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Turkish Bank Case Showed Erdogan's Influence With Trump - The New York Times - 0 views

www.nytimes.com/...trump-erdogan-halkbank.html politics US trump election turkey Erdogan
shared by yehbru on 30 Oct 20 - No Cached
  • a criminal investigation into Halkbank, a state-owned Turkish bank suspected of violating U.S. sanctions law by funneling billions of dollars of gold and cash to Iran
  • For months, President Recep Tayyip Erdogan of Turkey had been pressing President Trump to quash the investigation, which threatened not only the bank but potentially members of Mr. Erdogan’s family and political party.
  • Mr. Barr pressed Mr. Berman to allow the bank to avoid an indictment by paying a fine and acknowledging some wrongdoing. In addition, the Justice Department would agree to end investigations and criminal cases involving Turkish and bank officials who were allied with Mr. Erdogan and suspected of participating in the sanctions-busting scheme.
  • ...27 more annotations...
  • “You don’t grant immunity to individuals unless you are getting something from them — and we wouldn’t be here.”
  • Six months earlier, Matthew G. Whitaker, the acting attorney general who ran the department from November 2018 until Mr. Barr arrived in February 2019, rejected a request from Mr. Berman for permission to file criminal charges against the bank, two lawyers involved in the investigation said. Mr. Whitaker blocked the move shortly after Mr. Erdogan repeatedly pressed Mr. Trump in a series of conversations in November and December 2018 to resolve the Halkbank matter.
  • Mr. Erdogan had a big political stake in the outcome, because the case had become a major embarrassment for him in Turkey.
  • And Mr. Trump’s sympathetic response to Mr. Erdogan was especially jarring because it involved accusations that the bank had undercut Mr. Trump’s policy of economically isolating Iran, a centerpiece of his Middle East plan.
  • Former White House officials said they came to fear that the president was open to swaying the criminal justice system to advance a transactional and ill-defined agenda of his own.
  • the administration’s bitterness over Mr. Berman’s unwillingness to go along with Mr. Barr’s proposal would linger, and ultimately contribute to Mr. Berman’s dismissal.
  • It predated Mr. Trump’s election but came to encompass a broad cast of players, including Rudolph W. Giuliani, the former New York mayor; Michael T. Flynn, Mr. Trump’s first national security adviser; and Brian D. Ballard, a lobbyist and fund-raiser for the president.
  • he investigation of Halkbank, Mr. Erdogan claimed, was a “big conspiracy” instigated by his rival Fethullah Gulen, a charismatic Muslim cleric. Mr. Gulen left Turkey in the late 1990s and moved to Pennsylvania, where, in Mr. Erdogan’s telling, he plotted an unsuccessful coup attempt just a month earlier, according to a summary of the conversation provided to The Times by the Biden aide.
  • “Top leadership in Turkey felt that Trump would be a tough-minded businessman, but a businessman they could work with,” Robert Amsterdam, a lobbyist for Turkey, recalled.
  • Mr. Erdogan also wanted the Obama administration to remove the judge overseeing Mr. Zarrab’s case in Manhattan, the Biden aide said. And he wanted Mr. Zarrab released and allowed to return to Turkey.
  • “If the president were to take this into his own hands, what would happen would be he would be impeached for violating the separation of powers,” Mr. Biden said
  • Mr. Erdogan asked Mr. Biden to remove Preet Bharara, then the U.S. attorney for the Southern District of New York. That office was in the early stages of an investigation into Halkbank and had already indicted a Turkish-Iranian gold trader, Reza Zarrab, for helping to orchestrate the sanctions-evasion scheme.
  • ust how idiosyncratic became more apparent last October, when Mr. Erdogan sent troops into Syria. Mr. Trump, who had initially given Mr. Erdogan the green light to do so, then faced an intense bipartisan backlash, leading him within days to take a tougher line with Turkey, threatening economic reprisals.
  • But the investigation by the federal prosecutors in Manhattan ground ahead. By early 2018, it had led to the indictments of nine defendants, including Turkey’s former economy minister and three Halkbank officials, on charges such as bank fraud and money laundering related to the sanctions-evasion scheme.
  • ut Mr. Mnuchin raised concerns about how large a fine might be imposed on Halkbank. The French banking giant Société Générale agreed that same year to pay U.S. authorities more than $2 billion to resolve charges that it had violated U.S. sanctions against Cuba and bribed officials in Libya, among other accusations
  • A fine on that scale would threaten the future of Halkbank, lobbyists and lawyers for the bank argued, as did top Turkish officials in conversations with members of the Trump administration
  • Mr. Erdogan made clear that he was frustrated with the continued pestering by Southern District prosecutors concerning Halkbank, and he wanted Mr. Trump to intervene to help wrap up the investigation, Mr. Bolton said in the interview
  • Mr. Trump also told Mr. Erdogan that he wanted to replace the prosecutors in Mr. Berman’s office in Manhattan, whom Mr. Trump considered to be holdovers from the Obama era.
  • Mr. Rosenstein was convinced that the evidence was compelling, perhaps even more so than in other sanctions-evasion cases in which the United States had charged banks, lawyers familiar with the investigation said. The memo from the prosecutors also noted that the actions Halkbank was accused of taking were helping to support Iran’s economy, which was antithetical to Mr. Trump’s foreign policy goal of tightening economic pressure on the country.
  • Mr. Rosenstein urged Mr. Berman to come to Washington to present the Southern District’s argument to Mr. Whitaker. The goal was not to file charges immediately against the bank. Instead, the plan was to give the Southern District more leverage to squeeze Halkbank to accept a deferred prosecution agreement that included an admission of wrongdoing.
  • Discussions between Halkbank and the Southern District continued, according to lawyers involved in the case. But the bank maintained its refusal to admit to wrongdoing and insisted on a deal that would end investigations and drop existing charges.
  • At times, the prosecutors were left with the impression that bank officials felt they had all the leverage because of the relationship between Mr. Trump and Mr. Erdogan.
  • The suggestion that the Justice Department would offer Turkish officials protection from criminal charges, even without their agreement to assist in the investigation, was unacceptable and unethical, Mr. Berman argued, according to lawyers close to the investigation.
  • Mr. Barr sought to persuade Mr. Berman that the so-called global settlement would enforce U.S. sanctions law and avert a rift with an ally in a volatile part of the world.
  • “That is the biggest prize that Erdogan could ever receive,” Mr. Erdemir said. “Erdogan was not trying to save the bank. He was trying to save his ministers and save himself.”
  • The National Security Council asked the Education Department about a network of charter schools, partly funded with federal money, that were said to be linked to Mr. Gulen, the Erdogan rival who was living in Pennsylvania. The agency was then asked if the money could be blocked, one official involved in the conversations said. But Education Department officials resisted, saying they did not have the legal authority to stop the funding.
  • On Oct. 15, the Justice Department gave the prosecutors in Manhattan approval to file charges against Halkbank, a direct slap at Mr. Erdogan.The prosecutors rushed to present evidence before a grand jury and secured a six-count indictment that same day charging Halkbank with money laundering, bank fraud and conspiracy to violate the Iran sanctions. So far, no additional individuals have been charged.
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Opinion | What Will Trump Do After Election Day? - The New York Times - 0 views

