Leonard Cohen 21 September 1934 – 7 November 2016
Andrew Nikiforuk calls me an economist. Now we’ve heard it all… Still, good to see people are listening.
The economist Raúl Ilargi Meijer wrote an interesting essay explaining why there is a Donald Trump in September. He credited Trump’s rise to “the most important global development in decades.” That development, says Meijer, is “the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.” “In the same way it will be the end of — almost — all traditional political parties, which have ruled their countries for decades and are already today at or near record low support levels (if you’re not clear on what’s going on, look there, look at Europe!),” he wrote.
“This is not a matter of what anyone, or any group of people, might want or prefer, it’s a matter of ‘forces’ that are beyond our control, that are bigger and more far-reaching than our mere opinions, even though they may be man-made.” The end of growth is tied inexorably to the deplorable quality of energy now being fracked and mined in North America. Bitumen and fracked oil just can’t support rich societies because these poor resources invite debt, environmental ruin and poor returns. Meijer adds “that the politico-econo-media machine churns out positive growth messages 24/7 goes some way towards explaining the lack of acknowledgement and self-reflection, but only some way. The rest is due to who we ourselves are. We think we deserve eternal growth.”
In the end, neither candidate talked about what mattered: growing climate anarchy; unrelenting economic stagnation; declining energy returns; and the onslaught of robots and algorithms in the workplace, government and home. Trump should remind us of two things and Camus, who understood the nature of tragedy, has expressed them well. The first is that “Nothing is more despicable than respect based on fear.” Trump embodies that sentiment. The second is the growing absurdity of it all. “Basically, at the very bottom of life, which seduces us all, there is only absurdity, and more absurdity. And maybe that’s what gives us our joy for living, because the only thing that can defeat absurdity is lucidity.”
Not too impressed with Thomas Frank’s piece overall, but he gives a reasonable expose of what the Dems did wrong.
Start at the top. Why, oh why, did it have to be Hillary Clinton? Yes, she has an impressive resume; yes, she worked hard on the campaign trail. But she was exactly the wrong candidate for this angry, populist moment. An insider when the country was screaming for an outsider. A technocrat who offered fine-tuning when the country wanted to take a sledgehammer to the machine. She was the Democratic candidate because it was her turn and because a Clinton victory would have moved every Democrat in Washington up a notch. Whether or not she would win was always a secondary matter, something that was taken for granted. Had winning been the party’s number one concern, several more suitable candidates were ready to go.
There was Joe Biden, with his powerful plainspoken style, and there was Bernie Sanders, an inspiring and largely scandal-free figure. Each of them would probably have beaten Trump, but neither of them would really have served the interests of the party insiders. And so Democratic leaders made Hillary their candidate even though they knew about her closeness to the banks, her fondness for war, and her unique vulnerability on the trade issue – each of which Trump exploited to the fullest. They chose Hillary even though they knew about her private email server. They chose her even though some of those who studied the Clinton Foundation suspected it was a sketchy proposition. To try to put over such a nominee while screaming that the Republican is a rightwing monster is to court disbelief.
If Trump is a fascist, as liberals often said, Democrats should have put in their strongest player to stop him, not a party hack they’d chosen because it was her turn. Choosing her indicated either that Democrats didn’t mean what they said about Trump’s riskiness, that their opportunism took precedence over the country’s well-being, or maybe both. Clinton’s supporters among the media didn’t help much, either. It always struck me as strange that such an unpopular candidate enjoyed such robust and unanimous endorsements from the editorial and opinion pages of the nation’s papers, but it was the quality of the media’s enthusiasm that really harmed her. With the same arguments repeated over and over, two or three times a day, with nuance and contrary views all deleted, the act of opening the newspaper started to feel like tuning in to a Cold War propaganda station.
