Weekend Economists Celebrate Groundhog Day With George January 30-Feb. 1, 2015

[Demeter]

Groundhog Day (Monday) is the first day of Solar Spring--halfway between the Solstice and the Equinox. It may not feel like it, but the sun is coming back from the southern hemisphere to warm the frozen North, the days are getting longer, the onions and potatoes are sprouting in your cupboard...

The earth, being a rather slow-moving system thermally, takes a while to warm up, so mortals call March 21st the first day of Spring, 6 weeks from now.

Just ignore them! Celebrate the real Spring!

We in the Midwest really need something to celebrate. It's going to be well below 20F (without the added windchill) for most of next week here in Michigan, and 6 inches of snow are predicted for Saturday night. We need the snow, because this polar vortex is killing the plants, especially my roses, again, because they have no protective blanket of fluffy snow....

(Demeter's Spring Soliloquy interrupted by nudging from the audience)

Who is George, you ask? A public figure who elicits strong opinion...from people of every persuasion!


This picture is shy--click to see!

The first is from a site that supports Obama, the second hates Wikileaks and advocates against a so-called "radical revolution", the third site accuses Soros of conspiring with Obama and Hillary to destroy Americans' rights, the 4th proposes to defeat Communism....NOW!

We will pause in the weekend's Spring bacchanal now and then to explore how this one man pissed off so many...and he did it "economically"!

[Demeter]

1. Will a 3rd bank be struck by lightning (FDIC) this month? Check back later!

Last edited Sun Feb 1, 2015, 11:34 AM - Edit history (1)

NOPE. NOT THIS WEEKEND.

[Demeter]

2. We turn to the knows-all, tells all Wikipedia for the low-down on George

George Soros (/ˈsɔroʊs/ or /ˈsɔrɒs/; Hungarian: Soros György; Hungarian: [ˈʃoroʃ]; born August 12, 1930, as Schwartz György) is a Hungarian-born American business magnate, investor, and philanthropist.

(In Hungarian society as in most Asian ones, the family name comes first; hence Schwartz Gyorgy= George Schwartz...Demeter)

He is the chairman of Soros Fund Management.

He is known as "The Man Who Broke the Bank of England" because of his short sale of US$10 billion worth of pounds, giving him a profit of $1 billion during the 1992 Black Wednesday UK currency crisis.

Soros is a well-known supporter of progressive-liberal political causes. Between 1979 and 2011, Soros gave away over $8 billion to human rights, public health, and education causes. He played a significant role in the peaceful transition from communism to capitalism in Hungary (1984–89) and provided one of Europe's largest higher education endowments to Central European University in Budapest. Soros is also the chairman of the Open Society Foundations.

Early life

Soros was born in Budapest, Hungary, to a non-observant Jewish family. His mother Elizabeth (also known as Erzsebet) came from a family that owned a thriving silk shop. His father Tivadar (also known as Teodoro) was a lawyer and had been a prisoner of war during and after World War I until he escaped from Russia and rejoined his family in Budapest. The two married in 1924. Tivadar was an Esperantist writer and taught Soros to speak Esperanto in his childhood. Soros later said that he grew up in a Jewish home and that his parents were cautious with their religious roots. In 1936 his father changed family name from Schwartz ("black" in German) into Soros (a successor in Hungarian or will soar in Esperanto).

Soros was thirteen years old in March 1944 when Nazi Germany occupied Hungary. When Jewish children were barred from attending school by the Nazis, Soros and the other schoolchildren were made to report to the Jewish Council, which had been established during the occupation. Soros later described this time to writer Michael Lewis:

The Jewish Council asked the little kids to hand out the deportation notices. I was told to go to the Jewish Council. And there I was given these small slips of paper ... It said report to the rabbi seminary at 9 am ... And I was given this list of names. I took this piece of paper to my father. He instantly recognized it. This was a list of Hungarian Jewish lawyers. He said, "You deliver the slips of paper and tell the people that if they report they will be deported."

Soros did not return to that job, but instead went into hiding the next day. Later that year, at age 14, Soros lived with and posed as the godson of an employee of the Hungarian Ministry of Agriculture. The official was at one point ordered to inventory the remaining contents of the estate of a wealthy Jewish family that had fled the country; rather than leave the young Soros alone in the city, the official brought him along. The next year, 1945, Soros survived the Battle of Budapest, in which Soviet and German forces fought house-to-house through the city.

Soros emigrated to England in 1947 and became an impoverished student at the London School of Economics. While a student of the philosopher Karl Popper, Soros worked as a railway porter and as a waiter. A university tutor requested aid for Soros, and he received £40 from a Religious Society of Friends (Quaker) charity. In a discussion at the Los Angeles World Affairs Council in 2006, Alvin Shuster, former foreign editor of the Los Angeles Times, asked Soros, "How does one go from an immigrant to a financier? ... When did you realize that you knew how to make money?" Soros replied, "Well, I had a variety of jobs and I ended up selling fancy goods on the sea side, souvenir shops, and I thought, that's really not what I was cut out to do. So, I wrote to every managing director in every merchant bank in London, got just one or two replies, and eventually that's how I got a job in a merchant bank." That job was an entry-level position in Singer & Friedlander.

In 1951, Soros earned a BSc in philosophy and a PhD in philosophy in 1954, both from the London School of Economics.

Career

In 1956, Soros moved to New York City where he worked as an arbitrage trader for F. M. Mayer (1956–59) and as an analyst for Wertheim & Co. (1959–63). He planned to stay for five years, enough time to save $500,000, after which he intended to return to England to study philosophy. During this period, Soros developed the theory of reflexivity based on the ideas of Karl Popper. Reflexivity posited that the valuation of any market produces a procyclical "virtuous or vicious" circle that further affects the market.

Soros' experience from 1963 to 1973 as a vice-president at Arnhold and S. Bleichroeder resulted in little enthusiasm for the job and a desire to assert himself as an investor to make reflexivity profitable. In 1967, First Eagle Funds created an opportunity for Soros to run an offshore investment fund as well as the Double Eagle hedge fund in 1969.

In 1970, Soros founded Soros Fund Management and became its chairman. Among those who held senior positions there at various times were Jim Rogers, Stanley Druckenmiller, Mark Schwartz, Keith Anderson, and Soros' two sons.

In 1973, due to regulatory restrictions limiting his ability to run the funds, Soros resigned from his First Eagle funds. He then established the Quantum Fund.

In August 2010, Soros acquired a 4 percent stake in the Bombay Stock Exchange (BSE) for about $35 million.

Soros announced in July 2011 that he had returned funds from outside investors' money (valued at $1 billion) and instead invested funds from his $24.5 billion family fortune due to U.S. Securities and Exchange Commission disclosure rules.

In 2013 the Quantum fund made $5.5 billion, making it again the most successful hedge fund in history. The fund has generated $40 billion since its inception in 1973.

Currency speculation

Soros had been building a huge position in pounds sterling for months leading up to September 1992. Soros recognized the unfavorable position at which the United Kingdom joined the European Exchange Rate Mechanism. For Soros, the rate at which the United Kingdom was brought into the European Exchange Rate Mechanism was too high, their inflation was also much too high (triple the German rate), and British interest rates were hurting their asset prices.

On September 16, 1992, Black Wednesday, Soros' fund sold short more than $10 billion in pounds, profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound. Soros's profit on the bet was estimated at over $1 billion. He was dubbed "the man who broke the Bank of England". In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

On Monday, October 26, 1992, The Times quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position."

In 1997, during the Asian financial crisis, the Prime Minister of Malaysia Mahathir bin Mohamad accused Soros of using the wealth under his control to punish the Association of Southeast Asian Nations (ASEAN) for welcoming Myanmar as a member. Following on a history of antisemitic remarks, Mahathir made specific reference to Soros' Jewish background ("It is a Jew who triggered the currency plunge&quot and implied Soros was orchestrating the crash as part of a larger Jewish conspiracy. Nine years later, in 2006, Mahathir met with Soros and afterwards stated that he accepted that Soros had not been responsible for the crisis. In 1998's The Crisis of Global Capitalism: Open Society Endangered Soros explained his role in the crisis as follows:

The financial crisis that originated in Thailand in 1997 was particularly unnerving because of its scope and severity. ... By the beginning of 1997, it was clear to Soros Fund Management that the discrepancy between the trade account and the capital account was becoming untenable. We sold short the Thai baht and the Malaysian ringgit early in 1997 with maturities ranging from six months to a year. (That is, we entered into contracts to deliver at future dates Thai Baht and Malaysian ringgit that we did not currently hold.) Subsequently Prime Minister Mahathir of Malaysia accused me of causing the crisis, a wholly unfounded accusation. We were not sellers of the currency during or several months before the crisis; on the contrary, we were buyers when the currencies began to decline – we were purchasing ringgits to realize the profits on our earlier speculation. (Much too soon, as it turned out. We left most of the potential gain on the table because we were afraid that Mahathir would impose capital controls. He did so, but much later.)

(NAKED SHORTS! DEMETER)

The nominal U.S. dollar GDP of the ASEAN fell by $9.2 billion in 1997 and $218.2 billion (31.7%) in 1998.

Economist Paul Krugman is critical of Soros' effect on financial markets.

"Nobody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is 'Soroi'."

[Demeter]

3. A CZARDAS FOR GEORGE

https://www.youtube.com/watch?x-yt-cl=85114404&v=aWCU2xYREp0&x-yt-ts=1422579428&feature=player_detailpage

The fast paced Czardas (chär-däsh) whose correct spelling is Csárdás is the National dance and music style of Hungary. The dance originally derived from the Magya Kor (Hungarians, c.9th century to present) and Palotás peoples and later became popular in the early 1800's. Czardas means 'Innkeeper' and is of Gypsy origin which is done in duple time (2/4). The dance starts off slow, easy and sedate then ends up in a fast whirling and turning pace. There are still performing troupes who do this dance today.

The tárogató instrument, (similar in timbre) to that of the clarinet, provides much colour, in parts making everything sound traditionally Russian. The female does steps that are similar to Flamenco but the sounds she makes are not

important while at the same time using their hands around the body in a shimmering type motion. Their outfits (wide skirts) are used to accent the turning and twirling they do while dancing. The males steps again are similar to the Flamenco but uses his heels to create 'Sharkazni' or a stomping sound. The male will leap, jump, squat and use knee bends etc. while they dance. The male and female dancers will also clap and snap their fingers to create a mood to the rhythm of the music. Many people in the United States see this dance as a Russian Dance, however it is not.

In America, the Russian dance was usually performed with what they called 'Kazotskys', where the dancer squats down, crosses their arms across their chest and Kicks their legs out alternately. Altho this was an already established Hungarian dance called Czardas and it was not Russian, most Americans would not know the difference and still today see it as Russian dancing. Ida Forsyne was one of the first American woman to do these 'Kazotsky's' at the end of her performance in her Moscow program. These "Kazotsky's where done long before her but after this one performance, and her improvisations of it, she would be hailed (incorrectly) as the greatest Russian dancer of all time as she traveled the world for nine years without a break. For about 15 years this style Ida started would be done by many dancers in American Vaudeville and even on the Broadway stages from 1911 to 1925 and was even portrayed this way in many Hollywood movies and Television shows even today.

Russian / Hungarian dancing was popular in the States especially in American Vaudeville as early as 1900, but Ida Forsyne brought it to the forefront, up until Tap dancers started to control the stages. Ida Forsyne, Greenlee and Drayton, U.S. Thompson, Willie Covan, Dewey Weinglass and others would excel in these quote "Russian Dances," often times calling it Legomania and sometimes a mixture of these and other dances were called Eccentric Dancing after WWI (see below).

The Jewish Czárdás dance version seems to be related, but is more of a couples dance form (touching or Partnerd) rather than the male and / or female not touching but dancing together. Some of the steps used like the Rida, Buzz and Chug steps, leaps and knee bends (dips) play a part.


Birth Place Hungary

Creation Date ? 1300s ?

Creator PAlotás Peoples

Dance Type National / Folk

[Demeter]

4. Soros' Public predictions

Soros' book, The New Paradigm for Financial Markets (May 2008), described a "superbubble" that had built up over the past 25 years and was ready to collapse. This was the third in a series of books he has written that have predicted disaster. As he states:

I have a record of crying wolf ... I did it first in The Alchemy of Finance (in 1987), then in The Crisis of Global Capitalism (in 1998) and now in this book. So it's three books predicting disaster. (After) the boy cried wolf three times ... the wolf really came.

He ascribes his own success to being able to recognize when his predictions are wrong.

I'm only rich because I know when I'm wrong ... I basically have survived by recognizing my mistakes. I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or take flight. When I make the decision, the backache goes away.

In February 2009, Soros said the world financial system had effectively disintegrated, adding that there was no prospect of a near-term resolution to the crisis. "We witnessed the collapse of the financial system ... It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

Insider trading conviction

In 1988, Soros was interested in purchasing shares in French companies. The Socialist party had lost its majority of seats in the Assembly, and the new government under Jacques Chirac had instituted an aggressive privatization program. Many people considered shares in the newly privatized companies undervalued. During this period, a French financier named Georges Pébereau contacted one of Soros' advisors in an effort to assemble a group of investors to purchase a large number of shares in Société Générale, a leading French bank that was part of the program. The advisor reported to Soros that Pébereau's plan was ambiguous and included an implausible takeover plan, which later failed. On that advice, and without ever having met the financier, Soros decided against participating.

Soros did, however, move forward with his strategy of accumulating shares in four French companies: Société Générale, as well as Suez, Paribas and the Compagnie Générale d'Électricité. In 1989, the Commission des Opérations de Bourse (the French stock exchange regulatory authority) conducted an investigation of whether Soros' transaction in Société Générale should be considered insider trading. Soros had received no information from the Société Générale, and had no insider knowledge of the business, but he did possess knowledge that a group of investors was planning a takeover attempt. The COB concluded that the statutes, regulations and case law relating to insider trading did not clearly establish that a crime had occurred, and that no charges should be brought against Soros.

Several years later, a Paris-based prosecutor reopened the case against Soros and two other French businessmen, disregarding the COB's findings. This resulted in Soros' 2005 conviction for insider trading by the Court of Appeals (he was the only one of the three to receive a conviction). The French Supreme Court confirmed the conviction on June 14, 2006, but reduced the penalty to €940,000.

Punitive damages were not sought because of the delay in bringing the case to trial. Soros denied any wrongdoing, saying news of the takeover was public knowledge and it was documented that his intent to acquire shares of the company predated his own awareness of the takeover.

His insider trading conviction was upheld by the highest court in France on June 14, 2006. In December 2006, he appealed to the European Court of Human Rights on various grounds including that the 14-year delay in bringing the case to trial precluded a fair hearing. On the basis of Article 7 of the European Convention on Human Rights, stating that no person may be punished for an act that was not a criminal offense at the time that it was committed, the Court agreed to hear the appeal. In October 2011, the court rejected his appeal in a 4–3 decision, saying that Soros had been aware of the risk of breaking insider trading laws.

Soros was also known to have backed Arab protests uprisings and revolutions in 1989 “Reflecting on the Arab revolutions, one very important factor is that people were willing to sacrifice their lives for a common cause,” Mr. Soros said. “That is a memory, a historic event, that will change those countries forever. It is irreversible.”

[Demeter]

5. Soros the Sportsman and the All-American Pastime

Sports

In 2005, Soros was a minority partner in a group that tried to buy the Washington Nationals, a Major League baseball team. Some Republican lawmakers suggested that they might move to revoke baseball's antitrust exemption if Soros bought the team.

In 2008, Soros' name was associated with AS Roma, an Italian association football team, but the club was not sold. Soros was also a financial backer of Washington Soccer L.P., the group that owned the operating rights to Major League Soccer club D.C. United when the league was founded in 1995, but the group lost these rights in 2000.

On August 21, 2012, the BBC reported SEC filings showing Soros acquired a roughly 1.9% stake in English football club Manchester United through the purchase of 3.1 million of the club's Class-A shares.

I GUESS "PERSISTENCE" WOULD BE A GOOD DESCRIPTOR FOR GEORGE...

[Demeter]

6. Soros the Philanthropist

Soros has been active as a philanthropist since the 1970s, when he began providing funds to help black students attend the University of Cape Town in apartheid South Africa, and began funding dissident movements behind the Iron Curtain.

Soros' philanthropic funding includes efforts to promote non-violent democratization in the post-Soviet states. These efforts, mostly in Central and Eastern Europe, occur primarily through the Open Society Foundations (originally Open Society Institute or OSI) and national Soros Foundations, which sometimes go under other names (such as the Stefan Batory Foundation in Poland). As of 2003, PBS estimated that he had given away a total of $4 billion. The OSI says it has spent about $500 million annually in recent years.

In 2003, former Federal Reserve Chairman Paul Volcker wrote in the foreword of Soros' book The Alchemy of Finance:

George Soros has made his mark as an enormously successful speculator, wise enough to largely withdraw when still way ahead of the game. The bulk of his enormous winnings is now devoted to encouraging transitional and emerging nations to become "open societies", open not only in the sense of freedom of commerce but—more important—tolerant of new ideas and different modes of thinking and behavior.

Time magazine in 2007 cited two specific projects—$100 million toward Internet infrastructure for regional Russian universities, and $50 million for the Millennium Promise to eradicate extreme poverty in Africa—noting that Soros had given $742 million to projects in the U.S., and given away a total of more than $7 billion.

Other notable projects have included aid to scientists and universities throughout Central and Eastern Europe, help to civilians during the siege of Sarajevo, and Transparency International. Soros also pledged an endowment of €420 million to the Central European University (CEU). The Nobel Peace Prize winner Muhammad Yunus and his microfinance bank Grameen Bank received support from the OSI.

According to National Review Online the Open Society Institute gave $20,000 in September 2002 to the Defense Committee of Lynne Stewart, the lawyer who has defended controversial, poor, and often unpopular defendants in court and was sentenced to 2⅓ years in prison for "providing material support for a terrorist conspiracy" via a press conference for a client. An OSI spokeswoman said "it appeared to us at that time that there was a right-to-counsel issue worthy of our support", but claimed later requests for support were declined.

In September 2006 Soros pledged $50 million to the Millennium Promise, led by economist Jeffrey Sachs to provide educational, agricultural, and medical aid to help villages in Africa enduring poverty. The New York Times termed this endeavor a "departure" for Soros whose philanthropic focus had been on fostering democracy and good government, but Soros noted that most poverty resulted from bad governance.

Soros received honorary doctoral degrees from the New School for Social Research (New York), the University of Oxford in 1980, the Corvinus University of Budapest, and Yale University in 1991. He received the Yale International Center for Finance Award from the Yale School of Management in 2000 as well as the Laurea Honoris Causa, the highest honor of the University of Bologna in 1995.

Soros played a role in the peaceful transition from communism to capitalism in Hungary (1984–89) and provided a substantial endowment to Central European University in Budapest.

In the United States, Soros donated a large amount of money in an unsuccessful effort to defeat President George W. Bush's bid for re-election in 2004.

In 2010, he donated $1 million in support of Proposition 19, which would have legalized marijuana in the state of California.

He was an initial donor to the Center for American Progress, and he continues to support the organization through the Open Society Foundations. The Open Society Foundations has active programs in more than 60 countries around the world with total expenditures currently averaging approximately $600 million a year.


Political donations and activism
United States

On 11 November 2003, in an interview with The Washington Post, Soros said that removing President George W. Bush from office was the "central focus of my life" and "a matter of life and death". He said he would sacrifice his entire fortune to defeat Bush "if someone guaranteed it".

