Monday, August 22, 2016

Merritt, Galbraith, and Stiglitz

I read the reviews in The New York Times Book Review.

I read the reviews of the new books by Giles Merritt, James K. Galbraith, and Joseph Stiglitz.  I read with rapt attention. This, because I've been writing articles about the EuroCrisis for the past 6 years.

Of course, The Drs. Merritt, Galbraith, and Stiglitz don't need me to explain the EuroCrisis to them.  And I don't need them to explain the EuroCrisis to me.

"Everybody knows what everybody knows."  ~Slim Fairview.  
The first of "The Quotations of Slim Fairview (c) 2016

When there is a crisis, or a disaster, as with the European Economy, it is a sad indictment of Economics that Economists will tell us what happened and why rather than tell us what will happen and what to do about it.

I am in good company.  

Chancellor Merkel has been a strict adherent to austerity.  On the other hand, President Obama has been an advocate of Economic Stimulus.  Now, to insure that I do not sound too Keynesian, let me express it in Republican Terms.  "You have to spend money to make money."

Ken Rogoff, the purported architect of austerity expended some energy making the Network rounds.  He appeared on CNBC, on CNN, and on BBC--World News America.  Each time he said the same thing.

"Even if we go back to 2010...."

Can we go back to 2010?  No? What else have you got?

"Even if we were to wipe out Greece's entire debt...."

Can we wipe out Greece's entire debt?  No? What else have you got?

When Fareed Zakaria asked Dr. Rogoff, point blank, about the success of President Obama's economic stimulus programme, Dr. Rogoff made a sarcastic allusion to the economic travails of Puerto Rico and returned to Europe.  "Even if we were to wipe out Greece's entire debt...."

Now, there is Urban Legend suggesting that some youngsters majoring in Economics tried running Dr. Rogoff's numbers through the computer and failed to duplicate his results.  The story died with no resolution, or conclusion.  It is still urban legend.  


Back to the EuroCrisis and Slim Fairview's Empirical Method of Analysis.


Did we try austerity?
Yes.
Did the European economy get more high, good, better?
No.
Did the European economy get more low, bad, worse?
Yes.
Conclusion?
Abandon austerity: embrace economic stimulus.


We all know what Einstein said.  "The definition of insanity is doing the same thing over and over again and expecting different results."

Slim Fairview builds on that.  "By extension, the argument can be made that sanity is doing the same thing over and over again and expecting the same results."  Meaning.  We had economic stimulus.  We had good results.  Europe embraces economic stimulus, Europe has good results.

Some may cite slowing global growth as part of the cause of Europe's problems.  Others may say that Europe's economic travails have been part of the cause of slowing global growth.


Heart Warming Moments.


When the reviewer, Paul Hockenos, imputed the following to the author, James K. Galbraith:

"The EU erred egregiously in making draconian austerity policies the price of Greece's rescue...."  And concluded the paragraph, "Greece's withdrawal from the Eurozone, he suggests, would have been preferable."  I wrote, the problem is not that Europe can't afford Greece.  The problem is that Europe can't afford Germany.

The latter, a sentiment expressed to Steve Liesman on Squawkbox by a guest as Mr. Liesman indicated with..."So in other words, what you're saying is Europe can't afford Germany."


The review by Roger Lowenstein of The Euro, the book by Nobel Laureate Dr. Joseph Stiglitz was more dense.  Just as Mr. Lowenstein says of the book.  (imagine an economic text written by Michael Moore.)  I would have written, imagine an economic text written by Marie-Claire Blais.  

Mr. Lowenstein "indicts" Dr. Stiglitz for descending to slurs evoking the Nazi era; but, concludes the paragraph with, "The fact is, German industry is more productive."

I reject the Nazi slurs.  That the German economy benefited from deficit spending elsewhere in Europe has been generously expressed. However,  I would have written, Merkel fed the German economic machine at the expense of the Satellite Nations in southern Europe.

