IMF seems to be rethinking on austerity

Paul Krugman in December 2011 "If I have this right, Olivier is suggesting that harsh austerity programs may be literally self-defeating, hurting the economy so much that they worsen fiscal prospects.

This in turn means that the analogy to medieval doctors who bled their patients, then bled them even more when the bleeding made them sicker, is exactly right: austerity reduces growth prospects, leading to calls for even more austerity."

From Washington Post in January 2013 "The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth.......

Blanchard and Leigh deduced that IMF forecasters have been using a uniform multiplier of 0.5, when in fact the circumstances of the European economy made the multiplier as much as 1.5, meaning that a $1 government spending cut would cost $1.50 in lost output.

What are the implications for the future?

This paper may not be an official position of the IMF, but coming from the agency’s top economist, it is bound to change how the agency generates forecasts."

From The Guardian on April 18, 2013:George Osborne told by IMF chief: rethink your austerity plan

Cornel Ban at Triple Crisis On the Road to Damascus Ambiguity and Continuity at the IMF

A seventh grader who worked as a labourer wins Jnanpith award

Popular Telugu writer Ravuri Bharadhwaja has been selected for the prestigious Jnanpith award for 2012. 
A write up about his work in Telugu.  From this interview, he seems to be from a poor family and struggled for a long time. Another interview below with Gollapudi Marutirao (with too many advertisements)
https://www.youtube.com/watch?v=Ngdu67oSfRQ

More data related posts

Jayati Ghosh in 'Country Income Shares in PPP': "...suggests that just three countries (Brazil, China and India) together account for around 30 per cent of global GDP already, around the same as the total share of large Northern countries (Canada, France, Germany, Italy, the UK and the US).
If this were an accurate representation  of reality it would mark a truly astounding change over the past three decades. but since the output of different countries is measured in terms of 1990 PPP dollars, rather than nominal exchange rates, this greatly exaggerates the extent of change. With nominal exchange rates, the rising trend share of these countries is still evident but not so marked: the GDP of these three countries in 2011 accounted for just above 16 per cent of world GDP according to IMF, (around half of the ratio estimated by the HDR) and their share of total merchandise exports is just above 13 per cent according to the WTO."

Catherine Rampell in A history of oopsies in economic studies "...in response to controversies over mistakes, coding disputes and academics under siege who are protective of their data, some top journals like The American Economic Review now require authors to submit data and code “sufficient to permit replication” when sending in a paper. Sometimes the underlying numbers and code must be made publicly available. But there are exceptions, as sometimes the data are proprietary or very sensitive. Researchers have to get special permission to use the highly coveted Social Security records data, for example, and have to agree not to share the numbers with unauthorized parties."

Felix Salmon explains Arindrajit Dube's analysis of the famous Rienhart-Rogoff paper "In other words, the causation here seems about as clear as causal analysis can ever be: low growth causes high debt, rather than high debt causing low growth. Indeed, once you get past 90% of GDP, your debt load doesn’t seem to have any significant effect on future growth at all!" 

Dean Baker In History of Economic errors, Martin Feldstein deserves a mention

Battle over data interpretation

Dean Baker on 16th April, 2013 How much unemployment did Reinhart and Rogoff's arthmetic mistake cause?
Dean Baker on July 4, 2010 It would be helpful if Rogoff and Reinhart made their data available
Krugman's response to Reinhart-Rogoff response Reinhart-Rogoff continued
More discussion at Economist's View

P.S. Now, there is a flood of comments and it may take some time before the dust settles down, if ever. So, I will stop with a few more links. Here is the original Reinhart-Rogoff paper and the paper which pointed the errors is here. From a summary of the later paper by Mike Konczal: "They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result."
It seems as Dean Baker complained earlier, the data was not available to others for a long time. Reinhart-Rogoff response mentions a 2012 paper with Vincent Reihart, an economist at Morgan Stanley.
 Tyler Cowen wonders about Reinheart-Rogoff paper:
"The most interesting question to me is a rather squirrelly and subjective one: how should this episode change the relative ratios of what I read?  Should I in fact read fewer quantitative economics papers, instead (at the margin, of course) preferring more narrative history?  This is not the first time that an extremely influential major empirical result has been overturned or at least thrown into serious doubt."
A few weeks earlier, he talked of smell test The smell test for an Academic paper.
Probably, lot of the updates will be at http://delong.typepad.com/

Nicky Winmar moment and after

It was supposed to be a defining moment in Australian sport which made a dent on racism in sport. It happened
twenty years ago: shown at the beginning of this video https://www.youtube.com/watch?v=i5ebT-0izPE and is being celebrated with an exhibition. More here:
"At half-time in the reserves, the pair emerged from the visitors' change rooms, down the players' race, to familiarise McAdam with what was then the most hostile territory for opposing clubs in Australian football.