Soros gave $3 million to the Center for American Progress, $2.5 million to MoveOn.org, and $20 million to America Coming Together. These groups worked to support Democrats in the 2004 election. On September 28, 2004, he dedicated more money to the campaign and kicked off his own multi-state tour with a speech: Why We Must Not Re-elect President Bush delivered at the National Press Club in Washington, DC.

The online transcript to this speech received many hits after Dick Cheney accidentally referred to FactCheck.org as "factcheck.com" in the Vice Presidential debate, causing the owner of that domain to redirect all traffic to Soros' site.

When Soros was asked in 2006 about his statement in The Age of Fallibility that

"the main obstacle to a stable and just world order is the United States", he responded that "it happens to coincide with the prevailing opinion in the world. And I think that's rather shocking for Americans to hear. The United States sets the agenda for the world. And the rest of the world has to respond to that agenda. By declaring a 'war on terror' after September 11, we set the wrong agenda for the world. ... when you wage war, you inevitably create innocent victims."

Soros was not a large donor to US political causes until the 2004 presidential election, but according to the Center for Responsive Politics, during the 2003–2004 election cycle, Soros donated $23,581,000 to various 527 groups dedicated to defeating President Bush.

A 527 group is a type of American tax-exempt organization named after a section of the United States tax code, 26 U.S.C. § 527.

After Bush's re-election, Soros and other donors backed a new political fundraising group called Democracy Alliance, which supports progressive causes and the formation of a stronger progressive infrastructure in America.

In August 2009, Soros donated $35 million to the state of New York to be ear-marked for under-privileged children and given to parents who had benefit cards at the rate of $200 per child aged 3 through 17, with no limit as to the number of children that qualified. An additional $140 million was put into the fund by the state of New York from money they had received from the 2009 federal recovery act.

On October 26, 2010, Soros donated $1 million, the largest donation in the campaign, to the Drug Policy Alliance to fund Proposition 19, that would have legalized marijuana in the state of California if it had passed in the November 2, 2010 elections.

In October 2011 a Reuters story, "Soros: not a funder of Wall Street protests", was published after several commentators pointed out errors in an earlier Reuters story headlined "Who's behind the Wall St. protests?" with a lede stating that the Occupy Wall Street movement "may have benefited indirectly from the largesse of one of the world's richest men (Soros)".

Reuters' follow-up article also reported a Soros spokesperson and Adbusters' co-founder Kalle Lasn both saying that Adbusters – the purported catalyst for the first Occupy Wall Street protests – had never received any contributions from Soros, contrary to Reuters' earlier story which reported that "indirect financial links" existed between the two as late as 2010.

On September 27, 2012, Soros announced that he was donating $1 million to the super PAC backing President Barack Obama's reelectionPriorities USA Action.

In October 2013, Soros donated $25,000 to Ready for Hillary, becoming a co-chair of the super PAC's national finance committee.

[Demeter]

7. WEE will continue in the morning

Demeter gets really tired clomping around in enough clothes to cover three people, just to stay warm...

[Fuddnik]

8. For your Superbowl and Groundhog Day dining pleasure.

Braised Groundhog Recipe

Braised in mustard and white wine: A groundhog?!

Time for a full disclosure. This is not the first groundhog I’ve eaten. As such, I’ve learned a few things along the way. Like, for instance, groundhogs have musk glands in their armpits. YOU MUST REMOVE THESE IF YOU DON'T WANT TO THROW UP FROM THE STINK OF BRAISED MUSK GLANDS AS THEY BOIL AWAY! If you have difficulty finding (or shooting) groundhog, you can substitute two rabbits or six pounds of chicken.



Servings: 6 servings
Ingredients
1 (5 to 6 pound) groundhog, cut into 6 serving pieces
2 tablespoons extra-virgin olive oil
1 3/4 cups reduced sodium chicken broth
2 medium onions, chopped
3 cloves garlic, finely chopped
1 teaspoon fresh thyme, chopped
3/4 stick unsalted butter, cut into tablespoon size pieces
2 1/2 cups dry white wine
1/3 cup Dijon mustard
1/4 cup whole grain mustard
, for seasoning
Directions:

Rinse the groundhog pieces, remove any fat, and cut out the glands underneath the front legs and armpits, then pat the meat dry. Season with 1 tablespoon Kosher salt and 1 teaspoon pepper.
Heat the oil in a large heavy skillet, then brown the meat, in batches. This will take about 5 minutes per batch. Transfer the meat to a medium heavy pot. Reserve the skillet.
Add the broth to the pot.
Pour off any fat from skillet, then add the onions, garlic, thyme, and 3 tablespoons butter and cook over medium heat, stirring and scraping up any brown bits, until onions are softened. This will take about 5 minutes.
Add the wine and boil until the liquid is reduced by half. This will take about 8 minutes.
Pour the mixture over the groundhog. Cover the pot and bring to a gentle simmer over medium heat. Braise the groundhog until it is very tender. This will take 1 1/2 to 2 hours.
Transfer the groundhog to a serving dish and keep warm.
Bring the liquid in the pot to a boil and reduce it to about 3 cups. This will take about 10 minutes. Whisk in the mustards. Remove the pan from the heat and add the remaining 3 tablespoons butter, swirling the pot until incorporated. Season sauce with salt and pepper and pour over the groundhog.

[Demeter]

9. Knowing Ann Arbor, it's probably illegal to catch, let alone eat a groundhog

and that's okay by me.

[DemReadingDU]

10. Groundhog! Must be an Ohio recipe

We see groundhogs everywhere around here. Although, chicken sounds a more palatable ingredient.

[Fuddnik]

37. It's Stone Crab season down here.

No need to eat anything else.

[Fuddnik]

40. I just finished mowing the lawn.

No groundhogs out there, so we'll have to do without.

[MattSh]

11. Denial is massive here on DU.

I posted this thread hoping that it would generate some thoughtful comment. What a mistake that was.

Did Sanctions on Russia help defeat the Democrats in 2014?

http://www.democraticunderground.com/10026157428

I've believed for a while that America would not change course until it massively hit rock-bottom. I stand by that assessment.

[MattSh]

12. But hey, I'll try again.

Eva Morales (Bolivia President), there's a spot reserved for you under the DU bus.

http://www.democraticunderground.com/10026159872

[Demeter]

28. It's EvO, he's a guy

[MattSh]

33. You're not the first one to mention that...

I went back and corrected it.

[Demeter]

27. It will take a massive dying off of the old generation, too

We've already hit bottom, it's just that some individual 1% people haven't, and the 99% are convinced by the lies from the 1%, that it will be shortly over.

It's like the Reagan delusion. Once the cushy (or demented) left the electorate, change was possible. Unfortunately, THEN we got W and Obama....change, to be sure, but not in the right direction.

[mahatmakanejeeves]

80. Mark Twain? Sounds too good to be true.

Quote Investigator: Denial Is Not a River in Egypt

Quote Investigator: There is no substantive evidence that Mark Twain used this expression. In 1936 a version of this pun-based joke was described by a syndicated newspaper columnist who was responding to a popular song. This citation was located by the extraordinary etymologist Barry Popik {ORSG}:

There is a goofy song going the rounds. The radio seems full of it. It prompts this first paragraph. Excuse it, please. What is denial? De Nile, teacher, is a river in Egypt. That was a terrible boner. You ought to know better than that.

In 1960 another instance of the quip appeared in Boys’ Life magazine. The periodical used the term “Daffynishion” to refer to definitions incorporating word play {BLRH}:

Now all I need to go with that is the picture of Abraham Lincoln holding a smartphone.

Ahhh, that didn't take long.

[MattSh]

13. Google Ban in Crimea Prompts Companies to Switch to Russian Services / Sputnik International

I'm sure Yandex (Russian search engine) is very pleased with this.

Crimean internet users are turning to Russian internet service companies following Google's announcement that it would make its Apps inaccessible on the peninsula in accordance with the latest round of US sanctions.

MOSCOW, January 25 (Sputnik) — Google's announcement to clients in Crimea that the company's services would no longer be accessible after January 31 has prompted local business owners to switch to alternatives, including the popular Russian internet company and search engine Yandex, Rossiyskaya Gazeta has reported.

Google announced this week that its Google Apps services would no longer available to Crimean-registered accounts. In a letter written to users, the company noted that "we are obliged to comply with the recently adopted international sanctions, and users will not be able to access Google Apps from inside Crimea from January 31, 2015. Since access to Google for accounts located in Crimea will be suspended, we strongly recommend that you export your data prior to January 31."

The announcement follows news from earlier in the week that Google AdSense would block Crimean customers' accounts beginning January 23.

As a result of the company's decision, Crimean business owners have noted their intention to switch to other Russian internet firms, including Yandex and Mail.ru. For instance, the director of the Yalta-based interior design firm Bell'Arte told Russian news agency RIA Novosti that "we will be transferring our client base to Yandex and will be using their services [in future]."

Yandex is Russia's largest internet search engine on the Runet (Russian-language internet), and is estimated to account for over 60 percent of all searches in Russia. Like Google, in addition to the search service, the company also has an extensive range of other products, including mail, an e-commerce platform, maps, news, video, and more.

Earlier, US companies PayPal, Apple, Visa and MasterCard also announced their intentions to join in on the newest round of sanctions, announced last December. The sanctions have demanded that US companies stop providing a range of products and services to Crimea by February 1, 2015.

Complete story at - http://sputniknews.com/russia/20150125/1017318615.html

[MattSh]

14. The 4th Media » War and Dollar: To Protect US Dollar, The FRB, US Bankers Prepare for a Major War

Although many funerals have been held for the US dollar, still it lives on. On the eve of the collapse of the Bretton Woods currency system, the dollar made up almost 80% of global foreign-exchange reserves (in 1970 it totaled 77.2%, and in 1972 – 78.6%).

Then, after the transition to the system negotiated at the 1976 Jamaica Conference, that percentage gradually declined, reaching its lowest level – 59.0% – in 1995.

In the wake of financial globalization, the dollar’s positions strengthened again (reaching 70-71% between 1999 and 2001), but then a new decline was seen in the dollar component of global foreign-exchange reserves – dropping below 61% in 2014. Nevertheless, it is still higher than in 1995.

According to the Bank for International Settlements, in April 2010, 84.9% of global foreign-exchange market transactions were carried out in dollars, a figure that had increased to 87% by April 2013.

For comparison, the percentage of those transactions conducted in euros during that same period fell from 39.1 to 33.4%. The discrepancy between the positions of the dollar in world finance vs. the US positions in the global economy cannot be overlooked.

The US share of world GDP is currently about 20%. China has already surpassed America in terms of GDP (based on the purchasing power parity of the currency), but in the global currency market, only 2.2% of transactions were carried out in yuan in April 2013.

There is no accurate data regarding how much of the world’s foreign-exchange reserves are held in yuan, but experts estimate that it is not much higher than 1%.

These disparities are quite reminiscent of the global economic panorama of the late nineteenth and early twentieth centuries. In those days the world’s economic leaders were being reshuffled.

The United States was in first place due to the volume of its industrial and agricultural output. Germany was moving into second place in some categories. And Great Britain, which for most of the nineteenth century had been considered «the world’s factory», had begun to slide into third place.

Complete story at - http://www.4thmedia.org/2015/01/war-and-dollar-to-protect-us-dollar-they-prepare-for-a-major-war/

[xchrom]

15. GERMANY'S MERKEL SAYS SHE DOESN'T SEE ANOTHER GREEK DEBT CUT

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_GREECE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-31-07-20-33

BERLIN (AP) -- German Chancellor Angela Merkel has underlined the refusal of Greece's European creditors to consider forgiving part of the debt-ridden country's rescue loans, though she stressed in an interview published Saturday that Berlin's aim is to keep Greece in the eurozone.

Greece's new government insists it will honor pre-election promises to seek a cut on the country's rescue debt and scrap painful budget measures that were demanded in exchange for the loans.

Merkel said in an interview with the daily Berliner Morgenpost that Europe will continue showing solidarity with Greece and other nations hit by Europe's debt crisis "if these countries undertake their own reform and saving efforts," and fended off a question about the new Greek government's moves to reverse reforms and rehire suspended workers.

"We - Germany and the other European partners - will now wait and see what concept the new Greek government comes to us with," she was quoted as saying. She was clear, however, about prospects of a debt cut.

[Demeter]

29. The next cut will most likely be Merkel herself

She has become intransigent and irrelevant, and as a consequence, the German banksters are not getting their way.

[xchrom]

16. DRIVE TO REPEAL MEDICAL DEVICE TAX NO SLAM DUNK IN CONGRESS

http://hosted.ap.org/dynamic/stories/U/US_CONGRESS_MEDICAL_DEVICE_TAX?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-31-03-28-21


WASHINGTON (AP) -- It flew through the Republican-run House in 2012, and a year later 79 of the Democratic-led Senate's 100 members embraced it. With Republicans now controlling both chambers of Congress, the chances for repealing the 2.3 percent tax on medical devices are better than ever.

Yet abolishing the tax won't be easy, even though Republicans rank it a top priority and are backed by Democrats from states that rely on the industry for jobs.

The upcoming battle underscores the complex politics surrounding President Barack Obama's health care law. Another round of that fight looms next week, when the House will likely vote to repeal the entire 2010 law.

The device tax repeal faces a possible Obama veto. It is also opposed by many Democrats, including some who backed eliminating the tax in 2013 but say they want to replace any lost revenue.

[xchrom]

17. Citigroup Removed Its Swiss Franc Hedge at the Worst Possible Time

http://www.bloomberg.com/news/articles/2015-01-30/citigroup-said-to-drop-hedges-week-before-loss-on-swiss-turmoil

(Bloomberg) -- Citigroup Inc.’s loss on a surge in the Swiss franc this month was exacerbated by the bank’s decision to let protections against currency swings lapse a week earlier, according to people with knowledge of the situation.

The bank didn’t renew derivatives trades that would have blunted the impact from Switzerland’s surprise move to let the franc rise, said the people, who asked not to be identified discussing the strategy. The company’s losses exceeded $200 million in the hours after the announcement, before traders pared the deficit to closer to $150 million, the people said.

The loss at Citigroup, which dethroned Deutsche Bank AG last year as the world’s biggest foreign-exchange dealer, illustrates the perils of unhedged trading in the currency markets. Citigroup has faced particular scrutiny of its ability to manage risks after soured mortgage holdings forced it to draw more taxpayer support than any U.S. bank during the financial crisis.

Citigroup was exposed after selling options on the Swiss franc to customers and failing to renew offsetting hedges, according to one of the people. The options gave buyers the right to collect from a strengthening franc and from higher volatility. While the derivatives desk lost money that day, the spot currency desk turned a profit, one person said.

[Demeter]

30. I wonder if the world did NOT end because of that

Imagine if those derivatives contracts had existed...whoever held them would be busted.

[MattSh]

18. National Bank of Ukraine's plan: More inflation

Ukraine plans to inflate its way out of economic troubles. Like nothing can go wrong there...

Ukraine plans to inflate its way out of economic troubles. As National Bank Governor Valeriya Gontareva said on Jan. 16, the monetary base will increase by 27 percent this year.

This means turning on the money printing press.

As inflation almost reached 25 percent last year, more cash in the system brings another risk that the hryvnia, Ukraine's heavily devalued currency, will keep losing its value. The National Bank expects this year's inflation to exceed 17 percent.

Ukraine has a pitiful track record of tackling inflation. Hyperinflation destroyed the kupon, a currency that country had in 1992-1996, prior to introducing the hryvnia.

Lack of understanding of the macroeconomic issues by the members of parliament that they showed during Gontareva's Jan. 16 visit to the Verkhovna Rada has become the subject to jokes of financial analysts. Executing the money printing policy in a country whose parliament tends to be populist when it comes to serious financial discussion is questionable.

"Yes, emission (printing the money) should take place," said First Deputy Finance Minister Igor Umansky in an interview with LB website. "But money should come to the economy not through banks, but through the state budget."

Complete story at - http://www.kyivpost.com/content/business/national-bank-plans-large-scale-money-printing-this-year-378568.html

My note: On a related note, the advertised exchange rate for the hrivna (the local currency) to the dollar runs around 16.5. But it's simply not possible to get dollars in any bank at that rate. Or any rate. If you want dollars (under the assumption that they will hold their value a lot better than the hrivna), you need to go to the black market and buy them at a rate of 24! And even at a near 50% premium, they sell out quickly.

Warning: this guy really doesn't like the DJ, though I do believe his anger is misplaced.


"Panic"

Panic on the streets of London
Panic on the streets of Birmingham
I wonder to myself
Could life ever be sane again?
The Leeds side-streets that you slip down
I wonder to myself
Hopes may rise on the Grasmere
But Honey Pie, you're not safe here
So you run down
To the safety of the town
But there's Panic on the streets of Carlisle
Dublin, Dundee, Humberside
I wonder to myself

http://www.azlyrics.com/lyrics/smiths/panic.html

[MattSh]

19. TASS: Economy - IMF loans are no help to Ukraine — Ukrainian lawmaker

KIEV, January 26. /TASS/. The IMF’s monetary policy is unacceptable for Ukraine and makes it a mere supplier of raw materials to Europe, the leader of the Opposition Bloc and deputy of the Verkhovna Rada, the Ukrainian parliament, Vadim Rabinovich said to the Ukrainian magazine Korrespondent on Monday.

“The IMF’s monetary policy is austerity aimed at destroying our own nation. It suits us if we want to leave behind 5-7 million people,” Rabinovich said.

He added that “not a single country has been rescued by the IMF loans yet.” “Only private entrepreneurs can do that. We need to quit hold of the economy, lift taxes on small and medium enterprises (SME) for two years, lift inspections for two years, stop borrowing internationally, and stimulate only those sectors that have the future, like IT or agriculture,” he said.

“Now [they] try to make Ukraine a mere supplier of raw materials to Europe,” Rabinovich said, adding that in order to find a way out of the complicated economic situation “we need to lay down a clear plan how to proceed.” “And instead of admitting guilt - we’re not accustomed to it in Ukraine - they’re trying to bring the matter to a close with the help of war,” he said.

Complete story at - http://itar-tass.com/en/economy/773458

[xchrom]

20. Seven Reasons Cheap Oil Can't Stop Renewables Now

http://www.bloomberg.com/news/articles/2015-01-30/seven-reasons-cheap-oil-can-t-stop-renewables-now

1. The Sun Doesn't Compete With Oil
Oil is for cars; renewables are for electricity. The two don’t really compete. Oil is just too expensive to power the grid, even with prices well below $50 a barrel.

Instead, solar competes with coal, natural gas, hydro, and nuclear power. Solar, the newest to the mix, makes up less than 1 percent of the electricity market today but will be the world’s biggest single source by 2050, according to the International Energy Agency. Demand is so strong that the biggest limit to installations this year may be the availability of panels.
“You couldn’t kill solar now if you wanted to,” says Jenny Chase, the lead solar analyst with Bloomberg New Energy Finance in London.

2. Electricity Prices Are Still Going Up

The real threat to renewables isn’t cheap oil; it’s cheap electricity. In the U.S., abundant natural gas has made power production exceedingly inexpensive. So why are electricity bills still going up?



Fuel isn’t the only component of the electricity bill. Consumers also pay to get the electricity from power plant to home. In recent years, those costs have soared. Annual investments in the grid increased fourfold since 1980, to $27 billion in 2010, according to a report by Deutsche Bank analyst Vishal Shah. That’s driving bills higher and making rooftop solar attractive.

