Imagine an alternate timeline where Clinton had a beard.

My comment at Economist's View.
Summary/Genealogy

December 22, 2012
Maya and the Vigilantes by Krugman

[O]ne way to tell what’s driving interest rates over any given period is to look at what was happening to other asset prices…. If rates have risen because investors fear default and fiscal chaos, stock prices should plunge. Did this happen during the supposed vigilante attack of the 1990s?

Well, no.

What really happened in 1994? The economy was starting to recover (it was actually adding 300,000 jobs a month for a while),and investors expected the Fed to tighten a lot. Clearly, they overreacted. But the events don’t bear the “signature” of an attack driven by debt fears.

BACK WHEN I FEARED THE BOND-MARKET VIGILANTES: MAUNDERING OLD-TIMER REMINISCENCE WEBLOGGING by DeLong

The right policy, we thought--and I think the evidence is pretty clear that we were 100% right--was to aggressively move to reduce the budget deficit in 1993 even thought the recovery was weak in order to eliminate any market expectations that high deficits would lead to higher inflation, and--more importantly--to eliminate any belief on the part of the [Alan Greenspan] that [he] need to raise rates rapidly and far to create a low-investment jobless recovery in order to guard against any possibility of a renewed inflationary spiral. 

That was not an attack but a horizon-sighting of bond-market vigilantes--or perhaps only the market thinking [Alan Greenspan] thought [he] was about to get a horizon-sighting of bond market vigilantes. 

I think we were right then to fear and take steps to ward off the bond-market vigilantes--or perhaps only right to fear and take steps to ward off any [Alan Greenspan] decision that i[he] needed to fear and take steps to deal with bond-market vigilantes. In any event, our policies were right. [changed "Federal Reserve" to "Alan Greenspan"].

December 24, 2012
Bond Vigilantes and the Power of Three by Krugman

Matthew Yglesias picks up on a point I’ve tried to make at some length recently: the popular story about how an attack by bond vigilantes can cause an interest rate spike and turn America into Greece, Greece I tell you, is incoherent. (Here’s a 2010 example from Alan Greenspan — the piece in which he declares it “regrettable” that the vigilantes haven’t yet attacked, but grudgingly concedes that low rates might persist “well into next year”, that is, into 2011. So what has he learned from the failure of his prophecy? Nothing, of course).

February 15, 2013
The best reason to worry about the deficit by Ezra Klein

The theory was correct. By the end of Clinton’s term, the interest rate on 10-year Treasurys had fallen to 5.26 percent — lower than it had been in 30 years. And the economy was, indeed, booming. “The deficit reduction increased confidence, helped bring interest rates down, and that, in turn, helped generate and sustain the economic recovery, which, in turn, reduced the deficit further,” Treasury Secretary Robert Rubin said in 1998.

February 16, 2013
Can We Cut the Crap on Robert Rubin and Deficit Reduction by Dean Baker

So we are supposed to believe that the difference between the 2.5 percent real interest rate in the high deficit pre-Clinton years and the 2.2 percent real interest rate at the end of the Clinton years is the difference between the road to hell and the path to prosperity? This is the sort of nonsense that you tell to children. It might past muster with DC pundits, but serious people need not waste their time. 

The story of the boom of the Clinton years was an unsustainable stock bubble. This led to a surge in junk investment like Pets.com. It led to an even larger surge in consumption. People spent based on their stock wealth, pushing the saving rate to a then record low of 2.0 percent (compared to an average of 8.0 percent in the pre-bubble decades). 

Robert Rubin acolytes may not like it, but the deficit reduction was a minor actor in the growth of the 1990s. The bubble was the real story. That may not be a smart thing to say if you're looking for a job in the Obama administration, but it happens to be the truth. You have to really torture the data to get a different conclusion.

February 19, 2013
CROWDING-IN AND RAPID GROWTH IN THE 1990S: DEAN BAKER GETS ONE WRONG, I THINK by DeLong

The actual inflation rate in 1991 was 5%/year, but the expected inflation rate over the next decade was more like 3%/year. We are not talking about an 0.3 percentage-point decline in real interest rates, but rather about a 2.3 percentage-point decline in real interest rates. Moreover, back in 1992 when we unwound the yield curve and projected interest rates in the future we saw nominal interest rates has highly likely to rise unless the deficit was substantially reduced. The 2000 we were looking forward at had forecast nominal interest rates of not 7.86%/year but 10%/year or so--a real interest rate of 7%/year. 

