"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen


"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister


"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont


"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister


"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Saturday, September 26, 2015

Friday, September 25, 2015

Emmys and Game of Thrones

Game of Thrones won for Best Drama Series. Benioff and Weiss won for Best Drama Writing for "Mother's Mercy." Peter Dinklage won for best supporting actor. David Nutter won for Best Drama Directing for "Mother's Mercy."

Tatiana Maslany was nominated for Best Drama Actress but didn't win.  The Knick was nominated. Veep won a bunch also. Silicon Valley was nominated. Better Call Saul and Bob Odenkirk were nominated.

And Evan Rachel Wood and Olivia Wilde were on HBO's Dolly and Em, two of my favorites.

Tuesday, September 22, 2015

Corbyn and Krugman and rate rage

Here's the real problem with Jeremy Corbyn's wacky money-printing scheme by Ryan Cooper

I don't completely agree with him.

Krugman  and Rate Rage.


Milton, Money, and Interest Rates

More On The Political Economy Of Permahawkery
Is QE good or bad for capital, for rentiers, whatever? No matter — it’s bad for bankers, because it leads to a compression of the net interest margin, the spread between deposit rates and lending rates. And that is why there’s so much agitation for rate hikes on the part of finance.
Rate Rage

The Rage of the Bankers


Monday, September 21, 2015

Dean Baker, Mason, DeLong, Krugman: bankers: evil or stupid

The Argument for Higher Interest Rates: Are the Bankers Evil or Stupid? by Dean Baker

I see my friends Paul Krugman and Brad DeLong are arguing over whether the pressure from the banking industry for the Fed to raise interest rates is the result of their calculation that higher interest rates would raise their profits or is it just ignorance of the way the economy works. Krugman argues the former and DeLong the latter. I would mostly agree with Krugman, but for a slightly different reason.
I don't see the clear link, claimed by Krugman, between higher Fed interest rates and higher net lending margins for banks (the difference between the interest rate they charge on loans and the interest rate they pay on deposits). Such a link may exist, but his data don't show it. On the other hand, I think it is still not hard to make a case for banks' self-interest in following a tight money policy.
An unexpected rise in the inflation rate is clearly harmful to banks' bottom line. This will lead to a rise in long-term interest rates and loss in the value of their outstanding debt. This is very bad news for them.
While we (the three of us) can agree that such a jump in inflation is highly unlikely in the current economic situation, it is not zero. Furthermore, a stronger economy increases this risk. If we assume that the banks care little about lower unemployment (they may not be bothered by lower unemployment, but high unemployment is not something they wake up every morning worrying about), then they are faced with a trade-off between a greater risk of something they really fear and something to which they are largely indifferent. It shouldn't be surprising that they want to the Fed to act to ensure the event they really fear (higher inflation) does not happen. Hence the push to raise interest rates.
I suspect also there is a strong desire to head off any idea that the government can shape the economy in important ways. There is enormous value for the rich to believe that they got where they are through their talent and hard work and that those facing difficult economic times lack these qualities. It makes for a much more troubling world view to suggest that tens of millions of people might be struggling because of bad fiscal policy from the government and inept monetary policy by the Fed.

Interest Rates and Bank Spreads by J.W. Mason


The Fed is powerless

Roger Farmer:
From January of 2007, through September of 2008, expected inflation fluctuated between two percent and three and a half percent. When Lehman Brothers declared bankruptcy in September 2008, expected inflation fell by nearly eight hundred basis points in the space of two months and by October of 2008 it reached a low of negative four and half percent.

Immediately following the Federal Reserve purchase of one point three trillion dollars of new securities, expected inflation went back up into positive territory.