From email I received yesterday: “People have been wiped out overnight. He had given a tax amnesty initially, declare your black money and pay a 30% tax. Later that increased to 50% and finally this. Huge wealth confiscation. Property prices expected to collapse. Dunno why such a shock move was implemented? The economy is doing well, low levels of debt overall, banks under state control and he was doing the right things. Income tax reform and a sales tax would’ve been much better to widen the tax base. India has major issues but when I went earlier this year to Delhi the development and progress is obvious. Infrastructure is pretty good, super airport, air quality is horrid, malls springing up everywhere and housing rental is very affordable but buying is ludicrously expensive. Economy was booming. Perfect black swan event. Only 3 people knew- The PM, FM and CB governor.”
Queues of angry, panicked Indians wound around bank buildings in Mumbai, the financial capital, on Thursday morning, two days after the prime minister, Narendra Modi, announced that 500- and 1,000-rupee notes, worth around £6 and £12, would be taken out of circulation. In a televised announcement on Tuesday night, Modi had urged Indians not to rush to banks, as they would have until the end of 2016 to deposit cash in their accounts. But with the high-value notes withdrawn from Wednesday in an effort to combat corruption, black-market trade and tax evasion, many were left without cash for day-to-day expenses. Banks were closed on Wednesday, and reopened on Thursday morning with a cap on cash withdrawals. ATMs remained closed, so currency was only available from the banks.
Newspapers around the country reported long queues at branches, as people scrambled to exchange their high-value banknotes for 100-rupee bills. At the Churchgate branch of the Bank of India, dozens of people queued in the midday heat, filling out deposit forms as a security guard barked instructions. “Life is completely paralysed,” said Maganbhai Solanki, who had been waiting in line for four hours. “On the news, they said banks would open at 8am today. I got here at 8.01,” he said. “Now, it’s noon, but I’m still here. Around 50 people in the queue ahead of me got tired of waiting and left but I have no choice. There’s no money in the house. We only have 500- and 1,000-rupee notes which are worth nothing. We didn’t even have enough to pay the milkman this morning.”
The dollar comes home.
An emerging-markets selloff deepened amid concern developing economies will face capital outflows and weakening exports once Donald Trump is in The White House, while optimism surrounding his policies spurred gains in commodities and European shares rose. MSCI gauges of emerging-market equities and currencies sank to four-month lows since the election of Trump, who pledged to restrict imports and add fiscal stimulus that’s seen hastening interest-rate hikes by the Federal Reserve. More than $1 trillion was wiped off the value of bonds this week, something that’s happened only once before in the last two decades, as Treasuries lost the most since 2009. Shanghai shares entered a bull market, while industrial metals had their best week in more than 25 years.
Developing-nation assets have been roiled since Trump’s surprise win in Tuesday’s vote and central banks in India and Indonesia were said to have intervened Friday in support of their currencies. Futures indicate an 80% chance that the Fed will raise rates next month and expectations are building for more increases. Ten-year Treasury yields have climbed above 2% for the first time since January amid speculation the president-elect’s plans to cut taxes and boost spending will widen the U.S. budget deficit and stoke inflation. “There’s been a big rotation out of emerging markets into U.S. dollar assets,” said Jeffrey Halley, a market strategist at Oanda Asia Pacific Pte in Singapore. “An emerging market is a market you can’t emerge from in an emergency. It’s one of the best lessons I’ve ever learnt in 30 years in the market. When everybody runs for the door at the same time, the door’s very small.”
Why repeat the west’s mistakes? What’s in it for Xi?
China’s household debt as a proportion of GDP has more than doubled to 40.7% in less than 10 years. While developed nations have higher rates of household debt, Chinese families are much more leveraged because income is lower and so proportionately the costs of social welfare from pensions to healthcare are much higher. At the end of 2014, the out-of-pocket health spend in China as a%age of total expenditure was 32%, compared to 9.7% in Britain and 11% in the United States, World Health Organization data shows. “Household debt leverage is very alarming, even though the aggregate amount is controllable,” said Wan Zhe, chief economist at China National Gold Group Corporation, visiting researcher at Chongyang Institute for Financial Studies, Renmin University of China.
