Dear Naked Capitalism Reader,
Friends, things didn't quiet down this month, did they? Not only are we not "done with" Covid, there's a war on. We've covered both. But there are other matters financial and political that we've covered too, and we'd like to share some of the posts that we hope you'll especially like. | | Major Stories 03/25/22 Post  by Yves Smith, Some Additional Comments on the Russian Counter-Sanction of Requiring Gas Payments in Roubles." The only way a Western institution would deal with the Bank of Russia would be if a Western bank, on behalf of its gas customer, were to go to the Bank of Russia to make the currency exchange. Unless that bank has previously had a clearing account with the Bank of Russia, this would be a non-starter independent of the sanctions, plus we see no reason for a Western bank to stick its neck out this way. Gas buyers who want to deal with Russia will need to open accounts with non-sanctioned Russian banks, if they don't have them already. Having said that, it is possible that Russia will offer buyers a central bank account for those who want to avail themselves of it, just to make a point. "
Sausage Factory comments: "Mar. 14, 2022: '[In two weeks, China and the Eurasian Economic Union – Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan – will reveal an independent international monetary and financial system. It will be based on a new international currency, calculated from an index of national currencies of the participating countries and international commodity prices.' The currency resembles Keynes' invention Special Drawing Rights.SDRs are a synthetic currency which derives its value from a global, publicly traded basket of currencies and commodities. Immense beyond imaging, and stable as the Pyramids. Everyone gets a seat at the table and a vote. It may eventually be administered by an arm of the UN. SDRs pose a serious alternative to the US dollar, both for the EAEU, the BRI's 145 member states, the Shanghai Cooperation Organization (SCO), ASEAN, and the RCEP. Middle East countries, including Egypt, Iran, Iraq, Syria, Lebanon, are keenly interested. Less well known is that the EAEU, the BRI, the SCO, ASEAN, and the RCEP were discussing a merger before the currency news hit. It is reasonable to expect them to join this new, cooperatively managed, stable reserve currency regime in which they can settle their trades in stable, neutral, predictable SDRs."
03/22/22 Post by Yves Smith, Ukraine Latest: More Shortages; Misunderstanding Russian Strategy?." One striking bit is that about halfway into the piece, experts admit that they've relied completely, as in over-much, on what passes as intel from Ukraine. It seems to be occurring to then only now that they should have treated it as a hermeneutic, given Ukraine's need to present itself as winning, both to win Western support and to prevent troop desertions. From the Financial Times: 'Ukraine's information dominance has masked its losses: thousands of open-source images of exploded Russian armour have been taken by Ukrainian civilians, who are unlikely to post similar pictures of their own side's losses. This has led to a natural bias in the online content being scrutinised by many analysts.' Ahem. My understanding is that the validity of these images is questionable. There are claims, at least some backed by actual supporting images, that purported kills of Russian equipment are often if not mainly shots from earlier in the Donbass conflict that have been recycled, or more important, Ukraine equipment losses depicted as Russian (remember most Ukrainian armaments are of Russian origin). To put it more bluntly, this is the worst sort of visual evidence and too questionable to serve as a source for reaching conclusions about operational results….yet the Financial Times suggests it was not vetted."
Jung comments: "Everything you've summarized rings true to me. The dubious nature of visual evidence in the 21st is very annoying. I've been operating under the assumption that while not definitive images are likely true. I also fell in part for the trap of using currency exchange rate as an indicator of the economy. Together these have led me to overestimate the cost of the war for Russia, even though I was previously uncertain anyway."