www.nytimes.com/...trump-election-officials.html US politics election trump gop pandemic policy
shared by clairemann on 30 Oct 20 - No Cached
  • and it could be one of tumult, banners colliding, incidents at the polls and attempted hacks galore. More likely than not, it will end without a winner named or at least generally accepted.
  • America will probably awaken on Nov. 4 into uncertainty. Whatever else happens, there is no doubt that President Trump is ready for it.
  • They are worried that the president could use the power of the government — the one they all serve or served within — to keep himself in office or to create favorable terms for negotiating his exit from the White House.
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  • “at how profoundly divided we’ve become. Donald Trump capitalized on that — he didn’t invent it — but someday soon we’re going to have figure out how to bring our country together, because right now we’re on a dangerous path, so very dangerous, and so vulnerable to bad actors.”
  • I can’t know all their motives for wanting to speak to me, but one thing many of them share is a desire to make clear that the alarm bells heard across the country are ringing loudly inside the administration too, where there are public servants looking to avert conflict, at all costs.
  • History may note that the most important thing that happened that day had little to do with the religious leader and his large life, save a single thread of his legacy.
  • You don’t know Donald Trump like we do. Even though they can’t predict exactly what will happen, their concerns range from the president welcoming, then leveraging, foreign interference in the election, to encouraging havoc that grows into conflagrations that would merit his calling upon U.S. forces.
  • “That’s really him. Not the myth that’s been created. That’s Trump.”
  • He’d switch subjects, go on crazy tangents, abuse and humiliate people, cut them off midsentence. Officials I interviewed described this scenario again and again.
  • Even if it takes weeks or months before the result is known and fully certified, it could be a peaceful process, where all votes are reasonably counted, allowing those precious electors to be distributed based on a fair fight. The anxiety we’re feeling now could turn out to be a lot of fretting followed by nothing much, a political version of Y2K.Or not.
  • For Mr. Trump, the meeting was a face-to-face lifeline call. When he returned to Washington, he couldn’t stop talking about troop withdrawals, starting with Afghanistan. During his campaign, he had frequently mentioned his desire to bring home troops from these “endless wars.”
  • “were it Obama or Bush, or whatever, they’d meet Billy Graham’s grandson and they’d be like ‘Oh that’s interesting,’ and take it to heart, but then they’d go and they’d at least try to validate it with the policymakers, or their military experts. But no, with him, it’s like improv. So, he gets this stray electron and he goes, ‘OK, this is the ground truth.’ ”
  • Senior leadership of the U.S. government went into a panic. Capitol Hill, too. John Bolton, who was still the national security adviser then, and Virginia Boney, then the legislative affairs director of the National Security Council, hit the phones, calling more than a dozen senators from both parties.
  • “Is there any way we can reverse this?” he pleaded. “What can we do?”
  • Mr. Kelly was almost done cleaning out his office. He, too, had had enough. He and Mr. Trump had been at each other every day for months. Later, he told The Washington Examiner, “I said, whatever you do — and we were still in the process of trying to find someone to take my place — I said whatever you do, don’t hire a ‘yes man,’ someone who won’t tell you the truth — don’t do that.”
  • “I think the biggest shock he had — ’cause his assumption was the generals, ‘my generals,’ as he used to say and it used to make us cringe — was this issue of, I think, he just assumed that generals would be completely loyal to the kaiser,”
  • In February 2019, William Barr arrived as attorney general, having auditioned for the job with a 19-page memo arguing in various and creative ways that the president’s powers should be exercised nearly without limits and his actions stand virtually beyond review.
  • “President Trump serves the American people by keeping his promises and taking action where the typical politician would provide hollow words,” she said. “The president wants capable public servants in his administration who will enact his America First agenda and are faithful to the Constitution — these principles are not mutually exclusive. President Trump is delivering on his promise to make Washington accountable again to the citizens it’s meant to serve and will always fight for what is best for the American people.”
  • To replace Mr. Coats, Trump selected Representative John Ratcliffe of Texas, a small-town mayor-turned-congressman with no meaningful experience in intelligence — who quickly withdrew from consideration after news reports questioned his qualifications; he lacked support among key Republican senators as well.
  • There are many scenarios that might unfold from here, nearly all of them entailing weeks or even months of conflict, and giving an advantage to the person who already runs the U.S. government.
  • “sends letters constantly now, berating, asking for the sun, moon, stars, the entire Russia investigation, and then either going on the morning talk shows or calling the attorney general whenever he doesn’t get precisely what he wants.” The urgency, two F.B.I. officials said, ratcheted up after Mr. Trump was told three weeks ago that he wouldn’t get the “deliverables” he wanted before the election of incriminating evidence about those who investigated and prosecuted his former national security adviser, Michael Flynn.
  • The speculation is that they could both be fired immediately after the election, when Mr. Trump will want to show the cost paid for insufficient loyalty and to demonstrate that he remains in charge.
  • Nov. 4 will be a day, said one of the former senior intelligence officials, “when he’ll want to match word with deed.” Key officials in several parts of the government told me how they thought the progression from the 3rd to the 4th might go down.
  • A group could just directly attack a polling place, injuring poll workers of both parties, and creating a powerful visual — an American polling place in flames, like the ballot box in Massachusetts that was burned earlier this week — that would immediately circle the globe.
  • Would that mean that Mr. Trump caused any such planned activities or improvisations? No, not directly. He’s in an ongoing conversation — one to many, in a twisted e pluribus unum — with a vast population, which is in turn in conversations — many to many — among themselves.
  • “stand back and stand by” instructions? Is Mr. Trump telling his most fervent supporters specifically what to do? No. But security officials are terrified by the dynamics of this volatile conversation.
  • Conservative media could then say the election was being stolen, summoning others to activate, maybe violently. This is the place where cybersecurity experts are on the lookout for foreign actors to amplify polling location incidents many times over, with bots and algorithms and stories written overseas that slip into the U.S. digital diet.
  • Those groups are less structured, more like an “ideology or movement,” as Mr. Wray described them in his September testimony. But, as a senior official told me, the numbers on the left are vast.
  • That army Trump can direct in the difficult days ahead and take with him, wherever he goes. He may activate it. He may bargain with it, depending on how the electoral chips fall. It’s his insurance policy.
  • Inside the Biden campaign they are calling this “too big to rig.”
  • Races tend to tighten at the end, but the question is not so much the difference between the candidates’ vote totals, or projections of them, as it is what Mr. Trump can get his supporters to believe. Mr. Trump might fairly state, at this point, that he can get a significant slice of his base to believe anything.
  • There were enormous efforts to do so, largely but not exclusively by the Russians, in 2016, when election systems in every state were targeted.
  • The lie easily outruns truth — and the best “disinformation,” goes a longtime C.I.A. rule, “is actually truthful.” It all blends together. “Then the president then substantiates it, gives it credence, gives it authority from the highest office,” says the senior government official.
  • Mr. Trump will claim some kind of victory on Nov. 4, even if it’s a victory he claims was hijacked by fraud — just as he falsely claimed that Hillary Clinton’s three million-vote lead in the popular vote was the result of millions of votes from unauthorized immigrants.
  • In the final few weeks of the campaign, and during Mr. Trump’s illness, he’s done two things that seem contradictory: seeking votes from anyone who might still be swayed and consolidating and activating his army of most ardent followers.
  • The F.B.I. has been under siege since this past summer, according to a senior official who spoke on the condition of anonymity. “The White House is using friendly members of Congress to try to get at certain information under the guise of quote-unquote, oversight, but really to get politically helpful information before the election,”
  • “They’re the reason he took off the damned mask when he got to the White House” from Walter Reed, the official said. “Those people eat that up, where any reasonable, rational person would be horrified.
  • You ask it to be refilmed, and you take off your mask, which, in my mind, has become a signal to his core base of supporters that are willing to put themselves at risk and danger to show loyalty to him.”
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FC95: The Age of Louis XIV, the "Sun King" (1643-1715) - The Flow of History - 2 views