The counterfactual for 2010 is thus different not by 0.3 percentage-points but by 4.8 percentage-points. That is a much bigger deal. 

How big a deal? Enough to boost the growth rate of potential output by between 0.5 and 1.0 percentage points per year, in my estimation…

 Andy Harless comments:

Empirically I have to call this for Dean. Take the real 10-year yield at the end of the last quarter before the election, using the Philadelphia Fed Survey of Professional Forecasters 10-year expected inflation rate. In 1992, the real yield was 2.6% (6.4-3.8). In 2000, it was 3.3% (5.8-2.5). Obviously, you could choose the dates differently and get a different answer, but it's hard to imagine that there's strong evidence of declining real yields when my first cut shows them increasing. And I don't think you can use projections if those projections are based on models in which crowding out has large effects on interest rates. 

However, (1) everyone should realize that interest rates are endogenous, and I'm not sure the long run elasticity of investment demand with respect to the interest rate is very large, (2) it's obvious if you remember the late 1990's that there is dynamic, multiple equilibrium kind of stuff going on here, and I think interest rate comparisons are missing the important part of the story.

February 21, 2013
DeLong responds:

(i) At least as we saw it, much of the effect of Clinton fiscal policy was baked into the interest-rate cake by the fall of 1992, (ii) we did have a large unexpected increase in desired high-tech investment spending in the 1990s, and (iii) we at least had no doubt that without deficit reduction on a large scale Greenspan was going to push interest rates up far and fast...

My posts:

First post

Second post

Third post

Fourth post

Fifth post

Sixth post

Seventh post

I have to call this for Krugman/Baker/Harless against DeLong/Klein. I guess the counterfactual would be that if Clinton hadn't done deficit reduction on a large scale, Greenspan would have pushed interst rates up far and fast. No doubt DeLong agrees with Krugman and views Greenspan's current views on bond vigilantes as wrong. So Greenspan would have been wrong to send the economy into recession in the 90s. What would have followed?

mommy-daddy wars (Malcolm and Martin) continued

From this post.

It would be nice if DeLong could have "shown his work" on how they came up with the counterfactuals.

Andy Harless comments:

Empirically I have to call this for Dean. Take the real 10-year yield at the end of the last quarter before the election, using the Philadelphia Fed Survey of Professional Forecasters 10-year expected inflation rate. In 1992, the real yield was 2.6% (6.4-3.8). In 2000, it was 3.3% (5.8-2.5). Obviously, you could choose the dates differently and get a different answer, but it's hard to imagine that there's strong evidence of declining real yields when my first cut shows them increasing. And I don't think you can use projections if those projections are based on models in which crowding out has large effects on interest rates. 

However, (1) everyone should realize that interest rates are endogenous, and I'm not sure the long run elasticity of investment demand with respect to the interest rate is very large, (2) it's obvious if you remember the late 1990's that there is dynamic, multiple equilibrium kind of stuff going on here, and I think interest rate comparisons are missing the important part of the story.

and

...or rather, I should say, "I think the long run elasticity of investment demand with respect to the interest rate MAY BE quite large" (not the opposite). But "long run elasticity" is really an attempt to shoehorn my subsequent point into a simple comparative static context. You don't ultimately need to "bring down interest rates" in order to "make it easier for the private sector to invest and grow," you just need to make the resources available. The interest rate would be the signal through which this process is transmitted, but given the weird dynamics and multiple equilibria, it's not clear to me that the interest rate should end up much lower than where it started.

Really this is a discussion of the bond vigilantes who the rightwing argues will punish Obama for turning us into Greece. Or is the "confidence fairy" with the discussion of prodding the private sector to invest and grow?

Bond Vigilantes and the Power of Three by Krugman

central banker vigilantes

BACK WHEN I FEARED THE BOND-MARKET VIGILANTES: MAUNDERING OLD-TIMER REMINISCENCE WEBLOGGING by DeLong

The right policy, we thought--and I think the evidence is pretty clear that we were 100% right--was to aggressively move to reduce the budget deficit in 1993 even thought the recovery was weak in order to eliminate any market expectations that high deficits would lead to higher inflation, and--more importantly--to eliminate any belief on the part of the Federal Reserve that it need to raise rates rapidly and far [sic?] to create a low-investment jobless recovery in order to guard against any possibility of a renewed inflationary spiral. 