[MattSh]

21. ‘Empire of Chaos’ in the House

Pepe Escobar (who's apparently also under the DU bus)

No one in Western corporate media will tell you why US President Barack Obama is hitting Riyadh with a high-powered delegation to “pay his respects” to the new House of Saud potentate, King Salman.

Talk about a who’s who – including CIA head John Brennan; General Lloyd Austin, head of US Centcom; Secretary of State John Kerry; leading House Democrat Nancy Pelosi; and even senile Senator John “Bomb Iran” McCain.

It must have been heart wrenching for most in this crowd to skip a visit to the Taj Mahal in India so they would be part of the last-minute, “unscheduled” stop in Riyadh.

This is how the astonishing mediocrity that doubles as US Deputy National Security Adviser Ben Rhodes, spun it; “Principally, I think this is to mark this transition in leadership and to pay respects to the family and to the people of Saudi Arabia, but I’m sure that while we’re there they’ll touch on some of the leading issues where we cooperate very closely with Saudi Arabia.”

The White House and the Pentagon did not bother to “pay their respects” in person to the people of France after the Charlie Hebdo massacre. The House of Saud – “our” top bastards in the Persian Gulf – is of course much more valuable.

And yet, Air Force One, we got a problem. High-level US financial sources assure this correspondent the trip is all about Obama shoring up the new King’s support for their financial/economic war on Russia as the House of Saud is starting to have second thoughts. The Saudi role in this war has been to come up with the oil price shock – which is hurting not only Russia but also Iran and Venezuela, among others. Besides, the US puppet theoretically in charge in Ukraine, Petro Poroshenko, has just visited Saudi Arabia.

Russia is not Iran – with all due respect to Iran. If the House of Saud really believes they are talking to the head of a superpower rather than a ventriloquist’s puppet – which is Obama’s role – they are effectively doomed. Nothing Obama says means a thing. The real ‘Masters of the Universe’ who run the ‘Empire of Chaos’ want the House of Saud to do most of their dirty work against Russia; and in a later stage they will take care of the “towel heads” - as the saying goes in Washington - over their development of nuclear missiles with Pakistan. And especially because the Saudi-launched oil price war is bound to destroy the US oil industry - against US national interests.

Complete story at - http://rt.com/op-edge/226719-empire-saudi-usa-king-obama

[xchrom]

22. Greek Markets Dive as Syriza Digs In to Fight Austerity

http://www.bloomberg.com/news/articles/2015-01-31/greek-markets-dive-as-syriza-digs-in-to-fight-austerity

(Bloomberg) -- Greece’s government bonds and stock market plunged in the week after the election of Syriza, the political party whose vow to renegotiate debt obligations and roll back austerity measures has sparked an investor flight.

Italian and Spanish sovereign securities fell for the first time in three weeks amid concern the European Central Bank’s quantitative-easing plan won’t fully insulate the rest of the region’s debt markets from Greece’s turmoil. The yields on German bunds dropped to record lows as investors sought the safest assets. Barclays Plc analysts said the likelihood of a Greek exit from the euro area is higher under the rule of new Prime Minister Alexis Tsipras than in 2012.

“It has been a case of rapid swings of the pendulum between markets that do not really want to believe that ‘Grexit’ is now a higher-probability event than it was in 2012, and on the other hand the combative and seemingly uncompromising rhetoric from Tsipras and Varoufakis, and German officialdom,” said Marc Ostwald, a strategist at ADM Investor Services International Ltd. in London. He was referring to Greece’s Finance Minister Yanis Varoufakis.

Greek 10-year yields rose 276 basis points, or 2.76 percentage points, to 11.17 percent as of 4:55 p.m. London time Friday, the biggest weekly increase since May 2012. The 2 percent security due in February 2025 fell 12.65, or 126.50 euros per 1,000-euro ($1,129) face amount, to 54.465.

[xchrom]

23. Podemos Looks to Capture Tsipras Momentum to Oust Rajoy

http://www.bloomberg.com/news/articles/2015-01-31/podemos-looks-to-capture-tsipras-momentum-to-oust-rajoy


(Bloomberg) -- Thousands of supporters of Spanish anti-austerity party Podemos converged on Madrid today to kick off a year of campaigning they hope will end with the ouster of Prime Minister Mariano Rajoy.

The group, which has led in most recent opinion polls, has been energized by the election victory of its ally Syriza in Greece, where Prime Minister Alexis Tsipras is challenging the European Union’s insistence on spending cuts after a seven-year recession that wiped out 25 percent of the economy.

“Greece, brothers, here we come,” the crowd shouted. “Tick tock, tick tock, Mariano -- you won’t survive till summer.”

Podemos emerged over the past year, matching similar movements in Italy, Ireland and Greece, where many voters have grown tired after years of austerity. While Spain’s economy is growing at the fastest pace in seven years, its 24 percent unemployment rate means many voters are still to feel the effects of the recovery.

[MattSh]

24. Greece At The Crossroads: The Oligarchs Blew It

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.

A great many narratives invoking Greece are being tossed around, but only one really encapsulates the unvarnished truth: the Oligarchs blew it. The oligarchs in both Greece and the European Union/ECB had the opportunity a few years ago to trade some of their outsized wealth and political power for stability and sustainable expansion.

Instead, they chose to not just cling to every shred of their outsized wealth and power but to actively increase it. Their greed and hubris has now put their entire system of parasitic wealth extraction at risk of collapse. Their political stranglehold on power has been weakened, and there's no going back: they blew it, and now it's too late. The debt-serfs have finally had enough.

If you enter Greece in the custom search box on this site, six pages of blog entries come up. I have addressed the situation in Greece many times; this summarizes my conclusion:

Greece, Please Do The Right Thing: Default Now (June 1, 2011)

Thankfully, many in Greece have reached the same conclusion, for the same reasons:

Greece's New FinMin Warns "We Are Going To Destroy The Greek Oligarchy System"

The basic problem is that Greece Is a Kleptocracy (June 28, 2011). Greece has shown the world how oligarchies can expand their wealth and power even as their populace slides deeper into poverty. A recent article, Misrule of the Few: How the Oligarchs Ruined Greece, lays out the key dynamics.

Writer Pavlos Eleftheriadis pulls no punches:

"Greece has failed to address (rising wealth/income inequality) because the country’s elites have a vested interest in keeping things as they are. Since the early 1990s, a handful of wealthy families -- an oligarchy in all but name -- has dominated Greek politics. These elites have preserved their positions through control of the media and through old-fashioned favoritism, sharing the spoils of power with the country’s politicians. Greek legislators, in turn, have held on to power by rewarding a small number of professional associations and public-sector unions that support the status quo. Even as European lenders have put the country’s finances under a microscope, this arrangement has held."

The vested interests have obscured the cold reality of rising inequality by focusing obsessively on "growth" as the fix-all to inequality.

Complete story at - http://www.zerohedge.com/news/2015-01-27/greece-crossroads-oligarchs-blew-it

[xchrom]

25. Fannie Overseer Setting Capital Rules for Nonbank Mortgage Firms

http://www.bloomberg.com/news/articles/2015-01-30/fannie-overseer-setting-capital-rules-for-nonbank-mortgage-firms

(Bloomberg) -- A U.S. housing regulator will require nonbank mortgage firms to meet minimum liquidity and net worth standards to curb risks to taxpayers from the rapidly expanding industry.

Companies selling mortgages to Fannie Mae and Freddie Mac or collecting payments on loans backed by the two U.S.-owned enterprises must meet the new standards, the Federal Housing Finance Agency said Friday. The agency will seek public comment before completing the proposal, which it said is likely go into effect by the end of the year.

“The proposed minimum financial requirements ensure the safe and sound operation” of Fannie Mae and Freddie Mac and “further FHFA’s goal of fostering liquid, efficient, competitive and resilient national housing finance markets,” the agency said in a statement.

The FHFA’s move, which comes amid regulatory scrutiny of nonbank mortgage servicer Ocwen Financial Corp., is likely to set a bar for the entire industry because Fannie Mae and Freddie Mac now back more than half of new U.S. home loans. An increasing share of payment-collection work is shifting to companies regulated at the state level that don’t have to meet the same requirements as nationally regulated banks.

[Demeter]

32. Hmm....who is in charge over there?

Someone who gives a damn?

[MattSh]

26. "No Balalaika, Sputnik, Babushka"--Ukraine's High-Tech Giant Goes Under

By Sergey Kirichuk

Translated from Russian by J.Hawk

They are saying that Yuzhmash will be forced into bankruptcy, and its territory will be converted into shopping mall, an entertainment center, and housing for the elite.

Dnepropetrovsk experienced a protest by workers of the legendary Yuzhmash, the largest rocket enterprise in Ukraine. The workers, who have not gotten their salaries for several months, came out in the streets without coordinating the demonstration with the “official” labor union. They say this is the first spontaneous rebellion by its workers during its entire history, since the plant had never had such problems before due to its special rocket/space profile. And the plant has a long history, its construction began already in 1944. It was initially intended to manufacture cars, but the still-rebuilding USSR was drawn into the arms race, and in 1951 it was realigned to manufacture ICBMs.

At the beginning of the 21st millennium I had an opportunity to distribute leaflets of the All-Ukrainian Labor Union at the entryway of this unique enterprise. In order to preserve secrecy, the leaflets were distributed by workers from other factories so that the management would not be able to determine who the Yuzhmash activists were. The workers took the leaflets without exceptional enthusiasm, but with demonstrative friendliness and respect. This was a generation of highly qualified workers and engineers, who understood their time was passing. They were not needed, the labor market valued merchandizers and sales managers. But it was these people, the engineers, the highly skilled workers, the scientists, who comprised the electoral nucleus of the Communist Party of Ukraine.

Leonid Kuchma (2nd President of Ukraine) worked as the general director of Yuzhmash between 1986 and 1992, so the inhabitants of the East and Center of the country placed many hopes in him. They hoped in vain that “their own” technocrat will hear them better than the “repainted” ideologue Kravchuk (1st President of Ukraine). Kuchma, alas, abandoned his voters but the enterprise survived in spite of the collapse of the economy, and managed to start the production of Zenit and Cyclone rockets, as the modified Soviet-era ICBMs were called. The plant also manufactured tractors, trolleybuses, and streetcars.

Complete story at - http://fortruss.blogspot.com/2015/01/no-balalaika-sputnik-babushka-ukraines.html

[MattSh]

31. Russian Banks Cancel US Contracts Over Demands to Reveal Taxpayers' Data

Russian banks have canceled contracts with their US clients because of the Foreign Account Tax Compliance Act (FATCA), the law that requires foreign banks to share information on US citizen's banking activities. If a bank does not comply, it may be subject to a fine.

NOVOSIBIRSK, January 28 (Sputnik) — Russian banks have been forced to cancel contracts with their US clients due to the Foreign Account Tax Compliance Act (FATCA), law that requires foreign banks to provide information on US citizens' banking activities, a senior Russian official said Wednesday.

The FATCA, which became law in 2010, requires foreign banks to report information on some US clients. If a bank does not comply, it may be subject to a fine. Moscow and Washington were negotiating a FATCA deal acceptable for both sides until March 2014, when the United States suspended the talks over the Ukraine crisis.

"We could not put our national security under risk in this case, this is why a rule was adopted, under which every credit services organization may cancel the contracts with its clients, the US residents, and avoid FATCA regulations this way," Deputy Director of Russia's Federal Financial Monitoring Service Pavel Livadny told journalists.

Complete story at - http://sputniknews.com/business/20150128/1017469026.html

[Demeter]

34. Thanks guys for the posts

I'll be back, but I don't know when. I have a lot to do before the snow comes tonight.

There's so much more to the George, as well....scandal and conspicuous consumption, intrigue and more!

[MattSh]

35. Famous Moron Thomas Friedman Says "Czar Putin" Might Invade Baltics in Order To Raise Oil Prices

Policy wonks and other nerds might recall that Russia just announced a $35 billion "anti-crisis" spending plan to support an economy battered by Western sanctions and falling oil prices. But how will the Russians pay for this robust financial package?

Nobody really knows except for Thomas Friedman, who is considered by all responsible historians to be the greatest disseminator of knowledge since Gutenberg and his revolutionary torrent-sharing machine, "the printing press."

Although he is known as an accomplished author and pie-eating champion, Thomas Friedman is also celebrated as a highly-authoritative gossip columnist for The New York Times. And it is his most recent gossip scoops which sparked your correspondent's curiosity and admiration.

"Czar Putin"—we are now quoting directly from Friedman—"is now almost entirely dependent on oil and gas exports, so he’s really hurting with the oil price collapse."

However, this conundrum is easily remedied, or so we are led to believe:

If Putin decides to fully invade Ukraine, or worse, one of the Baltic states, and test whether NATO will really fight to defend either, the price of oil will go up.

100% brilliant. All Putin needs to do is invade "one of the Baltic states"—any Baltic state, it doesn't really matter which one—and then abracadabra!, back to $100 oil and caviar for breakfast. The beauty of this plan is in its remarkable simplicity.

Complete story at - http://russia-insider.com/en/2015/01/29/2913

[Demeter]

36. Anyone who listens to Friedman without contempt

has my sympathies to his family.

[MattSh]

38. Ukraine’s Low Vaccination Rate May Start European Epidemic

The Ukrainian Ministry of Healthcare stated that the level of poliomyelitis vaccination in the country is comparable with that of developing African countries and called the situation with children’s immunization ‘catastrophic’.

MOSCOW, January 28 (Sputnik) — Ukraine poses a serious threat to Europe due to an extremely low level of vaccination against poliomyelitis, Minister of Healthcare of Ukraine, Alexander Kvitashvili, said during a press conference in Vinnytsia in west-central Ukraine.

"Polio vaccination coverage is less than 30%. This is the level of less-developed African countries; it's a disaster. In general, vaccination of the population and children should be part of country’s security," Kvitashvili said, cited by UNIAN.

The minister also added that Ukraine is currently discussing with UNICEF the possibility of raising funds for children’s vaccination in the country.

Poliomyelitis is an infectious disease that can affect the human nervous system and can result in partial or full paralysis. Though the virus was first recorded about 6000 years ago, outbreaks still occur, especially among people who have not been vaccinated.

Complete story at - http://sputniknews.com/society/20150128/1017443935.html

Part of the reason was a major vaccination scare 6 years ago:

The Ukrainian Ministry of health has called a moratorium on mandatory vaccination against measles and rubella. The President of Ukraine, Viktor Yushchenko, has insisted that vaccination is carried out on a voluntary basis only. This comes after more than 100 pupils were taken to hospital, one of whom died after having been injected with a vaccine from India.

Last week Ukraine was shaken by the news of a teenager's death. Senior pupil Anton Tishchenko died in intensive care in a hospital in the city of Kramatorsk in Donetsk Region after he'd been given the vaccine against measles and rubella (Tresivac ZA 26-X). Later, dozens more teenagers who'd received the same medication were rushed to hospital in Kramatorsk alone. Similar situations were reported in the cities of Donetsk, Kharkov and Kremenchug amongst others.

By Friday night a total of 87 people had been admitted to hospital with the same symptoms: high blood pressure, splitting headache, high temperature and sore throat.

Medical officials urged journalists not to spread unverified frightening stories. They said that the vaccine from the Indian enterprise Serum Institute of India, which had been delivered to Ukraine as humanitarian aid by UNICEF, is not just safe but considered to be the best in the world. They said this vaccine was certificated and registered in Ukraine, but never showed the above mentioned documents to the citizens.

http://www.vaccines.me/articles/bwwbp-mmr-vaccine-in-ukraine-2008---death-and-92-hospitalizations.cfm

[Demeter]

39. Riiiight. It's incompetence like this, outright lying and cover-up

That has poisoned the vaccine well.

It's a good example of don't-give-a-damn for the public health. Such elitist abuse of the public trust will cost the 1 % everything they have.

If the vaccines were safe, people would not be dying of them, or even seriously ill. Big Pharm is out for blood. The blood they get will be their own.

And in the process, they destroy science, technology, education, and governments.

[Demeter]

41. George Soros' Activism in Central and Eastern Europe

According to Waldemar A. Nielsen, an authority on American philanthropy,"Soros has undertaken ... nothing less than to open up the once-closed Communist societies of Eastern Europe to a free flow of ideas and scientific knowledge from the outside world". From 1979, as an advocate of 'open societies', Soros financially supported dissidents including Poland's Solidarity movement, Charter 77 in Czechoslovakia and Andrei Sakharov in the Soviet Union. In 1984, he founded his first Open Society Institute in Hungary with a budget of $3 million.

Since the fall of the Soviet Union, Soros' funding has continued to play an important role in the former Soviet sphere. His funding of pro-democratic programs in Georgia was considered by Russian and Western observers to be crucial to the success of the Rose Revolution, although Soros has said that his role has been "greatly exaggerated". Alexander Lomaia, Secretary of the Georgian Security Council and former Minister of Education and Science, is a former Executive Director of the Open Society Georgia Foundation (Soros Foundation), overseeing a staff of 50 and a budget of $2,500,000.

Former Georgian Foreign Minister Salomé Zourabichvili wrote that institutions like the Soros Foundation were the cradle of democratisation and that all the NGOs which gravitated around the Soros Foundation undeniably carried the revolution. She opines that after the revolution the Soros Foundation and the NGOs were integrated into power.

Some Soros-backed pro-democracy initiatives have been banned in Kazakhstan and Turkmenistan. Ercis Kurtulus, head of the Social Transparency Movement Association (TSHD) in Turkey, said in an interview that "Soros carried out his will in Ukraine and Georgia by using these NGOs ... Last year Russia passed a special law prohibiting NGOs from taking money from foreigners. I think this should be banned in Turkey as well."

In 1997, Soros closed his foundation in Belarus after it was fined $3 million by the government for "tax and currency violations". According to The New York Times, the Belarusian president Alexander Lukashenko has been widely criticized in the West and in Russia for his efforts to control the Belarus Soros Foundation and other independent NGOs and to suppress civil and human rights. Soros called the fines part of a campaign to "destroy independent society".

In June 2009, Soros donated $100m to Central Europe and Eastern Europe to counter the impact of the economic crisis on the poor, voluntary groups and non-government organisations.


Africa

The Open Society Initiative for Southern Africa is a Soros-affiliated organization. Its director for Zimbabwe is Godfrey Kanyenze, who also directs the Zimbabwe Congress of Trade Unions (ZCTU), which was the main force behind the founding of the Movement for Democratic Change, the principal indigenous organization promoting regime change in Zimbabwe.


Support of separatist movements

In November 2005, Soros said: "My personal opinion is there's no alternative but to give Kosovo independence." Soros has helped fund the non-profit group called Independent Diplomat. It represented Kosovo, the Turkish Republic of Northern Cyprus (under military occupation by Turkey since 1974), Somaliland and the Polisario Front of Western Sahara.


GEORGE IS A BUSYBODYLITTLE BOY.

ONE COULD ASK WHY, ONE COULD ASK HOW, ONE COULD ASK HOW MUCH...BUT THIS IS A MAN WITH A MISSION. IT DOESN'T SOUND LIKE THE KIND OF MISSION I'D LIKE MESSING WITH MY LIFE, BUT I'M OPINIONATED.

[Demeter]

42. GEORGE SOROS AND DRUG POLICY REFORM

Soros has funded worldwide efforts to promote drug policy reform.

In 2008, Soros donated $400,000 to help fund a successful ballot measure in Massachusetts known as the Massachusetts Sensible Marijuana Policy Initiative which decriminalized possession of less than 1 oz (28g) of marijuana in the state.