The example "US v. EuroUnion" vis-a-vis their respective structures is something I expressed--perhaps not eloquently--several years ago in an interview with solotablet.it   

As far as the democratisation of the EuroUnion, I would suggest that The European Commission exists for one reason and one reason only.  To justify the existence of The European Commission.


MIGRANTS are NOT the problem.  Merkel is the problem.  However, I called that in 2013 when I wrote:

Merkel's Big Lies?  Ten tactics used in an Economic Putsch.  Or, Merkel's Economic Theatre of Operation.

"Austerity only makes it sound bad.  I just wanted to balance the budget."

"Don't you think I've seen the posters of me dressed as a Nazi?  Poor me. I'm the victim here."

And, I did forecast the unrest and the rise of the right.

I posted  Greek Proposal.  Tsipras folded.  Merkel issued a fait-accompli, and Tsipras returned to Greece with his tail between his legs.  

I also wrote  This is Brexit.

"But don't bother listening to me. Everyone always doesn't listen to me." ~Slim Fairview

The last quotation from "The Quotations of Slim Fairview (c) 2016

Warmest regards,

Slim



Copyright (c) 2016  Bob Asken
All rights reserved.

Sunday, June 26, 2016

Brexit: Now What?



This morning I received a message.

We are out of the Union.  Now what?

The following is my unedited and unpolished reply.

In "This is Brexit" I suggested the Exit Nations. Britain Greece Italy Portugal Spain.

 I have repeatedly warned that the EuroCrats pursuit of Merkelism would lead to disaster and explained the inherent flaws.

 I called the migrant crisis in Merkel's Big Lies, (I believe it was "lies number 6 and numbers 7). In addition

(In the New York Times, an article about China and the AIIB. Also that Singapore has logged more visits to my blog in 4 months than Germany did in 4 years and that the Most read article of all time, is

Emerging Nation Economic Union (That is coming) Also, I pointed out that Ashburn Virginia (Amazon) is hawking my ppt presentation Global Management and that France is hawking my ppt presentation "Forming an E 20"

The best move would be for the "Exit Economic Union" to form and to do so quickly.

Now the EuroCrats (Juncker) are sabre rattling. Telling Britain to get out quickly. This is a sad face saving gesture like Cameron attempting to look like a strong leader by scheduling the referendum in the first place.

Nonetheless, I wrote Europe is unraveling and why in two articles

"Gordian's EuroKnot and

Rogoff, Merkel, and China, Oh My.

The Exit Nations must unite quickly, and issue the faite-accompli described in This is Brexit. And resist efforts to cause problems.

For example, there is no reason that the British Passport that was valid the day before the election should not be valid the day after the election (metaphorically speaking). The only problems are the ones that will be created by the Commission.

(Their Budget should be cut. Not the working people, but the "leadership and management people", should have their wages cut by 10%.

I pointed out, "The European Commission is a gratuitous organisation that exists wholly and solely to validate its own existence."

The commission exists to justify the existence of the commission.

Too much of what the commission concerns itself with (barging into other countries' business) could be handled by treaty or by sidebar agreements within the framework of "The Union".

Still little chance they will listen to me. I warned of the disaster of Merkelism, the "migrant situation" that Saudi Arabia would act to protect its revenues, China's global economic diplomacy, and the rest.

Also


Future of the G 20 in Good Times & Bad
 

 "But don't bother listening to me. Everyone always doesn't listen to me."
The Quotations of Slim Fairview (c) 2016.

Thank you again for your interest in what I write and in reading about my views. I am deeply flattered.

Sincerely,

Slim.

Copyright (c) 2016 Bob Asken
All rights reserved.

Wednesday, June 15, 2016

This is Brexit



The chances are, if history is a guide, that Cameron will fold despite the vote. 

The Greeks voted OXI. Tsipras folded. Varoufakis folded. 

Merkel issued a fait accompli. to Greece. Take it or leave it. Greece folded. 