That was not an attack but a horizon-sighting of bond-market vigilantes--or perhaps only the market thinking the Federal Reserve thought it was about to get a horizon-sighting of bond market vigilantes.

This is the famous episode where Clinton throws a tantrum over being pressured by Rubin and Greenspan to drop his campaign promise of enacting a middle class tax cut-spending bill  and where Carville says he now wishes to come back as the bond market. Here is where the social democratic, Eisenhower-Republican elite political class bend the knee to the giant vampire squid financial sector. Clinton should have pulled a Shinzo Abe and replaced Greenspan.

DeLong  writes "I think the evidence is pretty clear that we were 100% right." What's the evidence? A recent meme and topic of discussion has been the declining labor share of productivity gains. Ever since the 1980s we've a had a shampoo economy: bubble, bust, rinse, repeat. The 1990s look better in light of the 2000s, but they ended with a stock-tech bubble which morphed into a disastrous housing bubble. 

Every recovery from a recent recession have been a slow "jobless recovery."

...and--more importantly--to eliminate any belief on the part of the Federal Reserve that it need to raise rates rapidly and far [sic?] to create a low-investment jobless recovery in order to guard against any possibility of a renewed inflationary spiral. 

George W. Bush increased deficits and failed to renew an inflationary spiral.

Fear-of-China Syndrome by Krugman

How is it possible that we’re borrowing much less from foreigners when the government deficit has gone up so much? The answer is that the private sector is deleveraging, having moved into massive surplus as consumers try to pay down debt and corporations hold back on investment in the face of weak consumer demand. All those government deficits have only partly offset this move, so that overall national borrowing from overseas is down, not up. 

But what would happen if the private sector stopped deleveraging? The answer is, we’d have a strong economic recovery, which would among other things greatly reduce the budget deficit. A side implication of this point, of course, is that for the time being that deficit is a good thing, helping to support the economy while the private sector unwinds its excessive leverage. 

So who’s actually financing the US budget deficit? The US private sector. We don’t need Chinese bond purchases, and if anything we’re the ones with the power, since we don’t need their money and they have a lot to lose. In fact, we don’t want them to buy our bonds; better to have a weaker dollar (a point that the Japanese actually get.)

The last hyperlink sends one to:

Chinese Bond Purchases by Krugman

September 10, 2010

Regular readers may remember that I’ve spent more than a year trying to knock down the idea that the United States dare not get tough with China, because we need them to keep buying our bonds; as I wrote way back in May 2009, given the fact that we’re in a liquidity trap, a decision by China to buy fewer of our bonds would actually be doing us a favor — it would weaken the dollar, and help our exports. 

I’ve failed, despite repeated attempts, to get through with this point here — but the Japanese get it. They’re complaining to China about its purchases of yen-denominated bonds, which they argue — correctly — hurts Japan by strengthening the yen. 

Quick update: I should also link to this post, and quote Dean Baker again: China has an unloaded water pistol pointed at our head.

The confidence fairy lives.

What about the bond vigilantes?

(via Krugman)

1. Paul Krugman is right 2. If you think Paul Krugman is wrong, refer to #1

As DeLong and others have said. Here Krugman points out that Bill Gross has written a letter of apology to PIMCO's investors over being wrong about the end of QE2 this summer. He said interest rates in the bond market would spike, but they didn't and he lost money. As Krugman pointed out at the time, all you needed was an understanding of the IS-LM model to judge that Gross was wrong. Gross is usually good and advocated relief in the mortgage market via Fannie and Freddie to provide stimulus. But Gross wasn't alone with mistaken bet. Ever since the American Recovery and Reinvestment Act was signed into law by Obama, the Very Serious People of Washington and the media have been obsessing over the bond vigilantes and deficit-reduction.

They have been proven wrong again.

Here's Krugman calling it in real time. I remember it very well because up to that point I had some respect for Gross's no-nonsense analytical abilities.

Here's the Wonkish explanation for Krugman's disagreement with Gross.

The Internets are wonderful. Here's a good blog post from Nov. 22 2009, discussing those who warned of a bubble in Treasuries.

