Bigger Than Facebook

Spending four years of your life starting off in the world of work rather than going into debt

By Robert Tracinski

With the less-than-spectacular launch of the Facebook IPO, I've heard a number of people speculating that the social networking boom is played out and that innovation will now turn elsewhere. I think they're missing out on a big area that is still left to conquer, an Internet breakthrough that will be way bigger than Facebook.

The rap against Facebook is that the activity it captures--essentially, a half billion people gossiping about their own lives--is so ephemeral that it could all disappear overnight, which is essentially what happened to Facebook's precursor, MySpace. As Rich Lowry put it, Mark Zuckerberg is basically the Henry Ford of goofing off. By the way, for my Facebook friends, let me add that I think this criticism is unfair. I've found Facebook useful, for example, as a news feed where people I know post interesting articles they have come across. But imagine if much of the same technology were used to capture an activity with far more substantial and enduring value.

Property Rights and Fishery Conservation

The tragedy of the commons

By Jonathan H. Adler

Fisheries continue to be among the best examples of the tragedy of the commons in action. As Garrett Hardin himself noted in his 1968 essay, "the oceans of the world continue to suffer" from the dynamic of the commons. Alas, little has changed. Ocean fisheries remain in trouble, as study after study reveals. Most fisheries around the globe are fully or over-exploited, and a substantial number have already faced collapse. The problem with fisheries management runs deep. 

Consumer 3D Printer

Markets in Everything

A $1,299 replicator for the home

Makeusof.com -- "Cubify understands the problem with geeky, DIY, hard to build and calibrate printers; and their Cube aims to solve this (pictured above). Currently on pre-order and due for release on May 25th, the device is about as consumer level as you can get.

At $1,299, it costs as much as a new desktop PC (and considerably less than the other leading consumer level 3D printer – the Makerbot Replicator) – but like all printers, they’ll get you on the cartridges! Yes, you heard me right – the Cube eschews traditional standardized filament rolls in favor of device-specific filament cartridges, with a variety of garish colors available for $50 each. The simplified loading process means switching out colors or loading a new cartridge is easy."

Should Black People Continue To Tolerate Black-On-Black Crime?

A True Epidemic

By WALTER E. WILLIAMS

Each year, roughly 7,000 blacks are murdered. Ninety-four percent of the time, the murderer is another black person.

According to the Bureau of Justice Statistics, between 1976 and 2011, there were 279,384 black murder victims. Using the 94% figure means that 262,621 were murdered by other blacks. Though blacks are 13% of the nation's population, they account for more than 50% of homicide victims.

Nationally, black homicide victimization rate is six times that of whites, and in some cities, it's 22 times that of whites. Coupled with being most of the nation's homicide victims, blacks are most of the victims of violent personal crimes, such as assault and robbery.

Paralyzing Vice Or Inventive Social Self-Defense?

Looking into Corruption

By George Handlery

It is elementary, that when you write about a term you should give its definition. In the case of corruption, we all know what is meant. This agreement does not help to get closer to a precise meaning that satisfies everybody at all times. Those that admit this and persist to give a definition are either fools or they write a weekly column. It is quite likely that the “or” can be omitted. 

Its omnipresence is what makes “corruption” as slippery as a freshly caught fish. We often become unaware participants because an innocent aspect is implied. This can make actions that open privileged opportunities not legally actionable and these are therefore not criminal. When I got my Swiss citizenship an official had to determine whether I am integrated. Due to assumptions he had reason to make in the light of my training, he skipped the obligatory questions about society and politics. Once he found out that I am a member of a local pistol club, being a participant himself, he visibly concluded that I “belong”. The case gets more complicated once other shared interests are exploited to pull the cart of a firm. For good reason, retired politicians are in demand as lobbyists. For the same reason, many countries limit their lobbying.

The Fraud Of Austerity

The collective memory loss

By Richard Rahn

Denial is leading to collective economic suicide in Europe and the United States. The French elected a socialist president who wants to raise taxes on those elusive rich and keep spending as if there is no tomorrow. 