The race was next to the area occupied by the fanatical Collingwood cheer squad and the racial abuse hurled at the two Aboriginal players from the moment they emerged was so offensive that, two decades on, McAdam still can't bring himself to repeat it. ''I don't want to say what it was, but it was full-on,'' is how he puts it. ''I'll just say that it was racial and it was bad - it was terrible.

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''We just looked at each other and, whether it was me or him, just basically said to each other, 'We're not going to put up with this crap! Let's get out there today and run amok. Let's get first and second best on ground.' And it was funny. It turned out that way and we won the game, which was the most important thing.''

When the siren sounded, and an undermanned St Kilda recorded its first win at the ground in almost two decades, Winmar found himself near the Collingwood cheer squad, and instinctively, spontaneously, raised his arms over his head before lifting his St Kilda guernsey, pointed to his bare brown skin and declared: ''I'm black - and I'm proud to be black!''

As some in the crowd responded with yet more abuse, a defiant Winmar blew a few kisses before jogging to the middle of the ground in and hugging McAdam."

A few years earlier, I went to watch an Australian rules football match and did not like what I heard and never went to see a football match again. So, I do not know whether Winmar;s gesture helped.

Writing about the perceptions after the attacks on Indian students Bruised reputation has not recovered.

Playing with data

Earlier, we have seen a longer version of 'Is Europe's central bank misleading us over who's to blame eorozone's crisis?'
Now we have this 'Are Germans really poorer than Spaniards, Italians and Greeks?'. Conclusion
"From this analysis it follows that it is misplaced to conclude from the ECB study that Germany is poor compared to some southern European countries and that therefore it is not reasonable to ask German taxpayers to financially support ‘richer’ southern countries (see e.g. Wall Street Journal 2013). The facts are that Germany is significantly richer than southern Eurozone countries like Spain, Greece and Portugal."

A recent rose from my garden

Links April 14, 2013

Some good news A village that plants new tress for newborn girls:
"Here, villagers plant 111 trees every time a girl is born and the community ensures these trees survive, attaining fruition as the girls grow up.

Over the last six years, people here have managed to plant over a quarter million trees on the village's grazing commons- inlcuding neem, sheesham, mango, Amla among others.............

On an average 60 girls are born here every year, according to the village's former sarpanch Shyam Sundar Paliwal, who was instrumental in starting this initiative in the memory of his daughter Kiran, who died a few years ago.

In about half these cases, parents are reluctant to accept the girl children, he says.

Such families are identified by a village committee comprising the village school principal along with panchayat and Anganwadi members.Rs. 21,000 is collected from the village residents and Rs.10,000 from the girl's father and this sum of Rs. 31,000 is made into a fixed deposit for the girl, with a maturity period of 20 years.But here's the best part.“We make these parents sign an affidavit promising that they would not marry her off before the legal age, send her to school regularly and take care of the trees planted in her name,” says Mr. Paliwal.People also plant 11 trees whenever a family member dies."

Another Madras Loyola college student remembers Fr. Racine. Mine are linked in a comment. However I did not like that college and I think I went back only once, that too to visit Fr. Racine.

 Le Carre comes out of the cold (via 3quarksdaily):
" And I had absolutely no sense of transition from the one war to the other, because in the secret world there barely was one. To the hard-liners of east and west the second world war was a distraction. Now it was over, they could get on with the real war that had started with the Bolshevik Revolution in 1917, and had been running under different flags and disguises ever since.............The merit of The Spy Who Came in from the Cold, then – or its offence, depending where you stood – was not that it was authentic, but that it was credible. The bad dream turned out to be one that a lot of people in the world were sharing, since it asked the same old question that we are asking ourselves 50 years later: how far can we go in the rightful defence of our western values, without abandoning them along the way?."