The Brexit Vote is window dressing. Cameron seems not to be Britain's new Wellington. Cameron seems to be Britain's new Tsipras, new Varoufakis. 

Cameron's call for a referendum was a shabby display, a feeble attempt to look strong. A feeble attempt to be a strong leader. 

The vote is too close to call. However, if the vote is stay, Cameron goes to the table stripped of everything except the title of Britain's Symbolic Figurehead. If the Brit's vote Exit, he has a sword that is too heavy for him to wield. 

Cameron does not have the right stuff.

Cameron will fold because Merkel will issue a fait accompli, This is, after all, Merkel's last ditch effort to fend off those who want Merkel out for domestic reasons. 

What Cameron should do is to find allies. As Benjamin Franklin said in 1776, "Either we all hang together, or we all hang separately." 

Britain, Greece, Spain, Portugal, Italy issues the following: 

We will void the EuroUnion Agreement effective [eg 31 July 2016] unless you submit an offer we find acceptable. When you submit such an offer,  will then take it home for a vote. We will not discuss it, we will not issue demands. You will come up with the offer to keep us in." 

The first item on the "reform" agenda should be taking a blue pencil to strike out those regulations that impinge on domestic issues. (sovereign / internal matters) 

Next, we will review the rights and responsibilities of the respective nations. However, there is a larger issue.

The one article on my blog that has skyrocketed is Emerging Nation Economic Union

In 2013 I predicted that China will form a Global Capital Investment Facility.  In 2015 they announced that they did. The HQ is in Singapore. The highest number of visits to my blog come from Singapore. 

Also, I wrote "The Next Challenge is Here." And "Forming an E 20.

The links to same: 



GreekEnomics {The only real value to this article is the number of links to articles regarding Merkel and Europe) 
 

However, the EuroUnion is Unraveling.





In Addition, this is what is going to happen and indeed is happening,
 




And should happen




Thank you again. 

Best of luck.

Warmest regards,

Slim.

Copyright (c) 2016  Bob Asken'
All rights reserved.

Wednesday, May 4, 2016

AAPL GOOGL FB INDIA



Remember:

Back in 2013 I wrote

Apple and Facebook should buy aol Time-Warner CNN.  The concern?>  Buy content. They didn't.  Today, the industry is gobbling up content like Raisinettes(r)  at the movie theatre.

I also wrote several articles about Apple and the Corporate Success Parabola.


Remember when Xerox almost became a verb?  When IBM was synonymous with computers. Today? Not so much.

As Cell-phone sales taper off in China, and Tim Cook appeared on Mad Money with Jim Cramer I had a flashback to Bill Ackman selling Penney Stocks as JCP was on the skids. And to defend Ron Johnson.  I felt validated when someone on CNBC illuminated Cook's response on sales by expanding the analysis to a two year data report.  All I heard was Jim Cramer asking Tim Cook about Cell phones and Tim Cook responding with Q4 and Q1 financial data.  Warning, Will Robinson.

Now, India is the target.As Tim Cook ;pointed out: 50% of India's population is 25 and under. By 2020 a short 4 years from now, India will be the most populous nation on the planet. 
Please check my numbers. I wasn't listening too closely.

Content:  Bollywood is bigger than Hollywood.  One would think that rather than trying to convince the consumers to buy what the company wants to sell, tech would sell what the consumers want to buy.  Op Cit Ron Johnson.

If Apple and Facebook could team up, they could create a platform for Bollywood.  (How many years ago did I write: India: The Facebook Evolution and other articles about India?

Then we have National Pride.  China has technology, a cost effective labour force, a large consumer market, and the outpouring of National and Cultural pride, i-phone sales in China can transform into C-phone sales.  And the same can happen in India.  Will Apple be left out?  Will Apple continue to ignore content?  Will Google?  When will the i-phone sales in India give way to I-phone sales in India.  For the slow folk:  India-Phones.

Every corporation has a success parabola.  The way to avoid the doom is to transform to meet demand.  That comes from marketing not advertising.