Many on the left, including European socialists in tandem with the New York Times and its economist Paul Krugman, are falsely claiming that Europe and even the United States are being saddled with "austerity." Their claim is that governments are not spending enough to reduce unemployment. They want higher taxes on the most productive plus bigger government. 

The Seeds of the EU’s Crisis Were Sown 60 Years Ago

Can there be a fiscal without a political union?

By Clive Crook

The arc of Europe’s postwar history is turning toward tragedy. It isn’t just that much of the continent has fallen into a new Great Depression, or that in some countries things will get worse before they get better. It isn’t even that the whole mess was avoidable. It’s that the crisis is dividing Europe along the very lines the European project was intended to erase.

Decades of cliches about European solidarity and the European idea are being held up to ridicule. The argument that Britons, Germans, Greeks, Italians and Spaniards are instinctive cultural partners whose commonalities transcend their obvious differences and historical enmities -- that “Europe” is a real community, not just a heavily worked-over Brussels blueprint -- turns out to be, let’s say, disputable.

Ancient stereotypes frame conversation about the crisis. Germans are bossy and severe. Italians are idle. Greeks are corrupt. Brits are arrogant. The French are vain. So much for 60 years of European unification.

The Autism-Welfare Nexus

Another cycle of government dependency and poverty

By PAUL SPERRY

If Steve Jobs were a child today, his school no doubt would drag his parents into the office and tell them he was so difficult and disruptive he needed to be examined by a doctor.

His chastened parents, in turn, would take him to a pediatrician who more than likely would diagnose him with high-functioning autism and prescribe a daily regimen of Prozac or Ritalin.

Prescriptions in hand, his working-class parents could then apply for federal disability benefits. And his school could qualify for more federal aid.

Europe: The World’s Worst Dentist With the World’s Dullest Drill

Frightened and bored at the same time

By WALTER RUSSELL MEAD

The European monetary crisis is like a botched root canal: painful, expensive, interminable. Weeks, months and even years go by and the world helplessly sits in the chair as the incompetent dentists poke, scrape, bicker and endlessly, endlessly drill.  From time to time there are shots of Novocaine—usually in the form of liquidity injections from the ECB—that reduce the pain to a dull throb, but there are no signs of improvement, no signs that the long and futile European process is coming to any kind of successful conclusion.

We are frightened and bored at the same time: we can’t look away but we can’t bear to master the intricate details of this most tedious of world crises.

The Two Europes

Neither the long- or short-term futures look terribly bright

by FRANCIS FUKUYAMA

The Greek election on Sunday was a predictable disaster: the two mainstream parties, the socialist PASOK and the center-right New Democracy (ND), were displaced by new extremist parties that appeared on their right and left, including the left-wing Syriza and KKE (Communist) parties which won a quarter of the vote between them, and the right-wing Independent Greeks and Golden Dawn parties getting almost 18 percent.

The main issues in the campaign revolved around whether Greece should fulfill the terms of the pact that had been negotiated with the EU and IMF and continue the austerity that implied. None of the parties, however, was willing to take up what from the beginning was the source of Greece’s problems, and the reason it got into such trouble with its public debt in the first place, which is the country’s pervasive clientelism.

In Defense of Bank Runs

“Money is what the government says it is.”

By Detlev Schlichter

One with a liberal view might ask:

Is it really true that we have too-much state involvement in finance? Do we really have some form of monetary central planning? Does this view not completely underestimate the power of the big private banks?

When one looks at the gigantic positions these private banks have on their balance sheets (and the even bigger positions they have ‘off balance sheet’), and when one looks at the outsized bonuses the bankers pay themselves, and when one furthermore considers that most money-creation is done by the private banks, then it appears as if ‘central planning’ or ‘the power of the bureaucracy’ appear inaccurate descriptions of the present system.

After all, J.P. Morgan just admitted to losing $2 billion and counting on complicated derivative positions. How can that be the fault of central bankers or imaginary monetary ‘central planners’? Isn’t this the opposite of central planning? Is this not capitalism running amok?