Ashwin Parameswaran  thinks that some of the left and the right can combine "Neither the left nor the right is wrong. But both of them only see one side of what is the core strategy of neoliberal crony capitalism – increase the scope and reduce the scale of government intervention........But both the radical left and the radical right need to realise the misguided nature of many of their disagreements. A robust safety net is as important to maintaining an innovative free enterprise economy as the dismantling of entry barriers and free enterprise are to reducing inequality."
He also links to his essay All systems need a little disorder

Top Economic Advisers Forcast Unrest and War

A quick review of Kedar Sharma's work  Atul's blog http://atulsongaday.me/2013/04/12/dekh-hamen-muskaaye-kyun/
More about Kedar Sharma's interactions with Nehru
http://autarmota.blogspot.com.au/2012/12/rama-vaidyanathan-kedar-sharma-pandit.html
http://cfsindia.org/tag/kedar-sharma/

A new blog from India based on data

Abi has pointed out a new data based blog and an interesting post there We are the 5%:
"Take a look at the map below. It maps the proportion of households in each district, who told census-takers that they own all of the following – a TV set, a phone, a computer and a vehicle (scooter/motorcycle or car). That number, for the country as a whole, is 4.6% (roughly 11 million households)."
I posted the link in my Facebook and there is a comment that the figure is like ninety percent in USA. The point of the post seems to be this five percent is like the one percent in USA, the opinion, decision makers and those who implement the decisions. This seems possible. 
 There are some benefits in India not available in the US. One of my aged relatives recently broke his back and got operated at the government expense and is even getting a pension even though he never worked. When I mentioned this to a friend and inquired how widely such benefits are available, he responded that we the 5% swallow most of the money in those schemes. This tallies with a point that Lant Pritchett made in Everything you think you know about poverty is wrong
"One common belief among people working in international development is that a poor country can be changed by improving its education system, but Pritchett’s research suggests otherwise. The problem in poor countries is that they cannot make effective use of their people’s skills, Pritchett said, so giving them more skills does lead to development. Counter-intuitively, his research has shown that countries whose education system improves actually grow slower on average. He suggests that one reason for this may be that putting more educated people into a corrupt bureaucracy may result in more sophisticated corruption."

Another point that puzzles me is that I know many in towns and villagers who have properties worth crores of rupees but do not own personal computers. It is possible that owning personal computer is not yet a measure of influence in India. I am not sure but it seems that the data has to be interpreted carefully.

Savings and Loans

From a Credit Slips post : " Rhino Foods in Burlington found that employees in financial strain were not as good at their jobs and that the small loans improved the company’s bottom line.  Rhino brought in a combination social worker/financial advisor, who helped arrange 17% income advance loans paid back through wage deductions. Once a loan is paid off, the default rule is that the employee continues to pay into a savings account in the same amount as the prior loan repayment deduction. People who had never saved a dime are now building wealth."
Related PBS video http://video.pbs.org/video/2364991049
(Again via Naked Capitalism links)

I cannot resist posting this

From Naked Capitalism Links 4/12/13:
"Poll: Most Women See Bias in the Workplace Wall Street Journal. Duh! Women experience bias everywhere. Barry Ritholtz told me recently that for over 15 years, when his wife would put down her credit card to pay for dinner, the waiter would inevitably bring back the charge form to him to sign. Every time. She would sputter to him about it and he would say, “It’s because I have a penis” and sign the receipt. He similarly recounts how women he knows who run businesses and want to get a quote (say for an IT installation) will have the salesperson try to find someone else to talk to, assuming the woman can’t be in charge (mind you, I never get this sort of thing, but I send a “don’t fuck with me” vibe rather than normal female politeness/chipperness).

Recently Barry’s wife looked at the receipt. He’d written “I have a penis” in the signature line. He’d been doing that for 15 years (she dug out some older receipts to confirm) and the restaurant and bank never saw anything amiss."

Raj Chetty wins John Bates Clark medal

A description of his work http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/12/raj-chetty-was-just-named-the-best-american-economist-under-40-heres-why/
NYTimes interview http://economix.blogs.nytimes.com/2013/04/12/a-chat-with-raj-chetty-clark-medalist/
A link to his lectures on Public Economics via MR http://www.youtube.com/course?list=EC2SOU6wwxB0v3c46v2ptuDKIHmXHRAmeU

Trilok Kapoor version of 'zindagi dene wali sun'

One of his own from Trolley Driver 1948
https://www.youtube.com/watch?v=dOjUoLYbTrk

Puzzled

I try to keep track of Indian things via internet and visiting about once an year. but I really do not know how things are working for the poor. I heard stories (from a reliable social worker in Hyderabad) of a mother and daughter of whom only one can go out since they have only one decent set of clothes to wear. On the other hand, we have a poor relative of around 90 and at one stage we arranged for him to say in an old people's home paying around three thousand rupees a month. Then he had an accident in the bath room and broke his back. It seems that now he had a free operation under some government scheme and even gets a pension. He never worked, mainly lived off the land and sold most of it. I wonder how widely these schemes are available and how well they are working.

Last bottle gourd and luffa of the season?

