Picturing Our Dystopian World – Where Less Is More

The economic growth expectations for the world in 2014 just plunged to fresh lows at a mere 2.78% – that is 15% “less” growth than was expected a year ago. The world’s equity markets are up 25% “more” than at the start of 2013. Thus, our dysfunctional dystopian world where ‘less’ economic growth is ‘more’ wealth-creating. Long live the central bank utopia…

 

MSCI World (green) vs 2014 World GDP expectations (red)

 

Chart: Bloomberg

h/t @Not_Jim_Cramer


    



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Rand Paul Sets Up Nationwide Network for 2016, Law Firm Say Christie Wasn’t Involved in Bridge Scandal, IMF To Give Ukraine $14-18 Billion: P.M. Links

  • Rand Paul’s campaign organization has assembled

    200 people across all 50 states
    , making him the first potential
    presidential candidate for 2016 to establish a nationwide network
    in preparation for the election.
  • A law firm that Gov. Chris Christie (R-NJ) hired to investigate
    New Jersey bridge closure scandal concluded that the governor was

    not involved
    .
  • The International Monetary Fund announced that it intends to
    give Ukraine
    $14–18 billion
    . Part of that package will come from the
    U.S.
  • The IRS says it will
    take years
    to respond to all of Congress’s requests regarding
    the targeting of Tea Party groups.
  • Citigroup shares fell 5 percent after the bank failed a Federal
    Reserve
    stress test
    , an indicator of Citigroup’s (in)ability to
    withstand serious economic downturn.
  • If you live in New York City and don’t like juggling your
    groceries, you better start hoarding plastic grocery bags. The city
    council just introduced a bill that would impose a
    10-cent fee
    on each bag.

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Jesse Walker on Flight 370 Conspiracy Theories

Did you really expect all the
speculation about the lost Flight 370 to stop just because the
authorities think they know what happened? Alternative theories are
still bound to flourish, Jesse Walker writes. Indeed, if you look
at the reasons why such ideas emerge, you’ll see that this is the
kind of mystery that’s most likely to inspire suspicious
stories.

View this article.

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Late-Day VIX-Selling Panic Rescues S&P From Red Close Year-To-Date

The major US equity indices all pushed into negative YTD territory today in yet another pump-dump-and-small-ramp deja vu day. Early strength gave way quicker today as Biotechs bounced off an early dump (but closed back below their 100DMA for 2nd day – first time in 18 months), momo names were crushed (down 10-14% post-FOMC), Citi was banged over 5% (on extremely heavy volume post CCAR), and the NASDAQ tested down (and bounced off) its 100DMA. Treasuries were mixed once again with bear-flattening the dominant theme. The USD ended the day unch on the week with EUR weakness offset by CAD and GBP strength. AUDJPY was in chgarge of stocks most of the day-session. Copper and oil improved as gold and silver slipped more (though bounced at the close). Late-day JPY pump, VIX dump rescued the S&P back to +0.03% return for 2014.

 

All major US equity indices back to unchanged or worse in 2014… the S&P 500 closed +0.03% YTD (Nasdaq, Russell and Dow all red year-to-date)

 

Whocouldanode that financial stocks were getting ahead of themselves?

 

As Citi was crushed…

 

But today saw Biotechs bounce off an early flush ending small green…

 

And high-beta Momos once again…

 

Since The FOMC, Nasdaq and Small caps have been hammered…

 

even as the broad indices bounced on a magical AUDJPY carpet ride as 330RAMP CAPITAL arrived…(note USDJPY was in charge in the pre-open but algos flipped soon after the US open when they could not garner any momo from USD).