Soros has also funded similar measures in California, Alaska, Oregon, Washington, Colorado, Nevada and Maine. Among the drug decriminalization groups that have received funding from Soros are the Lindesmith Center and Drug Policy Foundation. Soros donated $1.4 million to publicity efforts to support California's Proposition 5 in 2008, a failed ballot measure that would have expanded drug rehabilitation programs as alternatives to prison for persons convicted of non-violent drug-related offenses.

In October 2010, Soros donated $1 million to support California's Proposition 19.

According to remarks in an interview in October 2009, it is Soros' opinion that marijuana is less addictive but not appropriate for use by children and students. He himself has not used marijuana for years. Soros has been a major financier of the Drug Policy Alliance – an organization that promotes cannabis legalization – with roughly $4 million in annual contributions from one of his foundations.


Death and dying

The Project on Death in America, active from 2001 to 2003, was one of the Open Society Institute's projects, which sought to "understand and transform the culture and experience of dying and bereavement".

In 1994, Soros delivered a speech in which he reported that he had offered to help his mother, a member of the Hemlock Society, commit suicide. In the same speech, he also endorsed the Oregon Death with Dignity Act proceeding to help fund its advertising campaign.

[Demeter]

43. SOROS: MAN OF PHILOSOPHY

Reflexivity, financial markets, and economic theory


Soros' writings focus heavily on the concept of reflexivity, where the biases of individuals enter into market transactions, potentially changing the fundamentals of the economy.

Soros argues that different principles apply in markets depending on whether they are in a "near to equilibrium" or a "far from equilibrium" state. He argues that, when markets are rising or falling rapidly, they are typically marked by disequilibrium rather than equilibrium, and that the conventional economic theory of the market (the 'efficient market hypothesis') does not apply in these situations.

Soros has popularized the concepts of dynamic disequilibrium, static disequilibrium, and near-equilibrium conditions. He has stated that his own financial success has been attributable to the edge accorded by his understanding of the action of the reflexive effect.

Reflexivity is based on three main ideas:

Reflexivity is best observed under special conditions where investor bias grows and spreads throughout the investment arena. Examples of factors that may give rise to this bias include (a) equity leveraging or (b) the trend-following habits of speculators.

Reflexivity appears intermittently since it is most likely to be revealed under certain conditions; i.e., the character of the equilibrium process is best considered in terms of probabilities.

Investors' observation of and participation in the capital markets may at times influence valuations and fundamental conditions or outcomes.

A recent example of reflexivity in modern financial markets is that of the debt and equity of housing markets. Lenders began to make more money available to more people in the 1990s to buy houses. More people bought houses with this larger amount of money, thus increasing the prices of these houses. Lenders looked at their balance sheets which not only showed that they had made more loans, but that their equity backing the loans – the value of the houses, had gone up (because more money was chasing the same amount of housing, relatively). Thus they lent out more money because their balance sheets looked good, and prices rose higher still.

This was further amplified by public policy. In the US, home loans were guaranteed by the Federal government. Many national governments saw home ownership as a positive outcome and so introduced grants for first-time home buyers and other financial subsidies, such as the exemption of a primary residence from capital gains taxation. These further encouraged house purchases, leading to further price rises and further relaxation of lending standards.

The concept of reflexivity attempts to explain why markets moving from one equilibrium state to another tend to overshoot or undershoot. Soros’ theories were originally dismissed by economists, but have received more attention after the 2008 crash including becoming the focus of an issue of the Journal of Economic Methodology.

View of problems in the free market system

Despite working as an investor and currency trader, Soros argues that the current system of financial speculation undermines healthy economic development in many underdeveloped countries. He blames many of the world's problems on the failures inherent in what he characterizes as market fundamentalism.

Victor Niederhoffer said of Soros: "Most of all, George believed even then in a mixed economy, one with a strong central international government to correct for the excesses of self-interest."

Soros claims to draw a distinction between being a participant in the market and working to change the rules that market participants must follow.

According to Mahathir bin Mohamed, Prime Minister of Malaysia from July 1981 to October 2003, Soros—as the hedge fund chief of Quantum—may have been partially responsible for the economic crash in 1997 of East Asian markets when the Thai currency relinquished its peg to the US dollar. According to Mahathir, in the three years leading to the crash, Soros invested in short-term speculative investment in East Asian stock markets and real estate, then divested with "indecent haste" at the first signs of currency devaluation. Soros replied, saying that Mahathir was using him "as a scapegoat for his own mistakes", that Mahathir's promises to ban currency trading (which Malaysian finance officials hastily retracted) were "a recipe for disaster" and that Mahathir "is a menace to his own country".

In an interview regarding the late-2000s recession, Soros referred to it as the most serious crisis since the 1930s. According to Soros, market fundamentalism with its assumption that markets will correct themselves with no need for government intervention in financial affairs has been "some kind of an ideological excess". In Soros' view, the markets' moods—a "mood" of the markets being a prevailing bias or optimism/pessimism with which the markets look at reality—"actually can reinforce themselves so that there are these initially self-reinforcing but eventually unsustainable and self-defeating boom/bust sequences or bubbles".

In reaction to the late-2000s recession, he founded the Institute for New Economic Thinking in October 2009. This is a think tank composed of international economic, business and financial experts, mandated to investigate radical new approaches to organising the international economic and financial system.

[Demeter]

44. SOROS: A MAN OF MANY VIEWS, IF NOT VISION

Views on antisemitism

At a Jewish forum in New York City, November 5, 2003, Soros partially attributed a recent resurgence of antisemitism to the policies of Israel and the United States, and the role of wealthy and influential individuals:

There is a resurgence of anti-Semitism in Europe. The policies of the Bush administration and the Sharon administration contribute to that. It's not specifically anti-Semitism, but it does manifest itself in anti-Semitism as well. I'm critical of those policies ... If we change that direction, then anti-Semitism also will diminish. I can't see how one could confront it directly ... I'm also very concerned about my own role because the new anti-Semitism holds that the Jews rule the world ... As an unintended consequence of my actions ... I also contribute to that image.

In a subsequent article for The New York Review of Books, Soros emphasized that

I do not subscribe to the myths propagated by enemies of Israel and I am not blaming Jews for anti-Semitism. Anti-Semitism predates the birth of Israel. Neither Israel's policies nor the critics of those policies should be held responsible for anti-Semitism. At the same time, I do believe that attitudes toward Israel are influenced by Israel's policies, and attitudes toward the Jewish community are influenced by the pro-Israel lobby's success in suppressing divergent views.

Views on Europe

In October 2011, Soros drafted an open letter entitled "As concerned Europeans we urge Eurozone leaders to unite", in which he calls for a stronger economic government for Europe using federal means (Common EU treasury, common fiscal supervision, etc.) and warns against the danger of nationalistic solutions to the economic crisis. The letter was co-signed by Javier Solana, Daniel Cohn-Bendit, Andrew Duff, Emma Bonino, Massimo d'Alema, Vaira Vike-Freiberga.

Views on China

Soros has expressed concern about the growth of Chinese economic and political power. "China has risen very rapidly by looking out for its own interests ... They have now got to accept responsibility for world order and the interests of other people as well." Regarding the political gridlock in America, he said, "Today, China has not only a more vigorous economy, but actually a better functioning government than the United States".

Views on Russia and Ukraine

In May 2014, Soros told CNN's Fareed Zakaria: "I set up a foundation in Ukraine before Ukraine became independent of Russia. And the foundation has been functioning ever since and played an important part in events now."

In January 2015, Soros said that "Europe needs to wake up and recognize that it is under attack from Russia." He also urged Western countries to expand economic sanctions against Russia for its support of separatists in eastern Ukraine.

In January 2015, Soros called on the EU to give $50 billion of bailout money to Ukraine to stabilize its economy and indirectly provide a stimulus to the European economy by encouraging exports and investments in Ukraine. Soros hoped that Russia's troubles and Ukraine's progress would make Russia's President, Vladmir Putin, rethink unstabilizing Ukraine.


DOESN'T LIKE THE SOVIET UNION, MR. SOROS DOES....TOO BAD IT'S BEEN GONE FOR 30 YEARS....

[Demeter]

45. GEORGE SOROS: MAN OF PROPERTY

Wealth

As of July 22, 2014 Forbes listed Soros, at 83, as the 27th richest person in the world, the world's richest hedge-fund manager, and number 7 on its list of the 400 wealthiest Americans, with a net worth estimated at $23 billion.

Personal life

In 1936, Soros' family changed their name from Schwartz to Soros, in response to growing anti-semitism with the rise of fascism. Tivadar liked the new name because it is a palindrome and because of its meaning. Although the specific meaning is left unstated in Kaufman's biography, in Hungarian, soros means "next in line", or "designated successor"; and, in Esperanto, it means "will soar".

Soros has been married three times and divorced twice: In 1960, Soros married Annaliese Witschak. Annaliese was an ethnic German immigrant from Germany who had been orphaned during the war. Although she was not Jewish, she was well liked by Soros' parents as she had also experienced the deprivations and dislocation brought about by World War II. They divorced in 1983. They had three children: (23 YEARS OF MARRIAGE)

Robert Daniel Soros (born 1963): The founder of the Central European University in Budapest, as well as a network of foundations in Eastern Europe. In 1992, he married Melissa Robin Schiff at the Temple Emanu-El in New York City. The Rabbi Dr. David Posner officiated the ceremony.

Andrea Soros Colombel (born 1965): The founder and president of Trace Foundation, established in 1993 to promote the cultural continuity and sustainable development of Tibetan communities within China. She is also a founding partner and member of the board of directors of the Acumen Fund, a global venture fund that employs an entrepreneurial approach in addressing the problems of global poverty. She is married to Eric Colombel.

Jonathan Tivadar Soros (born 1970): A Senior Fellow at the Roosevelt Institute, a think tank based in New York City. In 2012, he co-founded Friends of Democracy, a SuperPAC dedicated to reducing the influence of money in politics. He is a graduate magna cum laude of Harvard Law School and the John F. Kennedy School of Government. He received his B.A. from Wesleyan University. In 1997, he married Jennifer Ann Allan at the Siasconset Union Chapel in Nantucket, Massachusetts. The Rev. Edward B. Anderson, a Unitarian minister, officiated the ceremony.

In 1983, George Soros married Susan Weber, twenty five years his junior. They divorced in 2005. They have two children: (22 YEARS OF MARRIAGE)

Alexander Soros (born 1985): Alexander is also gaining prominence for his donations to social and political causes, focusing his philanthropic efforts on "progressive causes that might not have widespread support". Alexander serves on the boards of Jewish Funds for Justice and Global Witness, and led the list of student political donors in the 2010 election cycle.

Gregory James Soros (born 1988), artist

In 2008, Soros met his current wife, Tamiko Bolton, forty-two years his junior; he married her on September 21, 2013. Bolton is the daughter of a Japanese-American nurse and a retired naval commander. She was raised in California, earned an MBA from the University of Miami, and runs an Internet-based dietary supplement and vitamin-sales company.

Soros's elder brother Paul Soros, a private investor and philanthropist, died on June 15, 2013. Also an engineer, Paul headed Soros Associates and established the Paul and Daisy Soros Fellowships for Young Americans. He was married to Daisy Soros (née Schlenger), who, like her husband, was a Hungarian Jewish immigrant, and with whom he had two sons, Peter and Jeffrey.

Peter Soros was married to the former Flora Fraser, a daughter of Lady Antonia Fraser and the late Sir Hugh Fraser and a stepdaughter of the late 2005 Nobel Laureate Harold Pinter. Fraser and Soros separated in 2009.

Soros is an atheist.

AND MARRIED A WOMAN YOUNG ENOUGH TO BE HIS GRANDDAUGHTER.

[Demeter]

47. 83-Year-Old Billionaire George Soros Weds 42-Year-Old Woman — Here Are The Pictures

http://www.theblaze.com/stories/2013/09/22/83-year-old-billionaire-george-soros-weds-42-year-old-woman-here-are-the-pictures/







George Soros, the 83-year-old billionaire investor, philanthropist and supporter of liberal political causes, married for a third time on Saturday, tying the knot with education consultant Tamiko Bolton. Soros and Bolton, 42, exchanged vows in a small ceremony at his Bedford, New York, estate, which Soros bought in 2003 from “Jurassic Park” author Michael Crichton. Federal judge Kimba Wood officiated at the non-denominational wedding, which was attended by members of the couple’s families, including the groom’s five children, a source familiar with the wedding told Reuters.

For Soros, whose net worth is $20 billion according to Forbes, it was his third marriage. It was Bolton’s second. Soros put a Graff wedding band on Bolton’s finger during the half-hour ceremony, according to the source. The exchange of vows was followed by a reception with more than 500 guests at the Caramoor Center for Music and the Arts, a Westchester County complex known for its Italian Renaissance-inspired buildings and lush gardens.

Among the reception guests were World Bank President Jim Yong Kim and some foreign leaders, including Hendrik Toomas Ilves, president of Estonia; Ellen Johnson Sirleaf, president of Liberia; and Edi Rama, prime minister of Albania.
Christine Lagarde, managing director of the International Monetary Fund, and Bono of the rock band U2 also attended the reception, according to the source familiar with the wedding. Also expected to attend were fellow titans of the hedge fund world, Paul Tudor Jones and Julian Robertson. From the U.S. political realm those invited included Minority Leader of the U.S. House of Representatives Nancy Pelosi and the lieutenant governor of California, Gavin Newsom, both Democrats.

On Friday night, the couple held a reception for 300 guests at the Museum of Modern Art in Manhattan for a preview of a new exhibition of works by Belgian surrealist painter Rene Magritte – “Magritte: The Mystery of the Ordinary, 1926-1938.”

Their honeymoon plans were not immediately disclosed.

Hungarian-born Soros, who established one of the first hedge funds in 1969 and is probably best known for famously betting against the British pound in 1992, met Bolton at a dinner party in 2008. Their engagement was announced in August 2012. Bolton, who was raised in California, is the daughter of a nurse and a retired naval officer. She graduated from the University of Utah and holds an MBA from the University of Miami. Bolton has been a consultant and entrepreneur working in health and education. She started an Internet-based dietary supplement and vitamin sales firm, and her most recent project was advising on development of a web-based yoga education platform.

The bride’s dress was designed by U.S.-based, Lebanon-born Reem Acra, whose gowns have been worn on the red carpet by many stars, including Angelina Jolie and Jennifer Lopez. The reception on Saturday night featured Hungarian composer and conductor Iván Fischer, a family friend of Soros, who created a new arrangement for the occasion played by the Budapest Festival Orchestra. Cape Verdean Mayra Andrade also sang with the Harris Lane Orchestra. Andrade and Roma ensemble Via Romen will perform at a Sunday brunch. Acclaimed event planner Marcy Blum was the wedding coordinator.

In lieu of gifts, the couple asked that donations be made to charities, including Global Witness, Harlem Children’s Zone, National Dance Institute, Planned Parenthood and the Roma Education Fund.

[Demeter]

46. George Soros conspiracy theories

Many conspiracy theories have been created about Hungarian-American financier and philanthropist George Soros since his rise to economic wealth. Many of them deal with the intersection between his political beliefs and his financial wealth; author Michael Wolraich has deemed the phenomenon "Anti-Sorosism".

Anti-Sorosism has come under increasing scrutiny due to the growing political currency of anti-Soros conspiracy theories in conservative and nationalist circles, with Wolraich comparing anti-Sorosism to long-running conspiracy theories about the Rothschild family dating to 1800s Europe.

Malaysia

Soros draws a distinction between being a participant in the market and working to change the rules that market participants must follow. According to Mahathir bin Mohamed, Prime Minister of Malaysia from July 1981 to October 2003, Soros — as the hedge fund chief of Quantum — may have been partially responsible for the economic crash in 1997 of East Asian markets when the Thai currency relinquished its peg to the US dollar. According to Mahathir, in the three years leading to the crash, Soros invested in short-term speculative investment in East Asian stock markets and real estate, then divested with "indecent haste" at the first signs of currency devaluation. Soros replied, saying that Mahathir was using him "as a scapegoat for his own mistakes", that Mahathir's promises to ban currency trading (which Malaysian finance officials hastily retracted) were "a recipe for disaster" and that Mahathir "is a menace to his own country".

The two traded angry barbs against each other in various newspapers and broadcast interviews over the next nine years. The nominal US dollar GDP of ASEAN fell by US$9.2 billion in 1997 and $218.2 billion (31.7%) in 1998.

In 2006, during a visit by Soros to Malaysia on his book tour in the region, he met with Mahathir for the first time, and Mahathir conceded that he did not view Soros as responsible for the financial crisis.

Glenn Beck's conspiracy theory

On November 9, 2010 American conservative television host Glenn Beck aired an hour-long television program, titled The Puppet Master, dedicated to Soros (which he had announced as “D-Day for George Soros”). Accusations he made during this program, specifically that Soros collaborated with the Nazis as a child and that “many people would call him an antisemite”, have met with condemnation from groups including the Anti-Defamation League and The American Gathering of Jewish Holocaust Survivors and Their Descendants. Beck continued discussing Soros in his programs of November 10, 2010 and November 11, 2010, making additional claims including that Soros, with the help of others, is attempting to collapse the United States economy in order to help create a new world order.

Beck's statements also drew ridicule from The Daily Show host Jon Stewart in a November 18, 2010 skit titled 'The Manchurian Lunatic', taking aim at Beck by utilizing many tropes which appear often in segments of Beck's eponymous television broadcast. While the skit was praised by various major media outlets, Beck replied on November 25 by insinuating that Stewart and fellow Comedy Central host Stephen Colbert are keeping or turning people into "sheep".

LaRouche's "drug trade" conspiracy theory

Perennial American presidential candidate Lyndon LaRouche and his movement have also published a body of literature which claims Soros is a leader of the international illegal drug trade. LaRouche's anti-Soros stance dates back to the 1990s, with Michael Lewis of The New Republic citing an anti-Soros protest by members of the LaRouche movement in a January 10, 1994 profile; the charge has been repeated in the years since by Dennis Hastert, and Accuracy in Media's Cliff Kincaid.

Other countries

Some Soros-backed pro-democracy initiatives have been banned in Kazakhstan and Turkmenistan. Ercis Kurtulus, head of the Social Transparency Movement Association (TSHD) in Turkey, said in an interview that "Soros carried out his will in Ukraine and Georgia by using these NGOs... Last year Russia passed a special law prohibiting NGOs from taking money from foreigners. I think this should be banned in Turkey as well."

Strong anti-Soros movement exists in Bulgaria, especially connected with the protests in the country in 2013-14.

2011 Forbes article

In 2011, Forbes magazine published an extensive article about George Soros, his activism, and U.S. foreign policy. From the article: "Soros is hated because many Eastern Europeans and Central Asians believe that he is using his money to subvert their political systems. Rightly or wrongly, this view tends to promote anti-Americanism. And it gives dictators a talking point to use against American diplomats."

[Demeter]

48. GEORGE SOROS, LIGHTNING ROD FOR HATE

George Soros - Enemy of the Free Market

Revealing the evil deceptive ploys and tactics of George Soros, progressive liberals, Marxists, Communists, Socialists, et. al. all to create a One World Government of unrepresentative control, in the same manner Radical Islam wants to create a caliphate.


Top 10 Reasons George Soros Is Dangerous by Human Events - Human Events' readers, in an online poll, recently voted billionaire financier George Soros "the single most destructive leftist demagogue in the country." Here are the Top 10 Reasons George Soros Is Dangerous:
...1. Gives billions to left-wing causes:
...2. Influence on U.S. elections:
...3. Wants to curtail American sovereignty:
...4. Media Matters:
...5. MoveOn.org:
...6. Center for American Progress:
...7. Environmental extremism:
...8. America Coming Together:
...9. Currency manipulation:
..10. Delusions:

The Soros-funded Democracy Alliance is the most dangerous political group in America. - From the Washington Post, full size image found here.