America's most profitable export

is Tobacco according to Wiki answers, but Cash according to Bruce Bartlett:
"... 84 percent of the increase in cash since 1990 has been in the form of $100 bills, which have risen to 77 percent of the value of cash outstanding in 2012 from 52 percent in 1990.......According to a Federal Reserve study, the vast bulk of United States currency held abroad is $100 bills. Indeed, 65 percent of all $100 bills in existence circulate outside the United States."
P.S. See also http://www.econbrowser.com/archives/2013/04/who_is_holding.html

Twin songs in Hindi films

AK of 'Songs of Yore' makes a point that I am vaguely aware of but not so much detail:
"Now if you observe carefully you notice a very strange phenomenon. In all these songs the male version caught the popular fancy. The female versions lagged so far behind that many of them became extinct from public memory and it would be difficult to believe that they existed. ......
If you somehow block the memory of the male versions and listen to the female versions of the above songs, they are technically sound and quite melodious. Then why even Lata versions pale in comparison to their male counterparts seems inexplicable. Perhaps it has to do with something abstract in the way our senses respond to when the same song is sung by a male and a female singer, and we always seem to be favouring the former."

Here is a possible exception that proves the rule. Geeta Dutt's version of 'preetam aan milo' came after the famous version by C.H. Atma and seem to be popular even though it  comes in snatches against different backgrounds:https://www.youtube.com/watch?v=_LywY3L5CCM

There is also a short version by Asha Bhosle in 'Mardon Wali Baat' 

https://www.youtube.com/watch?v=bQZaw5B_uWc

Offhand, this is the only example that I remember.
P.S. This topic intrigues me. I found a couple more posts on the same topic, again w.r.t. Hindi songs
http://anuradhawarrier.blogspot.in/2012/08/its-first-anniversary-of-my-blog.html
http://amvaishnav.wordpress.com/2012/08/13/version-song-a-song-rendered-by-two-or-more-different-singers-or-in-different-moods/
There is one about Tamil songs in TFM but no links http://tfmpage.com/forum/12586.11309.5.html

Ashwini Parameswaran's blog

I have been reading posts in his blog Macroeconomic Resilience for a while, but only recently I started understanding a bit. Check out his recent posts. Rajiv Sethi mentions that one of the earlier posts
Resilience Stability Trade Off: Drawing Analogies Between River Flood Management and Macroeconomic Management as one of his favorite posts.

Summary of a Lant Pritchett speech on Poverty

'Everything you think you know about poverty is wrong': (via Chris Blattman)
"Counter-intuitively, his research has shown that countries whose education system improves actually grow slower on average. He suggests that one reason for this may be that putting more educated people into a corrupt bureaucracy may result in more sophisticated corruption.....
Working temporarily, Prichett suggests, three-year visas would give the poor an opportunity to earn a substantial amount of money, money that could change the trajectory of their lives when they returned home."
Some of the earlier posts about Lant Pritchett's ideas here, here, here and here.

Struggling to understand

After the recent confiscation of deposits in Cyprus and the attempts in Australia to tax superannuation, I found that I do not know how money originated or how it works now. Looking around, I found a 1993 paper by Randall Wray The origins of money and the development of the modern financial system which seemed understandable. But reading it a second time, I understood less. Then I found that he updated the paper in 2012 and read it again and understood even less. Here is the later version http://www.levyinstitute.org/pubs/wp_717.pdf
There is also a book What is money? edited by John Smithin in which experts discuss different theories.

Today's editorial 'The welfare of the patient must be paramount' and the news which triggered it ' 'Deceitful' Big Pharma accused of putting lives at risk' An earlier report from WSJ

First draft of a paper

First draft of 'Adopted almost invariant sets and splittings of groups' with Vincent Guirardel and Peter Scott is ready if anybody is interested. I assume that it will be ready before the end of year. Peter Scott is a long time collaborator and wrote the paper so far, though he claims that I outlined the arguments a few years ago. My final paper may be some thing that I will not understand.

Ruth Prawer Jhabvala RIP

Obituaries in The Guardian and in The Outlook.
The New Yorker makes some of her stories available online.

One more tax haven seems to be unravelling

From The Guardian article Offshore Secrets
"Millions of internal records have leaked from Britain's offshore financial industry, exposing for the first time the identities of thousands of holders of anonymous wealth from around the world, from presidents to plutocrats, the daughter of a notorious dictator and a British millionaire accused of concealing assets from his ex-wife.

The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens....................

As well as Britons hiding wealth offshore, an extraordinary array of government officials and rich families across the world are identified, from Canada, the US, India, Pakistan, Indonesia, Iran, China, Thailand and former communist states..........

