Ali’s blog

Mostly quant stuff with occasional digressions

Archive for January, 2009

Barter Deals: Another Symptom of the Breakdown of Global Financial Markets

Posted by alifinmath on January 27, 2009

Another stake through the heart of global finance capital. An article in today’s FT:

Countries struggling to secure credit have resorted to barter and secretive government-to-government deals to buy food, with some contracts worth hundreds of millions of dollars.

In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil.

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Norman Finkletein And The Price for Speaking The Truth

Posted by alifinmath on January 26, 2009

It’s always a pleasure for me to read anything penned by Paul Craig Roberts, who was a Treasury Official during Reagan’s first term. His latest can be found here at vdare.com; it discusses the hefty price to be paid for speaking the truth. An excerpt:

We see such acts of personal cowardice every day. Recently we had the case of Jewish scholar and Israel critic Norman Finkelstein, whose tenure was blocked by the cowardly president of DePaul University, a man afraid to stand up for his own faculty against the Israel Lobby, which successfully imposed on a Catholic university the principle that no critic of Israel can gain academic tenure.

The same calculation of self-interest causes American journalists to serve as shills for Israeli and US government propaganda and the US Congress to endorse Israeli war crimes that the rest of the world condemns.

When US military officers saw that torture was a policy coming down from the top, they knew that doing the right thing would cost them their careers. They trimmed their sails. One who did not was Major General Antonio Taguba. Instead of covering up the Abu Ghraib prison torture scandal, General Taguba wrote an honest report that terminated his career.

Despite legislation that protects whistleblowers, it is always the whistleblower, not the wrongdoer, who suffers. When it finally became public that the Bush regime was committing felonies under US law by using the NSA to spy on Americans, the Justice (sic) Department went after the whistleblower. Nothing was done about the felonies.

Yet Bush and the Justice (sic) Department continued to assert that “we are a nation of law.”

For decades the US government has taken the position that Israel’s territorial expansion is not constrained by any international law. The US government is complicit in Israel’s war crimes in Lebanon, GazaWest Bank. and the

The entire world knows that Israel is guilty of war crimes and that the US government made the crimes possible by providing the weapons and diplomatic support. What Israel and the US did in Lebanon and Gaza is no different from crimes for which Nazis were tried at Nuremberg. Israel understands this, and the Israeli government is currently preparing its defense, which will be led by Israeli Justice (sic) Minister Daniel Friedman. UN war crimes official Richard Falk has compared Israel’s massacre of Gazans to the Nazi starvation and massacre of Jews in the Warsaw Ghetto. Amnesty International and the Red Cross have demanded Israel be held accountable for war crimes. Even eight Israeli human rights groups have called for an investigation into Israel’s war crimes.

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Unemployment among the Credentialed

Posted by alifinmath on January 25, 2009

First of all, let me say that the official unemployment stats are a complete crock. As Paul Craig Roberts points out in some recent article of his, if we were measuring unemployment by the 1980 criteria, we’d be at 17.5% unemployment (or more) today. The unemployment stats are just as bogus as the inflation stats.

In the recession of the early ’80s, we saw unemployment among the middle- and upper-middle-classes for the first time. Since that time, the problem has never gone away – it’s just been deftly brushed under the rug. There’s been a hemorrhage of skilled well-paying jobs in the USA across the board for decades. This problem has just got acutely worse in the last year or so.

My eye was caught by an article in today’s New York Times:

“A job loss in America is, psychologically, a real big hit,” said Cathy-Ann Romero, 53, another co-leader, who lost her job as a human resources manager 10 months ago.

Ms. Romero, who holds two master’s degrees, recently applied for a part-time job as a packer on the overnight shift at an online grocery store to help make ends meet.

These are the grim realities of life in the United States today. Joining support groups is not going to change the fact that there are few (if any) jobs going and a huge number of potential applicants, each of whom is desperate. Yet because of the cult of individualism prevailing in the US, people are programmed neither to look for nor criticise systemic faults in society and economy but to play, instead, the make-believe game that they are “the masters of their soul and the captains of their destiny.”