Role reversal

Many people on Wall Street are now warning that there’s a huge bubble in government debt, that interest rates will spike any day now; it’s a warning that clearly has the Obama administration’s ear. A good sample is this piece from Morgan Stanley, according to which “Our US economics team expects bond yields to rise to 5.5% by the end of 2010 – an increase of 220bp that outstrips the 137bp increase in the fed funds rate expected over the same horizon.”

Btw: what? Almost everyone expects unemployment in late 2010 to remain close to 10%. Why, exactly, would the Fed funds rate rise sharply?

Anyway, I was wondering: it’s my impression that the same people now warning about the alleged Treasury bubble dismissed warnings about the housing bubble. Is this true?

I think so. Morgan Stanley, September 2006:

The pessimists argue that the bursting of a putative housing bubble means that prices could decline significantly. There is some risk that prices could decelerate faster or even decline in real terms — after all, investment and speculative activity has picked up in the past five years. But the character of housing demand makes the much-feared decline in prices on a nationwide basis unlikely …

Hmmm.

Coincidently Morgan Stanley and Goldman Sachs economists are now calling on the Fed to target nominal GDP. (via DeLong)

Krugman on the real-time test of Keynesian versus classical economics.

Bond Vigilantes Ignored

If they're not saying what people want to hear. Krugman and Steve Collender highlight the hypocrisy.

The Fear
(or a bubble in money)

Roubini says there's a bond bubble which will have a disasterous correction. Nick Rowe explains the "bond bubble" in plain English and points out it's bad but not for the reasons Roubini says.

A bubble in house prices is a bad thing. It will cause over-investment in building new houses, under-investment in other things, and under-consumption. A bubble in bond prices is a much worse thing. It will cause under-investment in everything, and under-consumption in everything, because it causes under-employment of everything. That's because bonds and money are close substitutes. A bubble in bonds causes a bubble in money. And a bubble in money can cause a bubble in bonds. Or perhaps they are just different aspects of the same bubble, in both money and bonds.

It's not the bubble in bonds per se that is the big problem. If there were only a bubble in bonds, and no bubble in money, it would be no worse than a bubble in houses. It might lead to the wrong mix of real investment and consumption (presumably too little real investment and too much consumption, due to a wealth effect). It's when a bubble in bonds spills over into a bubble in money, the medium of exchange, that we get a big problem. An excess demand for the medium of exchange is what causes, and is the only thing that can cause, a general glut of all goods. And that causes employment and output to fall, and both consumption and investment to fall.

That's why we should be worried about the bond bubble.

If the US and world economy returned immediately to long-run equilibrium, and expected and actual inflation increased to target, the price of US government bonds would immediately fall. And people who held bonds would suffer a large loss when the bubble burst. But perhaps it won't return to long-run equilibrium for a long time. That is what holders of bonds must be forecasting, because if they are right in this forecast, their decisions to hold bonds at current prices are rational.

And maybe they are right. Who am I to know better? But, like all bubbles, the beliefs that sustain the bond bubble are, at least partly, self-fulfilling. The bond bubble, and the associated money bubble, create the general glut, and prevent the economy returning to long-run equilibrium. And the belief that the economy will not return soon to long-run equilibrium is what sustains the bond bubble.

We need to burst the bond bubble. Bursting the bond bubble will help the economy recover more quickly.

(via Andy Harless, via DeLong)

But maybe he agrees with Roubini? In the comment section Rowe is asked

Or alternatively, why the old-fashioned Keynesian idea of liquidity preference -- which is all that excess bond demand amounts to -- is usefully re-labeled as a bubble?

and he responds:

Precisely because the people who are now saying that bonds are not a bubble, might be lead to rethink their position, and think that in some important sense, the demand for bonds and money is too high, and that the thing we ought to be doing is worrying about this, and bursting that bubble, not propping it up. Rhetorical? Sure.

Someone else in the comments writes along the lines of what DeLong has written

The bubble in bond prices exists only in crazy minds of fixed income traders. Shut them down and get to something more productive and worth talking about. Any bond of US government will pay 100 at maturity with coupons which were fixed at issue date.

Yes the government's debt costs will go up if rates rise, but the United States is not Greece.

Rowe links to Daniel Gross's "The Bubble that Isn't." So I don't think he agrees with Dr. Doom.