“The first issue is that household debt has risen too quickly, the second is that it has risen too quickly as a proportion” of GDP and disposable income, said Wan. Underlining these concerns, authorities are trying to calm a property rally. In the latest move, regulators told banks to limit the issuance of home loans, the Shanghai Securities Journal reported on Thursday. The balance of retail mortgages at the end of the third quarter hit 16.8 trillion yuan ($2.5 trillion), more than a third higher than a year earlier, China central bank data shows. More broadly, consumer debt financed by Chinese banks has grown sharply, from 3.8 trillion yuan at the end of 2007 to 17.4 trillion yuan at the end of last year, a compound annual growth rate of 21%, Fitch Ratings said in a report.
But the growth in income has been much more modest, rising 6.3% in January to September compared with the year-earlier period, the weakest pace since 2013 when the National Bureau of Statistics first started issuing the data. “The rapid growth in outstanding (consumer) loan balances has been accompanied by an increase in NPLs (non-performing loans) across all segments of consumer debt,” the Fitch report said.
It just keeps falling, that’s all it does anymore.
China’s currency is heading for its steepest weekly drop since January, when a series of weaker fixings roiled global financial markets, as Donald Trump’s election victory boosted the dollar and raised the threat of a more protectionist America. Bonds tumbled. The yuan fell 0.06% to 6.8134 at 10:07 a.m. in Shanghai, approaching the 6.83 level at which China pegged the currency after the 2008 global financial crisis. The exchange rate has fallen 0.9% this week to a six-year low as Trump’s unexpected win spurred a tectonic shift in fund flows, with emerging-market currencies tumbling with bonds while stocks rally. The 10-year yield on government debt climbed about 10 basis points this week, the most since May 2015.
Bloomberg’s dollar index held near an eight-month high amid speculation the Federal Reserve will boost interest rates to cap inflation as a Trump-led administration steps up spending. Trump has also threatened punitive tariffs on China’s imports. Accelerating declines in the yuan are a turnaround from the August-September period, when policy makers were suspected of propping up the currency before its entry into the IMF’s reserves basket. “A rally in the dollar has driven the yuan weaker, and the PBOC won’t likely defend the currency at this point because the costs of intervention could be very high under such an environment,” said Irene Cheung at Australia & New Zealand Bank in Singapore. “But if the depreciation accelerates in the coming weeks, there’s still a chance that China could take measures to stabilize the market.”
Potentially messy if used for political purposes.
The U.S. judge overseeing a lawsuit against President-elect Donald Trump and his Trump University told both sides they would be wise to settle the case “given all else that’s involved.” Lawyers for the president-elect are squaring off against students who claim they were they were lured by false promises to pay up to $35,000 to learn Trump’s real estate investing “secrets” from his “hand-picked” instructors. Earlier on Thursday, U.S. District Judge Gonzalo Curiel tentatively rejected a bid by Trump to keep a wide range of statements from the presidential campaign out of the fraud trial. Trump owned 92% of Trump University and had control over all major decisions, the students’ court papers say. The president-elect denies the allegations and has argued that he relied on others to manage the business.
Trial is scheduled to begin Nov. 28, and Curiel told lawyers he was not inclined to delay the six-year-old case further. Trump lawyer Daniel Petrocelli said he would ask to put the trial on hold until early next year, in light of the many tasks the magnate has before his inauguration. Curiel said he would allow both sides to file briefs on whether to delay the case. He also indicated they should consider making a deal. “It would be wise for the plaintiffs, for the defendants, to look closely at trying to resolve this case given all else that’s involved,” Curiel said. Petrocelli told reporters after the hearing that Trump might have to be a “little more flexible” about settling the case now that he is president-elect, although the lawyer wasn’t sure his client would was willing.
ANother thing that just continues.
The mood in the Washington press corps is bleak, and deservedly so. It shouldn’t come as a surprise to anyone that, with a few exceptions, we were all tacitly or explicitly #WithHer, which has led to a certain anguish in the face of Donald Trump’s victory. More than that and more importantly, we also missed the story, after having spent months mocking the people who had a better sense of what was going on. This is all symptomatic of modern journalism’s great moral and intellectual failing: its unbearable smugness. Had Hillary Clinton won, there’s be a winking “we did it” feeling in the press, a sense that we were brave and called Trump a liar and saved the republic. So much for that. The audience for our glib analysis and contempt for much of the electorate, it turned out, was rather limited.
