Links 23 January 2013

Here’s a list of things Reynard read over night.

Global Macro:

North America:

  • Obama Needs a New Deal for His Second Term – Slate
  • Existing Home Sales: Another Solid Report – Calculated Risk
  • Existing-Home Sales Slip in December, Prices Continue to Rise; 2012 Totals Up –
  • Chicago Fed “Economic Growth Moderated in December” – Calculated Risk


  • Time for a land tax in the UK – The Guardian
  • German Investor Confidence Increases to 2 1/2-Year High – Bloomberg
  • EU states get blessing for financial trading tax – Reuters
  • EU Set to Allow Nations to Move Ahead on Transaction Tax – Bloomberg
  • France, Germany prepare plans for deeper economic union: Merkel – Reuters


  • How much can the Chinese consumer really spend – Project Syndicate
  • In China, signs that one-child policy may be coming to an end – Reuters
  • Peking University professor estimates roughly 10,000 officials fled China in 2012 with as much as £100 billion – The Telegraph
  • Wild swings and roundabouts courtesy of the BoJ – FT Alphaville
  • Why does Japan need to ‘right its economic ship’? – The Economist
  • Japan 2.0 (and that’s a target, mind) – FT Alphaville
  • Has BoJ policy changed THAT much? – FT Alphaville
  • Japan faces pressure for more stimulus – The AFR
  • Bank of Japan makes boldest attempt yet to lift economy – Reuters


  • Do Australians care about climate change? – The Conversation
  • Rising house prices to stop further rate cuts – The AFR
  • “Aus should play the role of a kind-hearted lamb’’ – Chinese Colonel – SMH
  • Taking healthcare from children, a new low. But at least we can still afford Grand Prix – The Age
  • The Rio Tinto domino – FT Alphaville
  • Time to broaden Australia-India engagement beyond uranium – SMH
  • Alco urges action on domestic gas price – The AFR
  • Falling emissions cuts carbon tax take – The Australian
  • APRA sounds warning for super – The Australian
  • Baby boomers stager blindly into retirement – Financial Standard


  • Postioning for credit losses, the JPMorgan way – FT Alphaville


    • AB on the topioc of iceland this is from an interview with Már Gudmundsson, governor of the Central Bank of Iceland from CFA magazine:

      Why did Iceland let the banks fail?
      Iceland let the banks fail because it had no other option. If it had attempted to bail out the banks with the government’s own resources, it would have bankrupted the country. We are talking about a banking system that was 10 times GDP.
      In the autumn of 2008, post-Lehman, the nature of the problem was that there was a wholesale run on the foreign currency liabilities of the Icelandic banks.
      Becoming responsible for the banks’ whole
      balance sheet, which was still bleeding, was just impossible because their foreign currency balance sheet was 7.5 times GDP, whereas the foreign exchange reserves of the Central Bank were just over a third of GDP. It was not that Icelanders were necessarily more clever than others but that Iceland didn’t have any choice
      in the matter

      • I don’t know enough about the situation to know where the truth really lies (and I can’t read Icelandic to read the full reports), but from the link I posted:

        “2. Iceland told the creditors to go jump.

        Yes and no. Iceland didn’t bail out the collapsed banks, but that wasn’t for the want of trying. If you read through the Report of the Special Investigation Commission you’d find out that the Icelandic government tried everything it could to save the banks, including asking for insane loans to pay off the banks’ debts.”


        “So the true story is that Iceland tried and tried and tried and tried as hard as we could to save the creditors. The only reason why we didn’t is that the Icelandic government, then and now, is completely incompetent.

        Dumb things Icelandic officials did while trying to garner international support (mentioned in the report) :

        Spin that a noncommittal but positive reply from the Russians was a loan agreement, pissing off the Americans and the Russians resulting in no loans from either.

        Not answering Alistair Darling’s phone call (he was the UK’s Chancellor of the Exchequer or finance minister at the time). They literally put him on hold, then told him to call later and hung up.

        Announcing on live TV that we were not going to help creditors, including those who had deposits, while they were in the middle of negotiations for funding to save said banks. Then having to backtrack to get any sort of help from the EU.

        Lying to the governor of the Bank of England and the president of the European Central Bank about the state of the banks.”

  1. Monbiot on land tax? A Fabian socialist wet dream; near impossible to implement. Having witnessed the types that call for it I am even more sceptical as to any merit – from interest does it operate anywhere in the world?

      • Hi Mav. Long time no see.

        Nah – didn’t research it, just figured if promoted by Monbiot my gut reaction would be to question it, have read previously a little critique from Rothbard et al. And let’s be honest, sometimes you have dealing with personalities that forever place you in opposition to an idea…

        Don’t know if it’s going to be promoted by MB editorial – hope not.

    • I’m not sure what you mean by near impossible to implement. On a technical level it would be the easiest to implement, even easier than income tax. It is on the political level that it would be much harder as all the rent-seekers would try to stop it.

  2. ” The West has now reached the point where total private and public debt, together with unfunded government liabilities, can never be repaid by an ageing demographic. One day even debt servicing will be an issue. With fewer taxpayers and lenders, the ability to take from the future to provide for the present will end. This is when we see the final collapse of the great international governmental Ponzi scheme.”

    follow the first hit for a free view of the article:

    • Reality starts to seep into the MSM.

      “final collapse of the great international governmental Ponzi scheme”

      I don’t know how long they can put this off, maybe months, maybe a few years, maybe a restructure of global debt or change to the monetary system will defuse the inevitable collapse.

    • “What has differentiated Australia is that the Hawke-Keating and Howard-Costello governments largely eschewed the public policy excesses of the major economies. This changed in 2007 and Australia is now in the process of establishing its own Ponzi scheme.”

      Quite right. We have thrown in the towel it seems, unless we change Govt’s.