 

Release the Kraken 
(or Damn the Gods)

Appeasing the Bond Gods by Paul Krugman

Release the Kraken Part Deux 

Floyd Norris on government controlled behemoth zombies Fannie and Freddie:

Already the four big commercial banks -- JPMorgan Chase, Bank of America, Wells Fargo and Citigroup -- have taken losses of $9.8 billion on loans they have repurchased or expect to be forced to repurchase. Moshe Orenbuch, an analyst at Credit Suisse, says he thinks that figure will rise to $20 billion or $30 billion before the wave is over. Other analysts think the number could be significantly higher.

...  

So far, most of the money the banks have paid has gone to Fannie Mae and Freddie Mac, which used to be government-sponsored enterprises and now, after the bailouts, are government-controlled. But even though they have collected billions, Fannie and Freddie are getting increasingly frustrated with the banks for what they see as foot-dragging.

Freddie, in its quarterly report filed this month, said it was now requiring banks "to commit to plans for completing repurchases, with financial consequences or with stated remedies for noncompliance, as part of the annual renewals of our contracts with them."

A spokesman for Freddie would not say just what those remedies or financial consequences might be. But any bank that wants to keep offering mortgages must have contracts with Fannie and Freddie. Tying the repurchases to contract renewals could be a strong bargaining chip.

The mortgages sold to Fannie and Freddie were supposed to conform to specified requirements. Those requirements did get weaker as the credit bubble intensified -- a fact some bankers privately mutter the government now wants to forget -- but they were still of higher quality than many mortgages sold into private securitizations.

The Next Six Months are Crucial
(or Dylan Matthews Reduces Uncertainty*)

I see Dean Baker has a lengthy fisking of Thomas Friedman's column for today, but I'm not going to read it until I perform the exercise of doing it myself. Then I'll compare notes and see how I did.

Friedman takes the title of his column "Really Unusually Uncertain" from a description Bernanke recently made about the economy in testimony to Congress. The Fed Chairman described the atmosphere as "unusually uncertain" because the economy was giving off mixed signals. Economists are also divided on where the economy is heading, with many saying they don't know.

Right from the start, Friedman puts on his pundit hat and quotes PIMCO's** C.E.O Mohamed El-Erian to the effect that "Structural problems need structural solutions."  The Consenus seems to have latched on to the term "structural."*** Yesterday, the Minnesota Fed President asserted that the labor market had "structural" problems that would take time to sort out. Friedman opines:

There are no quick fixes. In America and Europe, we are going to need some big structural fixes to get back on a sustained growth path -- changes that will require a level of political consensus and sacrifice that has been sorely lacking in most countries up to now.

"We" are all going to need to compromise and sacrifice. But what exactly are these "structural problems"?

The first big structural problem is America’s. We’ve just ended more than a decade of debt-fueled growth during which we borrowed money from China to give ourselves a tax cut and more entitlements but did nothing to curtail spending or make long-term investments in new growth engines. Now our government owes more than ever and has more future obligations than ever -- like expanded Medicare prescription drug benefits, expanded health care, an expanded war in Afghanistan and expanded Social Security payments (because the baby boomers are about to retire) -- and less real growth to pay for it all.

Well Obama's health care reform should help with the deficit and government debt. Social Security isn't that bad off and the government's debt problems should ease with growth. Bill Clinton balanced the budget ten years ago, but he did it with "debt-fueled growth" - or rather with help from a stock market tech bubble and Alan Greenspan. Here Friedman raises an interesting issue. How do we get "sustained" growth rather than "debt-fueled" growth? Or more accurately, how do we get sustained debt-fueled growth, rather than bubblicious debt-fueled growth?

Structurally speaking, our political elites allowed the housing bubble to blow up and pop. And just to make sure the resulting financial crisis would be severe and sink us in recession, they allowed the shadow banking system to metastasize and outgrow Depression-era government regulations, some of which were scrapped anyway. At least Friedman, along with Rogoff and Reinhart, call for more fiscal**** stimulus in the face of weak employment levels:

America will probably need some added stimulus to kick start employment, but any stimulus right now must be in growth-enabling investments that will yield more than their costs, or they just increase debt. That means investments in skill building and infrastructure plus tax incentives for starting new businesses and export promotion. To get a stimulus through Congress it must be paired with spending cuts and/or tax increases timed for when the economy improves.

