Weekend links: 19 & 20 January 2013

Here’s a list of things Reynard read overnight.

Global Macro:

North America:

  • FOMC: Transcripts and Other Historical Materials, 2007 – Federal Reserve
  • Fed missed warning signs in 2007 as crisis gathered steam – Reuters
  • Inside the Fed’s 2007 crisis response – Washington Post
  • Fed Transcripts Show Shift From Complacency to Alarm – Wall Street Journal
  • Three Stages of Fed Grief: Key Quotes From 2007 – Wall Street Journal
  • From subprime to crisis: the Fed’s 2007 transcripts – FT Alphaville
  • 2007 FOMC transcripts: a few more excerpts – FT Alphaville
  • Markets will panic over our debt crisis. Sometime. – Washington Post
  • House G.O.P. Agrees to Lift Debt Ceiling for 3 Months – New York Times
  • Consumer sentiment hits year low in January – Reuters
  • Preliminary January Consumer Sentiment declines to 71.3 – Calculated Risk
  • State Unemployment Rates “little changed” in December – Calculated Risk


  • IMF sees up to 9.5 billion euro Greek funding gap – The AFR
  • Bank of Italy sees gloom deepening for economy – Reuters
  • ECB: Euro area financial markets: where do we stand? – European Union
  • Euro zone to tackle thorny question of aid for bank – Reuters
  • Spanish bank bad loans as % of total – Thomson Reuters


  • Reading the China GDP growth entrails – FT Alphaville
  • China recovery taking hold – The AFR
  • SocGen China Hard Landing Presentation – Business Insider
  • China’s economy rebounds in fourth quarter, 2012 weakest since 1999 – Reuters
  • China Exits Slowdown as Quarterly Growth Tops Forecasts: Economy – Bloomberg
  • China wealth gap data stoke scepticism – Financial Times
  • The Limits of China’s Consumer Revolution by Zhang Monan – Project Syndicate
  • China records slowest growth for 13 years – Financial Times
  • China GDP in two charts | beyondbrics – Financial Times


  • There are signs unemployment could break higher than 5.5 per cent, but there’s also reason for hope – ABC The Drum
  • Swan eyes surplus in far distance – The AFR
  • States not needed but here to stay – The AFR
  • Fortescue’s great escape – The AFR
  • Australia too expensive for tourists – The Age
  • Treasurer declares time on side of mining boom – The Age
  • Swan claims IMF support for backdown on surplus – The Australian
  • Domestic gas shortgage looming as supplies go offshore – The Australian


  1. An inquiry into the former Finmin of Greece

    Politicians in Spain under investigation

    Why is Europe in trouble again? Entitlements of the middle classes?
    Or perhaps corruption, crime, tax evasion, immoral politicians, corporate greed and then as a contributor to the problems excessive middle class welfare.

    The fierce liberals-labor or right-
    left debate is pretty useless in this era of distortions.

    • Danielle Park

      Consumer Sentiment Bottoms
      Saturday, January 19th, 2013

      Fiscal reality hits hard… even Jamie Dimon is suffering!

      Download/Listen (Duration: 16:22 — 11.2MB)

      • Paul Tustain – Printing money for beginners (and experts)

        BullionVault founder and CEO Paul Tustain discusses his recent analysis, Printing Money For Beginners And Experts.


  2. Gidday all,

    I have some weird thoughts this morning, I was gone much of yesterday and didnt realise the spat about who was calling who what which started on thursday kept going for a fair bit…..

    Without getting into who is at fault and who is right or wrong, I dont think it in the interests of the site for it to happen again.

    I was wondering this morning if maybe there is scope for the people who own this site, and those who come here a fair bit, to maybe come to some agreed terms on issues like……

    -distracting comments/comments not on topic; and

    then I started thinking about……

    -maybe scope for more of a genuine forum where users can load up subjects

    from there i started wondering if Macrobusiness has any plans to take this further with maybe internet TV/TV or something along those lines.

    I realise the site isnt mine to change, but would have thought there should probably be something done to try and avoid a repeat of the imbroglio we saw.

    any thoughts?

    • innocent bystander

      well, I don’t hardly read the comments anymore (for the above reasons) so I missed the spat completely.
      anyome could start up a discussion forum – easy, go for it.
      as for this site, last time it went off the rails I suggested that posters be limited to 1 comment per thread. baring that stop comments altogether. you are only talking to yourselves at the moment and creating work for the mods.