03/10/22 Post by Yves Smith, Russia Sanctions Blowback Only Beginning: Globalization in the Crosshairs, Russian Retaliation Coming?." It's surprising that the business press has not gotten to be apocalyptic about the worst case downside of the economic war on Russia. And by that we are not including nuclear winter. Due to the fact that financial and real economy effects occur in very different time scales, we are in a phase similar to the runup to the global financial crisis, where it was clear Something Bad to Horrible was underway, yet the press and pols were largely sanguine. I gasped out loud in May 2007 when Bernanke declared that subprime was contained. The reason the blowback from the sanctions could be cataclysmic is that trying to isolate one of the biggest commodity producers in the world, with significant market share in many critical ones, will soon hit Covid-stressed supply chains. And if the economic brinksmanship isn't dialed down soon, we'll see tightly-coupled systems start to go critical. Because the hollowed out business press is much more fixated on finance than nitty gritty real economy operations, some bad outcomes will be noticed quickly because they affect visible companies, while others could be just as detrimental but not be picked up until the effects were advanced. And recall that the defining characteristic of a tightly coupled process is that a shock moves through the system so quickly that it can't be interrupted (or may not be reversible at all. Mind you, that does not necessarily mean it moves quickly in clock time."
Thuto comments: "As the collective world view of most people in the west was outsourced wholesale to the MSM over the last two weeks, western companies raced to grab hold of the shiny 'exiting the Russian market' social marker and bragging rights without thinking through the immediate implications, to say nothing of higher order effects. Being 'on the right side of history', as these companies are wont to say when justifying pandering to populations whipped into a rage lather by the press and chest thumping politicians, is about to become a really fraught affair."
03/08/22 Post by Lambert Strether, Discerning Volodymyr Zelensky." In this extremely short and simplistic post, I will do what it says on the tin: Scrape away the already deeply impacted layers of wartime propaganda[1]. I propose to do this in the old-fashioned American way: By following the money. ... As a caveat: I'm going to be looking at the dealings of a billionaire, the armed militants he funds, and a politician he funds. All these relationships are so complicated and intricate as to make, say, The Clinton Foundation look like a child's scribbled drawing. All these relationships are deeply rooted in the history of Ukrainian nationalism as well, with plenty of heroism and villainy to go around. By taking a transactional approach ('follow the money') I abstract away from all that. (For example, Watergate exploded because it involved cash payoffs, not because of the often bizarre personal histories of the participants. With that, let's begin with the money man. "
Skippy comments: "What if Zelensky is the epitome of a flexian neoliberal globalist that's – in it for himself – by serving his oligarchical betters for a lifestyle upgrade and is actuality void of any ethos [good or bad] except for posturing for the faithful unwashed. I'm reminded of a old NC post, way down the memory hole, that dealt with certain ideological perspectives which all neoliberal promoters adhered too. Mainly anyone in a position of wealth/power was innate[.] I referenced an European AET conference that was attended by top public and private administration people which were inform by the speakers that their social status was vindication of them being absolutely the right people in their rolls, work life and private life leaders over others. Which is kinda funny in this context as Zelensky is just a proxy for his betters in achieving their goals/agendas and seemingly willing to play his part to the hilt because his belief can be life boated out. Then live the exiled roll to keep the embers hot back home or return triumphantly one day. The idea that any of this has to do with some notion of heroic nationalism or any other such contrivance is just window dressing when its more of a Richard Smith exposé on financial flows and how far some are willing to go to preserve them and expand them [Capitalism – thud]."
03/01/22 Post by Nick Corbishley, Are Vaccine Passports About to Go Totally Global?." In other words, as countries around the world drop almost all of their COVID-19 public health measures, it looks like digital vaccine passports are going to be made not just universal but permanent. ... The Vaccine Credentials Initiative (VCI™) is one of a number of private partnerships working to harmonize vaccine passport standards and systems at a global level. The VCI™ is leading the development and implementation of the open-source SMART Health Card Framework and specifications. Its partners include U.S. government contractor MITRE Corporation, Amazon Web Services, Microsoft, Oracle, Sales Force and Mayo Clinic."
Mikel comments: "So the shots for Covid are still being propagandized as if they were sterilizing vaccines? They are getting loose with the term 'inoculation' too. These shots do not work like a mumps or measles shots. And people have lost their minds to keep thinking these shots are in the same league. If they get away with this, no telling what experimental junk will be in play next and it is a giant disaster in the making."
