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Old 2016-01-05, 05:05   #1
ewmayer
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Default Mystery Economic Theater 2016

By way of reference, here are links to previous installments of this thread series: 2015, 2014, 2013, 2012, 2011, 2010, 2009 and 2008.

--------------------------------

Welcome to 2016! With Just a Touch of Mayhem | Wolf Street

To quote the wooden-armed darts-cheating Prussian police constable from Young Frankenstein, 'A riot is an ugly thing ... and I think it's about time we had one!' (Uttered in a suitably exaggerated Prussian accent, mind you.)

Not to worry, I expect the next 'buying panic!' session no later than Wednesday, after suitable coordination amongst the world's key central banks. Help us, Plunge Protection Team, you're our only hope!

Last fiddled with by ewmayer on 2016-04-08 at 03:19 Reason: After splitting 2015++ thread, add refs. to previous years to post #1 of 2016 thread.
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Old 2016-01-05, 06:59   #2
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energy, -41%, yeah, beautiful, time to buy..

OTOH, what do you expect, with China being the biggest holder of US papers?

(joking apart, thanks for sharing)

Last fiddled with by LaurV on 2016-01-05 at 07:01
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Old 2016-01-05, 15:09   #3
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Quote:
It’s the great, barely-told story of the 1990s–the massive migration of Mexican farmers displaced by the dumping of heavily subsidized American grain on the Mexican market. NAFTA’s mandate that Mexico abandon tariffs on grain forced millions of Mexicans off of the land they had tilled for generations.
It was always so much more politically productive to blame the victims and whip up xenophobia. I went on a rant about "Free" Trade a couple of nights ago, citing the horrors of NAFTA, and the greater ones to come from TPP.
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Old 2016-01-07, 19:12   #4
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A comic book illustrated interview with Yanis Varoufakis:
https://www.jacobinmag.com/2016/01/y...ozone-tsipras/
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Old 2016-01-09, 02:11   #5
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Default Takedown of George Lucas, for your weekend perusal pleasure

This Pando piece is briefly un-paywalled, so I quote roughly the first two-thirds (with strategic edits to get under the 10kchar post limit) for public-access preservation:

The "white-slaver" awakens: It's not Disney to whom George Lucas should be apologizing | Pando
Quote:

George Lucas ended his 2015 in controversy, describing Disney—owners of the Star Wars franchise—as “white slavers.” He quickly apologized. To Disney.

Rather than apologizing to a $170bn corporation for hurting its feelings, Lucas should probably apologize to all of his employees from the mid-1980s onwards, and to the tens of thousands of VFX animators and tech engineers and others caught up in the massive wage-fixing cartel that spread across industries and oceans until it was busted up by the Department of Justice in 2010.

Better yet, he could pay back some of the stolen wages that VFX tech workers are seeking in a class action antitrust lawsuit … it was George Lucas himself who first initiated the illegal conspiracy to suppress tech workers’ wages by secretly coordinating recruitment and salaries with competing VFX film companies. Lucas later justified his actions by claiming that had he not secretly suppressed employees’ wages, the small movie studios would’ve gone bankrupt and everyone would’ve suffered. Stealing workers’ wages and their opportunities to protect Lucasfilm’s bottom line may have been an act of selfless benevolence, but it also turned Lucas into a multibillionaire when he sold out to Disney in 2012 and pocketed over four billion dollars for himself.

Disney too was party to the wage-fixing cartel, both in its own right, and by swallowing up the two original co-conspirators: Lucasfilm, and Steve Jobs’ Pixar—or more specifically, Jobs’ top lieutenant at Pixar, Ed Catmull. Seeing how well the conspiracy worked for Pixar’s bottom line, Jobs later conspired to duplicate the secret wage-suppression agreements in Silicon Valley, and from there the wage-fixing cartel metastasized, roping in companies with a combined workforce of well over a million people.

Today Lucas is one of the wealthiest men in the world, recently ranked #94 on the Forbes 400 list. And his Disney stake has doubled and then some, netting him another $2.2 billion just since late 2012.

But let’s go back to the beginning of the Techtopus wage-fixing cartel—to 1986, when Lucas sold off Lucasfilm’s computer animation division, Pixar, to Steve Jobs (and Ed Catmull, in a subordinate role).