      • Most of the time the comments and commentators add to the discussion of an issue but a limit of 1 or 2 comments per thread is a good idea.

        It would limit the spruikers but also limit the often fruitless exercise of those they frustrate of trying to get them to admit that they are being unreasonable. Usually the attempt plays to their objective of derailing useful discussion.

        Most readers are quite capable of reading 2 opposing comments and working out who is making the more credible point.

        I dont think bots or spruikers are a problem. Better to expose the limits of their arguments to reasoned discussion.

        • I should note that the line between spruik, spin and legitimate debate is often very fine and ultimately one must rely on the judgment and discernment of the reader to pick the difference.

          One person’s spin is the next person’s reasonable opinion.

          Hopefully, quality public discussion and debate will cause people to think deeply about their personal received wisdoms and biases with the result they question and perhaps change their position.

          Well there goes my 2 comments on this thread ! 🙂

    • I saw the distasteful commentary Thursday. Have to admit I was surprised they were allowed to stay up. Was not a good day for MB IMO.

      The solution? When the subject matter of comments strays into that area, kill it, delete it, cut it and fast. Ban the instigator (s) if appropriate. And alter the site rules to clearly reflect that.

      More censoreship (than current) isn’t the answer IMO, but Mod vigilence and fair application of rules is. There is no mileage at all entertaining in anyway commentary on MB relating to that vile subject. It’s a given that decent folk here are nauseated and inflamed by such things.

    • dumb_non_economist


      Please, don’t blow it out of proportion. I know you’re more resilient than that, it reeks of crocodile tears,

    • To those who thought the thread contained offensive opinion it might be a good idea in future to say so on the thread itself – after all only a handful of commenters stood up and stated their objections. I do wish there had been more.

      Sometimes the best avenue is to actually add your voice when it matters.

      (And +1 to the general gist of Pfh007s comments above, although naturally I suggest a limit of two comments too low!)

      • Settled then,it will be remembered as just another immature liberal meeting of sorts,with you as leader..little economic theory,less for the Lib’s n all about you,say’s insults and immaturity in the end found you still,to unable n inept to defend your leaders,Abbott or equivalence..headings just like two of your,home bases,too man-up on,n you circled it straight for the Dirt..again

    • I like the idea of limiting posters to a certain number of comments per thread, and perhaps a maximum number of comments per day. Maybe 3 comments max in a thread, I don’t know about daily post max.

      The comments are a great part of MB, and posters more often than not add value to the original piece. But it’s rare that a poster adds any value after their second or third post to the thread. At that point it’s usually just dogmatic defence of their first comment (unnecessary) or distraction/derailing to prevent their position being successfully challenged (mischievous and sometimes undermining).

      It would also reduce some of the friction in threads, where prolific posters provoke poor behaviour (what a mouthful!). It doesn’t excuse poor behaviour but efforts should be made to reduce provocation too.

      • By the way, I was travelling and missed the kerfuffle on Thursday so those are just general comments, not directed at anyone or any particular thread.

    • 3d1k,

      Notwithstanding the rolling commentary of persoanl criticism, the subject of note really had no place being on MB. It would have been best to have been nipped in the bud (or better – not appear at all). That it wasn’t I think was the error.Vigorous discourse is quite ok but as you saw, inflamatory as it was, it got out of hand quickly.

      There is a lesson here.

        • Agreed.

          The standard of material presented on this site is high, as to are the majority of the comments. I like the fact that people don’t always get an easy ride (I’ve been schooled a couple of times and it made me sit back and think – dangerous I know). So please don’t put rules in place to cater to the lowest common denominator, as we have enough of those out there as it is.

      • Campaigners would be well served to exercise civility and moderation when commenting.

        One lesson that I’m sure has been learned is that extreme comments on public fora remain on the record – technology easily captures and secures for future reference.

        Recent publicity around high-profile political Twitter Twits demonstrates inappropriate statements can be hard to shake.

        Civil discourse the wise option.

    • For some reason I couldn’t post the below on the thread in question.

      I reread it all this morning and found I had missed several of the most offensive comments that got it all started, which is why the thread was allowed to proceed. I was also distracted for much of the afternoon and only skim read many of the later comments.