The British Foreign Office depends on the BVI's company licensing revenue to subsidise this residual outpost of empire, while lawyers and accountants in the City of London benefit from a lucrative trade as intermediaries."

P.S. More reports in The Guardian and Indian Express
http://www.indianexpress.com/news/global-media-investigation-finds-612-indian-firms-in-tax-havens/1097501/0

Nice picture

From the website of Shobana Chandrakumar
http://www.shobana.in/photo-gallery.html/freedomofmovement/
Freedom of movement seems to come only trained persons.

'Coarsening effects of privilege'

so says Chrystia Freeland  in the last chapter about the plutocrats''obliviousness and indifference to the suffering of others'.An angry Monbiot talks in similar terms
"Most of the world's people are decent, honest and kind. Most of those who dominate us are inveterate bastards. This is the conclusion I've reached after many years of journalism. Writing on Black Monday, as the British government's full-spectrum attack on the lives of the poorcommences, the thought keeps returning to me.".

Chrystia Freeland on plutocrats

I came across Chrysia Freeland's book 'Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everbody Else' from a passage quoted in Miles Kimball post The Rise Fall of Venice. Parts of the book are presented in the New Atlantic article The Rise of the New Global Elite which sounds like a panegyric of the plutocrats. But the book is more balanced, particularly the last two chapters is an antidote for some of the earlier hype. The earlier chapters may be useful to new entrepreneurs. The book won the 2013 Lionel Gelber prize. A review from FT.com Follow the Money by a former editor of The Economist.

Tax leakage from Bric

From Most foreign investment in BRICs is not foreign at all-it's tycoons using tax havens
"The clearest sign that BRICs are leaking tax revenues is that each country’s biggest source of outside investment is a tax haven. China counts the tiny Caribbean bolthole of the British Virgin Islands as its biggest source of foreign investment (not including the Chinese territory of Hong Kong). India has Mauritius, Russia has Cyprus, and Brazil has the Netherlands."
via Tim Worstall in Forbes

An old Punjabi film song

from Yakke Wali http://www.youtube.com/watch?feature=player_embedded&v=ArFHH8EOIO0

Interesting article

in washingtonsblog but many things in the links related to banking and money creation are not clear to me. An interesting excerpt from from Benjamin Franklin's observations starting with a trip to London in 1764:
"When he arrived, he was surprised to find rampant unemployment and poverty among the British working classes… Franklin was then asked how the American colonies managed to collect enough money to support their poor houses. He reportedly replied:

“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”

In 1764, the Bank of England used its influence on Parliament to get a Currency Act passed that made it illegal for any of the colonies to print their own money. The colonists were forced to pay all future taxes to Britain in silver or gold. Anyone lacking in those precious metals had to borrow them at interest from the banks.

Only a year later, Franklin said, the streets of the colonies were filled with unemployed beggars, just as they were in England. The money supply had suddenly been reduced by half, leaving insufficient funds to pay for the goods and services these workers could have provided. He maintained that it was “the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War.” This, he said, was the real reason for the Revolution: “the colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction.”

Links 29 March, 2013

I thought that hundred thousand euros was lot of money to put in a bank. Today Age has a story about a Cypriot_Australian who worked in Australia for over thirty years, retired to Cyprus in 2007 with his life savings of a million Australian dollars, deposited in Laiki Bank and has been living on the interest.

Meanwhile, some of those who took advantage of tax shelters seem to be doing fine. WSJ has an article 'Wealth Over The Edge: Singapore' "But over the past decade, Singapore has undergone a dramatic makeover, as the rich and famous from Asia and beyond debark on its shores in search of a glamorous new home—and one of the safest places to park their wealth." Akshay Regulagedda who linked it on Facebook mentions that an Indian cabinet minister goes there for a haircut every two months.

One problem seems to be banks too big in comparison to a country's GDP. From an article coming from a German Foundation "For the Germans, the Cypriot saga played into political tropes about moral hazard and free-riding tax havens. One German public intellectual described Cyprus in the Financial Times as a "cesspool of profligacy and haven for tax-dodging Russian oligarchs." German media are providing detailed analyses of other tax havens to which their countrymen might be exposed. The daily Die Welt declared recently that the tax haven as an economic model has been "exhausted." Luxembourg, with a financial sector more than five times the size of its €44 billion GDP has come under particular scrutiny. With a financial sector twice the size of its GDP, the United Kingdon could also become a point of interest."