www.flowofhistory.com/...FC95 Louis XIV history france
shared by Javier E on 23 Oct 16 - No Cached
  • Introduction From 1643 to 1815 France dominated much of Europe's political history and culture.  Foreigners came to France, preferring it to the charms of their own homeland.  Even today, many still consider it the place to visit in Europe and the world.  In the 1600's and 1700's there was a good reason for this dominance: population.  France had 23,000,000 people in a strongly unified state compared to 5,000,000 in Spain and England, and 2,000,000 in the Dutch Republic and the largest of the German states.  This reservoir of humanity first reached for and nearly attained the dominance of Europe under Louis XIV, the "Sun King".
  • Louis' early life and reign (1643-61) Louis was born in 1638 and succeeded his father, Louis XIII, as king in 1643 at the age of five.  Luckily, another able minister and Richelieu's successor, Cardinal Mazarin, continued to run the government.  In 1648, encroachment by the government on the nobles' power, poor harvests, high taxes, and unemployed mercenaries plundering the countryside after the Thirty Years War led to a serious revolt known as the Fronde, named after the slingshot used by French boys.  Louis and the court barely escaped from Paris with their lives.  Although Mazarin and his allies crushed the rebels after five hard years of fighting (1648-53), Louis never forgot the fear and humiliation of having to run from the Parisian mob and fight for his life and throne against the nobles.  This bitter experience would heavily influence Louis' policies when he ruled on his own.
  • Louis XIV may not have said, "I am the state", but he ruled as if he had said it.  Louis was the supreme example of the absolute monarch, and other rulers in Europe could do no better than follow his example.  Although Louis wished to be remembered as a great conqueror, his first decade of active rule was largely taken up with building France's internal strength.  There are two main areas of Louis' rule we will look at here: finances and the army. Louis' finance minister, Jean Baptiste Colbert, was an astute businessman of modest lineage, being the son of a draper.  Colbert's goal was to build France's industries and reduce foreign imports.  This seventeenth century policy where a country tried to export more goods and import more gold and silver was known as mercantilism.  While its purpose was to generate revenue for the king, it also showed the growing power of the emerging nation state.  Colbert declared his intention to reform the whole financial structure of the French state, and he did succeed in reducing the royal debt by cutting down on the number of tax farms he sold and freeing royal lands from mortgage.  Colbert especially concentrated on developing France's economy in three ways.
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  • Versailles Louis' religious faith was largely a superficial one attached to the elaborate ritual of the Catholic mass.  This love of ritual also showed itself in how Louis ran his court at his magnificent palace of Versailles, several miles outside of Paris.  Much of the reason for building Versailles goes back to the Fronde that had driven Louis from Paris as a young boy.  Ever since then, Louis had distrusted the volatile Paris mob and was determined to move the court away from the influence of that city.  Versailles was also the showpiece of Louis' reign, glorifying him as the Sun King with its magnificent halls and gardens.
  • Religion was one aspect of Louis' reign that illustrated the absolute nature of his monarchy quite well.  Louis himself was quite a pious Catholic, learning that trait from his mother.  However, in the spirit of the day, he saw religion as a department of state subordinate to the will of the king.  By the same token, not adhering to the Catholic faith was seen as treason. As a result, Louis gradually restricted the rights of the French Huguenots and finally, in 1685, revoked the Edict of Nantes, which had given them religious freedom since the end of the French Wars of Religion in 1598.  This drove 200,000 Huguenots out of France, depriving it of some of its most skilled labor.  Thus Louis let his political and religious biases ruin a large sector of France's economy.
  • Results of Louis' reign The age of Louis XIV was important to European history for several reasons.  First of all, it saw the triumph of absolutism in France and continental Europe.  Versailles was a glittering symbol and example for other European rulers to follow.  Any number of German and East European monarchs modeled their states and courts after Louis XIV, sometimes to the point of financial ruin.  Second, Louis' wars showed the system of Balance of Power politics working better than ever.  French aggression was contained and the status quo was maintained.  All this had its price, since the larger sizes of the armies and the final replacement of the pike with the musket took European warfare to a new level of destruction.  Finally, Louis' reign definitely established France as the dominant power in Europe.  However, the cost was immense and left his successors a huge debt.  Ironically, the problems caused by Louis XIV's reign would help lead to the French Revolution in 1789 and the spread of democratic principles across Europe and eventually the world.
  • Louis' main goals were to expand France to its "natural borders": the Rhine, the Alps, and the Pyrenees.  This, of course, would make him enemies among the Dutch, Germans, Austrians, Spanish, and English.  Therefore, Louis' diplomacy had to clear the way to make sure he did not fight everyone at once.  For this purpose he skillfully used money to neutralize potential enemies (such as Charles II of England in the Secret Treaty of Dover) and extracted favorable terms from stalemate or losing situations.  But Louis could also make some fateful blunders to hurt his cause.  His obsessive hatred of the Dutch dominated his policy too much, as did his own self-confidence and arrogance in trying to publicly humiliate his enemies.  However, this just alarmed Louis' enemies more, especially the Dutch, Austrians, and English, who allied against Louis to preserve the balance of power.
  • Exhaustion on both sides finally led to the Treaty of Utrecht in 1713.  Louis' grandson took the throne of Spain and its American empire, but the French and Spanish thrones could not be united under one ruler.  Austria got the Spanish Netherlands to contain French aggression to the north.  Just as the Treaty of Westphalia in 1648 had contained Hapsburg aggression, the Treaty of Utrecht contained French expansion.  Two years later Louis XIV was dead, with little to show for his vaunted ambitions as a conqueror except an exhausted economy and dissatisfied populace.
  • Just as Louis's palace at Versailles dominated European culture during the late 1600's and early 1700's, his diplomacy and wars dominated Europeans political history.  As Louis himself put it: "The character of a conqueror is regarded as the noblest and highest of titles."  Interestingly enough, he never led his troops in battle except for overseeing a few sieges from a safe distance.
  • I am the state. — Voltaire, incorrectly quoting Louis XIV
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Why Democrats' tax plans are such a mess | The Economist - 0 views

www.economist.com/...rats-tax-plans-are-such-a-mess politics policy economics
shared by woodlu on 29 Oct 21 - No Cached
  • 0E BIDEN promised to pay for his big social-spending proposals by raising taxes on the rich and nobody else.
  • Now Democrats are rushing to find a big pot of money without raising headline rates of tax at all.
  • predicting that they would soon reach a compromise on a social-spending bill that would pass in both the House of Representatives and the Senate, where they cannot afford a single dissenting vote in their ranks.
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  • Kyrsten Sinema of Arizona,
  • satisfy two centrists:
  • Joe Manchin of West Virginia
  • desire for higher tax revenues without higher tax rates has left Democrats scrambling to make deep changes to how some levies work
  • new minimum tax on the biggest corporations’ accounting profits, which can exceed those declared to the tax authorities.
  • is a levy on
  • firms that buy back their own stock, a longtime bugbear on the left
  • a reform to the federal capital-gains tax that is designed to ensnare the ultra-rich. It would tax them annually on the paper gains of their investment portfolios, rather than when assets are sold, as under the current system
  • A tax on the book profits of companies would outsource tax rules to unaccountable accounting bodies, reduce the efficacy of desirable tax deductions for investment and, by interfering with the ability to carry forward losses, play havoc with firms whose profits are volatile.
  • no sound economic reason for penalising share buy-backs
  • firms could avoid the tax attached to them by paying dividends instead.
  • The “mark-to-market” capital gains tax is a messy attempt to rapidly extract enormous amounts from a tiny number of the very rich
  • this tax would apply only to securities traded on public markets, with different rules for stakes in privately held firms, it would deter entrepreneurs from floating their companies on the stock exchange.
  • That would ultimately be bad for investment and the incentive to innovate, and would get in the way of the widespread ownership of equities.
  • straightforward result of their fragile control of Congress and the idiosyncrasies of two of their senators
  • failed to bring in straightforward reforms that raise revenue by enlarging the tax base
  • abolishing the egregious exemption that resets accrued capital gains to zero when owners die and pass on their estates.
  • Taxing capital gains at death, as Mr Biden first proposed, would raise more than $200bn over a decade—not far off the “several hundred billion” Democrats say the tax on investment portfolios would yield
  • lobbyists defeated the idea
  • also preserved the carried-interest loophole, which lets investment managers class their fees as lightly taxed capital gains, not income.
  • lifting the cap on an exemption from federally taxable income of money used to pay state and local taxes. Doing that would benefit the wealthy, narrow the tax base and subsidise high-tax states.
  • Mr Biden ignored the example of Europe. Its social spending is funded using broad-based and efficient taxes, most notably value-added tax, a levy on consumption
  • unfriendly to economic growth to begin with. Narrowing the target further—the capital-gains reform would apply only to billionaires and those with more than $100m in annual income sustained over three years
  • proposal which is even more poorly designed, and which Mr Manchin is right to oppose
  • Democrats have pretended that raising taxes on businesses would have no negative effect on wages, contrary to the overwhelming consensus among economists.
  • The failure to agree on a tax plan carries echoes of doomed Republican attempts, under Donald Trump, to “repeal and replace” the Obamacare health-insurance system.
  • Democrats will have to confront the fact that permanently expanding the welfare state without damaging the economy means winning an argument for higher taxes, rather than always telling voters that some rich person will pay.
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Inflation in 19 nations using euro hits record high of 4.9% | AP News - 0 views