      When I reread it in full this morning I completely agreed with the sentiments expressed above, which is why I removed the entire debate. Indeed commentor “hubris and hyperbole” gave me a royal serve this morning after which I felt quite chastened, though guilty of a lack of focus not intent.

      Apologies to all for allowing it through. It was tawdry editing.

      BTW, we are planning forums for the site with appointed moderators.

      • Forums would be good! 💡

        Make me a moderator and you would see deniers, minebots and spammers disappear! 😉

      • A forum sounds like a great idea.

        It might be helpful to include a couple of sticky topics on the ‘Art of Disagreement’ , rhetoric, polemics etc.

        A beginners guide.

        This is more than just a list of rules. The idea is to give people tips on how to express their ideas effectively and how to spot and deflect or ignore ploys and other techniques used by the more experienced( or professional) commentators.

        One thing that drives, I think, all the commentators on MB nuts is the poor quality of debate in the MSM and surprisingly academia ( which struggles to get beyond the campus walls and be heard – and challenged)

        Intelligent, critical and most importantly persuasive debate on economic issues is so important that if a MB forum could lead the way it would be a great public service.

      • How will you keep the astroturfers and Australia Property Forum bulls away from such a forum?

    • I read articles and comments over last few days but I missed the spat that Gunnamatta refers to.
      That could be because I don’t bother to continue reading comments when I detect the thread has been hijacked by the same ol ‘mywaymen’.

      However, since the topic is up for discussion I’ll throw in my 2¢.

      Reading comments used to be worthwhile, but that was over 12 mths ago.
      Now it has features of a clique.
      I read MB to have the complicated explained in a way that is informative and readable (as opposed to dry, academic lingo). Twelve months or so ago that seemed to be the objective for MB.

      Too many comments now come from too few, and too many of the too few have agendas.

      I don’t agree with the suggestion that comments be limited to one per person per thread, at least not until an edit facility arrives.

      Another feature that is currently unequal is the ability to use html text formatting. The ‘too few’ (or most of them) have this skill but many of the rest don’t.

      MB – can we have an html formatting page (just for basic things like bold, quote etc.)?
      I know this isn’t a forum, but here is an example (from a forum) of a page of basic html formatting instructions that I find easy to use: http://whirlpool.net.au/wiki/wp_faq#whirlcode

      • Could be difficult to differentiate between those peddling a view for their own personal reasons compared with those with a corporate entity behind them. We all have our biases for one reason or another.

      • From personal experience running Bubblepedia, I can tell you that keeping astroturfers at bay is a full time occupation. 😯

        • Didn’t you get banned from Bubblepedia for trying to hijack the forum?

          You’re a banned member there now….. what happened?

          • That’s not what Dan Cox (Bubblepedia Owner) said…..

            Bubblepedia disruptions – funniest thing happened this week

            Postby dan » Sat Sep 29, 2012 9:52 pm

            Hi everybody, I thought I had all the troublesome hosting issues sorted out, and there would be no more slow server issues etc, but it seems to have happened again.

            This time it seems the moderators tried to knock off the forum and put it somewhere else without asking nicely. I’m not sure why they did this, maybe they will tell us one day. For now their accounts are suspended.

            What a funny thing to do.

            I have restored the forum to a point not long before they took it, so I apologize to anyone whose posts were lost.

          • You seem to be an agent of the forum we do not discuss here, Mr Martin Place. Duly noted.

            You also seem very keen to stop the management of this site from possibly appointing me a moderator of any putative new forum, because you found me a formidable opponent (not that they are considering it, but just in case they are, you are clearly reacting pre-emptively).

            Dan Cox, the owner of Bubblepedia, was not available to us for months. He was not reading or monitoring the Bubblepedia forum in any way. Numerous emails to him went unanswered and we were thus unable to install modifications that would quell a surge of spam. We finally decided to move the forum off elsewhere so that we could gain full access and run the forum properly. Someone (you?) contacted him via a channel we didn’t have, and he reacted against us in haste, and later regretted it, asking us to rejoin, which we rejected. I won’t go into more detail, other than to say that over 80% of the forum we “hijacked” was material created by Bobby Fischer and me anyway.

            Mods here should take note of the “Martin Place” persona. It’s one head of the astroturfing hydra.