In The Debate on Bank Size Over "What really moves the needle in terms of consensus among policy makers and the broader public opinion is when events combine with a new understanding of how the world works. Thanks to Senator Sherrod Brown, Democrat of Ohio; Senator Warren, Democrat of Massachusetts, and many other people who have worked hard over the last four years, we are ready to understand what finally defeated the argument that bank size does not matter: Cyprus."
Nothing will happen soon says The Atlantic And there are the problems that Holder mentioned

Links, 28 March, 2013

City of London Spider at the centre of tax havens by Nicholas Shaxson, the author of Treasure Islands. George Monbiot on London Corporation "There are 25 electoral wards in the Square Mile. In four of them, the 9,000 people who live within its boundaries are permitted to vote. In the remaining 21, the votes are controlled by corporations, mostly banks and other financial companies. The bigger the business, the bigger the vote: a company with 10 workers gets two votes, the biggest employers, 79. It's not the workers who decide how the votes are cast, but the bosses, who "appoint" the voters. Plutocracy, pure and simple" According to Shaxson, the rest of the votes is 23,000 and Blair wanted to increase it to 32,000. Shaxson has a new article on the new rich in the City of London 'A Tale of Two Londons' "A decade or so ago, that may have been true. But today another class sits above even them—the global commodity plutocrats: owners of mineral rights, or dominant players in mineral-rich countries in sectors such as construction and finance that benefit from commodity booms. " Some of them live in One Hyde Park built by Candy brothers. One of them names his children Monaco and Cayman.

Krugman on Cyprus 'Treasure Island Trauma' "But step back for a minute and consider the incredible fact that tax havens like Cyprus, the Cayman Islands, and many more are still operating pretty much the same way that they did before the global financial crisis. " and 'Hot Money Blues' "one thing seems certain: for the time being, and probably for years to come, the island nation will have to maintain fairly draconian controls on the movement of capital in and out of the country....I am, of course, not the first person to notice the correlation between the freeing up of global capital and the proliferation of financial crises; Harvard’s Dani Rodrik began banging this drum back in the 1990s. Until recently, however, it was possible to argue that the crisis problem was restricted to poorer nations, that wealthy economies were somehow immune to being whipsawed by love-’em-and-leave-’em global investors. That was a comforting thought — but Europe’s travails demonstrate that it was wishful thinking." Felix Salmon reminds "Cardiff Garcia looks at at a meta-study on capital controls and finds that only once — in Malaysia — were they effective. In that case, the controls were “accompanied by aggressive counter-cyclical spending, bans on short-selling the currency and trading it offshore, and defending the ringgit against speculators by fixing it to the dollar”. Those things aren’t happening in Cyprus and won’t be."

Andrew Watts in 'Mario Draghi's Economic Ideology revealed' "In other words the productivity measure includes inflation, the wage measure does not."

Daniel Little 'Michael Mann on Power' "This is an amazing corpus, and I think it throws important light on both the theory and the history. It is historical sociology on a macro-scale; and yet Mann also provides careful, almost ethnographic details at the level of individual actors -- fascists, ethnic paramilitaries, legislators, colonial administrators. So I think Mann also offers a great example of a sociologist who is not prisoner to a single methodology or a single avenue of approach to these supremely complex social processes.:

Michael Pettis on reckless bankers

in Why the world needs reckless bankers

"In fact, long-term wealth creation accrues most to societies in which the financial system most willingly funds risk-taking entrepreneurs. But the more a financial system is willing to finance risky new ventures, the greater the likelihood of banking instability.

.........

We should allow localised – manageable – banking crises to occur more often.

.....

What might in fact be best for the US and the world may be more and smaller banks, tougher and even ruinous competition, more bankruptcies, more kinds of financial institutions and a regulator whose main function is to enforce transparency and to manage periodic crises with countercyclical measures. Perhaps then we might even prefer a little more 19th-century-style “reckless banking”.'

From the Wikipedia

article Chinna Jeeyar Swamy
"We have heard several stories and legends about God incarnations, Godman, and Acharyas in the past, but very rarely can we come into the living presence of divinity like, His Holiness Tridandi Srimannarayana Ramanuja Chinna Jeeyar Swamiji.
......
For about four years i.e. from 1985 to 1988 there was a continuous and constant failure of rains in Andhra Pradesh. The state in general and Hyderabad in particular were reeling under the conditions of drought. Sri Swamiji was merciful enough to perform a Varuna Yagna in Hyderabad for a period of 9 days. From the last day of the yagnam (i.e. Poornahuti day) miraculously there were a heavy rains."
I missed him on visits to A.P. but it seems from his Facebook account he has been visiting Australia. May be I can find about Vedic science and look for a job in his university if there is a Cyprus type crisis here.