Half Of Detroit’s Streetlights May Go Out As City Shrinks

A socialist experiment gone terribly wrong

By Chris Christoff

Detroit, whose 139 square miles contain 60 percent fewer residents than in 1950, will try to nudge them into a smaller living space by eliminating almost half its streetlights.

As it is, 40 percent of the 88,000 streetlights are broken and the city, whose finances are to be overseen by an appointed board, can’t afford to fix them. Mayor Dave Bing’s plan would create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.

The Best Way To Get A University Level Education For Free

How do you get and maintain lifelong learning?

By Tina Sieber

The idea that you are never done learning has never been more true than today. The Internet has revolutionized the way we access information and knowledge – formerly a luxury accessible only to the rich and highly gifted – which is now freely available to anyone with Internet access.

Education and learning should be a lifelong process and the Internet is your chance to get a university level education for free, regardless of where you are in life. This article introduces you to the three best websites to get started.

Unemployment Insurance Schemes

The Dependency Of Welfare

by James Miller

In the Garden of Eden there is no scarcity.  Food, clothing, and shelter are in abundance.  Resources merely fall from the heavens upon command.  It is economic paradise precisely because economics does not exist.  The universal laws that hold in the world of scarce goods vanquish in the land of the plenty.

The vision of Eden is the politician’s main source of employment.  That is, promising to lead the suffering masses toward utopia by government decree makes for great electoral results.  The voting fodder ignorant of economics falls in line to cast a ballot to grant themselves other people’s money.  But of course many voters don’t see it this way.  Their vision of the state is that of Eden.  They see the bureaucrats and enforcers capable of tapping an infinite pot of wealth to pass along prosperity to those subservient enough to put them in office.  This in turn has lead to the establishment of the welfare state and its plethora of entitlement programs.

The importance of "Middle Land"

A Ravening Justice

By Mark Steyn

To get the obvious out of the way: I loathe John Edwards. I loathe him as a slick ambulance-chasing trial lawyer, as a preening poseur of a presidential candidate, as a multi-bazillionaire "advocate" for "the poor," as a third-rate sob sister peddling faux-Dickensian guff about entirely mythical "coatless girls" lying in their beds shivering at night because their father was laid off at the mill. I loathe everything about him except his angled nape, which I must concede, having been pressed up against it in a campaign crush in New Hampshire, is a thing of beauty, and well worth every penny of whatever Rachel Mellon paid for it.

Double trouble

Bipartisanship Is Behind Government's Worst Programs

By GEORGE F. WILL

Bipartisanship, the supposed scarcity of which so distresses the high-minded, actually is disastrously prevalent.

Since 2001, it has produced No Child Left Behind, a counterproductive federal intrusion in primary and secondary education; the McCain-Feingold speech rationing law (the Bipartisan) Campaign Reform Act); an unfunded prescription drug entitlement; troublemaking by Fannie Mae and Freddie Mac; government-directed capitalism from the Export-Import Bank; crony capitalism from energy subsidies; unseemly agriculture and transportation bills; bailouts of an unreformed Postal Service; housing subsidies; subsidies for state and local governments; and many other bipartisan deeds.

“Fascism, n. A supreme belief in the superiority of action over thought.”

It is very easy to call for grand, magical, all-resolving action when one is in opposition

By Tim Price

“Working at my desk today was somewhat surreal. Global risk markets were closing out a dreadful week. Newswires were full of disconcerting articles – J.P. Morgan, Greece, Spain, Italy, China, etc. Meanwhile, CNBC was in the midst of blanket coverage of the Facebook initial public offering. Mark Zuckerberg rang the bell to open NASDAQ trading, while helicopters provided live video of the employee gathering at Facebook’s Menlo Park headquarters. Insiders are now worth billions, the “average” employee millions. Even U2’s Bono pocketed $1.2bn (with a “B”). I noted above how I see J.P. Morgan’s predicament as a microcosm of global financial woes. Well, it is difficult for me today not to see Facebook as emblematic of the incredible transfer of wealth associated with Credit Bubbles. It’s almost as if this historic Bubble has been waiting to end with just such an exclamation point.”                 