Soros Next Generation Steps Up - Children of Liberal Icon Make Own Political Mark By Josh Nathan-Kazis - In the 2012 election cycle, the biggest single political donation made by a Soros didn’t come from George. The progressive hedge fund billionaire was outdone by his 26-year-old son, Alexander, who in March wrote a $200,000 check to the Democratic-leaning super PAC responsible for the 2008 Great Schlep campaign backing then presidential candidate Barack Obama. The elder Soros still outpaces his second-youngest child in overall political giving, according to Federal Election Commission records. But Alexander Soros’s major gift may point to a generational shift in the philanthropic and political efforts of the Soros family. As George Soros enters his 80s, the five children of the controversial Hungarian-born Jewish investor appear to be emerging from their father’s long shadow. Alexander Soros In the lead is Alexander who, in addition to his super PAC gift, has announced the launch of his own foundation. Jonathan Soros, 41, Alexander’s half-brother, also drew attention in April for his support of a new effort to introduce public financing of elections in New York State.

Jonathan Soros - You may already know the name George Soros, but did you know that this billionaire turned liberal bankroller is passing on his affinity for progressive causes to his son, Jonathan? The liberal media desperately tried to conceal his more than $2 million in donations to liberal candidates and causes. Jonathan Soros has served as vice chairman and director of the board of the Open Society Foundation, his father’s multi-billion dollar organization that has given $58 billion to blatantly liberal organizations. Yet the liberal media try to paint him as an advocate for removing money from politics and political races!

SOROS PUSHING OBAMA SCHEME TO SHUT DOWN COAL By LEO HOHMANN - 'Most aggressive plan by any president ever' - The new EPA regulations on power plants would result in millions of lost jobs while forcing consumers to pay more for their electricity, critics say. The EPA is accepting public comments on the proposed rules through Dec. 1 but the White House has decided to bypass Congress on the issue. Organizing for Action, funded by billionaire investor George Soros, Facebook co-founder Chris Hughes and other progressive rainmakers, asks recipients of the email to “Stand with the President” by submitting a public comment to the EPA before the deadline passes.

The Contents Of This Soros' Backed Group's Playbook To Take Over America Will Leave You Shocked (June 2014) - By Mike Ciandella - According to a recently published briefing book "obtained by Politico" by the liberal megadonor group Democracy Alliance, "progressives' long term success hinges on our ability to fundamentally change our current political system - including large questions about who can vote, the role money should play in politics, and what our courts look like."
The briefing, a report card of 2013's challenges and accomplishments for the organization, said that the George Soros founded and funded Democracy Alliance is "more than capable of turning back the latest threats from the Right." According to Politico, the briefing book was provided to Democracy Alliance donors "ahead of April's annual spring meeting."
The Democracy Alliance is a membership group that directs funding to a wide variety of liberal causes. It was created to consolidate the efforts of wealthy liberal donors such as George Soros, Tom Steyer and Robert Mckay. The report paid "particular attention" to "the successful examples of alignment that have developed over the last three years and highlight additional opportunities that could further advance our collective visions of a stronger democracy and more progressive America."
The document highlighted 21 organizations the Alliance viewed as success stories. These "successes" included items like:
- "Met goal to coordinate campaigns to block conservatives agendas" (America Votes),
- "Met goal to promote progressive vision of the law" (American Constitution Society),
- "Met goal to advance progressive state policies" (Center on Budget and Policy Priorities).
Another highlighted group, Progressive Majority, boasted that it helped "elect 60 progressives and flip six local governments" in 2013 alone.
Towards the end of the document is a list of 172 liberal groups that the Democracy Alliance encouraged its supporters to donate to, entitled "Progressive Infrastructure Map Spring 2014." A footnote on this list states that "[O]ver the last nine years, many of the organizations previously recommended for support by the Democracy Alliance have played instrumental roles in building a stronger, more integrated progressive infrastructure." These 172 groups cover a wide range of left-wing issues such as gun control, LGBT activism, pro-choice activism and climate change alarmism.
BMI Special Report George Soros (8/17/2011): Media Mogul Left Businessman Spends Millions Funding Journalism Read the executive summary or the full report Read sidebar: Top Journalists that Serve on Soros-Funded Boards

Since 2003, anti-American billionaire George Soros has spent more than$52 million funding media properties, and he has direct ties to more than30 news outlets—including The New York Times, The Washington Post,the Associated Press, CNN, and ABC. In keeping with his hard-left socialist vision for America, Soros goes after this the best way he knows how—through accessing and controlling the "news" media. And if that weren't enough, George Soros has now accepted a position on the National Finance Council of the Ready for Hillary Super PAC, a group paving the way for a 2016 presidential run for the former first lady. If the MRC doesn't expose Soros and neutralize these efforts, who knows where we'll be!

Connections: George Soros has direct or once-removed relationships with 2,074 people, organizations or other entities in our database of the most influential people in America. Under a scoring system that gives more weight to direct links, this score is higher than 99% of all entries. Click here for interactive map of connections.

Obama Stimulus Dollars Funded Soros Empire (April 17, 2012) Newly recently released tax documents, examined and analyzed by Tina Trent of www.sorosfiles.com, reveal how billionaire "philanthropist" George Soros expanded his U.S.-based empire by using funds from the American Recovery and Reinvestment Act of 2009, also known as the Obama stimulus. Soros and Obama worked hand-in-glove through the stimulus, which has been called the largest single partisan wealth transfer in American history.

Be sure to see the George Soros accomplices and their supporting tactics:

http://earstohear.net/soros.htmlhttp://earstohear.net/soros.html

THIS WEBSITE GOES ON FOR PAGES...BLAMING SOROS FOR A MULTITUDE OF THINGS

[Demeter]

49. GEORGE SOROS IS THE MONEY BEHIND WIKILEAKS

itmakessenseblog.com/2010/12/05/george-soros-is-the-money-behind-wikileaks/

GET UP, BE REAL, OPEN UP YOUR EYES ON WHAT IS HAPPENING – THE WIKILEAKS WEB SITE CAN BE SHUT DOWN IN SECONDS BY THE US GOVERNMENT

– WE ARE NOT DOING IT BECAUSE THIS IS PART OF GEORGE SOROS GRAND PLAN TO COLLAPSE THE US GOVERNMENT AND PANIC THE POPULATION.

LET’S CONNECT THE DOTS.

THE PLAYERS:

The Thief – Bradley Manning – Manning was an intelligence analyst assigned to a support battalion with the 2nd Brigade Combat Team,10th Mountain Division at Contingency Operating Station Hammer, Iraq. Agents of the U.S. Army Criminal Investigation Command arrested Manning based on information received from federal authorities provided by an American informant, Adrian Lamo, in whom Manning had previously confided Lamo said that Manning claimed, via instant messaging, to be the person who had leaked the “Collateral Murder” video of the July 12, 2007, Baghdad airstrike, in addition to a video of the Granai airstrike and around 260,000 diplomatic cables, to the whistleblower website Wikileaks, with Manning saying he hoped the release of the videos and documents would lead to “worldwide discussion, debates, and reforms.”

Bradley Manning Support Network – He needs money to perform – The following support Manning. – Michael Moore. Code Pink, Norm Chomsky, Daniel Ellsberg, Movement for a Democratic Society, Answer Coalition, Veterans for Peace, Open Society Institute – George Soros, all are National Socialist Organizations.

The Leaker – WikiLeaks – they define it as – a non-profit media organization dedicated to bringing important news and information to the public. We provide an innovative, secure and anonymous way for independent sources around the world to leak information to our journalists. We publish material of ethical, political and historical significance while keeping the identity of our sources anonymous, thus providing a universal way for the revealing of suppressed and censored injustices. Sounds wonderful doesn’t it – all National Socialist causes sound wonderful. Then you realize what they are…..

The Leeki – Julian Assange – is an Australian publisher, and internet activist. He is best known as the spokesperson and editor-in-chief for WikiLeaks, awhistleblower website. Before working with the website, he was a physics and mathematics student as well as a computer programmer. Assange, a former computer hacker, leads a nomadic existence and cultivates an aura of mystery. He left Sweden last month after authorities there said they wanted to question him about allegations of rape and other sexual offenses.

He describes the leaks as an opening of worldwide anarchy in .csv format, it’s climategate with a global scope and breathtaking depth, it’s beautiful and horrifying.

Julian Assange’s lawyer is Mark Stevens – who is also the Lawyer for George Soros’s Open Society Foundations.

George Soros is a listed “advisor” to wikileaks. Soros funds Wikileaks through – OSI his open Society Institute.

So let’s connect the dots. George Soros wants – the perfect storm to destroy the Republic. He wants us to lose diplomatic relationships, He wants other countries to not trust us. He funds the above people to disrupt our way of thinking. He wants you to think that the Government is always lying and that you will distrust the Government. He intends to add instability to your thinking. He wants Chaos.

Notice how his puppets reacted. Obama did not talk about what was going on. Hillary Clinton makes like they are the bad guys, but it is not serious. Eric Halter went to Europe to talk about soccer....



NOTE THE INCOHERENCE OF THIS SITE...AND ERIC HOLDER UPDATED TO "Eric Halter"...

[Demeter]

50. GUN NUTS DON'T FANCY GEORGE EITHER

George Soros: 13 New Gun Laws Needed Now

http://defeatcommunism.com/profiles/blogs/george-soros-13-new-gun-laws-needed-now

George Soros' Center for American Progress (CAP) has published a list of 13 new pieces of legislation they claim we need right now, in the wake of the crime at Sandy Hook Elementary.

As you will see, these proposals--like others from liberals--would not have stopped the shooting from taking place: they would not even have hindered it. But they would make it harder for law abiding citizens to get the guns they need to defend their lives and families.

For example, one of new laws that CAP wants is an end to private gun sales. This would include, of course, an end to those dreaded gun shows....

MUCH MORE AT LINK--GUESS WORD OF SOROS' ATTACKS ON COMMUNISM HAVEN'T MADE IT TO HOI POLLOI...

GEORGE SOROS IS IMPLEMENTING A "ONE WORLD" SOCIALIST GOVERNMENT

http://commieblaster.com/george-soros-fund/

THIS SITE PROVIDES VIDEOS OF SOROS PERFIDY....

[Demeter]

51. Of Course, when he writes stuff like this, the nuts will fall

Soros Warns of ‘Riots,’ ‘Brutal’ Clampdowns & Possible Total Economic Collapse

http://www.theblaze.com/stories/2012/01/24/soros-warns-of-riots-brutal-clampdowns-possible-total-economic-collapse/#

George Soros is no stranger to Blaze readers. The billionaire currency speculator and philanthropist has long been in the news, especially since the fateful day in 1992 when he helped crash England’s economy. In fact, since that day, he has been commonly referred to as “the man who broke the bank of England.”

Soros is shrewd, he has a keen eye for investments, and he knows how to play the markets. Therefore, when he makes a prediction, it might be safe to say it’s worth a listen. After all, his predictions (among other things) have made him the multi-billionaire he is today.

So you might want to pay attention to a recent story from The Daily Beast that claims George Soros is nervous about the future of the global economy and that he warns of dark things to come.

“At times like these, survival is the most important thing,” Soros said.

As he sees it, the world faces one of the most dangerous periods of modern history—a period of “evil,” writes the Beasts’ John Arlidge. “Europe is confronting a descent into chaos and conflict. In America Soros predicts riots in the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties. The global economic system could even collapse altogether.”

And to add a little color, Aldridge notes Soros says it all while “peering through his owlish glasses and brushing wisps of gray hair off his forehead.”

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros told Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

As mentioned in the above, and as The Daily Beast points out, Soros’ warning is probably based on his natural market instincts as well as personal experience....

FROM 2012

[Demeter]

52. On the whole, Soros does not get good press

How The Swiss National Bank Almost Crushed George Soros

http://www.zerohedge.com/news/2015-01-23/how-swiss-national-bank-almost-crushed-george-soros


Minutes after last week's Swiss National Bank shocker, jokingly we mused:

zerohedge @zerohedge
Follow

Will be ironic if Soros was long EURCHF
4:49 AM - 15 Jan 2015
47 Retweets 26 favorites

... because there would be nothing more ironic if the man who "broke the Bank of England" ended up being FXCMed himself by another central bank, over two decades later and just as he was set to finally retire, at the age of 84, formally, something he supposedly announced in Davos yesterday.

As it turns out, we were almost correct, and according to the WSJ, Soros Fund Management, which manages more than $25 billion for investor George Soros, was betting against the Swiss franc in the fall before it removed those bearish positions. Why did the Soros so conveniently take off a bet which, with leverage, could have resulted in massive losses for his hedge fund? The WSJ says he did so after "viewing the risk as too high relative to potential gains, said people close to the matter." Well as long as "people close" think Soros did not have input directly from the Swiss central bank, or perhaps the occasional hint from Kashya Hildebrand, then one can't help but marvel at the octogenarian's impeccable timing.

As a result, the franc’s surge last week didn’t have a major impact on Mr. Soros’s firm’s profits, "these people said." Naturally, if Soros was still short the CHF, he would have suffered massive losses...Curiously, Soros wasn't the only one to "luckily" pull his bearish CHF exposure ahead of the 30% move: Brevan Howard Asset Management, run by billionaire Alan Howard , was profiting from a negative bet on the Swiss franc against the dollar before it cut back shortly before the Swiss currency soared. Brevan’s flagship $23.7 billion fund gained 0.8% last week, taking gains for this year to 1.9%.

How lucky.

So Soros and Brevan were spared due to some truly impeccable timing. Others were not as lucky. Here is a quick recap of all the hedge funds (excluding the numerous retail FX brokers such as FXCM that blew up in the aftermath) that have been known to have suffered terminal or partial, but still cripppling, losses. We already know about

Marko Dimitrijevic, who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money when the SNB unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm. Everest Capital’s Global Fund had about $830 million in assets as of the end of December, according to a client report. The Miami-based firm, which specializes in emerging markets, still manages seven funds with about $2.2 billion in assets. The global fund, the firm’s oldest, was betting the Swiss franc would decline, said the person. A spokesman declined to comment on the losses. Calls to Dimitrijevic weren’t returned.

Michael Platt’s BlueCrest Capital Management lost 5.5 percent in its macroeconomic fund through Jan. 16, two people with knowledge of the matter said. Amid the losses, Luke Halestrap and Peter McGarry left the $15 billion Jersey-based firm and BlueCrest shut a portfolio run by currency money manager, Peter Von Maydell, according to people with knowledge of the decisions. Von Maydell, Halestrap and McGarry didn’t reply to e-mails and telephone messages seeking comment.

Comac Capital, the $1.2 billion firm run by Colm O’Shea, is returning money to clients after it lost 8 percent from the franc surge. The declines bring its loss this month to 10 percent, according to a person familiar with the matter. London-based Comac will continue to trade with internal money, the person said. A spokesman declined to comment.

Fortress Investment Group’s main macro hedge fund lost 7.6 percent last week, a period during which markets were roiled by movements in the Swiss franc. The macro fund’s decline last week brought its losses this year to 7.9 percent, Reuters reported, citing a letter to investors. Fortress didn’t give a reason for the loss in the letter, according to Reuters. Gordon Runte, a spokesman for Fortress, declined to comment.

SaxoBank moments ago reported it would lose up to $107 million on the Swiss Bank move.

But while the vast majority of "hedged" speculators were massively short the CHF into the Swiss announcement, there were some who bet against the central bank, and made huge profits. First and foremost among these, Quaesta Capital AG: "The firm, which oversees $3 billion in Pfäffikon, Switzerland, bought options “a considerable time” ago betting that the euro would drop below 1.20 francs, said Chief Executive Thomas Suter."

Those bets paid off last Thursday, when the Swiss National Bank ’s decision sent the franc soaring against the euro and delivered a boost to investors in a $120 million Quaesta strategy that is up at least 14% this year, according to a letter to investors.

“We immediately knew that it was going to be a very, very good day for this strategy and its investors,” said Mr. Suter, who said the firm made the bet because of its low cost and high potential rewards.

Omni Partners was another such winner, which "locked in a small profit, by making small trades that it closed out the same day following the massive franc-euro swing, according to a person familiar with the matter. Omni Partners has about $1 billion under management in London.

London-based macro hedge fund Rubicon Global was down 2.3% at the end of the first full week of January but recouped most of those losses, helped by a positive bet on the Swiss franc, said a person familiar with the matter. Rubicon declined to comment.

Stockholm-based Lynx Asset Management, which manages $5.5 billion, gained more than 2% last week, helped by bets against the euro. The firm is up about 4% this year to Jan. 16, said a person who has seen the numbers.

We expect to learn about even more victims and casualties in the coming days as career-ending margin calls can only be pushed straight to voicemail for so long.

As for everyone in the investing world else who was spared the violent move either to the up or downside, fear not: as more central banks retreat from currency wars, now that things are really heating up, the volatility seen last week will be merely a pleasant reminder of what is about to come as the Big Three move from mere soundbites and proceed to all out tactical FX warfare, until one day, China joins in as well. Then all bets are off.

[Demeter]

53. Greece Shows the Limits of Austerity in the Eurozone. What Now? By Lynn Parramore

http://ineteconomics.org/institute-blog/greece-shows-limits-austerity-eurozone-what-now

Mario Seccareccia, professor of economics at the University of Ottawa, has been outspoken in his warnings that austerity policies have the potential to smash economies and spread untold human misery. In his work supported by the Institute for Economic Thinking and elsewhere, he has challenged deficit hawks and emphasized the need for strong government investment in things like jobs, education, health care, and infrastructure if economies are to prosper. In the following interview, he talks about why what happened to Greece was entirely predictable, why the Greeks were right to reject austerity in the recent election, and what challenges the country faces in forging a sustainable path forward with the left-wing Syriza party at the helm.

Lynn Parramore: You have long been warning of problems in the Eurozone. What do the Greek elections mean to the debate about austerity and how it impacts economies?

Mario Seccareccia: I actually began warning about problems in the Eurozone even before they launched the Euro in 1999! A couple a years after the adoption, in 1992, of the Maastricht Treaty, which was the initial step in the creation the European Economic and Monetary Union or the Eurozone, I happened to be in Paris for the launch of a book that I had co-edited in French entitled Les Pièges de l’Austérité (The Austerity Traps) that had been published in November 1993.

During the discussions, a number of us were already raising very serious questions about a treaty which prevented national governments from doing what they needed to do to stabilize their economies — namely engage in needed deficit spending, regardless of the magnitude, during times of recession for the purpose of stabilizing income and employment. Some of us at the book launch warned of problems that could arise from a European supranational currency and a central bank which was not accountable to any national authority and which would push countries merely to become hostages to the whims of the financial markets. Along with many others, I’ve also raised concerns over what economists call “deflationary bias” in the structure of the Eurozone — that is, the tendency for policies to focus on lower inflation instead of more jobs and growth and to prevent greater public spending as a means to achieve growth.

I could see that Greece would be the country that would be hit first by these problems because it is financially the weakest link in the euro chain, and because of the high public debt ratio when it joined the Eurozone in 2002. What is surprising is that it took until 2010 to reach such a crisis even though the warnings had been there for a long time. Even at the start of the global financial crisis in 2008-2009, most European governments started stimulating their economies or bailing out their banks as we saw in Ireland and Spain. But no major cracks appeared until the end of 2009 when the financial markets got spooked because the Greek authorities were found hiding Greek sovereign debt with the aid of advisors of financial institutions.