 

As VIX-selling lifted the S&P into the green for 2014…

 

FX markets were very volatile but not if you look at the USD Index…

 

As Treasuries continues to bear-flatten…

 

Especially the long-end…

 

Charts: Bloomberg

Bonus Chart: Candy Crushederer…

 


    



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Economist Tyler Cowen’s Attacker Identified as John Pendleton

The man who attacked economist
and George Mason University professor Tyler
Cowen with pepper spray
 yesterday has been identified as
John Pendleton. Economic Policy Journal points
out
 that Pendleton has previously commented on
Cowen’s blog, Marginal Revolution, accusing Cowen of hacking his
computer and sexually harrassing him for several months. 

In
a comment posted
March 17, 2014, Pendleton wrote: 

What better place to do prison research than inside a
prison?

If the police and FBI won’t arrest you for hacking my
computer and sexually harassing me over the past several months, I
will do it myself—in the next couple weeks before school starts
again. Either way, one of us is going to prison 

I will entertain settlement offers at the email address
provided.

Sincerely,

Jonathan E Pendleton 

Yesterday afternoon, Pendleton made good on these threats,
busting into Cowen’s classroom as Cowen was teaching a class (on
vigilante justice, ironically enough). According to Arlington
County Police spokesman Dustin Sternbeck, Pendleton entered the
classroom, stood up on a desk, and announced that he was placing
Cowen under “citizen’s arrest.” Pendleton then attempted to
handcuff Cowen and, when Cowen resisted, sprayed him in the face
with pepper spray.

A student tried to intervene and Pendleton struck him with a
stun gun, according to Sternbeck. Cowen fled the room, with
Pendleton chasing and eventually catching up to him in the hallway
and trying once again to place him in handcuffs. 

Police eventually apprehended Pendleton, who was taken to the
Arlington County Police Department. He has been charged with
“assault by caustic substance” and abduction, and is being held in
a detention facility. 

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Fact Or Fiction: G-7 Unable To Get Deposit Back On “G-8 Summer Getaway” T-Shirts

THE HAGUE – Shortly after suspending Russia’s membership in the exclusive coalition of industrialized nations, the United States and the six other wealthy nations that compose the newly renamed Group of Seven reportedly found themselves unable to get their deposit back on a set of “2014 G8 Summer Getaway” T-shirts they had ordered for the body’s scheduled summit in June.

 

We placed an order for a box of medium- and large-sized crewneck tees back in February, but when we called to cancel this morning, the guy at the printing shop said the deposit is final and they don’t do any refunds,” said UK Prime Minister David Cameron, who explained that the forum of major global economies lost $80 on the order, which included matching yellow shirts featuring a stylized G8 logo and a pair of palm trees as well as a dozen custom-stitched “Scorchin’ In Sochi” hats.

Of course, Putin never gave us his $10 share, so we’re all going to have to cover that too. We’ll make sure everyone pays upfront when we order our new shirts, though we haven’t decided yet whether we want them to say ‘Brussels Bash ’14’ or ‘G7: Summer of Heaven.’ Plus, [Italian Prime Minister] Matteo [Renzi] is still really lobbying for us to pay extra and get tie-dyed ones.”

Cameron added that the world leaders were also left scrambling to revise their schedule of events for the upcoming meeting as the group’s downsizing had left German Chancellor Angela Merkel without a partner to participate in their annual three-legged race.

 

Source: The Onion


    



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Minnesota School District Where Sixth Grader Had To Surrender Facebook Password to Administrators Settles for $70,000

you bully, now do what we tell youThe Minnewaska Area Schools in Minnesota
have 
settled a lawsuit
brought by the family of Riley Stratton and
the local ACLU over an incident that happened two years ago. School
officials told the then-13-year-old sixth grader she had to give
them her Facebook password so that they could enter and search her
Facebook account. A police officer was present. What was Stratton
accused of doing?

Apparently, it started when she made a post (from home!) about
hating a hall monitor who she said was being mean. Stratton got an
in-school suspension for the infraction. Afterward, according to
the
Minneapolis Star-Tribune
, she went to Facebook to find out
who snitched. An unidentified parent then accused her of having a
Facebook conversation of a sexual nature with her son. For that,
school officials hauled Stratton in, took her Facebook password,
and went through her account. It’s unclear what they found, but the
district did not accept any liability in agreeing to the $70,000
settlement, and it is still defending its decision. Via the
Tribune:

Minnewaska Superintendent Greg Schmidt…says the case
teeters on a fine line over when schools can play a parenting role
to combat things such as cyberbullying.