apnews.com/...c09717fe7f1ccba8a2943e3d23044b
shared by sidneybelleroche on 30 Nov 21 - No Cached
  • Consumer prices across the 19 countries that use the euro currency are rising at a record rate as a result of a huge spike in energy costs this year, official figures showed Tuesday.
  • Consumer prices across the 19 countries that use the euro currency are rising at a record rate as a result of a huge spike in energy costs this year, official figures showed Tuesday.
  • Eurostat, the European Union’s statistics agency, said the eurozone’s annual inflation rate hit 4.9% in November, the highest since recordkeeping began in 1997 and up from 4.1% in October, the previous high mark.
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  • the eurozone, which is made up of 19 economies including France and Germany, is enduring big price hikes as a result of the economic recovery from the coronavirus pandemic and blockages in supply chains.
  • Across the eurozone, inflation is running at multiyear highs, including in Germany, Europe’s largest economy, where the annual rate has hit 6%.
  • Even that is below the 6.2% recorded at last count in the U.S., the biggest 12-month jump since 1990.
  • The eurozone’s core inflation rate, which strips out potentially volatile items such as alcohol, energy, food and tobacco, also spiked higher in November to an annual rate of 2.6% from 2%.
  • higher wages, for example.
  • However, the recently discovered omicron variant of the coronavirus has prompted some uncertainty over the global economic outlook, and as a result, central banks around the world are expected to hold back from announcing any big policy changes soon.
  • Many economists think the inflation spike over recent months will reverse next year as base effects linked with the sharp fall in prices during the pandemic last year, primarily of energy, are stripped out from annual comparisons.
  • Records started being compiled about the euro two years before its actual launch in 1999. For the first three years of its existence, it was an invisible currency that was traded on foreign exchange markets and used for accounting purposes and electronic payments. In 2002, euro notes and coins first came into circulation, replacing historic currencies such as the French franc, the German deutschmark and the Italian lira.
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Why Is Ethiopia at War in the Tigray Region? - The New York Times - 0 views

www.nytimes.com/...tigray-conflict-explained.html
shared by criscimagnael on 13 Jan 22 - No Cached
  • A year of conflict in Ethiopia, Africa’s second most populous country and a linchpin of regional security, has left thousands dead, forced more than two million people from their homes and pushed parts of the country into famine.
  • The tide of the civil war has fluctuated wildly. The government teetered in early November when fighters from Tigray surged south toward the capital, Addis Ababa, forcing Mr. Abiy to declare a state of emergency. Foreigners fled the country and the government detained thousands of civilians from the Tigrayan ethnic group.
  • But weeks later Mr. Abiy pulled off a stunning military reversal, halting the rebel march less than 100 miles from the capital, then forcing them to retreat hundreds of miles to their mountainous stronghold in Tigray.
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  • Mr. Abiy succeeded partly by mobilizing ordinary citizens to take up arms to block the Tigrayan advance. “Nothing will stop us. The enemy will be destroyed,”
  • Drones have also hit refugee camps in Tigray and killed dozens of civilians. Despite recent releases of political prisoners by Mr. Abiy, which prompted a phone call with President Joe Biden, the prospect of a cease-fire seems distant.
  • The conflict threatens to tear apart Ethiopia, a once-firm American ally, and further destabilize the volatile Horn of Africa region.
  • But after he took office in 2018, he set about draining the group of its power and influence in Ethiopia, infuriating the Tigrayan leadership, which retreated to its stronghold of Tigray. Tensions grew.
  • In September 2020, the Tigrayans defied Mr. Abiy by going ahead with regional parliamentary elections that had he had postponed across Ethiopia.
  • Two months later, T.P.L.F. forces attacked a federal military base in Tigray in what they called a pre-emptive strike against federal forces preparing to attack them from a neighboring region.
  • The Ethiopian military suffered a major defeat in June when it was forced to withdraw from Tigray, and several thousand of its soldiers were taken captive.
  • Through it all, civilians have suffered most. Since the war started, witnesses have reported numerous human rights violations, many confirmed by a U.N.-led investigation, of massacres, ethnic cleansing and widespread sexual violence.
  • The T.P.L.F. was born in the mid-1970s as a small militia of ethnic Tigrayans, a group that was long marginalized by the central government, to fight Ethiopia’s Marxist military dictatorship.
  • Tigrayans make up just 6 or 7 percent of Ethiopia’s population, compared with the two largest ethnic groups, the Oromo and the Amhara, which make up over 60 percent.
  • But at home, the Tigrayan-dominated government systematically repressed political opponents and curtailed free speech. Torture was commonplace in government detention centers.
  • Mr. Abiy, a onetime T.P.L.F. ally, moved quickly to purge the old guard. He removed Tigrayan officials from the security services, charged some with corruption or human rights abuses and in 2019 created a new political party. The Tigrayans refused to join.
  • At the same time, he strengthened his ties to President Isaias Afwerki, the authoritarian leader of Eritrea, who nursed a bitter, longstanding grudge against the Tigrayans.
  • But by mid-2020 that peace pact had become an alliance for war on Tigray.
  • Children are dying of malnutrition, soldiers are looting food aid, and relief workers have been prevented from reaching the hardest-hit areas, according to the United Nations and other aid groups. Since July, a government-imposed blockade of Tigray has kept desperately needed aid from reaching the area. In late November, the World Food Program announced that 9.4 million people across northern Ethiopia required food aid.
  • In western Tigray, ethnic Amhara militias have driven tens of thousands of people from their homes as part of what the United States has called an ethnic cleansing campaign.
  • Ethiopia’s ties to the United States, once a close ally, have come under great strain. Mr. Biden has cut off trade privileges for Ethiopia and threatened its leaders with sanctions.
  • He freed political prisoners, abolished controls on the news media and helped mediate conflicts abroad. His peace deal with Eritrea and its authoritarian leader, Mr. Isaias, caused the Ethiopian leader’s international profile to soar and led to his Nobel Peace Prize in 2019.
  • But even before the war erupted in Tigray, Mr. Abiy had resorted to old tactics of repression — shutting down the internet in some areas, arresting journalists and detaining protesters and critics.
  • In a stark speech in November, Mr. Abiy called on soldiers to sacrifice their “blood and bone” to bury his enemies in “a deep pit” and “uphold Ethiopia’s dignity and flag.”
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Oil Prices Stay High as Output From OPEC and Others Falls Behind - The New York Times - 0 views

www.nytimes.com/...oil-prices-opec.html international climate crisis us politics
shared by lucieperloff on 14 Jan 22 - No Cached
  • The sharp pullback came with an implicit promise that as factories reopened and planes returned to the air, the oil industry would revive, too, gradually scaling up production to help economies return to prepandemic health.
  • Members of the cartel OPEC Plus, which agreed to cut output by about 10 million barrels a day in early 2020, are routinely falling well short of their rising monthly production targets.
  • Production in the United States, the world’s largest oil producer, has also been slow to recover from its one-million-barrel-a-day plummet in 2020, as companies and investors are wary of committing money amid climate change concerns and volatile prices.
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  • A prolonged period when more oil has been consumed than pumped has drained tank farms to low levels. Investment in new drilling for new oil has also fallen to multiyear lows, though it is expected to pick up this year. At the same time, demand is expected to grow strongly, reaching prepandemic levels this year.
  • Energy Aspects forecasts that the deficit will reach just over one million barrels a day this month, or 1 percent of world supplies, and will probably increase later in the year.
  • A variety of factors are causing production in some countries to fall short, including political turmoil, outmoded regulatory regimes and pressures on international oil companies to rethink their investments so as to bolster profits and reduce carbon emissions. That shift could leave developing countries that depend on oil income out in the cold.
  • Nigeria’s industry is plagued by damage to infrastructure caused by oil thieves and others, problems that have worsened in recent months, according to the industry.
  • Kamel al-Harami, a Kuwaiti analyst, said that the domestic industry “does not have the experience and the expertise to deal with old and aged oil fields” but that public opinion is resistant to bringing in international companies.
  • Following a schedule agreed to in July, the group plans to raise the overall output by 400,000 barrels a day each month, even though they are missing the targets.
  • Analysts say Saudi officials don’t want to unilaterally increase output and risk busting up the arrangement with other producers that gives them so much control.
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Westward Expansion - Timeline, Events & Facts - HISTORY - 0 views