  3. http://www.hoisingtonmgt.com/pdf/HIM2012Q4NP.pdf

    Quarterly Review and Outlook
    Fourth Quarter 2012

    “These seven propositions strongly suggest that the latest fiscal policy actions will serve to further restrain economic growth. We cannot tax ourselves into prosperity as FDR’s 1937 effort and numerous other historical cases demonstrate. We can, however, deficit spend ourselves into poverty. Consistent with the academic research, we could not find historical precedent for the proposition that prolonged deficit spending achieved prosperity. Numerous examples of great empires like the Mesopotamian, Roman and the Bourbons of France collapsed under the weight of high government debt. Other countries have survived but have languished under increasingly miserable economic conditions.”

    • ….. and that report simply compounds the problems for the Fed and will illicit the standard (post 2008/9)response from them.

    • “At some point, central banks will have to take away the balm of easy money. If housing markets remain so fragile when they are getting so much help, they may break when it is removed”

      Well said.

    • Would be interesting to see the MB take on what the global monetary/financial system might look following the inevitable collapse or restructure we are heading toward (without going overboard as Zero Hedge often does). I feel that too much of the commentary here is based on the status quo remaining, the validity of such a view is likely to be challenged in the not too distant future.

      • +1 .. though of course one imagines the MB crew may well take issue with your “inevitable” assessment. I don’t, FWIW … lessons of history.

        “…too much of the commentary here is based on the status quo remaining”


  4. Re ‘Are CBs sowing the seeds……….’

    Mr White is a sensible fellow

    “Keynesian economics has made policymakers obsessed with encouraging consumer demand, but they have ignored the longer-run ramifications of easy credit and low interest rates. The most important price in the economy has been held low, probably far below its natural rate, for longer than any time in history including the 1930s,” he says.”

    Forcing down interest rates makes as much sense as having runners train at sea level knowing they will eventually need to compete in the Himalayas.

    • +1 …or to use a timely cyling analogy, it makes as much sense as picking your Tour de France team on the basis of how fast they ride downhill.

      • Absoloodle to both patrician and pfh…however even on MB you won’t get many supporters for that line of thinking. So It seems fat chance to ever persuade anyone else.
        So as BB said we will just wallow on to destruction.

        • I don’t share your pessimism.

          Slowly but surely more and more people are starting to understand that pumping up economic activity using manipulated interest rates to drive debt growth is poor public policy and an inflation response is no indicator of the damage that is being caused.

          Hopefully they are also starting to realise that they need to be sceptical of ANYTHING published by a bank masquerading as research.

          How seriously does anyone take dietary advice from KFC.?

          If govts want to stimulate economic activity ( i am not neccessarily saying they should) there is no need to use the indirect route of low interest rates and the banking system’s debt ledgers.

          If they want to stimulate activity they should do so directly and cut out the banks. Either print and spend or print and cut taxes.

          When economic activity generates an eventual inflation response, moderate the printing.

  5. http://www.businessinsider.com/db-deleveraging-is-almost-complete-2013-1

    I may be missing something in this joyful story about deleveraging in the USA.

    The graph at the bottom as noted by the excited commentary shows the household debt to income ratio has almost returned to its long term trend after getting head spins at close to 140%.

    As you might imagine, over the last 50+ years that trend has been up (No doubt – as everyone became skilled at leveraging up their personal balance sheets).

    My projection of that trend line has US households cracking 150%+ in about another 20 years – assuming no more bouts of irrational exurberance.

    No discussion of whether an upward sloping trend line for debt to income is even a good idea?

    Of course not!

    It is another bit of bank ‘research’ that endorses a growing role for debt.

  6. i have no idea of what you all talking about, I did no see the thread but I have witnessed some mob behavior lately, quite interesting I would say.

  7. Saw an absolute clanger in the Townsville Bulleton paper version (Remember them!) business section the other day, had the regular ‘Townsvilles about to boom; buy now bla bla bla’ article right next to the Rising Unemployment article. Sub editor and layout pers have a sense of humour

    • +1 on the app guys

      or at least a mobile device compatible version of the blog

      there are numerous examples of how this is done well. It can’t be that hard.

    • +1 an Ipad friendly site would be nice. In fact I was tying to work out how to do it myself (but have been busy with other stuff of late)