Government to the rescue! Golden straightjackets and invisible bond vigilantes be damned! (The world may be flat, but US Treasuries are still the safest investment.)

Second, America’s solvency inflection point is coinciding with a technological one. Thanks to Internet diffusion, the rise of cloud computing, social networking and the shift from laptops and desktops to hand-held iPads and iPhones, technology is destroying older, less skilled jobs that paid a decent wage at a faster pace than ever while spinning off more new skilled jobs that pay a decent wage but require more education than ever. 

I'm not sure but here things may be much more ominous than Friedman lets on. There's no class conflict or "outsourcing" in Friedman's (flat) world, just much less controversial concepts like "retraining" and "entrepreneurial innovation," even if the jobs aren't there thanks to a lack of aggregate demand.  And why is there less demand? Because as Friedman acknowledges, older, less skilled jobs are getting destroyed. Without consumers getting paid, they can't have demand - without incurring debt - and the US economy can't grow. (Without rising house prices they can't get loans.) And finally, Friedman turns to Europe:

But the global economy needs a healthy Europe as well, and the third structural challenge we face is that the European Union, a huge market, is facing what the former U.S. ambassador to Germany, John Kornblum, calls its first "existential crisis." For the first time, he noted, the E.U. "saw the possibility of collapse." Germany has made clear that if the eurozone is to continue, it will be on the German work ethic not the Greek one. Will its euro-partners be able to raise their games? Uncertain.

Greece couldn't devalue - as Argentina did - because they're on the euro, whereas the euro has been lower against the dollar which helped Germany's exports. Germany has basically exported its way to growth, something everyone can't do simultaneously, unless we find another planet to import our goods. Also Germany has better "automatic stabilizers" in times of recession and an innovative work-sharing program which reduced the fall in employment. So Germany - who didn't have a housing bubble even when England and Spain did - is doing better than the United States whose only social safety net is low interest rates/full employment and is suffering because of the fact.

------------------------
*My favorite recent blog subject title which was composed by Ezra Klein about his research assistant. Or perhaps Matthews wrote it himself?
** PIMCO's co-founder and co-chief investor Bill Gross was at Geithner's pow-wow on the housing market.
*** Is Structuralism back in vogue? I'd prefer post-structuralism.
**** Even though Friedman mentions Bernanke, he has no opinion on what the Fed can or should do. He's like the Mark Wahlberg character in the movie The Other Guys who has no idea what the Federal Reserve Bank is or does.

"Markets" can be mistaken 

Floyd Norris on invisible bond vigilantes.

As 2010 began, there was nearly unanimous agreement in financial circles on at least one thing: Interest rates were sure to rise during the year.

Quite to the contrary. As Labor Day approaches, interest rates have collapsed, plunging along with economic optimism.

(via Yglesias)

Part of it probably was Greece and the European Sovereign Debt crisis. There was a large increase in deficit spending because of the housing bubble bursting and the ensuing financial crisis and recession. There should be more until the housing market is sorted and aggregate demand is back at capacity levels. The good news is that with interest rates low, it's easier for the government to finance needed deficit spending. Calculated Risk reports that the Federal Reserve reports industrial production and capacity utilization increased in July:

The capacity utilization rate for total industry moved up to 74.8 percent, a rate 5.7 percentage points above the rate from a year earlier but 5.8 percentage points below its average from 1972 to 2009.

Krugman on how the past year has proven Niall Ferguson* wrong and Krugman and those of us who agree with him as correct. It's about liquidity and the prospects for recovery, not about righteous bond vigilantes enforcing discipline on profligate governments like Greece.

The reason Ferguson and his ilk are wrong in the way they are wrong is because they're free market, antigovernment fundamentalists. And the irony is that those are the types who led us to our current state of affairs.

--------------------------------
* Ferguson is bad on economics, but during the Bush years when Cheney pushed to make the executive branch unaccountable - on torture, detention, warrantless surveillance, etc. - and secretive, Ferguson was a conservative voice of reason.

Nobody expects the Invisible Bond Vigilantes.

Said Invisible Bond Vigilantes continue their Invisible Siege on runaway government deficits as the 10-year bond rate drops to 2.71 percent. Oh noes!

Amongst their weaponry are such diverse elements as fear, surprise, a ruthless efficiency, reverse psychology and invisibility.