                         — From “The Jig is Up‟, by Doug Noland.

Birds of a Different Feather

The Austrians And The Swan

By Mark Spitznagel

What is a black swan event, or tail event, in the stock market?

✓ It depends on who’s asking.

✓ To those familiar with Austrian capital theory, the impending U.S. stock market plunge (of even well over 40%)—like pretty much all that came before in the past century—will certainly not be a Black Swan, nor even a tail event.

✓ Nonetheless, the black swan notion is paramount—in perception: Market participants’ failure to expect a perfectly expected event—that is, they price in only Anglo swans despite the Viennese bird lurking conspicuously in the weeds—much like what is happening today, brings tremendous opportunity.

I. On Induction: If it looks like a swan, swims like a swan, …

By now, everyone knows what a tail is. The concept has become rather ubiquitous, even to many for whom tails were considered inconsequential just over a few years ago. But do we really know one when we see one?

The Yankee Comandante

A story of love, revolution, and betrayal

William Alexander Morgan being applauded by Fidel Castro, in Havana in 1959. Morgan said that he had joined the Cuban Revolution because “the most important thing for free men to do is to protect the freedom of others.”

by David Grann

For a moment, he was obscured by the Havana night. It was as if he were invisible, as he had been before coming to Cuba, in the midst of revolution. Then a burst of floodlights illuminated him: William Alexander Morgan, the great Yankee comandante. He was standing, with his back against a bullet-pocked wall, in an empty moat surrounding La Cabaña—an eighteenth-century stone fortress, on a cliff overlooking Havana Harbor, that had been converted into a prison. Flecks of blood were drying on the patch of ground where Morgan’s friend had been shot, moments earlier. Morgan, who was thirty-two, blinked into the lights. He faced a firing squad.

Flirting with fascism

Why Europe can’t shake its weakness for Nazism

by Peter Goodspeed

Like vermin in a time of pestilence, neo-Nazi groups appear to be enjoying a resurgence in a Europe plagued by increasing financial chaos and uncertainty. As Europe celebrated the 67th anniversary of V.E. Day and the defeat of Hitler’s Nazis this week, it also reeled in disbelief as an angry Greek electorate gave 7% of their votes to the neo-Nazi, anti-immigrant Golden Dawn party.

One Nation (under Germany)

European Union will become, finally, a federal state

By Ben Laurance 

Where does it all end? What will be the outcome of the financial storm battering Europe and its single currency? Can the euro be saved? And if so, what will be the long­term consequences?

The financial historian Niall Ferguson, visiting London from his self­imposed exile in America to promote the paperback version of his most recent book, is typically confident that he has the answers to these difficult questions — and they are not what you might expect from this tireless proponent of free markets.

A Greek Exit Could Make the Euro Area Stronger

The Long Goodbye

By Jacob Kirkegaard

A Greek exit from the euro area would inflict heavy damage in Greece and throughout Europe. It could also be one of the best things that ever happened to the currency union.

Greece’s repeat parliamentary election next month will serve as a referendum on whether the country should end its 12- year membership in the common currency. An affirmative answer would trigger a cardiac arrest of the Greek economy, as the banking system collapsed and foreign suppliers refused payment in drachmas. The financial system of the euro area, by far Greece’s biggest international creditor, would suffer hundreds of billions of euros in losses.

Forgive Us Our Debts?

The war between lenders and borrowers

by Irwin M. Stelzer
Debtors of the world, unite—you have nothing to lose but your IOUs!

That seems to be what the Greeks are discovering—that they have less to lose by default, with all of its consequences, than by trying to be Germans.