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  • In 1803, President Thomas Jefferson purchased the territory of Louisiana from the French government for $15 million. The Louisiana Purchase stretched from the Mississippi River to the Rocky Mountains and from Canada to New Orleans, and it doubled the size of the United States. To Jefferson, westward expansion was the key to the nation’s health: He believed that a republic depended on an independent, virtuous citizenry for its survival, and that independence and virtue went hand in hand with land ownership, especially the ownership of small farms.
  • On the contrary, as one historian writes, in the six decades after the Louisiana Purchase, westward expansion “very nearly destroy[ed] the republic.”
  • By 1840, nearly 7 million Americans–40 percent of the nation’s population–lived in the trans-Appalachian West. Following a trail blazed by Lewis and Clark, most of these people had left their homes in the East in search of economic opportunity. Like Thomas Jefferson, many of these pioneers associated westward migration, land ownership and farming with freedom. In Europe, large numbers of factory workers formed a dependent and seemingly permanent working class; by contrast, in the United States, the western frontier offered the possibility of independence and upward mobility for all. In 1843, one thousand pioneers took to the Oregon Trail as part of the “Great Emigration.”
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  • to carry the “great experiment of liberty” to the edge of the continent: to “overspread and to possess the whole of the [land] which Providence has given us,” O’Sullivan wrote. The survival of American freedom depended on it.
  • Meanwhile, the question of whether or not slavery would be allowed in the new western states shadowed every conversation about the frontier. In 1820, the Missouri Compromise had attempted to resolve this question: It had admitted Missouri to the union as a slave state and Maine as a free state, preserving the fragile balance in Congress. More important, it had stipulated that in the future, slavery would be prohibited north of the southern boundary of Missouri (the 36º30’ parallel) in the rest of the Louisiana Purchase.
  • They did not necessarily object to slavery itself, but they resented the way its expansion seemed to interfere with their own economic opportunity.
  • In 1837, American settlers in Texas joined with their Tejano neighbors (Texans of Spanish origin) and won independence from Mexico. They petitioned to join the United States as a slave state.
  • This promised to upset the careful balance that the Missouri Compromise had achieved, and the annexation of Texas and other Mexican territories did not become a political priority until the enthusiastically expansionist cotton planter James K. Polk was elected to the presidency in 1844. Thanks to the maneuvering of Polk and his allies, Texas joined the union as a slave state in February 1846; in June, after negotiations with Great Britain, Oregon joined as a free state.
  • Wilmot’s measure failed to pass, but it made explicit once again the sectional conflict that haunted the process of westward expansion.
  • In 1848, the Treaty of Guadelupe Hidalgo ended the Mexican War and added more than 1 million square miles, an area larger than the Louisiana Purchase, to the United States. The acquisition of this land re-opened the question that the Missouri Compromise had ostensibly settled: What would be the status of slavery in new American territories? After two years of increasingly volatile debate over the issue, Kentucky Senator Henry Clay proposed another compromise. It had four parts: first, California would enter the Union as a free state; second, the status of slavery in the rest of the Mexican territory would be decided by the people who lived there; third, the slave trade (but not slavery) would be abolished in Washington, D.C.; and fourth, a new Fugitive Slave Act would enable Southerners to reclaim runaway slaves who had escaped to Northern states where slavery was not allowed.
  • A decade later, the civil war in Kansas over the expansion of slavery was followed by a national civil war over the same issue. As Thomas Jefferson had predicted, it was the question of slavery in the West–a place that seemed to be the emblem of American freedom–that proved to be “the knell of the union.”
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Larry Summers was Biden's biggest inflation critic. Was he wrong? - The Washington Post - 0 views

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  • As inflation has plummeted while unemployment remains low, the president’s allies see not just a strong run of economic data but a new model for policymakers — proof of what is possible if the government is willing to be aggressive in fighting downturns.
  • Summers is the most prominent expert who disagrees. He blasted the administration’s $1.9 trillion 2021 stimulus law, the American Rescue Plan, for exacerbating inflation, arguing through 2022 that the U.S. economy would probably need a spike in unemployment for price hikes to fully abate and accusing President Biden’s team of the “least responsible” macroeconomic policy in 40 years. Biden’s economic policies had overstimulated the economy, Summers said on cable TV, in op-eds and in interviews, as well as in private talks. And he maintained it would almost certainly take a major slowdown — and millions of lost jobs — for inflation to return to the Federal Reserve’s 2 percent target.
  • Biden last year instinctively rejected the notion pushed by Summers that taming inflation would require policies that would throw millions of people out of work, according to five people familiar with the president’s private remarks
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  • The president’s allies are newly optimistic the brightening economic mood will further discredit the notion that a recession is necessary to tame inflation.
  • Despite the disagreement, senior White House aides still talk to Summers frequently and routinely seek his input. Summers has been to the White House several times this year alone, even as he continues to publicly hammer Biden’s industrial policy, student loan forgiveness and other economic programs.
  • Along with other centrist economists, Summers says inflation remains dangerously high, warning it could reaccelerate. The latest inflation report shows prices rising by 3.2 percent in July relative to one year ago, but a less volatile measure of price increases is still at 4.7 percent. The labor market remains strong not because Biden has defied the laws of economic reality, according to Summers, but because the battle against inflation is still far from won. Summers maintains the rescue plan sparked inflation that is at risk of becoming “entrenched” — a long-term problem for consumers and businesses.
  • “I don’t think anybody should reach any definitive judgments until we see how things play out,” Summers said in an interview. Summers said his predictions were based on standard macroeconomic models, and not meant to be interpreted as precise estimates. “The idea that bringing down inflation has nothing to do with increasing unemployment runs different from all conventional macroeconomic assessments.”
  • “The Democratic Party is currently split between people who thought the American Rescue Plan was appropriately sized and absolutely necessary — and those who think it was too big and had collateral effects that were quite damaging,” said Bill Galston, a policy analyst at the D.C.-based Brookings Institution who served in the Clinton administration. “This is a moral question, but it’s also a political question. If Joe Biden loses the election principally because of economic discontent over inflation and high prices, then a lot of Democrats will conclude it was not worth it.”
  • Summers has also made predictions that still do not appear to have been borne out, at least not yet. In a June 2022 speech at the London School of Economics, when inflation was at its 9.1 percent peak, Summers said the nation would “need” substantially higher levels of unemployment for inflation to come down.
  • “We need five years of unemployment above 5 percent to contain inflation — in other words, we need two years of 7.5 percent unemployment or five years of 6 percent unemployment or one year of 10 percent unemployment,
  • That same month, Summers and a co-author wrote that reducing job vacancies by 20 percent “requires, on average” a three percentage point increase in the unemployment rate. The number of job openings has fallen about 16 percent with no discernible jump in unemployment
  • In September 2022, Summers reiterated the point to Fortune: “I’m not sure you’re restraining inflation until you get the unemployment rate close to 5 percent, and to significantly restrain inflation you’re likely to need unemployment for some period at 6 percent.” The unemployment rate was 3.5 percent then and is the same level now.
  • In more recent interviews, Summers has defended his estimates by pointing out that inflation remains above the Fed’s 2 percent target. In particular, Summers emphasizes that it was always the case that transitory factors — such as soaring gas prices — pushed inflation up higher, to closer to 8 percent, but that the more stable “underlying” inflation was closer to 4.5 percent.
  • Even with lower overall inflation, Summers argues, underlying inflation remains largely unchanged — though the decline in transitory prices makes the problem appear to be going away.
  • “I think it’s fair to say — given how hot the economy is — the inflation performance at this point is better than I think many standard models would have predicted,” Summers said. “But I don’t think that all establishes we’re on a confident glide path to 2 percent with current rates of unemployment.”
  • More liberal economists argued that Summers misdiagnosed the cause of higher inflation, and therefore missed the cure. These economists contend that price spikes were overwhelmingly caused by supply chain disruptions, including lingering shocks from the pandemic and Russia’s invasion of Ukraine, not by too much government stimulus. As supply chains have normalized, so too has inflation.
  • Skanda Amarnath, executive director of the left-leaning think tank Employ America, emphasized that inflation is “now broadly decelerating,” not just in some idiosyncratic or transitory factors such as energy and used cars but across a large range of categories — household furnishings, technological equipment, wages, legal and professional services, and more.
  • “Remember when the experts said that to get inflation under control we needed to lower wages, and drive up unemployment? I never bought that,” Biden tweeted on July 20. “Instead, I focused on getting more Americans into the workforce, fixing our broken supply chains, and lowering costs.
  • Summers remains unconvinced about the rescue plan, pointing to substantial “unhappiness in the middle class about the state of the economy” over the last two years, mostly driven by inflation.
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Opinion | Donald Trump May Have Begun Losing - The New York Times - 0 views

