s banks just made the mistake of being banks in Greece.”
  • After all that? Greece still isn’t fixed.
  • To add a cherry on top, Greece’s refugee crisis continues to grow. Because it’s still safer to live in bankrupt Greece than the Middle East…
  • Texas vs. California Update for August 5, 2015

    Thursday, August 6th, 2015

    Time for another Texas vs. California roundup:

  • Oakland’s monthly rent has doubled in the last five years, but the Oakland police are laying off people and no longer investigate property crimes. (As Zero Hedge notes, average rent is now more than it was in San Francisco in 2012.) How’s that Blue State model of high taxes, high public union salaries, and declining basic services working out for you California?
  • Controlling big budget government programs through ballot initiatives.
  • Only voters can stop California’s union pension crisis. “Government union bosses are desperate to protect their gravy train at taxpayers’ expense. That’s why they are spinning a web of lies about the [ballot initiative].”
  • “With CalPERS’ actuaries demanding a pension funding increase from $3.7 billion to $7.25 billion by 2020, the state must either cut payroll by 30 percent or find a massive new tax source, like overturning Prop. 13.” (Hat tip: Pension Tsunami.)
  • Visualizing California’s staggering pension hole. (Hat tip: Pension Tsunami.)
  • Need to make up the funding shortfall for CalSTARS means cutting into actual teacher salaries.
  • Finally, California beats Texas in job creations. For one month. And by some 6,000 jobs.
  • The Green Behind California’s Greens: A handful of superrich donors have created the illusion of a grassroots environmental movement.”
  • Cloud Computer company LiveOps is moving from Redwood City, California to Cedar Park.

    “Thanks to our low-tax, low-regulation environment that allows all businesses to thrive, the State of Texas has become the national leader for technology job creation, and we continue to attract tech companies from around the country and around the world,” [Governor Greg] Abbott said. “On behalf of the State of Texas, I am pleased to welcome LiveOps to the Lone Star State as the company seeks to transform cloud-based customer service. With their help, the State of Texas can, and will, continue to lead the nation in job creation within the technology sector.”

  • Bra-maker Fashion Forms is relocating from Ventura, California to Austin.
  • California-based Relativity Media files for bankruptcy. Forbidden Kingdom was pretty good. Skyline was a pile of crap…
  • Add California to the list of Democratic Party controlled polises trying to kill Uber.
  • The War on Photography continues apace in Northern California.
  • Facebook is opening a $1 billion data center in Ft. Worth This means they’ll be able to ignore your “Most Recent” setting and tag you in sunglasses spam ten times faster…
  • LinkSwarm for July 31, 2015

    Friday, July 31st, 2015

    Another month down! here’s one final LinkSwarm to finish off July:

  • “Donations to the Clinton Foundation by Swiss bank UBS increased tenfold after Hillary Clinton intervened to settle a dispute with the IRS early in her tenure as secretary of state, according to a published report.” What are the odds?
  • Hillary way, way, way underwater in swing states. (Hat tip: Moe Lane.)
  • Lot of Democrats listed among indicted congress critters. And the Kay Baily Hutchison indictment was bogus.
  • “Nineteen sixty-eight was the year normal Americans saw the Democrats for what they were, and that’s the danger for them in 2016 too – that normal Americans will be reminded about what a circus of welfare-chiseling, race-obsessed, work-averse, baby-shredding freaks the Democrat party is.”
  • Iran says it can ban U.S. arms inspections at will. Wow, that Iran deal just keeps getting better… (Hat tip: Jihad Watch.)
  • Speaking of that Iran deal, the Obama Administration is hiding documents from the public, even though they’re not classified.
  • And the International Atomic Energy Agency refuses to testify to the Senate on Iran, even in a classified setting. Golly, it’s almost like they’re trying to hide something… (Hat tip: Ed Driscoll at Instapundit.)
  • Michael Totten on Hanoi’s Capitalist Revolution. I dare say that Hanoi more capitalist (and hopeful) than Detroit these days…
  • Medicare/Medicaid: Driving us into bankruptcy for half a century.
  • And Social Security could be broke in 12 years.
  • Another day, another American murdered by an illegal alien.
  • More guns, less crime. (Hat tip: Adam Baldwin’s Twitter feed.)
  • “The fact is that there is no point in arguing with liberal gun-control advocates because their argument is never in good faith….The liberal anti-gun narrative is not aimed at creating the best public policy but at disarming citizens the liberal elite looks down upon – and for whom weapons represent their last-ditch ability to respond to liberal overreach.”
  • “Anti-bullying” school seminar is turned into gay sex demonstration.
  • Brazil joins the league of the boned.
  • The mystery of China’s capital outflows.
  • Dice to sell Slashdot. They managed to take a thriving community and managed to drive much of it away with a combination of poor UI design (Beta, anyone) and pro-social justice warrior posts.
  • How #GamerGate shattered shattered Gawker’s myth of invincibility. Turns out that insulting your readers on behalf of social justice warriors isn’t a sustainable business model. Who knew?
  • Even before the hack, Ashley Madison was a complete scam. (Hat tip: Borepatch.)
  • WTO Trade Agreement Reached on IT Products