One of the most surprising aspects of the financial crises being played out around the world is the failure of policymakers to concede perhaps the most important underlying fact: This is a war by creditors, in control of the institutions of power, to saddle debtors with the cost of the errors in which both borrowers and lenders are complicit. It is in its way very much like some past debtor-creditor brawls: farmers vs. mortgage lenders, hard money financiers vs. those who wanted to avoid crucifying mankind on a cross of gold, Latin American dictators vs. foreign bankers.

Europe's borrow-and-spend train rolls on

What austerity?

There has been a lot of talk about the EU countries tightening their belts. The data indicate profligacy instead of prudence

By NEIL REYNOLDS

In a 2011 review of government spending in the countries known as Euro27, the European statistical agency tracked public expenditures from 2006, before the Crash, through 2010. Among other conclusions, Eurostat determined that austerity - whatever it was - had yet to reduce government spending. Only by the merest of margins, the agency said, could it document any real, absolute reduction in spending. Indeed, Euro27 governments spent €6.2-trillion ($8-trillion) in 2010: 50.8 per cent of Europe's GDP. Four years earlier, they had spent only 45.6 per cent. By this measure, European austerity has increased public spending by 12 per cent in four years.

How Sweden and Switzerland handle debt, taxes and spending

Heading for Taxmaggedon

by Keith Chrostowski

It’s just never-ending, this standoff in America over taxes, spending and deficits.

For three decades, we’ve stood firm on our particular ideological ramparts, seeing any solution that tilts even slightly toward the opposing philosophy as total surrender.

But other countries have picked their budgetary deadlocks. And they didn’t go all in on austerity or continue bottomless spending that pushed their countries off the debt cliff.

In sensible Switzerland, 85 percent of voters in 2001 approved a “debt brake.” It requires that spending by the central government grow no faster than trendline revenue.

Recession and Recovery

Six Fundamental Errors of the Current Orthodoxy

by Robert Higgs

As the recession has deepened and the financial debacle has passed from one flare-up to another during the past seven or eight months, commentary on the economy’s troubles has swelled tremendously. Pundits have pontificated; journalists and editors have reported and opined; talk-radio jocks have huffed and puffed; public officials have spewed out even more double-talk than usual; awkward academic experts, caught in the camera’s glare like deer in the headlights, have blinked and stumbled through their brief stints as talking heads on TV. We’ve been deluged by an enormous outpouring of diagnosis, prognosis, and prescription, at least ninety-five percent of which has been appallingly bad.

How smokers’ rights are being vapourised

The anti-smoking lobby has now targeted electronic cigarettes in order to crack down even on the ‘notion’ of smoking

by Jason Walsh 

In the battle for smokers’ rights, it is fair to say that those who like to indulge in the ‘evil weed’ have been on the losing side so far. Few people want to stick up for smokers and those who do argue for free choice are frequently accused of harbouring a sinister commercial agenda.

It’s not hard to see why smoking may not exactly be popular. Many people find tobacco smoke fairly unpleasant and the health dangers of active smoking are certainly real. In the absence of a real commitment to freedom in society, no permanent compromises with smokers are possible, no matter how much they segregate themselves from the rest of society. As such, the strictures on smoking have long passed from simple public-health measures and into the territory of behavioural control via legislation. How else can anyone describe the crazed idea of  (previously known as the lingering smell of burnt tobacco)?

An energy policy for dimwits

The UK government’s new energy strategy is about muddling through, not powering society forward

by Rob Lyons 

Yesterday, the UK government published a draft Energy Bill. The bill’s measures would mean rising energy costs and greater encouragement for new nuclear power and renewables, but underpinning it all is the aim of making us use less not do more.

Things used to be so much simpler. The name of the game was to provide energy as cheaply as possible - and that meant fossil fuels, which were not only cheap but abundant, easy to use, flexible and reliable. In reality, not much has changed. According to the International Energy Agency (IEA) report, World Energy Outlook 2011, in 2009 the world was powered by oil (33 per cent of total energy), coal (27 per cent), gas (21 per cent), biomass and waste (10 per cent) and nuclear (about six per cent) (1). Renewables - including not only wind and solar but hydro power, too - provided just three per cent. ‘Dirty’ fossil fuels thus provided 81 per cent of the world’s energy.