The problem, she said, is that she was one of some 300 people applying for 15 jobs on the graveyard shift. So group members brainstormed ways she could gain some advantage.

I remember reading a couple of years ago how something like 15,000 people applied for 300 jobs — at Walmart. The jobs are simply not there.

It’s not that things are much better in Europe (where I’m now based). But people here are not so stupid as to think there are individual solutions to collective problems. Hence the sustained rioting in Greece; hence the demonstrations in Latvia and Lithuania; and hence also the rioting in Iceland.

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Terra Incognita

Posted by alifinmath on January 24, 2009

If I’ve been remiss in posting, it’s not because there’s been too little to post about; on the contrary there has been — paradoxically — too much to post about. The world is going through a tectonic shift; something corresponding to the end of one geological period and the beginning of another. And it’s not that something this gargantuan wasn’t foreseen — it was on the cards, at least in general terms — but rather that its exact shape couldn’t be forecast (at least by me). Now that we’re in this storm, I’m bereft of the usual slick analysis. The old tools and ideas simply don’t work; we’re in terra incognita and the old conceptual maps are useless.

What seems to be at stake — and I write diffidently — is the survival of a US-dominated political and military order. In a certain sense the economics — which everyone has been focusing on — is almost ancillary. And in fact it always has been. People keep referring to the present situation as a “financial crisis.” They are profoundly mistaken. This crisis was precipitated by the financial unsustainability of a certain political and military order. It’s the current viability of this order that is the real crisis. This order has sometimes been called “globalisation,” sometimes “neoliberalism,” and sometimes “The Washington Consensus.” This scheme has involved the use of a US-dominated financial system to cover growing US economic weakness, and to keep going a massive con on the rest of the world in order to keep both the US military power and its plutocratic elite in place; conversely, it has been to use military power to help keep the financial house of cards aloft by coercion (US strategy in the Middle East is the prime example). I’m oversimplifying, of course, and I’m not sure I’m being entirely clear. But this seems to me to have been the core of American “grand strategy.” And now it’s come a cropper.

I have no confidence in this new administration: behind the figurehead of the new president are the same shadowy figures, the same gray eminences. This figurehead of a president hasn’t the foggiest idea of what’s really happening and wouldn’t know what to do even if he had real power. I didn’t bother voting: the American system is a complete sham; the fix is in and we’re presented with two virtually indistinguishable candidates who agree on everything important (which is never open to public discussion) but make a great clamor about things which matter not.

I do not know what the administration is going to do: if it is seriously contemplating this public works project, it should realise it will not work. No more than Roosevelt’s New Deal did during the Depression. This is what we refer to as a “crisis of the system.” And there seems to be no easy way of thinking about it — our usual tools don’t work. In my humble opinion we have to look beyond mathematics, beyond finance, and beyond economics: these will confuse us and camouflage what is really important. We have to focus, instead, on military power and coercion, and on who gets what resources and by what means. Thus, for example, discussion of whether the US banking system is technically insolvent is beside the point. These paper financial losses have lost meaning today. What is at stake is whether the US-dominated order of resource appropriation can stay in place and whether this declining power has the power to be able to enforce its extortion. The financial system has been a front for a system of global exploitation — this latter is what is key. Nothing else.

Postscript: I just stumbled across this radio interview with F.W. Engdahl. The interview is not ideal in that Engdahl’s interlocutor is not well-informed but Engdahl speaks along the same lines as my post above. For those not in the know, I heartily recommend Engdahl’s book, “A Century of War.” I recommend downing a stiff drink first — it’s depressing listening.

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Norman Finkelstein

Posted by alifinmath on January 24, 2009

A “Russia Today” News Network interview with Norman Finkelstein can be found here:

Finkelstein is a courageous man and one who, like John Pilger, speaks truth to power. I have both his books — “The Holocaust Industry” and “Beyond Chutzpah” — on my shelf.

Postscript: I went to YouTube to see whether there was anything else by Finkelstein and there is. Here is an interview with Finkelstein on Lebanese TV last year (january 2008), which I particularly recommend:

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