Dear rss free blog,
Paul
Krugman wrote a blog about the reaction to his NY Times Magazine
article about what he styled “freshwater”
macro-economists, numbers-mad non-east- or west-coast USA-heartland
ec or biz school profs who do not study or teach Maynard Keynes’ ideas and reject his
theories. Because this is feeding into the virulently anti-government
mood of some Americans going in for tea parties,
Krugman is worth quoting. These guys criticize not just Obamanomics,
TARP, bailouts, and viciously oppose Obama-care. Some also want to abolish the Fed and
social security:
“The
freshwater outrage over finding their own point of view criticized
is, you might think, a classic case of people who can dish it out but
can’t take it.
“But
it’s actually even worse than that.
“When
freshwater macro came in, there was an active purge of competing
views: students were not exposed, at all, to any alternatives. People
like Prescott boasted that Keynes was never mentioned in their
graduate programs. And what has become clear in the recent debate —
for example, in the assertion that Ricardian equivalence rules out
any effect from government spending changes, which is just wrong —
is that the freshwater side not only turned Keynes into an unperson,
but systematically ignored the work being done in the New Keynesian
vein. Nobody who had read, say, Obstfeld and Rogoff would have been
as clueless about the logic of temporary fiscal expansion as these
guys have been. Freshwater macro became totally insular.
“And
hence the most surprising thing in the debate over fiscal stimulus:
the raw ignorance that has characterized so many of the freshwater
comments. Above all, we’ve seen the phenomenon of well-known
economists “rediscovering” Say’s Law and the Treasury view (the
view that government cannot affect the overall level of demand), not
because they’ve transcended the Keynesian refutation of these
views, but because they were unaware that there had ever been such a
debate.
“It’s a sad
story. And the even sadder thing is that it’s very unlikely that
anything will change: freshwater macro will get even more insular,
and its devotees will wonder why nobody in the real world of policy
and action pays any attention to what they say.”
Both
roving reporter Frida Ghitis and my housekeeper Nidia are from
Colombia, a country with an important message for the world. Its
antitrust agency said yesterday it has forced Colombian banks and the
operators of the country’s Visa and Mastercard credit cards to pay 15
bn Colombian pesos ($7.65 mn) in a probe on fees charged users. Six
years ago, an investigation began into allegations that the two cc
companies were running a cartel to boost fees charged merchants (like
Colombian newsletters). They settled last year without anyone
admitting wrongdoing after the banks and the card companies agreed to
set the fees charged to merchants in a transparent way.
After
the companies failed to fulfill their side of the agreement, the
Bogota govt seized the money the banks had provided as a guarantee,
$7.65 mn. Among the fees I find intolerable are those for rejected cards from potential subscribers, usually because they are not freshwater enough for the card companies (being in Sri Lanka or Thailand). The eager buyer tries another card and another. Nothing goes through. But my firm is made to pay for every rejection. The next day the eager subscriber tries again, and the following day as well. My company’s fees go up because we have a product people want.
A
Canadian techie reader sought information about a hotshot Israeli
stock, Incredimail.com,
MAIL-Q, a high-flyer personal desktop software firm recommended by a
fellow blogger on seekingalpha.com, an Orthodox Jew with (at last
count) 8 children. To check up on Israeli stocks without learning
Hebrew, I recommend a public site: http://www.globes.co.il/serveen/ I publish this for general use. While roving reporter Frida is there
now, haven’t had a stringer in Israel since the last one retired.
MAIL is not my recommendation. My Canada techie reader may decide it
is a good idea and share his ideas with paid subscribers. Or not.
The
Israeli market in the run-up to the Jewish New Year holiday saw
exporter and foreign earning stocks falling, while real estate plays
rose. The reason does not require studying the Talmud. Israel’s
hawkish central bank is suspected of wanting to again raise interest
rates, which will push up the shekel. This hurts dollar-earners and
normalizes somewhat the high debt of Israeli property companies.
Because
of the Jewish New Year there will be a foreshortened newsletter
tomorrow. To quote my cousin Sandy, it will be “5770 and counting”.
Heinrich Nuhn, a high school master from my father’s hometown of Bebra,
Germany, wrongly sent me good wishes for 5769. I appreciate his
trying to keep in touch
The
Hebrew year is supposed to go back to Creation which is nonsense. But the
calendar, copied from the Babylonians, using leap months, keeps
better time between the sun and the moon than the Western calendar,
which had to be revised in the 18th
century, or the Eastern Orthodox one, whose revision a century later
led to the breakaway Old Believers movement.
Islam
dropped the Jewish-Babylonian calendar when Medina’s Jews rejected
Mohammed’s teaching, making the Moslem year too short for the solar
one. So holidays like Ramadan move backwards from year to year and
inconveniently fall in the high summer. This will occur in 2010;
nothing leads to Jihad more than fasting and not drinking water
during the daylight hours while the temperature is 120°C in the
shade. You have been warned.
The
last recommendation I wrote up before Rightside
Advisors, my former
publisher, went bankrupt, was a buy on GE
at
the virtual bottom of the market, March 6. It was published for both paid subscribers and, because GE is not a foreign stock, for pre-subscribers too. My gain on that hefty
non-Global-Investing position is 140%.
Without
putting new money into the stock market (because I personally
financed this re-start-up), I made back over 90% of my losses from
2008. I did re-allocate money from stocks I sold into new ideas; I
did reinvest dividends. But financing the newsletter and a year
without earnings and 15 months without reimbursed expenses, I could
not afford to play the market with spare cash. There was none.
While
some of our global picks also rose in triple digits, I did not risk
the same kind of money in them as in GE, which I consider a proxy for
the USA. News on some of these stocks for paid subscribers follows.
*Thailand’s
stock exchanges jumped yesterday perhaps because Paul Renaud’s new
free stock selection service is getting investors interested. Or
maybe because the Hochiminh stock exchange joined the ASEAN Asia
exchanges group allowing cross-border trading. Our MAI shares picked
by Paul continue to lag, so far.
A message from the webmaster: To all Global-Investing.com members:
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Thank you
-Roger