It was during this sale that Lucas, Jobs and Catmull made a secret “gentlemen’s agreement” to suppress the computer animation engineers’ wages by secretly coordinating their human resources departments and recruitment.

As Lucas explained in a remarkable 2013 deposition,

“I always -- the rule we had, or the rule that I put down for everybody … I had said that we cannot get into a bidding war with other companies because we don't have the margins for that sort of thing.”

A few minutes later, he added:

"It's not a normal industrial competitive situation."

…In reply to the plaintiffs’ lawyer’s question asking to name some of the VFX companies that Lucasfilm had a no-poaching agreement with, Lucas answered:

“Generally, all companies.”

He described the no-poaching agreement not as a policy, but in imperial terms, as His “wish”:

Q: You said generally that was the policy. Is that a policy that you made?

Lucas: It was a -- it wasn't a policy. It was my wish.

Q: Okay. And did you tell, for example, [former Lucasflim president Micheline] Chau that that was your wish?

Lucas: Yes.

Q: Okay. Did you -- when you told her that, did you expect her to communicate that to the people that worked for her that were responsible for -- for running the recruiting function at the company?

Lucas: Yes.

But when asked to describe how the agreement originated, Lucas became more evasive:

Q: Did you enter into an agreement with -- with Pixar with respect to recruiting or hiring from the two companies?

Lucas: I wouldn't call it an "agreement."

Q: Okay. What would you –

Lucas: It was basically a conversation that -- my only involvement was a conversation between Ed [Catmull] and myself about, since we were both fragile companies, that we wouldn't destroy each other.

Q: And can you tell me to the best of your recollection who said what to whom during that conversation?

Lucas: We were talking about that he was getting his group together, and … I said, great. But we should agree not to try to run each other out of business. I knew he wanted to go into the film business, and when it came to that, you know, we'll be helpful, but, you know, we -- I really didn't want him raiding the company and trying to take all the good people away.

Lucas said in the deposition that a free and fair employment market in computer VFX would be “killing” each other, and so it had to be avoided. One way to avoid being “killed” was to agree in secret not to recruit each other’s employees; enforcement was carried out by snitching on each other’s employees if they came looking for a better job.

Q: In your conversation with Ed Catmull, did you discuss with him how you would handle the situation when an employee did, in fact, want to leave one company for the other?

Lucas: We had discussed the -- the fact of, you know, if somebody want -- comes to them looking for a job and wants to leave here, at least give us a heads-up that that's what they're going to do.

Q: I'm sorry. Who would give whom the heads-up?

Lucas: Ed or somebody at Pixar would call us, whoever the head of, like, ILM, and say, hey, this person is looking for a job. He's come here. We just want to let you know.

At this point in the deposition … Lucas completely flipped and started arguing that the purpose of his non-solicitation “wish” with Pixar and other film companies had zero to do with his wish to avoid a “bidding war.” In order to refresh Lucas’ memory, the plaintiffs’ attorney showed him … this email from Pixar’s head of HR to Disney Studios’ head of HR, Subject: “Lucas gentleman's agmt. FYI”:

Hi Marge,

Here's something I wrote up for Ed [Catmull] a couple of years ago on the LFL [LucasFilm] relationship so you have it handy. I can provide you lots of examples of our following this procedure if it's helpful.

Attached was a document marked “CONFIDENTIAL” that begins, “Our gentleman’s agreement with the Lucas companies” and ends by emphasizing that no bidding up of a prospective employee’s salary is allowed:

Once we have had the conversation with LFL, we never counter if the candidate comes back to us with a better offer from Lucasfilm.

After being shown this and reams of other damning emails, Lucas was again asked about his position on suppressing recruiting in order to suppress wage bidding competition. Incredibly, Lucas denies everything in front of his face:

Q: Did you want to avoid bidding wars with Pixar?

Lucas: No. That wasn't the original intention of my wish.

Q: Okay. But did you want to avoid bidding wars with Pixar –

Lucas: No.

Q: -- with respect to employees?

Lucas: No.

Q: Did you have any feeling one way or another about bidding wars with respect to Pixar?

Lucas: No. I didn't -- no.