    Monday, July 27th, 2015

    A new trade agreement was struck at the World Trade Organization.

    A new global trade agreement that eliminates tariffs on more than 200 kinds of IT products should result in lower prices to technology buyers around the world as it is implemented over the next three years.

    The tentative deal, struck on Friday at a World Trade Organization meeting in Geneva, affects a wide variety of products ranging from smartphones, routers, and ink cartridges to video game consoles and telecommunications satellites. It covers US$1.3 trillion worth of global trade, about 7 percent of total trade today.

    This is one of those pieces of Snooze Inducing News that could very well turn out to be A Great Big Hairy Deal. Free trade is a win-win for the nations involved, so this could potentially help alleviate the real nasty recession that’s careening down the pike at us.

    A complete list of the products covered range from the excessively specific to the frustratingly general (“memories”). But a whole lot of them look related to semiconductors and semiconductor manufacturing equipment, an industry that American and Japanese companies dominate. (Almost makes me wish I hadn’t sold all my Applied Materials stock. Almost.)

    (Hat tip: Slashdot.)

    What It’s Like To Be an Honest Taxpayer in Greece

    Friday, July 10th, 2015

    I came across this comment from a Slashdot thread on programmers leaving Greece (usual online source caveats apply), and thought it was meaty enough to be worth excerpting and highlighting on its own:

    Let me tell you what happens when you’re 100% legal and declare everything up to the last penny you get as a software developer. In 2012 I had 100,000 Euros income paid 86,000 Euros spent on taxes (income tax with surprisingly different brackets than last year, “temporary” property tax, “temporary special contribution” 4% on the total turnover, mandatory social security, 55% of your current income tax as downpayment for next year). The year before I made 74,000 Euros and paid “only” 50,000 or thereabouts. In return I got: no schools, no roads, no pension, more taxes, more family members depending on me to live. The more you work the less you make (unless you have an ever-shrinking business). Crazy? That’s the Greek tax brackets for you.

    Meanwhile: I have to pay for my own hospital plan because in case I get sick I have to notify the public insurance carrier 15 days in advance of emergency surgery (no kidding!) or 3-4 months before booking an appointment with a doctor. I have to get an additional, expensive pension plan on top of the 350 Euros per month I am currently paying as mandatory social security because there will be no money when I’m 67 years old or have worked 40+ years to get the minimum pension of 700 Euros (nominal; actual payment after taxes and mandatory social security is around 480 Euros). I also need to set aside money to get the kids I’m planning on having to a private school because there are no teachers (not even substitutes) half of the time in the public schools.

    If you are wondering why people tax evade you have to first ask the questions: 1. how much does the state take in taxes and 2. what does the state offer for the money it takes from its citizens? If the answers are “most of your money” and “not that much at all” respectively it doesn’t take a genius to see why you get an endemic tax evasion for free.

    Anyway. After three years of battling the system I gave up and moved away. My last tax filing in Greece was 2014 for my income in 2013. I am owed a 13,000 Euro tax return since August 10th, 2014. Of course it’s NOT credited. And we’re talking about money I have paid as a tax downpayment to the state since August 2013. They hold my money hostage for 2 years and they won’t give it to me. Also, don’t make the mistake of asking whether there’s an interest rate for those two years. Don’t be silly. There’s not! Adding insult to injury I’m still a Greek tax citizen which means I get to pay taxes for the dividends I’m paid from my company abroad. Don’t be ridiculous, of course they are NOT offset by the money the Greek state owes me! I have so far paid another 40+ thousand Euro taxes in these two years where the Greek state owes me the 13,000 Euro tax return.

    I understand all this sounds alien to you. Why so much taxation, why no services in return, why the state isn’t punctual in paying back. Beats me, brothers and sisters. I have concluded that one must be outright insane to try and do business if they’re born in Greece.