Sitting at the Edge of the World

Fighting against windmills

“Very few beings really seek knowledge in this world. Mortal or immortal, few really ask. On the contrary, they try to wring from the unknown the answers they have already shaped in their own minds -- justifications, confirmations, forms of consolation without which they can't go on. To really ask is to open the door to the whirlwind. The answer may annihilate the question and the questioner.”

                                -Anne Rice.

By Mark Grant

One way or another, left or right, the funder or the funded; Greece is going. The situation is just not sustainable and $1.3 trillion in debt is going to be refuted and refuted with consequences that one only hopes the European Union acknowledges and is prepared for past the drivel that they spew out in the Press like Mount Vesuvius throwing up the phlegm of the world on some ashen afternoon in Rome. Sovereign debt, bank debt, municipal debt, $90 billion in derivatives, corporate debt and other obligations of the government left out to dry as Germany reeks with the stench of boars head gone bad.  This is about to be the way of it.

Interpreting India to the West

“Sorrow and the release from sorry.” 

By IRVING BABBITT

Buddhism, as is well known, has practically disappeared from the land of its origin. The older and more authentic form of the doctrine known as the Hīnayāna, or Little Vehicle, is found to-day chiefly in Ceylon, Burma, and Siam; the less authentic form of the doctrine known as the Mahāyāna, or Great Vehicle, which is less a religion than a system of religions, is found chiefly in Tibet, China, and Japan. Dr. Coomaraswamy has undertaken to give an account of both forms of the doctrine as well as to sketch the development of Buddhist art through the ages. His volume may be found useful by those who wish to get a first rapid impression of a vast and difficult subject. But from this point of view it is only a compilation, and the author does not claim anything more for it. His book, he says, “is designed not as an addition to our already overburdened libraries of information, but as a definite contribution to the philosophy of life.” It is as such that I propose to consider it.

"Growth" = Spending Other Peoples Money

The EU Political Game of Growth Vs Austerity is Akin to Polishing the Brass on the Titanic

By Graham Summers

France and other, weaker EU members have begun pushing for “growth.” This in of itself reveals how clueless the political elite in the EU are (economic growth in Europe is synonymous with living beyond one’s means and/or living off of others… the very policies that have lead to the EU Crisis).

Indeed, this shift from focusing on austerity to growth is really just a switch from one side of a coin to the other… without actually addressing the fact that the coin itself has no value as a concept.

Let me explain.

Predictions are mostly about the past

Feedback, Unintended Consequences and Global Markets

by Charles Smith

We cannot know that unintended consequences will always be destructive. Neither models nor projections have accurate track records in predicting the future. 

It seems an appropriate time to re-examine why our ability to predict the future of complex systems is so poor. A significant number of well-informed, smart people believe the Euro Experiment is unraveling in a positive feedback (i.e. self-reinforcing) death spiral.

What Are the Purposes of a Foreign Policy?

Liberty and Peace

By ROBERT A. TAFT

No one can think intelligently on the many complicated problems of American foreign policy unless he decides first what he considers the real purpose and object of that policy. In the letters which I receive from all parts of the country I find a complete confusion in the minds of the people as to our purposes in the world — and therefore scores of reasons which often seem to me completely unsound or inadequate for supporting or opposing some act of the government. Confusion has been produced because there has been no consistent purpose in our foreign policy for a good many years past. In many cases the reason stated for some action — and blazoned forth on the radio to secure popular approval — has not been the real reason which animated the administration.

Why Merkel and Hollande Will Make it Work

Overselling the Rift

By JACOB ALBERT

The leadup to the fateful meeting this past Tuesday between Francois Hollande and Angela Merkel was billed as a make-or-break moment for the foundering European Union. The European commentariat worked overtime to heighten the drama. “Berlin officials had worked feverishly behind the scenes to create the best possible impression of harmony before the visit, and tried in vain to downplay its significance,” gasped the Guardian. “But it was clearly far more than that, with two politicians who had never met before coming together to see not only if they could get on, but if they could work together to solve one of the most intractable problems Europe has faced since the second world war.” It’s hard to overstate the challenges facing the EU at the moment. But the anxious tone accompanying the summit was certainly overdone. For anyone with eyes, the chances of Merkel and Hollande being able to find a common ground always seemed like a good bet.