Los Alamos reminiscences of Richard Feynman

Probably very well known but I noticed it only today
Los Alamos From Below: Reminiscences 1943-1945, by Richard Feynman
Some excepts. First about cracking safes "Once, however, I did open a safe purely by accident, and that helped to reinforce my reputation. It was a sensation, but it was pure luck...... For 20 minutes I turned pi upside down. Nothing happened.

            So I started walking out of the office, and I remembered in the book about the psychology, and I said, “You know, it's true. Psychologically, DeHoffman is just the kind of a guy to use a mathematical constant for his safe combination. And the other important mathematical constant is e.” So I walk back to the safe. 27-18-28 - click, clock, it opens."

About meeting Niels Bohr "Then the son told me what happened. The last time he was there, he said to his son, “Remember the name of that little fellow in the back over there? He's the only guy who's not afraid of me, and will say when I've got a crazy idea. So next time when we want to discuss ideas, we're not going to be able to do it with these guys who say everything is yes, yes, Dr. Bohr. Get that guy and we'll talk with him first.""

About watching the first atomic bomb explosion:

"The next thing that happened, of course, was the ' I 'test, after we'd made the calculations. I was actually at home on a short vacation at that time, after my wife died, and so I got a message that said, “The baby is expected on such and such a day."

            I flew back, and I just arrived when the buses were leaving, so I went straight out to the site and we waited out there, 20 miles away. We had a radio, and they were supposed to tell us when the thing was going to go off and so forth, but the radio wouldn't work, so we never knew what was happening. But just a few minutes before it was supposed to go off the radio started to work, and they told us there was 20 seconds or something to go, for people who were far away like we were. Others were closer, 6 miles away.

            They gave out dark glasses that you could watch it with. Dark glasses! Twenty miles away, you couldn't see a damn thing through dark glasses. So I figured the only thing that could really hurt your eyes - bright light can never hurt your eyes - is ultraviolet light. I got behind a truck windshield, because the ultraviolet can't go through glass, so that would be safe, and so I could see the damn thing. OK.

            Time comes, and this tremendous flash out there is so bright that I duck, and I see this purple splotch on the floor of the truck. I said, “That ain't it. That's an after-image.” So I look back up, and I see this white light changing into yellow and then into orange. The clouds form and then they disappear again; the compression and the expansion forms and makes clouds disappear. Then finally a big ball of orange, the center that was so bright, becomes a ball of orange that starts to rise and billow a little bit and get a little black around the edges, and then you see it's a big ball of smoke with flashes on the inside of the fire going out, the heat.

            All this took about one minute. It was a series from bright to dark, and I had seen it. I am about the only guy who actually looked at the damn thing the first Trinity test. Everybody else had dark glasses, and the people at six miles couldn't see it because they were all told to lie on the floor. I'm probably the only guy who saw it with the human eye.

            Finally, after about a minute and a half, there's suddenly a tremendous noise - BANG, and then a rumble, like thunder -- and that's what convinced me. Nobody had said a word during this whole thing. We were all just watching quietly. But this sound released everybody- - released me particularly because the solidity of the sound at that distance meant that it had really worked.

The man standing next to me said, “What's that?"

I said, “That was the bomb.""

A fascinating book on tax havens

While trying to follow the recent Cypress events, I came across this quote from Nicholas Shaxson's book 'Treasure Islands':
"Having gone out of its way to welcome wealthy Arabs in the 1980s and rich Japanese and oil-rich Africans in the 1990s, the City has more recently, with the help of conduit havens like Cyprus, aggressively courted Russian oligarchs, providing them with bolt-holes beyond the reach of Russian law enforcement. By April 2008 a hundred companies from the former Soviet Union’s Commonwealth of Independent States (CIS) were listed on the London stock exchange…"