    And here you have the endpoint of the cradle-to-grave welfare state: benefits are theoretically generous for those on the dole (though good luck navigating the maze of inefficient, corrupt bureaucracy to collect them), while taxes are prohibitively high for those actually work for a living.

    This is why implementing fake austerity through higher taxes never works: It drives out the productive, the social compact is irreparably broken, and those living off the state’s largess feel no qualms about wringing every last possible penny from it.

    China’s Stock Market Meltdown Continues, NYSE Offline

    Wednesday, July 8th, 2015

    Maybe those are connected, maybe not.

    As Zero Hedge has been reporting for weeks, China’s stock market continues to slid with no end in sight, despite such measures as making it illegal for some people to sell stocks.

    In a possibly unrelated story, trading on the New York Stock Exchange has been suspended, supposedly due to a computer glitch. Maybe that’s true, maybe not.

    How does it feel to live in interesting times?

    Bank Runs Start in Greece

    Saturday, June 20th, 2015

    The bank runs have started in Greece. Why the Greek peeople would even keep their money in banks, having the example of Cyprus’s bank “bail-ins” before them, would keep any but the most minimal amout of cash in a Greek bank is a mystery.

    Given that Greek banks are insolvent without the European Central Bank’s backstop, one wonders why Greek PM Alexis Tsipras thinks he can continue to bluff the EU caving on reform demands. It’s tough to bluff when you have no hole cards…

    There’s talk of a “new” Greek proposal, which could mean Tsipras and Syriza are finally coming to their senses and giving in to EU demands, or it could be just another smokescreen. I mean, we’ve only seen about a dozen “new” Greek proposals this year that didn’t offer meaningful reform. What’s one more?

    Stay tuned…

    Greece to Receive It’s Final Final Final Final Final Final Final Offer

    Wednesday, June 3rd, 2015

    Looks like all of Greece’s creditors have finally decided it’s put up or shut up time for reform. “Greek Prime Minister Alexis Tsipras is expected to face demands for tough reforms of Greece’s pension system, labor laws and other areas, as well as creditors’ insistence on painful budget measures to ensure that Greece runs a fiscal surplus before interest.”

    At this point Greece seems completely and utterly broke, unless there’s more upfront money in that still unsigned Russian pipeline deal than reports indicate (doubtful, given Russia’s own financial straits), or Tsipras finds yet another hidden money reserve to tap (“We can can pay pensions from the children’s bone marrow fund!”). So despite Tsipras’ insistence that they be allowed to keep spending other people’s money on their bankrupt welfare state, this time the jig may finally, finally, really, we mean it this time, for sure, be up.

    Here’s a piece that explains in terms of game theory why Tsipras overplayed his weak hand:

    Now, as long as the EU keeps Greece in the Eurozone then the Tsipras administration will find itself forced to either exit the Eurozone or apply the austerity it promised to end. Not only would such an outcome send a clear signal to other Eurozone nations that exiting was foolhardy, it would also indicate that radical, nationalist, anti-establishment and anti-austerity parties cannot deliver on their promises.

    The EU won’t force Greece to exit the Eurozone but it won’t offer anything to keep Syriza in power, either. The EU simply needs to keep negotiating without offering anything but strict compliance with what was already agreed upon, which is continued austerity in return for loans. In effect, to use a sports analogy, the EU just needs to “run out the clock.” In the end, it appears that Tsipras will either be forced out of office or forced to break up his coalition and form a new government with the mainstream parties, the outcome that EU and Germany have been angling for all along.

    (Though make no mistake: that “primary surplus” was always illusory.)

    A few more Greek debt crisis links:

  • Now Greece is threatening not to pay this week’s debt payment to the IMF unless a deal is agreed on. Once again, Tsipras is playing chicken with a Yugo, while his opponents are driving a Tiger tank…
  • Tsipras needs to stop making empty promises and get a clue. “He cannot expect Germans to volunteer the money Greece needs, so he can spend it on the kind of leftist economic fantasy that was discredited all over Europe in the 1970s and 1980s. Just ask Argentina where default followed by populist economics leads.”
  • Germany has good reason to stop subsidizing Greece, namely their own crashing demographics: “Germany’s birth rate has collapsed to the lowest level in the world and its workforce will start plunging at a faster rate than Japan’s by the early 2020s, seriously threatening the long-term viability of Europe’s leading economy.” (Hat tip: Powerline.)
  • “A Greek exit is already priced into the euro.”