From 2010 onwards, Greece achieved notoriety because financial markets recognized that the country might decide not to comply with the terms of loan agreements with banks. Eventually in 2012, European leaders held a summit at the French resort of Deauville and agreed that if the private holders of sovereign debt wanted bailouts, they would be held responsible for the losses. Because of these developments since 2010, deficit hawks everywhere vilified Greece for all the supposed terrible consequences of government over-indebtedness, even though the structure of the Eurozone made it impossible for Greece to manage its economy effectively.

Deficit hawks started preaching long-term austerity, and we’ve seen the awful consequences ever since. People have suffered terrible hardship and dislocation, with countries such as Greece and Spain reaching rates of unemployment worse that what happened in the United States in depth of the Great Depression. You’d be hard-pressed to find examples of such a severe collapse historically, with the possible exception of certain Latin American countries, such as Argentina in 2001. Those who predicted that that this austerity policy would eventually lead to an economic turnaround because of the belief in private sector rebound obviously got it wrong. After five years of negative economic growth, the Greek electorate — with incredible courage — told the so-called Troika that they had had enough, especially with these deep cuts in wages, employment, and pension transfers.

************************************************

LP: Do you think there are lessons in what has happened in the Eurozone for students of economics and the way the subject is taught?

MS: Yes, indeed. Ever since the establishment of the modern nation-state in the late eighteenth and nineteenth centuries, the creation of the euro was perhaps the first significant experiment in modern times in which there was an attempt to separate money from the state, that is, to denationalize currency, as some right-wing ideologues and founders of modern neoliberalism, such as Friedrich von Hayek, had defended. What the Eurozone crisis teaches is that this perception of how the monetary system works is quite wrong, because, in times of crisis, the democratic state must be able to spend money in order to meet its obligations to its citizens. The denationalization or “supra-nationalization” of money with the establishment that happened in the Eurozone took away from elected national governments the capacity to meaningfully manage their economies. Unless governments in the Eurozone are able to renegotiate a significant control and access money from their own central banks, the system will be continually plagued with crisis and will probably collapse in the longer term.

MORE AT LINK...VALUABLE INFORMATION!

[xchrom]

54. Germany is done writing off Greece's debt

http://www.businessinsider.com/germany-is-done-writing-off-greeces-debt-2015-1

German Chancellor Angela Merkel ruled out any cancellation of Greece's debt and said the country has already received substantial cuts from banks and creditors.

"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel said in an interview with the Hamburger Abendblatt newspaper.

"I do not envisage fresh debt cancellation," she said.

The new Greek government has already begun to roll back years of austerity measures demanded by the EU and the International Monetary Fund in return for a 240 billion euro ($269 billion) bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the debt.



Read more: http://www.businessinsider.com/germany-is-done-writing-off-greeces-debt-2015-1#ixzz3QUxzOnJm

[xchrom]

55. Millennials are falling way behind

http://www.businessinsider.com/millennials-are-falling-way-behind-2015-1

The past is another country. In 1980, the typical young worker in Detroit or Flint, Michigan, earned more than his counterpart in San Francisco or San Jose. The states with the highest median income were Michigan, Wyoming, and Alaska. Nearly 80 percent of the Boomer generation, which at the time was between 18 and 35, was white, compared to 57 percent today.

Three decades later, in 2013, the picture of young people—yes, Millennials—is a violently shaken kaleidoscope, and not all the pieces are falling into a better place. Michigan's median income for under-35 workers has fallen by 26 percent, more than any state. In fact, beyond the east coast, earnings for young workers fell in every state but Hawaii and South Dakota.



The median income of young adults today is $2,000 less today than their parents in 1980, adjusted for inflation. The earnings drop has been particularly steep in the rust belt and across the northwest.

As you can see in the next interactive graph, the three states with the highest median income for young people in 1980 were also the three states with the steepest 33-year decline in median income: Michigan, Wyoming, and Alaska. The winners of this continental shake-up are all on the coasts, particularly Virginia, Maryland, and just about all of New England.



Read more: http://www.theatlantic.com/business/archive/2015/01/young-adults-poorer-less-employed-and-more-diverse-than-their-parents/385029/#ixzz3QUykaHza

Read more: http://www.theatlantic.com/business/archive/2015/01/young-adults-poorer-less-employed-and-more-diverse-than-their-parents/385029/#ixzz3QUyYqv2h

[Demeter]

59. I wonder how much of that improvement in the East is due

to college girls in the sex trades for their tuition payments....

You can't be too cynical, these days.

[xchrom]

56. Good economies don't make good stock markets

http://www.businessinsider.com/good-economies-dont-make-good-stock-markets-2015-1

The U.S. economy is in the best shape out of any economy in the world, but it reminds me of a great business with a bad stock. Despite its underlying economic strength, I believe U.S. equity markets are likely to underperform those of less healthy economies in the long run. When I look around the world at economies that have many more problems than the United States, I see more upside potential for equity valuations and market performance in places like Europe, China and India.

Certainly, the United States is in a self-sustaining recovery—already the fifth-longest economic expansion since World War II. Despite noise this week around the 3.4 percent decline in durable goods orders, recent economic data releases continue to be positive: new home sales rose to a 6.5-year high and the Conference Board’s Consumer Confidence Index surged to 102.9 in January, the highest since August 2007. The U.S. economy remains the engine sustaining global growth, but when it comes to equity market valuations, a lot of the risk premia are out of the market.

One of my favorite macro-valuation tools is to compare total stock market capitalization to underlying gross domestic product (GDP). In the United States, this ratio is currently 134 percent, the highest level since the third quarter of 2003, the year this global comparison data became available. By the same measure, equity valuations in the euro zone, China and India are much lower. China’s equity market capitalization, for example, is 51 percent of its GDP, significantly below the previous high of 101 percent registered just prior to the global financial crisis.



Read more: http://guggenheimpartners.com/perspectives/macroview/good-company-bad-stock#ixzz3QV3qwXEt

[Demeter]

60. This isn't a good economy and it certainly isn't a fair one

In fact, stock markets have NOTHING to do with the economy, as we well know. Especially now, when it's the gambler's hell for the sheeplike pension funds and the hedge funds.

[xchrom]

57. Obama is releasing his budget Monday — Here's what to expect

http://www.businessinsider.com/obama-is-releasing-his-budget-monday-2015-2

With a blend of tax hikes and spending increases, President Barack Obama's budget spells out a policy agenda that will distinguish him from Republicans who now control Congress. It also will contain what amount to opening bids for some long-shot compromises.

Republicans have already dismissed much of Obama's initiatives, spelled out in his State of the Union address. They've labeled as nonstarters his plans for more taxes on the rich to pay for free community college and to expand child care.

But Obama is releasing his $4 trillion budget Monday after a year of relative peace in Washington's budget battles as the federal deficit drops and as his poll numbers inch higher. Though Republicans will march ahead on their own, they ultimately must come to terms with the president, who wields the power of the veto.



Read more: http://www.businessinsider.com/obama-is-releasing-his-budget-monday-2015-2#ixzz3QV4YEFov

[Demeter]

61. Smoke, mirrors, bad arithmetic and worse policy

some real whoppers thrown in for spice, and a general snow job.


Speaking of snow: it's finally here! 2 inches already and it's supposed to go on for 24 hours. It's 24F now, heading for 1F Monday night. Wind chill is 17F, heading for -8F on Monday night.

I'm finishing the cooking of a big pot of chicken soup for lunch, after which I might start shoveling. Tomorrow might be canceled!

[Demeter]

73. TALKING ABOUT LIES

[xchrom]

58. Chinese manufacturing activity contracts for the first time in two years

http://www.businessinsider.com/r-china-official-pmi-falls-to-498-lowest-in-over-two-years-2015-1

BEIJING (Reuters) - Activity in China's factory sector contracted in January for the first time in more than two years, an official survey showed on Sunday, which will increase gloom about the outlook for the world's second-biggest economy this year.

The official Purchasing Managers' Index (PMI) fell to 49.8 in January from December's 50.1, a whisker below the 50-point level that separates growth from contraction on a monthly basis.

Analysts polled by Reuters had forecast a reading of 50.2.

A housing slump, erratic growth in exports and a state-led slowdown in investment to help restructure China's economy has hurt China's economy in the past year, when growth sunk to a 24-year low of 7.4 percent.



Read more: http://www.businessinsider.com/r-china-official-pmi-falls-to-498-lowest-in-over-two-years-2015-1#ixzz3QV57TcI3

[Demeter]

62. Those who live by the export market, die by the export market

That includes YOU, Angela!

[Demeter]

63. FROM LAST MARCH: George Soros pushes Obama to release strategic oil reserves to ‘ruin’ Russia

http://dailycaller.com/2014/03/27/george-soros-pushes-obama-to-release-strategic-oil-reserves-to-ruin-russia/

Liberal billionaire George Soros suggested that President Barack Obama release oil from the country’s strategic reserves to lower gas prices and “ruin” Russia’s energy-dependent economy.

Soros told a panel in Berlin last week that the best way to sanction Russia for its actions in Ukraine “is in the hands of the United States,” because its oil reserves can depress the price of oil, reports Bloomberg.

“The strongest deterrent is in the hands of the United States because it can release oil from the strategic oil reserve, which would then reduce the price of oil, and that would ruin the Russian economy, which lives on oil,” he told Marketplace in an interview published Wednesday.

“The Russian economy is very weak because the oligarchs who run the country don’t trust it and they send their money abroad,” he added. “So if you stop the inflow of funds, that will bring the Russian economy to its knees.”

“Ukraine is determined to reform, but it needs protection,” Soros continued.

Energy Secretary Ernest Moniz has dismissed the idea of using the U.S.’s Strategic Petroleum Reserve (SPR) to punish Russia, but others have gravitated towards the idea. Former Ford and Carter administration official Philip Verleger said that U.S. SPR reserves could reduce oil prices by $12 per barrel by releasing 500,000 barrels of oil.

Verleger added that lower oil prices would cost Russia about $40 billion in oil and gas revenues, or about 2 percent of its economy. Carl Larry, president of Oil Outlooks & Opinions LLC, told Bloomberg that releasing SPR oil would also lower costs for refiners and boost U.S. exports while reducing U.S. oil imports.

“We can increase exports and the U.S. wins on all levels,” Larry said. “Refiners have better margins in the U.S. and we push out exports from Russia.”

But releasing oil from the SPR is a double-edged sword. Oil prices are set in global markets, meaning that hurting Russian oil revenues would also hurt the bottom lines of U.S. oil companies.

“If you use oil and aim it at Russia, you’ll hit Texas,” Kevin Book, managing director of ClearView Energy Partners LLC, told Bloomberg. “Besides the intrinsic problem of taking your safety net and burning it for a flash in the pan, we’re not the low-cost producer.”



AND SO IT CAME TO PASS....TEXAS IS CRASHING...THANKS TO FRACKING'S SUCCESS.

THE MILITARY IS GRATEFUL THAT THE OIL RESERVES WERE NOT DRAINED TO SATISFY A VINDICTIVE OLD MAN'S DREAMS OF VENGEANCE.

[Demeter]

64. WHAT THEY ARE SAYING

[Demeter]

65. Top 10 Reasons George Soros Is Dangerous: HUMAN EVENTS: POWERFUL CONSERVATIVE VOICES

http://humanevents.com/2011/04/02/top-10-reasons-george-soros-is-dangerous/

Human Events’ readers, in an online poll, recently voted billionaire financier George Soros “the single most destructive leftist demagogue in the country.” Here are the Top 10 Reasons George Soros Is Dangerous:

1. Gives billions to left-wing causes: Soros started the Open Society Institute in 1993 as a way to spread his wealth to progressive causes. Using Open Society as a conduit, Soros has given more than $7 billion to a who’s who of left-wing groups. This partial list of recipients of Soros’ money says it all: ACORN, Apollo Alliance, National Council of La Raza, Tides Foundation, Huffington Post, Southern Poverty Law Center, Soujourners, People for the American Way, Planned Parenthood, and the National Organization for Women.

2. Influence on U.S. elections: Soros once said that removing President George W. Bush from office in 2004 was the “central focus of my life.” He put his money where his mouth is, giving $23.58 million to various 527 groups dedicated to defeating Bush. His early financial support helped jump-start Barack Obama’s political career. Soros hosted a 2004 fund-raiser for Obama when he was running for the Illinois Senate and gave the maximum-allowed contribution within hours of Obama’s announcement that he was running for President.

3. Wants to curtail American sovereignty: Soros would like nothing better than for America to become subservient to international bodies. He wants more power for groups such as the World Bank and International Monetary Fund, even while saying the U.S. role in the IMF should be “downsized.” In 1998, he wrote: “Insofar as there are collective interests that transcend state boundaries, the sovereignty of states must be subordinated to international law and international institutions.”

4. Media Matters: Soros is a financial backer of Media Matters for America, a progressive media watchdog group that hyperventilates over any conservative view that makes it into the mainstream media. Now its founder, David Brock, has openly declared war on Fox News, telling Politico that the group was mounting “guerrilla warfare and sabotage” against the cable news channel, and would try to disrupt the commercial interests of owner Rupert Murdoch—an odd mission for a 501(c)(3) tax-exempt educational foundation that is barred from participating in partisan political activity.

5. MoveOn.org: Soros has been a major funder of MoveOn.org, a progressive advocacy group and political action committee that raises millions for liberal candidates. This is the group that had on its website an ad comparing President George W. Bush to Adolf Hitler and ran the infamous “General Betray Us” ad in the New York Times, disparaging the integrity of Gen. David Petraeus.

6. Center for American Progress: Headed by John Podesta, White House chief of staff under President Clinton, the Center for American Progress has been instrumental in providing progressive talking points and policy positions for the Obama administration. There has also been a revolving door between the White House and the Soros-funded think tank, with Obama staffing his administration with many CAP officials.

7. Environmental extremism: Former Obama green jobs czar Van Jones and his leftist environmental ideas have been funded by Soros’ money at these groups: the Ella Baker Center, Green For All, the Center for American Progress, and the Apollo Alliance, which was instrumental in getting $110 billion in green initiatives included in Obama’s stimulus package. Soros also funds the Climate Policy Initiative to address global warming and gave Friends of the Earth money to “integrate a climate equity perspective in the presidential transition.”

8. America Coming Together: Soros gave nearly $20 million to this 527 group with the express purpose of defeating President Bush. A massive get-out-the-vote effort, ACT’s door-to-door canvassing teams included numerous felons, its voter registration drives were riddled with fraud, and it handed out incendiary fliers and made misleading taped phone calls to voters. ACT was fined $775,000 by the Federal Election Commission for violations of various federal campaign finance laws.

9. Currency manipulation: A large part of Soros’ multibillion-dollar fortune has come from manipulating currencies. During the 1997 Asian financial crisis, Malaysian Prime Minister Mahathir bin Mohamad accused him of bringing down the nation’s currency through his trading activities, and in Thailand he was called an “economic war criminal.” Known as “The Man who Broke the Bank of England,” Soros initiated a British financial crisis by dumping 10 billion sterling, forcing the devaluation of the currency and gaining a billion-dollar profit.

10. Delusions: Soros has repeatedly said that he sees himself as a messianic figure. Who but a megalomaniac would make these comments? “I admit that I have always harbored an exaggerated view of my self-importance—to put it bluntly, I fancied myself as some kind of god” or “I carried some rather potent messianic fantasies with me from childhood, which I felt I had to control, otherwise I might end up in the loony bin.” If only the loony bin were an option. As it is, one of the wealthiest men in the world is using his billions to impose a radical agenda on America.

AS OPPOSED TO SAY...THE KOCH BROTHERS, OR SHELDON ADELSON....

[bread_and_roses]

66. This is all wayyyyy too dense for me!

I don't understand currencies. I don't understand international finance. I used to be smart enough to learn such things, but I'm way too old and tired now.

What I do understand is that we get nothing but lies and spin from both our so-called "Representatives" and the media, and that both are under the command of their corporate paymasters. We can't believe a word of what we hear and read. It all has one purpose - to solidify the grip of the 1% on every resource and crush the rest of us into serfdom, reliant on the Company Store.

And knowing that is enough.

[DemReadingDU]

79. That sums it up

[Demeter]

67. The Tragedy of the European Union and How to Resolve It George Soros September 27, 2012

http://www.nybooks.com/articles/archives/2012/sep/27/tragedy-european-union-and-how-resolve-it/

In a fast-moving situation, significant changes have occurred since this article went to press. On August 1, as I write below, Bundesbank President Jens Weidmann objected to the assertion by Mario Draghi, the president of the European Central Bank, that the ECB will “do whatever it takes to preserve the euro as a stable currency.” Weidmann emphasized the statutory limitation on the powers of the ECB. Since this article was published, however, it has become clear that Chancellor Merkel has sided with Draghi, leaving Weidmann isolated on the board of the ECB.

This was a game-changing event. It committed Germany to the preservation of the euro. President Draghi has taken full advantage of this opportunity. He promised unlimited purchases of the government bonds of debtor countries up to three years in maturity provided they reached an agreement with the European Financial Stability Facility and put themselves under the supervision of the Troika—the executive committee of the European Union, the European Central Bank, and the International Monetary Fund.

The euro crisis has entered a new phase. The continued survival of the euro is assured but the future shape of the European Union will be determined by the political decisions the member states will have to take during the next year or so. The alternatives are extensively analyzed in the article that follows.

—September 7, 2012

I have been a fervent supporter of the European Union as the embodiment of an open society—a voluntary association of equal states that surrendered part of their sovereignty for the common good. The euro crisis is now turning the European Union into something fundamentally different. The member countries are divided into two classes—creditors and debtors—with the creditors in charge, Germany foremost among them. Under current policies debtor countries pay substantial risk premiums for financing their government debt, and this is reflected in the cost of financing in general. This has pushed the debtor countries into depression and put them at a substantial competitive disadvantage that threatens to become permanent.

This is the result not of a deliberate plan but of a series of policy mistakes that started when the euro was introduced. It was general knowledge that the euro was an incomplete currency—it had a central bank but did not have a treasury. But member countries did not realize that by giving up the right to print their own money they exposed themselves to the risk of default. Financial markets realized it only at the onset of the Greek crisis. The financial authorities did not understand the problem, let alone see a solution. So they tried to buy time. But instead of improving, the situation deteriorated. This was entirely due to the lack of understanding and the lack of unity.

The course of events could have been arrested and reversed at almost any time but that would have required an agreed-upon plan and ample financial resources to implement it. Germany, as the largest creditor country, was in charge but was reluctant to take on any additional liabilities; as a result every opportunity to resolve the crisis was missed. The crisis spread from Greece to other deficit countries and eventually the very survival of the euro came into question. Since breakup of the euro would cause immense damage to all member countries and particularly to Germany, Germany will continue to do the minimum necessary to hold the euro together.

The policies pursued under German leadership will likely hold the euro together for an indefinite period, but not forever. The permanent division of the European Union into creditor and debtor countries with the creditors dictating terms is politically unacceptable for many Europeans. If and when the euro eventually breaks up it will destroy the common market and the European Union. Europe will be worse off than it was when the effort to unite it began, because the breakup will leave a legacy of mutual mistrust and hostility. The later it happens, the worse the ultimate outcome. That is such a dismal prospect that it is time to consider alternatives that would have been inconceivable until recently.

In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon, or leading nation, or leaving the euro. In other words, Germany must lead or leave.