www.nytimes.com/...donald-trump-justice.html trump crisis justice accountability deterrence
shared by Javier E on 28 Apr 23 - No Cached
  • Without obvious shared goals, arguably all these different prosecutors, officials and individuals are undertaking an inadvertent deterrence project, keeping alive the bad parts of the recent past and applying pressure on the central players.
  • We talk about a “chilling” effect with abortion laws, regulatory action against corporations and certain speech policies; these “work” by exerting pressure, making people skittish and worried about getting caught up in legal trouble.
  • post-Jan. 6 prosecutions and the prospect of an indictment in Georgia may be causing people to be less rowdy.
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  • Deterrence is an uneasy goal, however — hard to measure, impossible to predict, and at danger of becoming retribution in the wrong hands, or even hardening reactionary and illiberal elements by accident.
  • Reaching one shared idea of what happened and why things went wrong, even within a smaller group behind closed doors, has real appeal, even if it’s not how we would want a country run. Instead, it’s like the best society can do is to keep applying a kind of societal weight to Mr. Trump — attention on the accurate memory of the events, the creation of legal hurdles and public scrutiny, possibly doomed prosecutions of varying quality — adding a little more weight, a little more weight, a little more weight in an effort to contain him
  • It’s like some mixed-up version of deterrence and truth, with a society trying something, anything, with possibly volatile precedents for the future.
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What stage of capitalism is Sam Bankman-Fried? - 0 views

messaging-custom-newsletters.nytimes.com/...oakv2 capitalism crypto collapse effectiveness
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  • For Sam Bankman-Fried and his crypto exchange FTX, the simple answer is that a leaked balance sheet leads your biggest rival, himself under federal scrutiny, to instigate a sort of “bank run” you cannot possibly cover, exposing billions of dollars in shortfalls you apparently created by riskily investing money that wasn’t yours.
  • How do you make a multibillion-dollar company disappear in a week?
  • And revealing yourself, in the process, to be a very new kind of financial villain — one who pitches not just the prospect of profit but also deliverance from the corrupt speculative system in which you “made” your “billions.”
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  • — what exactly was the meme?
  • Cryptocurrency is little more than a decade old, and yet it has passed through several reputational phases: first, as the lawless province of black marketeers and hard-core libertarians obsessed with escaping government oversight; then as a speculative market in which many of those people made an astonishing and enviable amount of money; then as an investment sector for adventurous normies who might previously have turned to simple day-trading; then as an “asset class” eyed by big-money investors and establishment banks
  • it was very tempting to believe, and nobody was trying to look all that closely, it turns out — not the editors who put him on the covers of Forbes and Fortune; not the traders who trusted him with billions in daily trading volume; not the recipients of his philanthropic pledges, many of which will now go unfulfilled; and most conspicuously, not the investors who handed him millions without seeming to even bother checking the books.
  • To investors and legislators, he looked like the potential face of a new era for crypto, poised to legitimize through transparency and regulation what had always been an enormously shady, if often quite lucrative, sector.
  • To progressives, he looked like our kind of oligarch, a sort of boy wonder who seemed capable of conjuring up world-changing billions guiltlessly, effectively out of thin air.
  • And he had promised to give that magic internet money away just as quickly
  • It was part of his DGAF brand, like the unkempt hair and cargo shorts he wore onstage alongside Bill Clinton and Tony Blair
  • As recently as July 2021, FTX raised $900 million from, among others, Sequoia Capital, Daniel Loeb’s Third Point and SoftBank Vision Fund, which had previously written down billions of dollars in investments in Uber and WeWork. In January, a Series C round raised an additional $400 million.
  • In a now-legendary profile published on the Sequoia website just weeks before the collapse, almost every paragraph contained what should have been a red flag but was presented instead as a mark of Bankman-Fried’s special genius — and Sequoia’s, for endorsing it
  • The death of FTX has been called crypto’s “Lehman moment,” but it was not the first such collapse — it follows the implosions of Celsius, Three Arrows Capital, Terra and Luna, among many others. But it’s fitting that Bankman-Fried will now always be remembered as this crypto crash’s central figure, because he postured as someone who could rewrite not just the rules of the financial system but its morality as well.
  • Now the comparisons are less flattering: to Bernie Madoff, of course, and to Elizabeth Holmes of Theranos, even though Bankman-Fried has not been charged with any crimes; also to Adam Neumann of WeWork, Travis Kalanick of Uber and the other iconic start-up hucksters of this strange venture-capital era.
  • those founders were, for all their delusions and sociopathy, pitch-deck visionaries — persuasive proselytizers for not just new products but whole new worlds that could be simply invested into being.
  • In his self-presentation, Bankman-Fried seemed to be pitching something else: an outward indifference approaching disdain. His serious-seeming commitment to effective altruism underlined the impression: If he was earning his billions only to donate them, he represented a very different case study in the morality or moral potential of unregulated markets
  • he flatly described the crypto markets as pointless speculation bordering on fraud — one of the interviewers paraphrased Bankman-Fried’s summary as “I’m in the Ponzi business, and it’s pretty good” — it wasn’t a misstep
  • What stage of capitalism is this?
  • in the world of big money he was a genuinely new archetype: a smugly superior Gen X slacker and an entitled, world-changing millennial at once
  • it has also been the source of a lot of reflection and debate, about whether it had been at all reasonable to treat what made him distinct as a basis for lionization.
  • He said in the Sequoia profile, for instance, that no book was ever really worth reading, and he told the economist Tyler Cowen in a podcast interview that faced with a coin-flip game in which half the time he’d double the value of the world and half the time he’d destroy it, he’d choose to play again and again
  • he revealed himself to be wasn’t a singular bad actor but a representative one. Blockchain technology may well offer meaningful uses for the wider world in the future, but as of now, it is most significant as the basis for a realm of pure and unregulated speculation.
  • The volatility was not some deep secret only now revealed. It’s an almost inescapable aspect of a financial subculture erected outside the oversight and control of the law on the principle that they weren’t necessary
  • The world’s second-largest crypto exchange has gone belly-up, but the crypto market as a whole is down by only about 20 percent. For many speculators, it seems, collapses like these were already priced in.
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Housing markets face a brutal squeeze | The Economist - 0 views

www.economist.com/...-markets-face-a-brutal-squeeze housing markets effects market
shared by Javier E on 22 Oct 22 - No Cached
  • interest-rate rises have now returned mortgage rates to levels not seen for decades. A year ago the 30-year fixed-rate mortgage in America was below 3%. Today it is only a little shy of 7%
  • Three factors will determine where the pain is most acute, and thus where these consequences are most likely. The first is recent price growth. Housing markets where prices have surged since the pandemic are especially vulnerable to cooling demand
  • Borrowing levels are the second factor. The higher household debt is as a share of income, the more vulnerable owners are to higher mortgage payments and defaults.
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  • The third factor is the speed with which higher interest rates pass through to homeowners. The biggest risk is to borrowers on floating-rate mortgages
  • not all fixed-term loans are alike. In America the bulk of them are fixed for two or three decades. In other countries, even fixed-rate borrowers will face soaring mortgage costs soon enough
  • all the ingredients for a deep housing slump are in place. This time, though, it is likely to be led not by America, but by Canada, the Netherlands, Australia, New Zealand and Norway
  • First-time buyers and recent borrowers are especially vulnerable. Many stretched their finances to buy a home, leaving less spare cash to cover a jump in mortgage costs
  • First-time buyers have also had less time to accumulate equity. Oxford Economics estimates that a 15% drop in house prices in America over a year would cancel out two-thirds of the housing equity they have accumulated since the start of the pandemic
  • the housing squeeze will have profound consequences. “The housing cycle IS the business cycle”, wrote Edward Leamer of the University of California, Los Angeles, in a paper published in 2007
  • The link between the two cycles arises because housing confers “wealth effects” on owner occupiers. When house prices rise, people feel good about their financial situation, so borrow and spend more.
  • It noted that housing slowdowns had preceded eight of the past ten recessions in America
  • 2019 research by the Bank of England found that a 10% increase in house prices raises consumption by 0.35–0.5%
  • Another important channel between the housing market and the rest of the economy is investment. Capital spending associated with housing, especially house building, can be extremely volatile—and is often the difference between a growing or shrinking economy.
  • Some people see an upside to a housing crash. They hope lower prices will allow young folk to buy their first houses. These hopes are almost certain to be dashed. In housing corrections, and sometimes for years after, home ownership rates tend to fall, rather than rise
  • Economic conditions that cause house prices to fall simultaneously imperil the chances of would-be homeowners. Unemployment rises and wages decline. If interest rates jump, people are able to borrow less and mortgage lenders tend to become more skittish about lending
  • The biggest effect of a housing downturn may be in politics
  • In countries where home ownership is seen as a rite of passage, lower prices without any increase in affordability will rub salt in already sore wounds. “Falling to what? Falling to absurdly grotesque prices instead of just unthinkable?”
  • For years more established homeowners took comfort in the thought that, even if real-wage growth was terrible, at least the price of their house was rising. Those days are over. Even baby-boomers, the great winners from a decade of price growth, now face the prospect of living off a smaller nest-egg in retirement, as downsizing becomes less lucrative
  • All this means rising interest rates will have unpredictable political repurcussions, as people who once benefited from the status quo discover what it feels like to lose out.
  • Do not be surprised, then, if policymakers launch enormous rescue operations
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China's Extreme Floods and Heat Ravage Farms and Kill Animals - The New York Times - 0 views