Lucas backtracked completely, claiming that other companies’ salary offers to VFX workers had absolutely zero influence on Lucasfilm’s own employee compensation levels. …at the end of the day [Lucas] vented about the way new companies with their sweet salary offers threatened to bankrupt Lucasfilm, nearly derailing his billionairedom:

Lucas: When a company is formed, they immediately go out and raid all the other companies. It's a big problem. And they will pay whatever it takes, even though it is irresponsible. And, of course, these companies are all out of business now, because they paid everybody more than they could afford.

So we have to protect ourselves against that, because that can completely wipe out a department … So if they take away 30 of our people, or key -- 10 of our key people, we're wiped out. We'll go bankrupt. So it's that close to the edge.

Q: Okay. Well, you never had that problem with Pixar, right?

Lucas: No.

In the final moments of the … deposition, [Lucas] completely reversed his earlier denials, and grandstanded about how his secret wage-suppression scheme was a kind of benevolent act of anti-capitalist charity, Mother Theresa by way of Mother Jones:

Q: Would you agree that your conversations with Ed Catmull served to head off any competition between the two companies to attract digital animation employees?

Lucas: No.

Q: Well, would you agree that the discussions you had with Ed Catmull generally prevented, as you said, efforts by the two companies that might have killed each other?

Lucas: Right. I was trying to -- we were trying to protect the San Francisco film industry. It is very, very small. It is very hard for us. We're not like Hollywood. And the only way we can survive is if we do it together. United we stand, divided we fall. This is not like a regular capitalist kind of operation where you're out to kill the other guy. I'm promoting digital technology for cinema, and I'm devoting a lot of my time working with animators and with visual effects people to try to expand the entire medium and discipline for everybody. When I came here … there was nobody.

Q: Did you believe that if you were kind of competing with Pixar for employees, and -- and recruiting or raiding each other's talent, that you would -- that would have limited your ability to do that?

Lucas: Yes.

Q: And it would have made -- it's your testimony that that kind of raiding or recruiting would have limited the growth of the industry here.

Lucas: Definitely.
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Old 2016-01-13, 01:51   #6
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Latest from the Torygraph's favorite monetarist: RBS cries 'sell everything' as deflationary crisis nears.

Recall that as late as last November, AEP was confidently reassuring us that I'll eat my hat if we anywhere near a global recession, and Global recession scare fades as stimulus revives manufacturing, and Roubini dismisses China scare as false alarm, stuns with optimism (admittedly this quotes another prognosticator, but AEP expresses no notable skepticism in his piece) and China's August scare is a false alarm as fiscal crunch fades.

Given RBS's gloomy prediction and AEP's volte-face, it's a good thing that no matter how bad things get in China and the old-fogey global economy, groaf will be restored and the world made safe for bankers and exponential-econ types because we can take AEP's word for it that Paris climate deal to ignite a $90 trillion energy revolution, eh?

Also, a recent piece on NC predicts that the coming deflationary crisis will be so severe that not only will oil drop to $20/barrel, it may go as low as $10 [!]:

2016: Oil limits and the end of the debt supercycle
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Old 2016-01-18, 17:31   #7
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On 9 February in Berlin they are holding the launch of Democracy in Europe (now that would be a good idea...)
https://www.volksbuehne-berlin.de/praxis/diem_25/
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Old 2016-01-19, 01:01   #8
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o Obama unveils wage insurance plan to spur job seekers | Reuters

Typical 0bama - fighting tooth and nail for secretly-negotiated jobs-destruction programs like TPP on the one hand, and loudly blathering about useless band-aids like this on the other.

o Apploitation in a city of instaserfs: How the “sharing economy” has turned San Francisco into a dystopia for the working class | Canadian Centre for Policy Alternatives

o On this Martin Luther King, Jr. holiday in the US, here is a link to a newly-discovered MLK speech whose theme and quoted snip can apply to any number of Soapbox discussions, from this one here [legal immunity of the looter elite, depredations of the "free-market capitalists", "sharing economy" business model, etc.] to the Nightmare Mid-East Theater one:

Newly Discovered 1964 MLK Speech on Civil Rights, Segregation & Apartheid South Africa | Democracy Now!
Quote:
“One of the great debates of history has been over the whole question of ends and means. All the way back from the days of Plato’s dialogues coming on up through Machiavelli and others, there have been those individuals who argued that the end justifies the means. But in a real sense, the nonviolent philosophy comes along and says that the end is pre-existent in the means. The means represent the ideal in the making and the end in process. And so that in the long run of history, immoral means cannot bring about moral ends.”
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Old 2016-01-19, 11:46   #9
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Quote:
And so that in the long run of history, immoral means cannot bring about moral ends.
If I sum this up, is says that bad deeds cannot produce good results. It gets in the way of the "time and chance" paradigm which arguably is more accurate. We say it as "Bad things happen to good people and good things happen to bad people". But this concept is far older than the English language, the oldest form I am aware of is in Ecclesiastes 8:14.

Quote:
There is a vanity which occurs on earth, that there are just men to whom it happens according to the work of the wicked; again, there are wicked men to whom it happens according to the work of the righteous.
So while bad deeds do not produce good results, bad things happen to good people and good things happen to bad people. Confused yet?


I am looking forward to the NY market open this morning after the turmoil last week. Non-stop cash injection by the fed/treasury gave us 5 years of inflated values. China has manipulated their market heavily by devaluing their currency in an attempt to prop up exports. There is a push pull effect where their market tanks when they devalue the currency yet the devalued currency results in more exports which you would think to be favorable for business.

Oil is settling in for a long drawn out depressed price with current $30 per barrel likely to sink to $20 over the next year. I like $1.40 gas, but this means hundreds of thousands of jobs will be cut in the oil production industry.

Last fiddled with by Xyzzy on 2016-02-23 at 01:54
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Old 2016-01-27, 10:24   #10
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Transparency International has produced its new annual index of corruption:
https://www.transparency.org/cpi2015

The top of the table (least corrupt countries) is dominated by Scandinavia, the Netherlands and New Zealand. Canada comes 9th, the UK joint 10th, the US in joint 16th place.
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Old 2016-01-30, 01:27   #11
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An NC reader comments on the movie version of the Michael Lewis bestseller The Big Short - the quoted passage also harks back to the (late stages of) the days when Wall Street ibanks were run as limited partnerships of a kind such that their owner/executives' *sses were actually on the line w.r.to ethical behavior of the firm:
Quote:
Finally saw The Big Short yesterday. They mentioned Lewis Ranieri (the “father” of mortgage-backed securities), so i went back a read the part of [ML's earlier book] Liar’s Poker that described his start at Salomon Brothers. I think it’s worth revisiting the passage (in Chapter 6) that describes the origin of Ranieri’s intense loyalty to the firm. Michael Lewis claims it began with the firm’s response to Ranieri’s need for healthcare —
Quote:
….”He [Ranieri] was a sophomore English major at St. John’s College when he took a part-time job on the night shift in the Salomon Brothers mailroom in 1968. The Salomon paycheck was seventy dollars a week. Several months into his new job he ran into money problems. He had no financial support from his parents (his father had died when he was thirteen). His wife lay ill in the hospital, and the bills simply accumulated. Ranieri needed ten thousand dollars. He was nineteen years old, and all he had to his name was his weekly paycheck.

He was finally forced to request a loan from the one Salomon Brothers partner he knew vaguely. “You gotta remember,” he says now, “I was convinced, really convinced, he was going to fire me.” Instead the partner told Ranieri that the hospital bill would be taken care of. Ranieri thought that meant it would be deducted from his weekly paycheck, which he couldn’t afford, and he began to protest. “It will be taken care of,” the partner repeated. Salomon Brothers paid the ten-thousand-dollar bill racked up by the wife of its mailroom clerk with three months’ tenure. There was no committee meeting to discuss whether this was appropriate. The partner to whom Ranieri had addressed his request hadn’t even paused before giving his answer. It was understood that the bill would be paid, for no reason other than it was the right thing to do.

One cannot be certain of the exact words spoken by a Salomon Brothers partner long since gone, but it is clear what Ranieri heard: Lewis Ranieri would always be taken care of. The act moved Ranieri deeply. When he speaks of loyalty, of the “covenant” between Salomon Brothers and the people who worked for Salomon Brothers, it is that single act of generosity he remembers.
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