Continuing Themes 03/07/22 Post by Jerri-Lynn Scofield, EPA Proposes Tougher Emissions Standards For Trucks." The Environmental Protection Agency (EPA) today proposed tougher emissions standards for heavy duty trucks, vans, and busses, the first such upgrade for this category of vehicles since 2001. I am aware of the irony of the administration proposing new emissions standards at a time when skyrocketing world oil and natural gas prices will do far more to reduce emissions – as users cut back on their energy use – than any tweak in standards. ... policy initiatives intended to address climate change and other environmental standards."
JBird4049 comments: "Upgrading and expanding public transportation everywhere and making it free, while doing the same for the railroads both transportation and cargo would be a godsend. Making transportation available for everyone while reducing the effects of raising fuel costs. Then use tax credits or just straight up checks for buying new vehicles would also do wonders. Keep the existing emissions rules for the old vehicles, while tightening them for new vehicles would also work without hurting the average person, business, or municipal public transit. People who wanted to keep the old jalopy, collectors car, or some such could do so, while everyone else would just transition to the improved versions when the wheels fall off the old one."
Business/Finance 03/11/22 Post by Nick Corbishley, Latin America, As a Whole, Refuses to Embrace Total Economic War Against Russia." On March 2, only four out of 33 Latin American and Caribbean countries — Cuba, Nicaragua, El Salvador and Bolivia — abstained in the vote to condemn Russia's invasion during the emergency meeting of the United Nations General Assembly. The real number would have almost certainly been five if Venezuela's diplomats hadn't been barred from attending the vote after Maduro's cash-strapped government had fallen behind on its subscription fees. On the other side of the divide, a small number of governments in the region have publicly endorsed the West's paralyzing economic sanctions against Russia. They include Ecuador, Colombia, Chile and Guatemala. The rest of the countries occupy the vast middle ground between the two polar extremes. Despite condemning Russia's invasion of Ukraine, they have expressed opposition to the US-NATO-led push to isolate Russia from the global economy."
Arizona Slim comments: "Methinks that the USA is going to learn that it isn't the worldwide bully boss that our government thinks it is. Funny thing about other countries: They tend to go their own way. On a personal note, here's a story from the Arizona Slim bicycle touring file: In 1980, I was riding in Canada and I kept seeing these boxy compact cars. They didn't look anything like the cars I knew from the States. Where in the heck were these things from? The answer: Those were Ladas. From the Soviet Union. Never would those cars ever be sold in the United States. But, obviously, they were sold in Canada."
03/11/22 Post by Jerri-Lynn Scofield, India Is Mulling Rupee-Ruble Payments System for Trade with Russia." India is discussing how to set up a rupee-ruble payment mechanism to enable it to trade with Russia, to circumvent the U.S. sanctions regime. India abstained from voting on the March United Nations (UN) General Assembly Resolution demanding an end to Russian offensive in Ukraine ... Since its Independence, India has tried to steer a neutral course between the U.S. and Russia (and previously, the USSR). During the 1950s, India's first prime minister, Jawaharlal Nehru, was a prime architect behind the Non-Aligned Movement, under which developing countries tried to pursue their national interests without binding themselves to either the U.S. or Soviet bloc. India, Indonesia, and Yugoslavia were mainstays of that movement, which today includes 120 member states, 18 observer states, and 10 international organisations. Following the collapse of the Soviet Union, India developed closer relations with the United States. Most recently, under prime minister Narendra Modi, India's policy tilted even more decisively in a pro-U.S. direction. Modi and Trump shared a strong affinity, and Modi even travelled to the U.S, to host massive rallies intended to galvanize Indian Americans in support of Trump. ... During the last several months, several considerations have prompted the Modi government to rethink the wisdom of putting all its eggs in the U.S. basket. Instead, India is returning to a more balanced approach, assessing its national interests vis-a-vis those of other countries and acting accordingly."
sidd comments: "The indian market always has been ingenious in circumventing restrictions. I recall a series of successful threeway trades in the 60's involving mineral ore, agro products and mining machinery between two eastern european countries and a very large indian mining corporation explained to me by a senior officer of the last. At the same time i was aware (one of my neighbours was involved) of deals for eastern european electrical equipment for diamonds through amsterdam. That was a long time ago, and in a different world. But i doubt the traders on dalal street are stupider these days."