Since all the accumulated debt is denominated in euros it makes all the difference who remains in charge of the euro.1 If Germany left, the euro would depreciate. The debt burden would remain the same in nominal terms but diminish in real terms. The debtor countries would regain their competitiveness because their exports would become cheaper and their imports more expensive. The value of their real estate would also appreciate in nominal terms, i.e., it would be worth more in depreciated euros.

The creditor countries, by contrast, would incur losses on their investments in the euro area and also on their accumulated claims within the euro clearing system. The extent of these losses would depend on the extent of the depreciation; therefore creditor countries would have an interest in keeping the depreciation within bounds.

The eventual outcome would fulfill John Maynard Keynes’s dream of an international currency system in which both creditors and debtors share responsibility for maintaining stability. And Europe would escape from the looming depression. The same result would be achieved, with less cost to Germany, if Germany chose to behave as a benevolent hegemon. That would mean (1) establishing a more or less level playing field between debtor and creditor countries and (2) aiming at nominal growth of up to 5 percent, in other words allowing Europe to grow its way out of excessive indebtedness. This would entail a greater degree of inflation than the Bundesbank is likely to approve.

Whether Germany decides to lead or leave, either alternative would be better than to persist on the current course. The difficulty is in convincing Germany that its current policies are leading to a prolonged depression, political and social conflicts, and an eventual breakup not only of the euro but also of the European Union. How to persuade Germany to choose between either accepting the responsibilities and liabilities that a benevolent hegemon should be willing to incur or leaving the euro in the hands of debtor countries that would be much better off on their own? That is the question I shall try to answer.

How We Got Here

When it was only an aspiration, the European Union was what psychologists call a “phantastic object,” a desirable goal that captured many people’s imagination, including mine. I regarded it as the embodiment of an open society. There were five large states and a number of small ones and they all subscribed to the principles of democracy, individual freedom, human rights, and the rule of law. No nation or nationality was dominant. Although the Brussels bureaucracy was often accused of a “democratic deficit,” elected parliaments had to give approval of the major steps.

The process of integration was spearheaded by a small group of farsighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

France and Germany used to be in the forefront of the effort. When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement. At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one. This led to a dramatic acceleration of the process. It culminated with the signing of the Maastricht Treaty in 1992 and the introduction of the euro in 2002.

The Maastricht Treaty was fundamentally flawed. The architects of the euro recognized that it was an incomplete construct: it had a common central bank but it lacked a common treasury that could issue bonds that would be obligations of all the member states. Eurobonds are still resisted in Germany and other creditor countries. The architects believed, however, that when the need arose, the political will could be generated to take the necessary steps toward a political union. After all, that is how the European Union was brought into existence. Unfortunately, the euro had many other defects, of which neither the architects nor the member states were fully aware. These were revealed by the financial crisis of 2007–2008, which set in motion a process of disintegration.

In the week following the bankruptcy of Lehman Brothers the global financial markets broke down and had to be put on artificial life support. This involved substituting sovereign credit (in the form of central bank guarantees and budget deficits) for the credit of the financial institutions that was no longer accepted by the markets. The central role that sovereign credit was called upon to play revealed a flaw in the euro that had remained hidden until then and that has still not been properly recognized. By transferring what had previously been their right to print money to the European Central Bank, the member states exposed their sovereign credit to the risk of default. Developed countries that control their own currency have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that borrow in a foreign currency have to pay premiums that reflect the risk of default. To make matters worse, financial markets can actually drive such countries toward default through “bear raids”—-short-selling the bonds of these countries, driving their cost of borrowing higher, and reinforcing the fear of impending default.

When the euro was introduced, government bonds were treated as riskless. The regulators in the various countries allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital, and the European Central Bank accepted all government bonds at its discount window on equal terms. This made it advantageous for commercial banks to accumulate the bonds of the weaker member countries, which paid slightly higher rates, in order to earn a few extra basis points.

In the aftermath of the Lehman Brothers crisis, Angela Merkel declared that the guarantee that no other systemically important financial institution would be allowed to fail should be given by each country acting separately, not by the European Union acting jointly. That was the first step in a process of disintegration that is now threatening to destroy the European Union.

It took financial markets more than a year to realize the implications of Chancellor Merkel’s declaration, demonstrating that they operate with far-from-perfect knowledge. Late in 2009, when the newly elected Greek government announced that the previous government had cheated and the deficit exceeded 12 percent of GDP, the financial markets began to realize that government bonds, which had been considered riskless, carried significant risks and could actually default. When they finally discovered it, risk premiums in the form of higher yields that governments had to offer so as to sell their bonds rose dramatically. This rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. That created both a sovereign debt problem and a banking problem, which are linked together in a reflexive feedback loop. These are the two main components of the crisis confronting Europe today.

There is a close parallel between the euro crisis and the international banking crisis of 1982. Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade. Today Germany is playing the same role as the IMF did then. The details differ, but the effect is the same. The creditors are in effect shifting the whole burden of adjustment onto the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center,” or “core,” and “periphery” have crept into usage almost unnoticed, although it is obviously inappropriate to describe Italy and Spain as periphery countries. In effect, however, the introduction of the euro relegated some member states to the status of less developed countries without either the European authorities or the member countries realizing it. In retrospect, that is the root cause of the euro crisis.

Just as in the 1980s, all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged. In this context the German word Schuld is revealing: it means both debt and guilt. German public opinion blames the heavily indebted countries for their misfortune. Yet Germany cannot escape its share of the responsibility. As I shall try to show, the Schuld or responsibility of the “center” is even greater today than it was in the banking crisis of 1982. In creating the euro, the “center” was guided by the same false economic doctrines that were responsible for the financial crisis of 2007–2008.

The Maastricht Treaty took it for granted that only the public sector can produce chronic deficits. It assumed that financial markets would always correct their own excesses. Although these market fundamentalist assumptions have been refuted by the 2007–2008 financial crisis, European authorities continue to abide by them. For instance, they treated the euro crisis as if it were a purely fiscal, i.e., budgetary, problem. But only Greece qualified as a genuine fiscal crisis. The rest of Europe suffered largely from banking problems and a divergence in competitiveness, which gave rise to balance of payments problems. The authorities did not understand the complexity of the crisis, let alone see a solution. So they tried to buy time.

Usually that works. Financial panics subside and the authorities realize a profit on their intervention. But not this time, because the financial problems were combined with a process of political disintegration. When the European Union was being created, political leaders kept taking the initiative for further steps forward; but after the outbreak of the financial crisis they became wedded to the status quo. They realized that the public had become skeptical about further integration. Under duress, every country was preoccupied with protecting its own narrow national interests. Any change in the rules would transfer power away from the European authorities based in Brussels back to the national authorities.

Consequently, the words of the Maastricht and Lisbon treaties were treated as if they were cast in stone, including for example Article 123, which forbids the European Central Bank to lend money to governments. This has pushed a great many of those who consider the status quo unsustainable or intolerable to adopt anti-European attitudes. Such is the political dynamic that has made the disintegration of the European Union just as self-reinforcing as the process of its creation had been.

Angela Merkel read German public opinion correctly when she insisted that each country should look after its own banking system. In fact, Germany has reversed itself since reunification. Just as it had been willing to make considerable sacrifices for the sake of reunification, now that it had to pay the costs of reunification it was focused on keeping its budget balanced. Far from always contributing a little bit more than others, Germany did not want to become the deep pocket for the rest of Europe. Instead of proclaiming that Germany has no policy other than a European one, the German media started vilifying the European Union as a “transfer union” that would drain Germany.

To make matters worse the Bundesbank remains committed to an outmoded monetary doctrine that is deeply rooted in German history. Following World War I, Germany had a traumatic experience with inflation; consequently it recognizes only inflation as a threat to stability and ignores deflation, which is the real threat today.

After reunification caused Germany’s debt burden to balloon, it introduced far-reaching labor market and other structural reforms and adopted a constitutional amendment requiring the federal budget to be balanced by 2016. This worked like a charm. Germany enjoyed an export-led recovery, helped by housing and consumption booms in the rest of Europe. Germany now advocates fiscal austerity and structural reforms as the cure-all for the euro crisis.

Why shouldn’t it work for Europe now, if it worked for Germany then? For a very good reason: economic conditions are very different. The global financial system is reducing its excessive leverage and exports are slowing down worldwide. Fiscal austerity in Europe is exacerbating a global trend and pushing Europe into a deflationary debt trap. That is, when too many heavily indebted governments are reducing their budget deficits at the same time, their economies shrink so that the debt burden as a percentage of GDP actually increases. Monetary authorities worldwide recognize the danger. Federal Reserve Chairman Ben Bernanke, Bank of England Governor Mervyn King, and even Bank of Japan Governor Masaaki Shirakawa have all engaged in unconventional monetary measures to avoid a deflationary debt trap.

The German public finds it extremely difficult to understand that Germany is foisting the wrong policy on Europe. The German economy is not in crisis. Indeed, until now Germany has actually benefited from the euro crisis, which has kept down the exchange rate and helped exports. More recently, Germany enjoyed extremely low interest rates, and capital flight from the debtor countries has flooded Germany with capital, at the same time as the “periphery” has had to pay hefty risk premiums for access to funds.

This is not the result of some evil plot but an unintended consequence of an unplanned course of events. German politicians, however, have started to figure out the advantages it has conferred on Germany and this has begun to influence their policy decisions. Germany has been thrust into a position where its attitude determines European policy. So the primary responsibility for a policy of austerity pushing Europe into depression lies with Germany. As time passes, there are increasing grounds for blaming Germany for the policies it is imposing on Europe, while the German public is feeling unjustly blamed. This is truly a tragedy of historic significance. As in ancient Greek tragedies, misconceptions and the sheer lack of understanding have unintended but fateful consequences.

If Germany had been willing at the outset of the Greek crisis to extend the credit that was offered at a later stage, Greece could have been rescued. But Europe did only the minimum necessary to avoid a collapse of the financial system and that was not enough to turn the situation around. The same happened when the crisis spread to the other countries. At every stage the crisis could have been arrested and reversed if Germany had been able to look ahead of the curve and been willing to do more than the minimum.

At the onset of the crisis a breakup of the euro was inconceivable. The assets and liabilities denominated in the common currency were so intermingled that a breakup would have led to an uncontrollable meltdown. But as the crisis progressed the financial system has been progressively reoriented along national lines. Regulators have tended to favor domestic lending, banks have been shedding assets outside their national borders; and risk managers have been trying to match assets and liabilities within national borders, rather than within the eurozone as a whole. If this continues, a breakup of the euro would become possible without a meltdown, but it would leave the central banks of the creditor countries with large, difficult-to-collect claims against the central banks of the debtor countries.

This is due to an arcane problem in the euro clearing system called TARGET2. In contrast to the clearing system of the Federal Reserve, which is settled annually, TARGET2 accumulates the imbalances between the banks in the eurozone. This did not create a problem as long as the interbank system was functioning because the banks settled the imbalances among themselves through the interbank market. But the interbank market has not functioned properly since 2007 and since the summer of 2011 there has been increasing capital flight from the weaker countries. When a Greek or Spanish customer makes a transfer from his account at a Greek or Spanish central bank to a Dutch one, the Dutch central bank ends up with a TARGET2 credit, offset by a TARGET2 claim against the Greek or Spanish bank. These claims have been growing exponentially. By the end of July this year the Bundesbank had claims of some €727 billion against the central banks of the periphery countries.

The Bundesbank has become aware of the potential danger and the German public has been alerted by the passionate if misguided advocacy of the economist Hans-Werner Sinn. The Bundesbank is increasingly determined to limit the losses it would sustain in case of a breakup. This is acting as a self-fulfilling prophecy. Once a central bank starts guarding against a breakup everybody has to do the same.

So the crisis is getting ever deeper. Tensions in financial markets have risen to new highs as evidenced by the historic low yield on German government bonds. Even more telling is the fact that the yield on the British ten-year bond has never been lower in its three-hundred-year history, while yields on Spanish bonds have set new highs.

The real economy of the eurozone is in decline while Germany is doing relatively well. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion, as expressed in recent election results, is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.
Where Are We Now?

The June Summit seemed to offer the last opportunity to preserve the euro within the existing legal frame. In preparing for it, the European authorities under the leadership of Herman Van Rompuy, president of the European Council—which includes all the heads of state or government of the EU member states—realized that the current course was leading to disaster, and they were determined to explore the alternatives. They also understood that the banking problems and the sovereign debt problems are tied together like Siamese twins and cannot be solved separately. They were trying to develop a comprehensive program but of course they had to consult with Germany at every point along the way. They received positive reinforcement from Germany on developing plans for a banking union because Germany was concerned about the risks that capital flight from the “periphery” countries posed to the Bundesbank. So that part of the program was much better developed than a solution to the sovereign debt problem, in spite of the reflexive feedback loop between the two.

The cost of refinancing the national debt was of critical importance to Italy. At the outset of the June summit, Prime Minister Mario Monti declared that Italy would not agree to anything else unless something was done about it. To avoid a fiasco, Chancellor Merkel promised that Germany would entertain any proposal as long as it was within the existing legal framework. The summit was salvaged. It was decided to finalize the plans for a banking union, allowing the European bailout funds, the ESM and the EFSM, to recapitalize the banks directly and, after an all-night session, the meeting was adjourned.2 Monti declared victory.

But in subsequent negotiations it turned out that no proposal for reducing risk premiums fit into the existing legal framework. The plan to use the ESM to recapitalize the Spanish banks was also weakened beyond recognition when Chancellor Merkel had to assure the Bundestag that Spain would still remain liable for any losses. The financial markets responded by pushing risk premiums on Spanish bonds to record highs, with Italian yields rising in sympathy. The crisis was back in full force. With Germany immobilized by its constitutional court, whose decision on the legality of the ESM will be announced on September 12, it was left to the European Central Bank to step into the breach.

Mario Draghi, the current president of the ECB, announced that it will do whatever it takes to preserve the euro within its mandate. Bundesbank President Jens Weidmann has since been vocal in emphasizing the legal limitations on the ECB ever since, but Jörg Asmussen, the representative of the German government on the ECB’s board, came out in support of unlimited intervention on the grounds that the survival of the euro was at stake. This was a turning point. Chancellor Merkel was backing Mario Draghi, leaving the Bundesbank president isolated on the board of the ECB. President Draghi made the most of this opportunity. Financial markets took heart and rallied in anticipation of the ECB’s decision on September 6. Unfortunately, even unlimited intervention may not be sufficient to prevent the division of the euro area into creditor and debtor countries from becoming permanent. It will not eliminate the risk premiums, only narrow them and the conditionality imposed on the debtor countries by the EFSF is likely to push them into a deflationary trap. As a consequence, they will not be able to regain competitiveness until the pursuit of debt reduction through austerity is abandoned.

The line of least resistance leads not to the immediate breakup of the euro but to the indefinite extension of the crisis. A disorderly breakup would be catastrophic for the euro area and indirectly for the whole world. Germany, having fared better than the other members of the euro area, has further to fall than the others—therefore it will continue to do the minimum that it considers necessary to prevent a breakup.

The European Union that will emerge from this process will be diametrically opposed to the idea of a European Union that is the embodiment of an open society. It will be a hierarchical system built on debt obligations instead of a voluntary association of equals. There will be two classes of states, creditors and debtors, and the creditors will be in charge. As the strongest creditor country, Germany will emerge as the hegemon. The class differentiation will become permanent because the debtor countries will have to pay significant risk premiums for access to capital and it will become impossible for them to catch up with the creditor countries.

The divergence in economic performance, instead of narrowing, will become wider. Both human and financial resources will be attracted to the center and the periphery will become permanently depressed. Germany will even enjoy some relief from its demographic problems by the immigration of well-educated people from the Iberian Peninsula and Italy instead of less qualified Gastarbeiter from Turkey or Ukraine. But the periphery will be seething with resentment.

Imperial power can bring great benefits but it must be earned by looking after those who live under its aegis. The United States emerged as the leader of the free world after the end of World War II. The Bretton Woods system made it the first among equals, but the United States was a benevolent hegemon that earned the lasting gratitude of Europe by engaging in the Marshall Plan. That is the historic opportunity that Germany is missing by holding the heavily indebted countries to their Schuld.

It is worth recalling that the reparations payments demanded of Germany after World War I were among the factors giving rise to National Socialism. And Germany had its own Schuld reduced on three separate occasions: the Dawes Plan in 1924, the Young Plan in 1929—too late to prevent the rise of Hitler—and the London Debt Agreement in 1953.

Today Germany does not have imperial ambitions. Paradoxically, the desire to avoid dominating Europe is part of the reason why Germany has failed to rise to the occasion and behave as a benevolent hegemon. The steps taken by the ECB on September 6 constitute the minimum that is necessary to save the euro but they will also take us a step closer to a two-tier Europe. The debtor countries will have to submit to European supervision but the creditor countries will not; and the divergence in economic performance will be reinforced. The prospect of a prolonged depression and a permanent division into debtor and creditor countries is so dismal that it cannot be tolerated. What are the alternatives?
The Way Out

Germany must decide whether to become a benevolent hegemon or leave the euro. The first alternative would be by far the best. What would that entail? Simply put, it would require two new objectives that are at variance with current policies:

1. Establishing a more or less level playing field between debtor and creditor countries, which would mean that they would be able to refinance their government debt on more or less equal terms.

2. Aiming at nominal growth of up to 5 percent so that Europe can grow its way out of its excessive debt burden. This will necessitate a higher level of inflation than the Bundesbank is likely to countenance. It may also require a treaty change and a change in the German constitution.

Both these objectives are attainable, but only after considerable progress toward a political union. The political decisions taken in the next year or so will determine the future of the European Union. The steps taken by the ECB on September 6 could be a prelude to the creation of a two-tier Europe; alternatively they could lead to the formation of a closer political union in which Germany accepts the obligations that its leadership position brings with it.

A two-tier eurozone would eventually destroy the European Union because the disenfranchised would sooner or later withdraw from it. If a political union is not attainable the next best thing would be an orderly separation between creditor and debtor countries. If the members of the euro cannot live together without pushing their union into a lasting depression, they would be better off separating by mutual consent.

In an amicable breakup of the euro it matters a great deal which party leaves, because all the accumulated debts are denominated in a common currency. If a debtor country leaves, its debt increases in value in line with the depreciation of its currency. The country concerned could become competitive; but it would be forced to default on its debt and that would cause incalculable financial disruptions. The common market and the European Union may be able to cope with the default of a small country such as Greece, especially when it is so widely anticipated, but it could not survive the departure of a larger country like Spain or Italy. Even a Greek default may prove fatal. It would encourage capital flight and embolden financial markets to mount bear raids against other countries, so the euro may well break up as the Exchange Rate Mechanism did in 1992.

By contrast, if Germany were to exit and leave the common currency in the hands of the debtor countries, the euro would fall and the accumulated debt would depreciate in line with the currency. Practically all the currently intractable problems would dissolve. The debtor countries would regain competitiveness; their debt would diminish in real terms and, with the ECB in their control, the threat of default would evaporate. Without Germany, the euro area would have no difficulty in carrying out the U-turn for which it would otherwise need Chancellor Merkel’s consent.