Here are some more excepts from the book http://www.thirdworldtraveler.com/Global_Secrets_Lies/Treasure_Islands.html
I am midway through the book and find it a fascinating account of globalization from around 1955, particularly the last thirty years.
Paul Krugman says in 'Treasure Island Trauma':
"A couple of years ago, the journalist Nicholas Shaxson published a fascinating, chilling book titled “Treasure Islands,” which explained how international tax havens — which are also, as the author pointed out, “secrecy jurisdictions” where many rules don’t apply — undermine economies around the world. Not only do they bleed revenues from cash-strapped governments and enable corruption; they distort the flow of capital, helping to feed ever-bigger financial crises.
One question Mr. Shaxson didn’t get into much, however, is what happens when a secrecy jurisdiction itself goes bust. That’s the story of Cyprus right now. And whatever the outcome for Cyprus itself (hint: it’s not likely to be happy), the Cyprus mess shows just how unreformed the world banking system remains, almost five years after the global financial crisis began."
An excellent review of Shaxson; book  'Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens' and 'Winner-Take-All Politics: How Washington Made Rich Richer- and Turned Its Back on the Middle Class' by Jacob Hacher and Paul Pierson appeared in the  London Review of Books last year. It is 'Did not they notice? Offshore' by David Runciman.  Excerpts from Runciman's review:
"This is the web, but where is the spider? At the heart of Shaxson’s story lies the City of London, itself a kind of island within the British state. Again, the rise of the City as the favourite place for foreigners to park their money, no matter who they were or where it came from, is related to imperial decline. After the Second World War, sterling still financed much of global trade, but the British economy was no longer able to sustain the value of the pound against the dollar. In the aftermath of Suez, which caused a run on the pound, the government attempted to impose curbs on the overseas lending of London’s merchant banks. The response of the banks, with the connivance of the Bank of England, was to shift their international lending into dollars. The result was the creation of the so-called ‘Eurodollar market’ – which was effectively an offshore haven. Because the trade was happening in dollars, the British saw no need to tax or regulate it; because it was happening in London, the Americans had no means to tax or regulate it. ....US policy-makers were now in a dilemma. They could try to face down the threat of offshore, either with higher domestic interest rates, or with tighter controls on currency outflows and a tougher regulatory regime requiring US banks to share information about their overseas activities. Or they could copy London by creating an offshore world of their own closer to home: in other words, if you can’t beat them, join them. The second was the path of least resistance – among other things it was a useful way of reinforcing the dollar’s position as the global reserve currency – and over time it was the one they took. .......

What happened to the representatives of all those people who don’t have lots of money to move around, who can’t relocate even if they wanted to, and who have an interest in a fair, open and broadly progressive tax system? Didn’t they notice what was going on?

This is the question that Jacob Hacker and Paul Pierson tackle in Winner-Take-All Politics. They don’t spend much time talking about offshore, but the story they tell has striking parallels with the one laid out by Shaxson. One of the ways you can identify an offshore environment, according to Shaxson, is that local politics gets captured by financial services. In that sense, Washington has gone offshore: its politics has been captured by the interests of a narrow group of very wealthy individuals, many of whom work in finance. For Hacker and Pierson this, more than anything else, explains why the rich have got so much richer over the last 30 years or so. And by the rich they don’t mean simply the generally wealthy; they mean the super-rich......

All this happened because the politicians followed the path of least resistance – as elected politicians invariably do – and the better organised and better-funded resistance came from the representatives of big business, not organised labour."

There is more about the increasing inequality and damage to the developing countries in the book. My take away point is a quote of Keynes in Shaxson's book which is almost Gandhian:
"Let goods be homespun whenever it is reasonably and conveniently possible. Above all, let finance be primarily national'.

The mouse that roared

Yves Smith has comprehensive report 'Cyprus: Will the Mouse that roared be Gored?', from money laundering and arms trade to Nato bases. As some of the comments point out, some of the points not covered are "The UK has a large money-laundering and tax-free system explained in Vanity Fair this month. It is independent from the UK government. Perfect to process the overseas money even from Russia while maintaining their air base in Cyprus. Perhaps the EU will have new respect for the global implications of their financial instability." "Cyprus and Iceland demonstrate that it is easier to impose unpopular, and unjust, antisocial measures in larger countries. Why?" "...the Archbishop of Cyprus formally placed the entire wealth of the Greek Orthodox Church of Cyprus at the government’s disposal this morning..." etc

A duet from 'Neki Aur Badi' 1949

Amirbai Karnataki and Feroz Dastoor and may be another male singer
http://www.youtube.com/watch?feature=player_embedded&v=PC8nf0_jPKw
via http://atulsongaday.me/2012/12/15/kyun-jee-scent-lagaaya-hai/
which also has the lyrics and translation.

Iraq oil after ten years

Barkley Rosser in 'Who Got Iraq's Oil Ten Years After the War Started': "The big winners in the oil industry in Iraq are the Chinese, followed by the old Saddam era operators from France and Russia, along with upstarts from Norway and Canada.  The US companies are only now beginning to get any pieces of the action, but not in the largest producing areas in the main parts of Iraq, but in the one part of Iraq that clearly can be said to be in better shape now than prior to the US invasion, the semi-autonomous Kurdish region of Iraq that was not on anybody's radar screen before as a major possible oil producing region.  I am quite certain this is not what Cheney either expected or hoped for."