This was particularly true when it came to voters, the ones who turned out by the millions to deliver not only a rebuke to the political system but also the people who cover it. Trump knew what he was doing when he invited his crowds to jeer and hiss the reporters covering him. They hate us, and have for some time. And can you blame them? Journalists love mocking Trump supporters. We insult their appearances. We dismiss them as racists and sexists. We emote on Twitter about how this or that comment or policy makes us feel one way or the other, and yet we reject their feelings as invalid. It’s a profound failure of empathy in the service of endless posturing. There’s been some sympathy from the press, sure: the dispatches from “heroin country” that read like reports from colonial administrators checking in on the natives.
But much of that starts from the assumption that Trump voters are backward, and that it’s our duty to catalogue and ultimately reverse that backwardness. What can we do to get these people to stop worshiping their false god and accept our gospel? We diagnose them as racists in the way Dark Age clerics confused medical problems with demonic possession. Journalists, at our worst, see ourselves as a priestly caste. We believe we not only have access to the indisputable facts, but also a greater truth, a system of beliefs divined from an advanced understanding of justice. You’d think that Trump’s victory – the one we all discounted too far in advance – would lead to a certain newfound humility in the political press. But of course that’s not how it works.
To us, speaking broadly, our diagnosis was still basically correct. The demons were just stronger than we realized. This is all a “whitelash,” you see. Trump voters are racist and sexist, so there must be more racists and sexists than we realized. Tuesday night’s outcome was not a logic-driven rejection of a deeply flawed candidate named Clinton; no, it was a primal scream against fairness, equality, and progress. Let the new tantrums commence!
How about using the $11 billion to rebuild Syria?
An $11.6 billion defense request that President Barack Obama sent Congress includes funds to buy more lethal drones for U.S. commandos fighting Islamic State and other terrorists as well as networks to counter the pilotless aircraft those groups are now using. The extra war-related funding requested Thursday for the current fiscal year would provide $5.8 billion for the Pentagon to continue operations in Iraq and Afghanistan. An equal amount for the State Department and the U.S. Agency for International Development would support counterterrorism efforts, refugee aid and improved embassy security, Obama said in a letter to lawmakers. While the amount requested for lethal drones is small, it provides a glimpse into a largely hidden phase of U.S. special operations in Iraq.
The White House requested $46.5 million to buy 535 Lethal Miniature Aerial Missile Systems and related equipment requested by the Special Operations Command Central due to “urgent operational needs.” The drone request is described as “for analytics, targeting, training, and equipment to support deployed U.S. Forces.” The only U.S. fighters in Iraq who are actively engaged in combat against Islamic State are in the highly classified Expeditionary Targeting Force set up a year ago to kill or capture militants. U.S. special operations forces also conduct raids in Afghanistan. The administration also requested, without elaboration, $150 million to develop and field within two years a network of “counter-small unmanned aerial systems at sites” in Iraq.
A rare light in the profession.
Bank of England Chief Economist Andy Haldane says economics suffers from tunnel vision and there’s a need to bring new ideas to the profession to make it relevant again. Haldane, whose speeches and papers have analyzed policy using everything from technology to biology, said his industry remains an “insular, self-referential discipline,” and this has to change. “One of the potential failings of the economics profession is that it may have borrowed too little from other disciplines – a methodological mono-culture,” he said in a speech on Thursday in Cambridge, England. An issue that dogs current economic models is forecasting performance, he said, noting the failure to predict the financial crisis and, since then, IMF world growth projections that “consistently over-estimated” the recovery.
It’s a timely point for BOE policy makers, who last week revised their projections for growth and inflation in the wake of Brexit. Haldane said economists need to improve their understanding of the world because rapid changes in economies have social and political implications. “It has been argued that these models were not designed to explain such extreme events” as the financial crisis, he said. “For me, this is not really a defense. If our models are silent about these events, this jeopardizes the very thing that makes economics interesting and economic policy important.” In his speech, he cited economist George Shackle’s description of the economy as a “kaleidoscope, a collision of colors subject to on-going, rapid and radical change.”