Advertising: convince the consumers to buy what you want to sell.
Marketing: sell what the consumers want to buy.

 The definitions of Slim Fairview  Marketing:  Find a need and fill it.  


Warmest regards,

Slim.





Copyright (c) 2016 Bob Asken
All rights reserved.


Saturday, April 30, 2016

Another Hidden Inflation



The discussion about wages has presented many opinions both for and against.  Inflation being only one of them.  What that means depends on who you talk to.

Nonetheless, any discussion about inflation will invariably motivate someone to talk about hidden inflation.  In short, when you pay the same price for a candy bar but the candy bar is smaller.  And there is the other type of inflation.  The added features inflation.  Here, a product has added features of little value but justify an increase in price.  The small cost of the added feature that drives revenue is called revenue enhancement.  

Then we have the inflationary factor that we ourselves create with little notice and no approbation.


This is an Economics Lesson.  

Focus on the Economics Only!!


For dinner, my wife and I have hamburgers with a side order of french fries.  My wife butys the Ball Park ®  Grilled burgers you can fry or cook  in the microwave but we fry because it tastes better.  She buys a package of buns for a dollar and the cheap fries.

I make a little more money  My wife buys the Martin's Potato Rolls ®.   Or, if you're a Republican, the potatoe rolls.

I make a little more money. My wife buys half a pound of Land O' Lakes ®  American Cheese orange and we have cheeseburgers.

I make a little more money and my wife buys a package of Kunzler's ®  bacon. On sale.  I've already done the test and measured the shrinkage of different bacons and do a unit cost evaluation on the results: how much bacon we have after we cook it.  Kunzler comes out cheaper--oops--more cost effective because I measured less, much less, shrinkage. (Op. cit. my comment on hidden inflation.)

Now we are eating Cheese and Bacon Burgers with the Ore-Ida ®  Fries.

The price of burgers did not rise.
The price of cheese did not rise.
The price of buns did not rise.
The price of bacon did not rise.
The price of the fries did not rise.

Still, the cost of dinner did rise.

This increase in spending is a form of inflation.  

This is not an increase in the price of living.  This in an increase in the expense of living.

Yes, we are getting more. Still, we are spending more.  This holds true when you look at the expense of living over the past, say, fifty years.  More things have become available.  Many of these things are new additions--the window air-conditioner.  Other things are upgrades.  A remote control to operate the window air-conditioner.  Features added to the razor for that morning shave, a timer on a the coffee pot.  

We still have an older 4 cup coffee maker.  The on off switch has a light.  The newer one has an orange sticker. That is a cost savings to the manufacturer without a decline in the quality of the product.  However, that older pot keeps the coffee warmer.  The hot plate is hotter.  

Then, there are gratuitous design features.  To keep coffee warm in an older coffee pot, you remove the plastic insert lid and place a bread and butter plate on the top of the pot.  That top has been replaced with a top that has a lever built into the handle.  Yes, you can remove the coffee pot top.  But the design prohibits you from placing a plate on top of the pot to keep the coffee warmer.  

I often wonder, how much would it add to the cost of the pot to create a hotter hot plate and replace the glass pot with a Pyrex pot?  A simple increase in manufacturing costs with a real consumer benefit at a modest price increase.  Right?  Don't bet on it.

Warmest regards,

Slim.



Copyright (c) 2016 Bob Asken
All rights reserved.

Disclosure: The mention of products by name is for the purposes of accuracy and realism only.  There is no recompense sought, offered, or accepted.  The opinions are my own and reflect real usage in real life and are not necessarily  a commercial product endorsement.

Friday, April 29, 2016

Rogoff & Merkel & China, Oh, My!


Something is up.  Think back.

Sarkozy tweets, "Merkel is not the problem.
Prime Minister Biden returns from Berlin to announce The Chancellor is our friend.
& More Recently,
Madame Lagarde Praised Merkel
Merkel initiated a phone conference with President Vladimir Putin
And President Obama again praised Merkel & made a grand pitch for Britain to stay in the EU.