03/14/22 Post by Yves Smith, Russia Sanctions Trade Shock: Fulfilling the Fears of Smoot-Hawley?." Our system of trade is so complex that it's a classic case of obliquity: no one can map its operations, so that it's impossible to devise efficient interventions on a macro basis. But a general rule (hence the name obliquity) is that in highly complex systems, a seemingly straightforward approach is much less likely to succeed than an indirect one. So if we start having large-scale problems, the officialdom is unlikely to be very successful in intervening. The reason the risk potential is large is that traded products have become critical o all advanced economies. Yet that exchabge is fragile thanks to widespread adoption of just-in-time inventory practices and the vogue for large companies to reduce their number of suppliers so as to increase their bargaining leverage. That means the potential for cascading problems is considerable. We got a taste of that with Covid supply chain issues. Imagine that happening in merely 25% of the products that depend on commodities where Russia and Ukraine have significant market shares. It's hard to think of an industry that would be spared."
John comments: "Fagin in the musical Oliver sings the ditty, 'I think I'd better think it out again.' Might have been a good idea before poking the Bear for twenty years or more. The interconnections of industry and trade seem to this untutored person to make the game of Go appear simple. The US government has been able to call its shots for such a long time that experiencing blow back must be a shock."
03/17/22 Post by Yves Smith, Progressives Fall for Crypto-Bros Intelligence-Insulting Claim of 'Inclusiveness'." Sadly the crypto touts have made enough money to fund a lobbying effort in Washington as well as enlisting some mayors as promoters, most notably New York City's Eric Adams. Two initiatives are underway: a Democratic party initiative to set a regulatory framework for crypto, as well as a Fed inquiry about a digital dollar. The Democrat crypto bill is not likely to pass this year due to intra-party splits. Given the high odds of a Democrat wipeout in the midterms, one has to wonder what becomes of it in 2023. An article earlier this week in Politico describes the fuzzy-headed 'progressive' enthusiasm for it: 'Sen. Elizabeth Warren of Massachusetts — who has long led the left's charge to crack down on banks and Wall Street — has emerged as one of the party's most vocal cryptocurrency critics, warning that it exposes consumers to danger, is ripe for financial crimes and is an environmental threat because of its electricity usage.'"
Ctesias comments: "Just a few loose remarks, as I recently started to look a bit closer into crypto. 1) Many people think crypto=bitcoin. Yes, it's the mothership of crypto, often regarded as the internet 'gold', as there is a finite supply / non-inflationary and mining it will become harder over time. Mining bitcoin is so terribly expensive in terms of energy, because the consensus model on which it is based is called Proof Of Work, which basically means that you have computers (and nowadays multi-million dollar computer farms with specialized hardware) competing against each other to solve puzzles. The first one at the finishing line will get the proceeds of solving the puzzle and the rest wasted their energy trying to do so. 2) bitcoin is basically useless in terms of what you can do with it, other than trading it or, indirectly, make use of payment systems that somehow keep bitcoin balances rather than fiat."