Haldane said agent-based models used in physics, chemistry and other sciences could enable a “fundamental changes in model dynamics.” Using it at the BOE has helped a better understanding of the housing market and the interaction of buyers, lenders and renters. Contrasting ABM models with traditional micro-founded economic ones, Haldane said the big picture usually looks very different from the small one. “Aggregating from the microscopic to the macroscopic is very unlikely to give sensible insights into real world behavior, for the same reason the behavior of a single neuron is uninformative about the threat of nuclear winter.”
It will take a long time before people understand this is a positive thing.
London’s real estate market, hurt by the Brexit vote, is “tanking by the day,” Green Property Chairman Stephen Vernon said. The firm, which has closed its London office, is waiting for an opportunity to buy into the market at lower values, the 66-year-old said at a conference in Dublin. Vernon would consider buying a real estate company, raising a fund or buying a portfolio of assets in London, he said. “It’s absolutely fantastic what’s going on,” said Vernon, who sold most of the firm’s properties in Ireland before values there crashed in 2008. A decision to re-enter the London market would be through a venture separate from Green Property and focus on commercial real estate, a spokesman for the investor said.
Office values in the City of London financial district fell the most in at least seven years in July after Britain voted to leave the European Union. Home prices in the U.K. capital fell for a fifth month in August, the worst streak since 2009, as higher taxes and the referendum result damped demand. The referendum result, higher levies on business premises and a rise in the stamp duty sales tax have led to a reduction in London commercial property values, Derwent London Plc Chief Executive Officer John Burns said in a statement on Thursday. “The central-London office market faces a number of challenges, including heightened global uncertainty, and business activity is likely to slow,” he said.
I am the one who loves changing from nothing to one.
Leonard Cohen was always the grown-up in the room. He was young once, of course, but the world never saw much of the modestly successful poet and novelist from Montreal. He was already 33 — ancient by 60s standards — when he gazed out from the sepia-tinted, photo-booth snapshot on the cover of 1967’s Songs of Leonard Cohen with his shirt, tie and smart side-parting. The face suggested that he’d been around the block a few times; the voice and words confirmed it. The man knew things about life and if, you listened closely, you might learn something. The truth was that Cohen felt as lost as anybody. What gave his work its uncommon gravitas wasn’t that he knew the answers but that he never stopped looking.
He searched for clues in bedrooms and warzones, in Jewish temples and Buddhist retreats, in Europe, Africa, Israel and Cuba. He tried to flush them out with booze and drugs and seduce them with melodies. And whenever he managed to painfully extract some nugget of wisdom, he would cut and polish it like a precious stone before resuming the search. Funny about himself but profoundly serious about his art, he liked to describe his songs as “investigations” into the hidden mechanics of love, sex, war, religion and death – the beautiful and terrifying truths of existence. A Leonard Cohen song is an anchor flung into a churning sea. It has the kind of weight that could save your life. [..] When the chief executive of Columbia Records heard that A&R man John Hammond wanted to sign Cohen in 1967, he reportedly said: “A 32-year-old poet? Are you crazy?” But Hammond, who had launched Billie Holiday, Bob Dylan and Aretha Franklin, didn’t give up. During the first recording session for Songs of Leonard Cohen he shouted encouragement: “Watch out, Dylan!”
At the time, Bob Dylan was rock’n’roll’s preeminent poet. Cohen really was a poet but he wasn’t rock’n’roll. Steeped instead in literary discipline, French chanson and Jewish liturgy, his work suggested old-fashioned patience. To Dylan a song was a lump of wet clay to be moulded before it sets fast; to Cohen it was a slab of marble to be chipped into shape with immense dedication and care. Cohen never stopped being a poet or lost his reverence for words. You’ll find some erratic musical choices in his back catalogue but not a single careless line; nothing disposable. Years later, he said he had only one piece of advice for young songwriters: “If you stick with a song long enough it will yield. But long enough is beyond any reasonable duration.” When you sense that a songwriter has spent that long finding the right words, the least you can do is pay attention.