To be specific, the shrunken euro area could establish its own fiscal authority and implement its own Debt Reduction Fund along the lines I shall describe below. Indeed, the shrunken euro area could go much further and convert the entire debt of member countires into eurobonds, not only the excess over 60 percent of GDP. When the exchange rate on the shrunken euro stabilized, risk premiums on eurobonds would fall to levels comparable to those attached to bonds issued in other freely floating currencies, such as the British pound or Japanese yen. This may sound unbelievable; but that is only because the misconceptions that have caused the crisis are so widely believed. It may come as a surprise, but the eurozone, even without Germany, would score better on standard indicators of fiscal solvency than Britain, Japan, or the US.3

A German exit would be a disruptive but manageable onetime event, instead of the chaotic and protracted domino effect of one debtor country after another being forced out of the euro by speculation and capital flight. There would be no valid lawsuits from aggrieved bond holders. Even the real estate problems would become more manageable. With a significant exchange rate differential, Germans would be flocking to buy Spanish and Irish real estate. After the initial disruptions the euro area would swing from depression to growth.
soros_3-092712.jpg Gero Breloer/AP Images/Corbis
Angela Merkel and German Finance Minister Wolfgang Schäuble at the Bundestag, Berlin, July 19, 2012

The common market would survive but the relative position of Germany and other creditor countries that may leave the euro would swing from the winning to the losing side. They would encounter stiff competition in their home markets from the euro area and while they may not lose their export markets, these would become less lucrative. They would also suffer financial losses on their ownership of assets denominated in the euro as well as on their claims within the TARGET2 clearing system. The extent of the losses would depend on the extent of the euro’s depreciation.4

Thus they would have a vital interest in keeping the depreciation within bounds. Of course there would be many transitional difficulties, but the eventual result would be the fulfillment of Keynes’s aspiration for a currency system in which the creditors and debtors would both have a vital interest in maintaining stability.

After the initial shock, Europe would escape from the deflationary debt trap in which it is currently caught; the global economy in general and Europe in particular would recover and Germany, after it has adjusted to its losses, could resume its position as a leading producer and exporter of high-value-added products. Germany would benefit from the overall improvement. Nevertheless the immediate financial losses and the reversal of its relative position within the common market would be so large that it would be unrealistic to expect Germany to leave the euro voluntarily. The push would have to come from the outside.

By contrast, Germany would fare much better if it chooses to behave as a benevolent hegemon and Europe would be spared the upheaval the German withdrawal from the euro would cause. But the path to achieving the dual objectives of a more-or-less level playing field and an effective growth policy would be much more tortuous. I will sketch it out here.

The first step would be to establish a European Fiscal Authority (EFA) that would be authorized to make important economic decisions on behalf of member states. This is the missing ingredient that is needed to make the euro a full-fledged currency with a genuine lender of last resort. The fiscal authority acting in partnership with the central bank could do what the ECB cannot do on its own. The mandate of the ECB is to maintain the stability of the currency; it is expressly prohibited from financing government deficits. But there is nothing prohibiting the member states from establishing a fiscal authority. It is Germany’s fear of becoming the deep pocket for Europe that stands in the way.

Given the magnitude of Europe’s problems, this is understandable; but it does not justify a permanent division of the euro area into debtors and creditors. The creditors’ interests could and should be protected by giving them veto power over decisions that would affect them disproportionately. That is already recognized in the voting system of the ESM, which requires an 85 percent majority to make important decisions. This feature ought to be incorporated into a new EFA. But when member states contribute proportionately, for instance by providing a certain percentage of their VAT, a simple majority should be sufficient.

The EFA would automatically take charge of the EFSF and the ESM. The great advantage of having an EFA is that it would be able to make decisions on a day-to-day basis, like the ECB. Another advantage of the EFA is that it would reestablish the proper distinction between fiscal and monetary responsibilities. For instance, the EFA ought to take the solvency risk on all government bonds purchased by the ECB. There would then be no grounds for objecting to unlimited open-market operations by the ECB. (The ECB may decide to do this on its own on September 6, but only after strenuous objections by the Bundesbank.) Importantly, the EFA would find it much easier than it would be for the ECB to offer public-sector participation in reorganizing the Greek debt. The EFA could express willingness to convert all Greek bonds held by the public sector into zero-coupon bonds starting to mature ten years out, provided Greece reached a primary surplus of, say, 2 percent. This would create a light at the end of the tunnel that could be helpful to Greece even at this late stage.

The second step would be to use the EFA to establish a more level playing field than the ECB will be able to offer on its own on September 6. I have proposed that the EFA should establish a Debt Reduction Fund—a modified form of the European Debt Redemption Pact proposed by Chancellor Merkel’s own Council of Economic Advisers and endorsed by the Social Democrats and Greens. The Debt Reduction Fund would acquire national debts in excess of 60 percent of GDP on condition that the countries concerned undertook structural reforms approved by the EFA. The debt would not be canceled but held by the fund. If a debtor country fails to abide by the conditions to which it has agreed the fund would impose an appropriate penalty. As required by the Fiscal Compact, the debtor country would be required to reduce its excess debt by 5 percent a year after a moratorium of five years. That is why Europe must aim at nominal growth of up to 5 percent.

The Debt Reduction Fund would finance its bond purchases either through the ECB or by issuing Debt Reduction Bills—a joint obligation of the member countries—and passing on the benefit of cheap financing to the countries concerned. Either way the cost to the debtor country would be reduced to 1 percent or less. The bills would be assigned a zero-risk weighting by the authorities and treated as the highest-quality collateral for repurchase agreements (repos) used in operations at the ECB. The banking system has an urgent need for such a risk-free liquid asset. Banks were holding more than €700 billion of surplus liquidity at the ECB, earning 0.25 percent interest at the time that I proposed this scheme. Since then the ECB reduced the interest rate paid on deposits further, to zero. This assures a large and ready market for the bills at less than 1 percent. By contrast, the plan announced by the ECB on September 6 is unlikely to reduce the cost of financing much below 3 percent.

The scheme I proposed was rejected out of hand by the Germans on the grounds that it did not conform to the requirements of the German constitutional court. In my opinion their objection was groundless because the constitutional court ruled against commitments that are unlimited in time and size, while the Debt Reduction Bills would be limited in both directions. If Germany wanted to behave as a benign hegemon it could easily approve such a plan. It could be introduced without any treaty change. Eventually the Debt Reduction Bills could provide a bridge to the introduction of eurobonds. That would make the level playing field permanent.

That leaves the second objective: an effective growth policy aiming at nominal growth of up to 5 percent. That is needed to enable the heavily indebted countries to meet the requirements of the Fiscal Compact without falling into a deflationary debt trap. There is no way this objective can be achieved as long as Germany abides by the Bundesbank’s asymmetric interpretation of monetary stability. Germany would have to accept inflation in excess of 2 percent for a limited period of time if it wants to stay in the euro without destroying the European Union.
How To Get There

What can bring Germany to decide whether to stay in the euro without destroying the European Union or to allow the debtor countries to solve their problems on their own by leaving the euro?

External pressure could do it. With François Hollande as the new president, France is the obvious candidate to advocate an alternative policy for Europe. By forming a common front with Italy and Spain, France could present an economically credible and politically appealing program that would save the common market and recapture the European Union as the idealistic vision that fired people’s imagination. The common front could then present Germany with the choice: lead or leave. The objective would not be to exclude Germany, but to radically change its policy stance.

Unfortunately, France is not in a strong position to form a united front with Italy and Spain in the face of determined opposition from Germany. Chancellor Merkel is not only a strong leader but also a skilled politician who knows how to keep adversaries divided. France is particularly vulnerable because it has done less than Italy or Spain to accomplish fiscal consolidation and structural reforms. The relatively low risk premium that French government bonds currently enjoy is due almost entirely to France’s close association with Germany. Asian central banks have been buying French bonds, especially since German Bunds have started selling at negative yields. Should France ally itself too closely with Italy and Spain, it would be judged by the same yardstick and the risk premium on its bonds may rise to similar levels.

Admittedly, the advantages of being in the same boat with Germany are liable to become illusory once a prolonged depression descends upon Europe. As the fault line between Germany and France becomes more apparent, financial markets are liable to reclassify France with Italy and Spain whether or not it remains faithful to Germany. So France’s real choice is, on the one hand, between breaking with Germany to save Europe and restore growth or, on the other, pretending to be in the hard currency boat for a limited time, only to be thrown overboard later. Taking the side of the debtor countries and challenging the policy of austerity would allow France to resume the position of leadership it held during Mitterrand’s presidency. That would be a more dignified position than being a passenger with Germany in the driver’s seat. Still, it would take great courage for France to part ways from Germany in the short run.

Italy and Spain have other weaknesses. Italy has proven itself incapable of maintaining good governance on its own. Its current debt problems were accumulated before it joined the euro; as a member it actually had a better record of primary budget surplus than Germany—even during much of the time when Berlusconi was in power. But Italy seems to need an outside authority to rid itself of bad governance. That is what has made Italians so enthusiastic about the -European Union. Spain is much healthier politically but the current government has become far too subservient to Germany for its own good. Moreover, the reduction in risk premiums as a result of the ECB’s bond purchases will be significant enough to remove the incentive to rebel against German domination.

The campaign to change German attitudes will therefore have to take a very different form from the intergovernmental negotiations that are currently deciding policy. European civil society, the business community, and the general public need to mobilize and become engaged. At present, the public in many eurozone countries is distressed, confused, and angry. This finds expression in xenophobia, anti-European attitudes, and extremist political movements. The latent pro-European sentiments, which currently have no outlet, need to be aroused in order to save the European Union. Such a movement would encounter a sympathetic response in Germany, where the large majority is still pro-European but under the spell of false fiscal and monetary doctrines.

Currently, the German economy is doing relatively well and the political situation is also relatively stable; the crisis is only a distant noise coming from abroad. Only something shocking would shake Germany out of its preconceived ideas and force it to face the consequences of its current policies. That is what a movement offering a workable alternative to German domination could accomplish. In short, the current situation is like a nightmare that can be escaped only by waking up Germany and making it aware of the misconceptions that are currently guiding its policies. We can hope Germany, when put to the choice, will choose to exercise benevolent leadership rather than to suffer the losses connected with leaving the euro.
Letters

Germany & the Euro October 25, 2012

FOTTNOTES

1

Debt issued under domestic law can be redenominated into the domestic currency; debt issued under foreign law cannot. The implications have been extensively analyzed by Jens Nordvig in his Wolfson Economic Prize paper. ↩
2

The European Financial Stability Mechanism, the EFSM, was set up in 2010 as a temporary organization based in Luxembourg to give financial assistance to eurozone member states; it will be replaced by the permanent ESM if Germany ratifies it; fifteen other members of the eurozone have already done so. ↩
3

General government deficit as percent of GDP: eurozone excluding Germany 5.3; UK 8.7; Japan 10.1; US 9.6; eurozone including Germany 4.2. Gross Public Debt as percent of GDP: eurozone excluding Germany 91; UK 82; Japan 230; US 103; eurozone including Germany 88. ↩
4

As interbank lending is resumed, Germany may even prefer to remain a member of the TARGET2 clearing system and allow balances to wind down gradually rather than taking an immediate loss. ↩

[Demeter]

68. TO SUMMARIZE

The dream bedazzled them, but reality took its revenge. And the people suffer for the old rich men's dreams.

[Demeter]

69. FRONTLINE'S Interview with George Soros 1999

http://www.pbs.org/wgbh/pages/frontline/shows/crash/interviews/soros.html



The global economic crisis, if we want to begin to understand the origins of it, from your point of view, where should we look?

You have to look at the system of currency pegs--when a currency is tied to the dollar or to another hard currency. This peg may not hold, but people assume that there is a fixed relationship between the dollar and, let's say, the Thai currency or the Malaysian currency. They then exploit the difference in domestic interest rates and the international market. They borrow in dollars and they lend in the domestic currency. They make a fortune in the process, as long as the peg holds. But because of, maybe, excessive borrowing, which allows a country to maintain a trade deficit over an extended period of time, or to engage in a currency or real estate boom financed by dollars, you have over-heating, trade imbalance, and then the capital flows reverse. People want to take their money out, instead of putting it in, and you have a crisis.

You've written and spoken about the deeper trends that are going on in the financial markets today.

The U.S. economy is today the single engine driving this very big plane. So if that engine were to conk out...it's a question of can you repair the other engines before this one gives out? Because even though people say that we live in a new world and the past is not relevant ... cyclical fluctuations are not eliminated. I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium. Equilibrium is appropriate when a market deals with known quantities. But in financial markets, you deal with unknown quantities. You're trying to discount the future. But the future depends on how you discount it today. It's not something fixed, so your discounting can't correspond to the future.

Now, there is the prevailing theory which holds that financial markets should be regarded as if they were in continuous equilibrium. I think that is actually a false image. Because, in effect, they are in continuous disequilibrium. Therefore, they are given to going to excesses in one direction or another. You can have a boom and a bust. Now, in practice, we have learned that that's the case. Through experience, we have evolved a system of central banking that prevents these excesses from going too far. Controlling the money supply, dampening the boom so that you don't get a bust. Then stimulating the economy [that] is in decline. You have various regulatory authorities and so on.

We now have global markets. We don't have an appropriate international mechanism for regulating the global financial markets. That's a problem. We have the Bretton Woods Institutions--the International Monetary Fund and the World Bank. But they were created for a different world, a world in which there were no capital movements. In fact, these institutions were designed to make trade possible in the absence of international lending, and so on. These institutions adopted themselves to changing circumstances.

You also had, at the time, fixed exchange rates. So the fixed exchange rate system broke down. Global capital markets developed. The institutions, the IMF, is not adequate to meet these circumstances. It adapted itself and did reasonably well in one crisis after another. There was a big international crisis in the '80s ... mainly focused in America. Then you had the Mexican crisis in '94. Now, you had this latest crisis. Here, the IMF method proved to be inadequate. So their intervention became part of the problem, instead of being part of the solution...

MORE

INCLUDES HIS GRUDGE AGAINST RUSSIA

[bread_and_roses]

70. Why call to end 60% of child poverty? What about the other 40%?

The total inadequacy of our side ....

http://www.childrensdefense.org/library/PovertyReport/EndingChildPovertyNow.html

I don't have the energy to go into it ... I just think it's a perfect example of how ridiculous most of the "solutions" out there are ... yeah! let's end 60% of child poverty!

[Demeter]

71. Must be that "47% Useless Eater" Idea Romney started

I don't know, b&r. The more I see, the less I can believe these are real people talking.

[Demeter]

72. American corruption is exceptional, too By Terry Golway

THAT'S THE USA---EXCEPTIONAL ALL THE WAY!

http://blogs.reuters.com/great-debate/2015/01/29/when-it-comes-to-corruption-u-s-politicians-have-a-lot-to-learn/

He was hardly a household name, and he owed his authority to the votes of a few thousand people on the Lower East Side of Manhattan. But for more than two decades, Sheldon Silver was one of the most powerful people in New York politics. He held up budgets, cut deals, blocked projects he didn’t like and doled out public dollars with little accountability. Governors came and went, but Silver seemingly was speaker of the New York State Assembly for life — beyond the reach of good-government critics, investigative journalists and ethics watchdogs. Until last week.

On Jan. 22, Silver was arrested, handcuffed, fingerprinted and brought before a judge, accused of an array of corruption charges. (Silver did not have to enter a plea, but he has denied the accusations.)

Photographs of him being led away from a courtroom showed not an imperious power-broker, but a stooped, 70-year-old man with a road map of worry on his face. U.S. Attorney Preet Bharara, whose office led the investigation, announced Silver’s indictment with a blistering statement accusing him of amassing “a tremendous personal fortune through the abuse of [his] political power.”

Silver’s alleged crimes are hardly unique to New York City, Albany or, indeed, the United States. Political systems and cultures may vary widely from nation to nation, continent to continent, but corruption is universal. From Bejing to Kabul, Moscow to Mexico City, beleaguered citizens surely would recognize Silver, or former Virginia Governor Bob McDonnell, or former New York Representative Michael Grimm as variations on the familiar lament that power corrupts, and that absolute power corrupts absolutely....But here’s the difference between the United States and many truly lawless nations that happen to be strategically important to Washington at the moment: Corrupt U.S. politicians invariably get caught, sometimes because they overreach, sometimes because an ambitious prosecutor or an investigative reporter comes along to expose the scam...

BUT DO THEY GET PROSECUTED, ASSET-STRIPPED AND JAILED?

[Demeter]

74. Can't tell if this is before or after his lucrative life as an author

[bread_and_roses]

75. "invariably get caught" ???????????????

All I can say is ....

[Fuddnik]

78. Just started a new book last night, "Thieves of State", by Sarah Chayes

I saw her on The Daily Show the other night, and it sounded interesting.

She lays the foundation that every conflict around the world, especially in the Mideast can be attributed to corruption. She spent several years in Afghanistan, and saw the system up front and personal.

The same types of shenanigans she saw there, she sees happening all across Europe, and especially in the former Iron Curtain countries. Our government and the people we deal with, give "democracy" such a bad name, that the citizenry long for "benevolent" dictators who will end the corruption.

The biggest problem, here and there, is that there is zero accountability for people that are caught.

I knocked off the first few chapters last night, and will pick it up later during the "Stupid Bowl".

[Demeter]

76. The Super Wealthy See Pitchforks and Guillotines in Their Future

http://www.nakedcapitalism.com/2015/02/super-wealthy-see-pitchforks-guillotines-future.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

This is a short but important conversation with Rob Johnson, the president of INET, on what was and more important, not said at Davos. The super wealthy know that the governance structures around them are breaking down, but rather than take measures to shoer them up, they are be retreating into concrete bunkers.

This is the Iron Law of Institutions on a societal level: people would rather take steps to better their position with a given social order than make sacrifices that would make them better off in an absolute sense, if not in a relative one.

He’s also too kind about Obama, but Johnson is a generous-spirited sort, so he tends to hope for the best even when the evidence is otherwise. That makes his assessment of the mood among the top elite even more sobering.

https://www.youtube.com/watch?x-yt-ts=1422579428&feature=player_embedded&v=Sriuwxwols8&x-yt-cl=85114404

[Demeter]

77. The Peak Oil Poet Replies February 1, 2015

the Bible tells us not to steal
it’s there in black and white
our laws are based upon it too
do not do wrong – do right

but somehow since these laws were writ
we’ve seen the system fail
but things will change for all the best
when the bankers go to jail

when the bankers go to jail my friends
when the bankers go to jail
we’ll finally see justice done
when the bankers go to jail

when the vampire squid has been deep-fried
in the slime of Bernank’s words
when politicians tell the truth
and not be lying turds

when “austerity” applies to them
and fairness does prevail
we’ll finally see justice done
and the bankers go to jail

when the bankers go to jail ee-hah
when the bankers go to jail
we’ll all be dancing in the streets
when the bankers go to jail

if all was as it ought to be
when any business fails
investors take a haircut
amid their tears and wails

but in our mean kleptocracy
that the MSM does hail
the working class pay all the bills
and no banker goes to jail

when the bankers go to jail dear God
when the bankers go to jail
the haircuts will be number ones
when the bankers go to jail

we’re predators i must admit
it’s human nature too
to seek a better living for
our wives and children too

but animals we’re not you see
it not just fine detail
we keep the law, control ourselves
and the bankers go to jail

yes you bankers go to jail you thieves
all you bankers go to jail
you’ll be some brother’s jail-house bitch
when you bankers go to jail

you may think it’s a silly dream
to think of their demise
they’re oh so very powerful
and every banker lies

but one day soon we’ll overthrow
and have them by the tail
we’ll tar and feather all of them
and send them all to jail

when the bankers go to jail for good
when the bankers go to jail
we’ll hear the bells of freedom ring
when the bankers go to jail

(maw! Dan’l done shot his self a banker wid his gun maw. Maw! I done gotta shoot a banker too maw.

You watch yawself Brad. Dem bankers is nasty nasty things and th’ best thung yawl can do is haul off and shoot dem from a goodly distance wid yo shotgun – ya hear me boy?)