03/07/22 Post by Michael Hudson, America Shoots Its Own Dollar Empire in Economic Attack on Russia." The recent escalation of U.S. sanctions blocking Europe, Asia and other countries from trade and investment with Russia, Iran and China has imposed enormous opportunity costs – the cost of lost opportunities – on U.S. allies. And the recent confiscation of the gold and foreign reserves of Venezuela, Afghanistan and now Russia, along the targeted grabbing of bank accounts of wealthy foreigners (hoping to win their hearts and minds, along with recovery of their sequestered accounts), has ended the idea that dollar holdings or those in its sterling and euro NATO satellites are a safe investment haven when world economic conditions become shaky. So I am somewhat chagrined as I watch the speed at which this U.S.-centered financialized system has de-dollarized over the span of just a year or two. The basic theme of my Super Imperialism has been how, for the past fifty years, the U.S. Treasury-bill standard has channeled foreign savings to U.S. financial markets and banks, giving dollar diplomacy a free ride. I thought that de-dollarization would be led by China and Russia moving to take control of their economies to avoid the kind of financial polarization that is imposing austerity on the United States.[1]But U.S. officials are forcing them to overcome whatever hesitancy they had to de-dollarize."
Pat comments: "Washington's arrogance about Ukraine has reminded me of Detroit. Denial there is a problem, doubling down on their usual methods, and a failure to recognize that marketing won't guarantee loyalty if the conditions do not merit it. Admittedly there is copious evidence that this brain trust is either incredibly bad at their job or their goals have nothing to do with America's well being or a combination of both and there is no loyalty to allies or partners, so it is an easier call to say the major players are going to be directly or indirectly driven to do the opposite of what Washington wants unlike Detroit in the late 60s and early 70s. The reality of this debacle will become increasingly clearer as time goes by. The Biden is doing better than I thought period is long over for me, more of my acquaintances have realizing his administration bites since last fall. I fully expect Biden to be considered one of the worst Presidents in history by the end of his term."
03/25/22 Post by Nick Corbishley, Unbeknown to Most, A Financial Revolution Is Coming That Threatens to Change Everything (And Not for the Better)." Given how much is at stake, this financial revolution is among the most important questions today's societies could possibly grapple with. It should be under discussion in every parliament of every land, and every dinner table in every country in the world Around 90 central banks are either in the process of experimenting with or are already piloting central bank digital currencies (CBDCs). In a world of just over 190 countries that is a large contingent, but given they include the European Central Bank (ECB) which alone represents 19 Euro Area economies, the actual number of economies involved is well over 100. They include all G20 economies and together represent more than 90% of global GDP. Three CBDCs have already gone fully live in the past two years: the so-called DCash in the Eastern Caribbean, the Sand Dollar in the Bahamas and the eNaira in Nigeria. The International Monetary Fund, the world's most powerful supranational financial institution, has been lending its expertise in the roll out of CBDCs. In a recent speech the Fund's President Kristalina Georgieva lauded the potential benefits (on which more later) of CBDCs while heaping praise on the 'ingenuity' of the central banks busily trying to conjure them into existence. So how could CBDCs impact our lives? Here are four of the most important ways: It will grant central banks far more power over our payment behavior. That power could be used to 'program' our spending. No limit on negative interest rates. Financial exclusion on steroids. "
Mike comments: "I'd be curious to know what the banking industries view of this is writ large. Maybe some banks anticipate this, such as Chase bank closing more and more of their physical locations. Others will outright reap the benefit like Black Rock. Though I agree with the premise of the article, the banking industry wont fight for this unless they receive a benefit. Government isn't known for being more efficient… Also what other interest groups might be against this? With as much money moves in and out of offshore accounts by the ultra wealthy, what's their play? I'm just trying to understand who benefits and who does not on the private side. I still have no doubt like the article stated the government will push hard for this, but also have no doubt there will be loop holes, like every other system. I will be watching for that, for my own sake. I'd prefer not to be subject to random seizures, negative interest rates, bail-ins etc since I still am of the shrinking crowd that believes in having a 6-12 month cash buffer. … Very enlightening article, certainly other people resonate with this article and feel a change on the horizon. Hopefully this can be a bipartisan issue to rally against this program."