www.nytimes.com/...xtreme-weather-china-food.html china extreme heat floods climate change crisis politics history culture policy
shared by Javier E on 26 Jun 23 - No Cached
  • unusually heavy rainfall, which local officials said was the worst disruption to the wheat harvest in a decade, underscored the risks that climate shocks pose to President Xi Jinping’s push for China to become more self-reliant in its food supply.
  • Ensuring China’s ability to feed 1.4 billion people is a key piece of Mr. Xi’s goal of leading the country to superpower status. In recent years, tensions with the United States, the coronavirus pandemic and Russia’s war on Ukraine have all created more volatility in global food prices, heightening the urgency for China to grow more of its own crops.
  • officials are concerned about the vulnerability of its food supply to global shocks. Last summer, prices for pork, fruit and vegetables spiked in China, prompting the government to release pork from its strategic reserves to stabilize prices. Afterward, Chinese leaders reiterated their call to prioritize food security.
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  • In a country where famines have destabilized dynasties throughout history, the ruling Communist Party is also aware that fulfilling basic needs is a prerequisite for political stability.
  • Already, farmland in China is shrinking, as rapid urbanization has polluted large swaths of the country’s soil and governments have sold rural land to developers. The distribution of water between northern and southern China is uneven, leaving some crop-growing regions vulnerable to droughts and others to flooding.
  • The war in Ukraine has threatened China’s access to wheat and fertilizers. And a trade war with the United States that began in 2018 made it more expensive for China to buy soybeans and other foods from America.
  • The Chinese government frequently points out that it has to feed one-fifth of the world’s population with less than 10 percent of the world’s arable land.
  • To create a more stable food supply, China has stockpiled crops and purchased more farmland overseas. It has been developing heat-resistant rice strains, genetically modified soybeans and new seed technologies, an effort that has triggered accusations of intellectual property theft from the United States.
  • The rains hit just as farmers were preparing to begin this year’s harvest, causing some of the wheat to sprout. This lower-quality wheat is unsuitable to process into flour and is typically sold at a lower price as animal feed.
  • the most recent fears about food security stemmed from the flooding in Henan Province and the surrounding regions in central China, which produce more than three-quarters of the country’s wheat.
  • “But when extreme weather conditions happen, it not only creates damage, but it’s also very expensive to fix.”
  • The extent of the damage to this year’s crop is still unclear. A lower wheat yield could force China to import more wheat this year and raise global grain prices
  • China is the world’s largest producer and consumer of wheat. Demand has risen along with incomes as people in cities buy more Western-style breads and desserts. Soaring meat consumption in China has also necessitated more wheat, which is used for animal feed.
  • China’s fixation on food security has global implications, in large part because it maintains huge stockpiles of food, including what the U.S. Department of Agriculture estimates is about half of the world’s wheat reserves.
  • Gauging the stability of China’s food supply is difficult because information about the exact quantity and quality of its crop stockpiles is treated like a state secret. Although the country’s official data regularly shows record high wheat output, for instance, analysts have questioned the reliability of the data.
  • In response to the accusations by Western countries that China was hoarding food, a commentary published in The Economic Daily, a state-controlled newspaper, revealed that China had enough wheat and rice reserves to feed its people for at least 18 months, which the article suggested was a reasonable amount of stockpiling.
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The Great Disconnect: Why Voters Feel One Way About the Economy but Act Differently - T... - 0 views

www.nytimes.com/...economy-voters-poll.html voter attitudes 2023
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  • By traditional measures, the economy is strong. Inflation has slowed significantly. Wages are increasing. Unemployment is near a half-century low. Job satisfaction is up.
  • Yet Americans don’t necessarily see it that way. In the recent New York Times/Siena College poll of voters in six swing states, eight in 10 said the economy was fair or poor. Just 2 percent said it was excellent. Majorities of every group of Americans — across gender, race, age, education, geography, income and party — had an unfavorable view.
  • To make the disconnect even more confusing, people are not acting the way they do when they believe the economy is bad. They are spending, vacationing and job-switching the way they do when they believe it’s good.
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  • “People have faced higher prices and that is difficult, but that doesn’t explain why people have not cut back,” she said of a phenomenon known as revealed preference. “They have spent as if they see nothing but good times in front of them. So why are their actions so out of whack with their words?”
  • Many said their own finances were good enough — they had jobs, owned houses, made ends meet. But they felt as if they were “just getting by,” with “nothing left over.” Many felt angry and anxious over prices and the pandemic and politics.
  • Also, economists said, wages have increased alongside prices. Real median earnings for full-time workers are slightly higher than at the end of 2019, and for many low earners, their raises have outpaced inflation. But it’s common for people to think about prices at face value, rather than relative to their income, a habit economists call money illusion.
  • “The pandemic shattered a lot of illusions of control,” Professor Stevenson said. “I wonder how much that has made us more aware of all the places we don’t have control, over prices, over the housing market.”
  • Inflation weighed heavily on voters — nearly all of them mentioned frustration at the price of something they buy regularly.
  • Consumer prices were up 3.2 percent in October from the year before, a decline in the year-over-year inflation rate from more than 8 percent in mid-2022. But inflation “casts a long shadow on how people evaluate things,” said Lawrence Katz, an economist at Harvard. Some people may expect prices to return to what they were before — something that rarely happens
  • Those feelings may be driving attitudes about the economy, economists speculated, sounding more like their colleagues from another branch of social science, psychology.
  • Younger people — who were a key to President Biden’s win in 2020 but showed less support for him in the new poll — had concerns specific to their phase of life. In the poll, 93 percent of them rated the economy unfavorably, more than any other age group.
  • “Everyone thinks a wage increase is something they deserve, and a price increase is imposed by the economy on them,” Professor Katz said.
  • There’s a sense that it’s become harder to achieve the things their parents did, like buying a home. Houses are less affordable than at the height of the 2006 bubble, and less than half of Americans can afford one.
  • “More than likely, half my income will go toward rent,” he said. “I was really hoping on that student loan forgiveness.”
  • Yet overall, economists said, data shows that more people are quitting jobs to start better ones, moving to more desirable places because they can work remotely, and starting new businesses.
  • He said he makes almost $80,000, serving in the military and working as a DoorDash deliverer, yet feels he had more spending money a decade ago, when he was two pay grades lower.
  • he uncertainty Mr. Blanck and Ms. Linn share about the future ran through many voters’ stories, darkening their economic outlook.
  • “The degree of volatility that we’ve experienced from different events — from the pandemic, from inflation — leaves them not confident that even if objectively good things are going on, it’s going to persist,”
  • In response to the pandemic, the United States built an extensive welfare state, and it has since been dismantled. While wealth has increased for families across the income spectrum, data shows, and there are indications that inequality could be shrinking, the changes have been small relative to decades of growing inequality, leading to a sense for some that the system is rigged.
  • “When things are going well, that means rich people are getting richer and all of us are pretty much second,” said Manuel Zimberoff, 26, a manufacturing engineer in Philadelphia. “And if things are going poorly, rich people are still getting richer, and all of us are screwed.”
  • For roughly two decades, partisanship has increasingly been correlated with views about the economy: Research has shown that people rate the economy more poorly when their party is not in power. Nearly every Republican in the poll rated the economy unfavorably, and 59 percent of Democrats did.
  • He brought up U.S. funding in Ukraine and the Middle East. He wanted to know: Is that the reason our economy is “slowing down?” He wasn’t sure, but he thought it might be. He plans to vote for “the Republican, any Republican,” he said. “Democrats have disappointed me.”
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They Did Their Own 'Research.' Now What? - The New York Times - 0 views