Big Lies in Politics

Nothing is easier for a politician than promising government benefits that cannot be delivered

By THOMAS SOWELL  

The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy them, and only in the short run. The current outbreaks of riots in Europe show what happens when the truth catches up with both the politicians and the people in the long run.

Among the biggest lies of the welfare states on both sides of the Atlantic is the notion that the government can supply the people with things they want but cannot afford. Since the government gets its resources from the people, if the people as a whole cannot afford something, neither can the government.

No ELA, No Euros! The End!

The mechanics of a Greek bank run

By David Zervos

As the Greek people begin to smell a Greek exit and a conversion of their hard earned Euro deposits back to Drachmas, they will withdraw Euros from Greek banks. So the Greek banks will head to the BoG with some dubious collateral to beg for Euros to pay depositors. The BoG takes the collateral, gives it a minuscule haircut, and draws Euros via the ELA. This of course creates an increase in BoG Target2 liabilities. The BoG then sends the Euros to the Greek bank and the Greek bank then gives the Euros to the hard working Greek depositor standing in line waiting to empty the account.

Importantly, Greek banks ONLY run out of Euros if the ECB can justify a shut down in funding to the BoG ELA facility or the Greek banks directly. Now, as we heard last week, the ECB has already stopped OMOs with 4 Greek banks (which one could safely assume are the big ones). So the ONLY thing standing between a Greek depositor and his/her Euros is the ELA. No ELA, no Euros!! And, as mentioned above, the ECB has once before threatened to turn off NCB access to Euros via the ELA in the case of Ireland. So there is a precedent for this to happen again!

The Slow Death of the Modern Nation State

The Looming Reversal of Centralization

 “Centralization induces apoplexy at the center and anemia at the extremities.” ~ Lamenais

By Paul Tuccinardi

The present political system is clearly insane. It suffers from schizophrenia. Around the world, almost no one trusts the politicians, yet almost everyone votes for incumbent politicians who promise to reform the government.

Voters now suspect (correctly) that all Western governments are headed for bankruptcy because of the pension programs and government-funded medicine, yet these two programs are politically untouchable. Voters demand them.

For four decades, soft-core critics of the pension/Medicare systems have come to voters with this announcement: “The two systems can be reformed, but we must act now. If we delay, they will bankrupt the government.” Yet the systems are never reformed.

Ratcheting Up The Crisis In Europe

Elections in Greece can’t cause as much trouble as bank runs in Barcelona or Turin

By WALTER RUSSELL MEAD

“Crisis in the eurozone” stories are getting boring and this is one two year old soap opera the world would just as soon see disappear. Nevertheless it grinds on; yesterday the German finance minister said it could go on for another two years.  Unfortunately, he’s right.

But while the news from Europe is complicated and inconclusive (they are always threatening to jump off the bridge but so far, no one has), this is still a story one has to watch. And after months and years when the crisis was mostly in the hands of elites — heads of government, central bankers and the like — in the last couple of weeks the public has been getting involved, and that makes the crisis more dangerous and harder to solve.

A Weekend At Bernie’s

Support for Greece Declared – Sort Of

By Pater Tenebrarum

The markets last week gave our vaunted policymakers on both sides of the pond something to chew over, and the G8 palaver this weekend was marked by the usual sotto voce declarations that the once again budding crisis would be stopped dead in its tracks by whatever interventions are required.

Considering the fact that the financial markets are nowadays seemingly mainly populated by traders suffering from a special form of attention deficit disorder (this includes the mindless computer trading programs of various types that are active in the markets),  we can imagine that these declarations may create a short term bounce in 'risk' – whether it lasts for mere hours or a few days remains to be seen.