Other Politics 03/14/22 Post by Lambert Strether, White House Chief of Staff Ron Klain Kowtows before the Economic Club Of Washington." That said, it would be churlish of me to dismiss the White House successes: They are running the two largest and most pervasive propaganda compaigns I've ever experienced: 'Covid is over!' and 'Ukraine! Ukraine! Ukraine!' And they're doing this quite successfully (though with more success for the latter than the former, having had 2022 – 2016 = 6 years of RussiaGate and Trump/Putin to build on). So Klain's White House staff is indeed very good; it's just a question of at what. And now we come to Covid. Rubenstien presents two topics for discussion: Masks and vax. From this, we deduce that those are the only two topics Rubenstien cares about — and hence, I would speculate, his class. No mention of non-pharmaceutical interventions, no mention of ventilation, no mention of layered protection, no mention of variants, no mention of the CDC, not even a theory of transmission (i.e, aerosols). He doesn't even ask Klain if another wave is coming, and whether the Administration is prepared for it; this is, I assume, a matter of indifference to him. "
Late Introvert comments: "Ron Klain is laughable light entertainment for pampered fools. Mockery is the only response. There is no question that the next C-19 wave is upon us, right after the experts announced that masks were no longer needed. The hell they aren't. I want to repeat a fact that I've mentioned before on here. My public school attending child has since about 2nd grade until March of 2020 had 'colds' involving vomiting and fevers that usually lasted 3 days, and occurred every 6 to 8 weeks like clockwork. No doctor ever had a clue. I wouldn't expect them to, I vomited as a child also, but my kid's were so frequent. But guess what? Since that time she has not been sick, or my wife, or myself. After we started the mask, wash up, gargle and nose spray, Vitamin D3 and just vigilance in public regimen. So she is determined to keep masking (junior in High School) even though everyone else is choosing… badly."
Science and Technology 03/09/22 Post by Jerri-Lynn Scofield, Failing the Fix: Grading Apple, Dell, Google, Microsoft on the Ease of Repair of Their Products." Few consumers step into electronics store thinking, 'I'm looking to buy a lemon today. One that's difficult to repair and which I'll have to throw away and replace when it breaks.' Many consumers would opt to purchase electronic devices that last and could be easily fixed. The problem: at present, they don't know which products so qualify. Yesterday, US Public Interest Research Group (US PIRG), a public interest group active on the right to repair front, issued a scorecard, Failing the Fix, ranking products of the most popular cellphone and laptop makers."
JE comments: "We get the behaviors we incentivize. If repairability is a priority then we need to reward it and penalize the undesirable behavior. Unfortunately the levers for such from a legislative perspective are held by those who perform those undesirable behaviors and profit from them. The only way we can vote is with our money. I type this on an 11 year old laptop for example and in as many purchases as practical I buy used or that which will last and/or can be repaired. If enough people did so, behaviors would change. That said, an industry move to a short list of standard batteries would dramatically increase the repairability of mobile phones. Thus suppliers would need to build only a handful of different models and new stock would be available for all phones. All of my 'upgrades' in the mobile phone department have been brought about by a lack of usable replacement batteries. How to force this behavior?"
And another thing….
03/02/22 NotThePilot comments: And while I know we're rapidly approaching a point where one has to be careful what one says, I have to say this: if there's one official I think should be absolutely ashamed of themselves in all of this, it's neither Zelensky nor Putin. It's Anthony Blinken. You had 1 job called diplomacy, Tony! And now the Russians are going to take everything they asked to negotiate back in Dec and then some, on top of all the chaos. Even if you agree entirely with the Atlanticist Blob (obviously I don't), it's a galactic, de-facto failure. Then again, Biden should have fired that guy the moment he advised trying to squeeze the Iranians instead of re-entering the JCPOA. | |
And there you have it - March at Naked Capitalism. We hope you've enjoyed this collection as much as we've enjoyed putting it together for you. Thank you for giving us your time and attention.
The Crew at Naked Capitalism
Donations gratefully accepted. | | | |
No comments:
Post a Comment