What is up?  I may be onto something.

Most recently, Ken Rogoff, the economist and purported architect of austerity in the EuroUnion has taken a conciliatory turn

He appeared on CNBC to say kind things about the success of our economic stimulus success.  Not so long ago, not so much.
the
I watched Dr. Rogoff on three networks: CNBC, BBC, & CNN.  And each time he said basically the same things:

Even if we go back to 2010 jibber jabber blah blah blah.  
Even if we were to wipe out Greece's entire debt...jibber jabber blah blah blah
(I apoligise for slinging around a lot of highfalutin economics jargon.)


However, when pressed by Mr. Zakaria on the success of the US stimulus programme, Dr. Rogoff made what I considered to be a sarcastic allusion to the economic travails of Puerto Rico then went back to Europe, "Even if we were to wipe out Greece's entire debt....."

I've said too often, If Britain can't leave the EuroUnion, and Merkel knows it, Britain can't bargain a fair deal.   Witness Tsipras and Greece.  My very plain understanding of the situation?  The more dramatic and hysterical the doom and gloom forecast if Britain [Greece] leaves the EuroUnion, the less substance there is to the proposition that a British Exit will be a disaster.  Hearken the the words imputed to the attorney F. Lee Bailey. "When I have the evidence, I pound the evidence; when I have the facts, I pound the facts; when I have nothing, I pound the table."

Will Cameron be Britain's next Wellington or Britain's next Tsipras?

This, in part, explains why I wrote Greek Proposal and Brit IN Brit OUT.

But more important, and not more importantly, recent comments by Carl Icahn on China reflect what I'd said repeatedly about Europe.

Austerity is a failure.  What Europe needs is Capital Investment, economic development, & growth.  In short, economic stimulus. Shorter?  Fiscal policy.  The same thing Mr Icahn said this morning 29 April on CNBC.   This, in a discussion about China.

In 2013 (2. February) I wrote China will begin a global capital investment initiative.  Today, Singapore is the top visitor to my blog two months running.  Singapore is the purported Headquarters of the AIIB.  The most read article?  Emerging Nation Economic Union.  In other words, Heads Up.

I believe the EuroUnion is about to unravel.  Not due to Britain's or Greece’s possible exit; but because of the efforts to keep them in.

Now? The Conciliatory tone taken by Ken Rogoff on CNBC.  And, of course, the alleged leak of a statement by the IMF to Merkel regarding holding Greece to the terms of austerity. This of course leads me to believe that Madame Lagarde holds the reigns of power. [sic]  Perhaps it is the romantic in me.  Ultimately, I started out in life as an English Lit Major.  But realistically, Madame Lagarde is brilliant, successful, and powerful.  And in a battle between hob-nailed boots and spike heeled shoes, Germany has never succeeded in the Hob-nailed boot approach.  Why not?  From the Quotations of Slim Fairview (c) 2016

The multitude can oppress the few, but the few cannot oppress the multitude. Not for very long, anyway.

The Chancellor, who made the cover of Time Magazine for inviting the refugees in will never make the back cover of Time Magazine for creating a crisis that resulted in the Migrants being thrown out.

China has a plan.  The AIIB is part of the plan.  Europe's embracing of the AIIB is not something I neglected to predict.  



"But don't bother listening to me. Everyone always doesn't listen to me."  The Quotations of Slim Fairview

Warmest regards,

Slim.




Copyright © 2016  Bob Asken
All rights reserved.

Monday, April 25, 2016

Why I Sold My Bazooka--Humour

By

Slim Fairview


Before I tell you why I sold my bazooka, it behooves me to tell you why I bought it in the first place.

In the first place, I bought a bazooka to go hunting. Ostensibly. Now I know what you bleeding hearts are saying. So right up front I will tell you that all I bought was the bazooka.  I did not buy any bullets for it.