“Some people think schools go too far and I get that,” Schmidt
said. “But we want to make kids aware that their actions outside
school can be detrimental.”

He wasn’t in charge at the time…but he was involved in the
settlement and said: “The school’s intent wasn’t to be mean or
bully this student, but to really remedy someone getting off track
a little.”

Who is this guy? A credentialed educational “expert,” no doubt.
When I was in middle school, if a teacher or administrator were
hanging around the park or other places young people congregated to
listen in on their conversation, he’d be considered a creep. Even
if someone did complain to an administrator about something someone
said outside of school, it seems unthinkable that the
administrator would take it seriously.

Ensuring a smooth-running classroom and school is enough of a
task without policing children outside of school to boot. “Getting
off track a little” is something that could merit, for example, a
phone call home. Certainly it doesn’t justify a brutish invasion of
privacy.

Though the district did not admit any liability in the incident,
it did agree to new restrictions that limit searches of online
accounts to when there’s “reasonable suspicion they will uncover
violations of school rules.” Even this is unreasonable. School
rules aren’t laws, and they shouldn’t be something students can
break while operating online and off-campus. Would a school claim
the power to search a student’s bedroom for cheat sheets?

Mercifully, Riley, who doesn’t want to return to any school
after the humiliating experience, is now homeschooled.

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Shikha Dalmia Discusses Milton Friedman with Walter Williams, Matt Yglesias and John Bouman

On Milton Friedman’s 100th birthday two years ago, Reason
Foundation Senior Analyst Shikha Dalmia sat down with author and
economist Walter Williams, Political Blogger Matthew Yglesias and
President of the Shriver Center John Bouman to discuss whether
Uncle Milty’s notion that markets create opportunities —
rather than breed injustice and inequality — was true or hooey. The
panel was one of three organized by the Free to Choose Network and
was aired by PBS stations across the country.

The other panels included luminaries such as Bryan Caplan, Amity
Shlaes, Brad DeLong, and Raghuram Rajan.

Friedman

To watch Dalmia’s video for free, go
here

To buy the videos of the other panels, go
here
.

For a sneak peek, go here.

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Greek Supreme Court Rules “Bank Deposit Confiscation” Against The Constitution

While we are sure the governments and their IMF handlers will find a way around such annoyances as the rule of law, the Greek Supreme Court just ruled that the seizure of bank deposits due to debts to the state without previous notice was against the Constitution. We humbly suggest the Ukrainian courts be rapidly brought to a decision on the same ruling, before IMF hands start dipping into pockets.

 

As Keep Talking Greece explains,

Greece’s Supreme Court ruled that the seizure of bank deposits due to debts to the state without previous notice was against the Constitution. The judges had taken up a debtor’s complaint filed in 2006. The debtor had seen his pension being grabbed from his bank account due to debts to the tax office.

 

The court ruling is provisional, judges are expecting to take the final decision on a session on May 5th 2014.

 

 

But the Supreme Court ruling may influence the current practice of tax authorities to proceed to so-called “electronic seizure of bank accounts” without previous notice.

 

This measure has been applied since 1.1.2014.

 

Tax offices and insurance funds are allowed to seize the amount of debt from salary, pensions and rents, provided 1,000 euro will be left in the bank account

 

More details of the Supreme Court ruling here in Greek

One wonders when the US Supreme Court would take up such a decision?

 

As a reminder, here is the IMF discussing their wealth tax idea…

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).

 

There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and—until he changed his mind—Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax—on bondholders—that also falls on nonresidents).

 

There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight—in turn spurring inflation.

 

The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth.


    



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