I say ostensibly because hunting was  the excuse  I told my wife to explain why I bought a bazooka.  You see I didn't want to worry her.  Of course, I must emphasize that I am opposed to my going hunting.  Not other people going hunting, just me.

Now,  I know there are those who defend hunting by claiming they hunt for food.  And those who reject the excuse by pointing out you can buy food at the supermarket, but let's be serious here: have you ever seen moose chops or an oven stuffer bunny rabbit in your grocer's meat case?

Still, hunting does involve getting up in the middle of the night, pitch dark, freezing  cold, and driving to the middle of nowhere, to get out of a warm car and walk deep into the forest to sit and wait for the Sun to come up.  And when it does, the ground thaws and you find yourself knee deep in mud.  Which brings us to another issue: there are no bathrooms in the forest.

After you set yourself up, you must wait for, say, a deer to go past.  Then you must shoot it.  If  you miss, the deer runs away with all the other deer in the area and you must go home.  Or, you can start walking into the forest looking for more deer.  This where other hunters are waiting for deer and you hope they don't know that you are the reason why all the other deer ran away.

However, if you wound the deer, you must track it until you find it, then kill it, unless another hunter finds it first and kills it, and you must walk back to your car and go home--deerless. If you kill the deer there is still work to be done.

You must now dress it, or undress it, but from the wrong side--the inside.  If you plan to eat it, you must check one of the organs to make sure the deer is not too sick to eat.  You must know which organ, what it looks like, and what it is supposed to look like.  If all is not well, you must walk back to your car and go home. Again--deerless.


That much done, you now carry it back to your car hoping not to get shot by someone who does not mistake your dead deer for a deer, or worse, mistake you for a dear and fires away.

If you get it home without being run off the road and killed by a non-violent, animal lover,  you must take your deer to be butchered.  I emphasize your deer because you might not get your own deer back.  Some deer are wild, some are farm raised, I don't know the difference, and presumably neither will you. But the butcher does and he knows hunters who know, and may switch your deer for someone else's deer.  Oh, and you must pay for this.

Now you have enough deer to feed your family and three other families for two years. But take heart. Etiquette says you must share your deer with others.  However, the only others who eat deer meat are hunters themselves and also have enough deer meat to feed four families for two years.  I will let you figure out the servings per pound, but it's not a pretty number.

This is why I don't hunt.  Nonetheless, I told my wife I bought the bazooka to go hunting.  My wife didn't buy it.  I broke down and confessed.

“I bought the bazooka for protection.  For your protection. To protect you. In case we have an intruder.”

That was when she got me to break down and confess that I didn't actually buy any bullets for the bazooka.

“I'm not having you shooting off bazookas  in my house.”

“But, honey, you don't understand. I just bought the bazooka. I didn't buy any bullets for it.”

“If I may ask, what good is buying a bazooka for protection if you don't have any bullets for it?”

“Easy.  If there is an intruder, all I have to do is to point the bazooka at him. He will see it, get scared, and run away.  See?”

My wife thought for a moment.  I figured I’d won her over when she said, "May I point something out?"

“Certainly.”

What happens if the intruder also has a bazooka.  But his wife doesn't love him as much as I love you and she let her husband buy bullets for his bazooka?

Then I saw the flaw in my otherwise flawless plan.  I agreed to sell my bazooka.  So, I truck on down (actually I have a compact) to the Gun Shop and Firing Range to sell my bazooka.  I tried to get as much for it as I paid for it, but there were few takers.  One fellow did agree to buy it but for much less than I wanted.  He said, "If you had bullets for it, I'd pay you a lot more."

I asked him what he wanted the bazooka for.

He said he was going to buy it for protection, but that he was going to tell his wife he was buying it to go hunting.

I see.  I just took my money and left.  I wasn't happy with what I got for it, but on the bright side, I got more for it than he’s going to get when he goes to sell it.  Come to think of it, that's how I got it for such a good price in the first place.

Warmest regards,

Slim



Copyright (c) 2013 Bob Asken
All rights reserved.