www.nytimes.com/...do-your-own-research.html new york times US research
shared by lilyrashkind on 31 May 22 - No Cached
  • Cryptocurrencies are notoriously volatile, but this wasn’t your average down day: People who thought they knew what they were getting into had, in the space of 24 hours, lost nearly everything. Messages of desperation flooded a Reddit forum for traders of one of the currencies, a coin called Luna, prompting moderators to share phone numbers for international crisis hotlines. Some posters (or “Lunatics,” as the currency’s creator, Do Kwon, has referred to them) shared hope for a turnaround or bailout; most were panicking, mourning and seeking advice.
  • But in the context of a broad collapse of trust in institutions and the experts who speak for them, it has come to mean something more specific. A common refrain in battles about Covid-19 and vaccination, politics and conspiracy theories, parenting, drugs, food, stock trading and media, it signals not just a rejection of authority but often trust in another kind.
  • DYOR is an attitude, if not quite a practice, that has been adopted by some athletes, musicians, pundits and even politicians to build a sort of outsider credibility. “Do your own research” is an idea central to Joe Rogan’s interview podcast, the most listened to program on Spotify, where external claims of expertise are synonymous with admissions of malice. In its current usage, DYOR is often an appeal to join in, rendered in the language of opting out.Nowhere are the contradictions of DYOR on such vivid display as in the world of crypto, where the phrase is a rallying cry, a disclaimer, a meme and a joke — an invitation to a community as well as a reminder of its harsh limits.
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  • Melissa Carrion, a professor at the University of Nevada, Las Vegas, who studies the rhetoric of health and medicine, spoke to 50 mothers who had refused one or more vaccines for their children for a study published in 2017.“Across the board, every single one of them gave some variation of the advice that a mother ‘should do her own research,’” she said in a phone interview. “It was this kind of worldview that was less about the result of the research than the individual process of doing it themselves.”
  • One of the enticing aspects of cryptocurrencies, which pose an alternative to traditional financial institutions, is that expertise is available to anyone who wants to claim it. There are people who’ve gotten rich, people who know a lot about blockchains and people who believe in the liberating power of digital currencies. There is some recent institutional interest. But nobody’s been around very long, which makes the idea of “researching” your way to prosperity feel more credible.
  • Cryptocurrency trading, in contrast to medicine, might represent DYOR in pure no-expert form. Virtually everyone is operating in a beginners’ bubble, whether they’re worried about it or not, betting with and against one another, in hopes of making money.
  • ere, so-called research materials are often limited to a white paper, marketing materials and testimonials, the “due diligence” posts of others, the reputations of a currency’s creators and the general sentiment of other possible buyers. Will they buy-in, too? Will we take this coin to the moon?In that way — the momentum of a group — crypto investing isn’t altogether distinct from how people have invested in the stock market for decades. Though here it is tinged with a rebellious, anti-authoritarian streak: We’re outsiders, in this together; we’re doing something sort of ridiculous, but also sort of cool. Though DYOR may be used to foster a sense of community, what it actually describes is participation in a market.
  • A year ago, Luna boosters (and a few skeptics) in online forums offered the same advice to gathered audiences of potential buyers reading their posts, looking for tips: just DYOR. Thousands invested in both Luna and TerraUSD. The price of Luna climbed from around $5 to over $100. After the crash, at least one Reddit user suggested that the situation highlighted the “limit” of DYOR; the coin’s price had fallen to nearly zero.
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Jack Bogle: The Undisputed Champion of the Long Run - WSJ - 0 views

www.wsj.com/...ion-of-the-long-run-1472855372 investment savings retirement financial economic
shared by Javier E on 03 Sep 16 - No Cached
  • Jack Bogle is ready to declare victory. Four decades ago, a mutual-fund industry graybeard warned him that he would “destroy the industry.” Mr. Bogle’s plan was to create a new mutual-fund company owned not by the founding entrepreneur and his partners but by the shareholders of the funds themselves. This would keep overhead low for investors, as would a second part of his plan: an index fund that would mimic the performance of the overall stock market rather than pay genius managers to guess which stocks might go up or down.
  • Not even Warren Buffett has minted more millionaires than Jack Bogle has—and he did so not by helping them get lucky, but by teaching them how to earn the market’s long-run, average return without paying big fees to Wall Street.
  • “When the climate really gets bad, I’m not some statue out there. But when I get knots in my stomach, I say to myself, ‘Reread your books,’ ” he says. Mr. Bogle has written numerous advice books on investing, including 2007’s “The Little Book of Common Sense Investing,” which remains a perennial Amazon best seller—and all of them emphasize not trying to outguess the markets.
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  • Mr. Bogle has some hard news for investors. The basic appeal of index funds—their ability to deliver the market return without shifting an arm and leg to Wall Street’s army of helpers—will only become more important given the decade of depressed returns he sees ahead.
  • Don’t imagine a revisitation of the ’80s or ’90s, when stocks returned 18% a year and investors, after the industry’s rake-off, imagined they “had the greatest manager in the world” because they got 14%. Those planning on a comfy retirement or putting a kid through college will have to save more, work to keep costs low, and—above all—stick to the plan.
  • The mutual-fund industry is slowly liquidating itself—except for Vanguard. Mr. Bogle happily supplies the numbers: During the 12 months that ended May 31, “the fund industry took in $87 billion . . . of which $224 billion came into Vanguard.” In other words, “in the aggregate, our competitors experienced capital outflows of $137 billion.”
  • That said, Mr. Bogle finds today’s stock scene puzzling. Shares are highly priced in historical terms; earnings and economic growth he expects to disappoint for at least the next decade (he sees no point in trying to forecast further). And yet he advises investors to stay invested and weather the storm: “If we’re going to have lower returns, well, the worst thing you can do is reach for more yield. You just have to save more.”
  • He also knows the heartache of having just about everything he has saved tied up in volatile, sometimes irrational markets, especially now. “We’re in a difficult place,” he says. “We live in an extremely risky world—probably more risky than I can recall.”
  • Then why invest at all? Maybe it would be better to sell and stick the cash in a bank or a mattress. “I know of no better way to guarantee you’ll have nothing at the end of the trail,” he responds. “So we know we have to invest. And there’s no better way to invest than a diversified list of stocks and bonds at very low cost.”
  • Mr. Bogle’s own portfolio consists of 50% stocks and 50% bonds, the latter tilted toward short- and medium-term. Keep an eagle eye on costs, he says, in a world where pre-cost returns may be as low as 3% or 4%. Inattentive investors can expect to lose as much as 70% of their profits to “hidden” fund management costs in addition to the “expense ratios” touted in mutual-fund prospectuses. (These hidden costs include things like sales load, transaction costs, idle cash and inefficient taxes.)
  • Mr. Bogle relies on a forecasting model he published 25 years ago, which tells him that investors over the next decade, thanks largely to a reversion to the mean in valuations, will be lucky to clear 2% annually after costs. Yuck.
  • Investing, he says, always is “an act of trust—in the ability of civilization and the U.S. to continue to flourish; in the ability of corporations to continue, through efficiency and entrepreneurship and innovation, to provide substantial returns.” But nothing, not even American greatness, is guaranteed, he adds
  • what he calls the financial buccaneer type, an entrepreneur more interested in milking what’s left of the active-management-fee gravy train than in providing low-cost competition for Vanguard—which means Vanguard’s best days as guardian of America’s nest egg may still lie ahead.
  • the growth of indexing is obviously unwelcome writing on the wall for Wall Street professionals and Vanguard’s profit-making competitors like Fidelity, which have never been able to give heart and soul to low-churn indexing because indexing doesn’t generate large fees for executives and shareholders of management companies.
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California gas prices: If Gov. Newsom's $400 rebate plan gets approved, how soon could ... - 0 views

abc7.com/...11678265 california gas prices
shared by lilyrashkind on 25 Mar 22 - No Cached
  • CALIFORNIA -- Californians shouldering the nation's highest gas prices could soon get a tax break, free rides on public transit and up to $800 on debit cards to help pay for fuel under a proposal revealed Wednesday by Gov. Gavin Newsom, but how soon could taxpayers start seeing the money?Gas prices have soared in recent weeks, the result of pandemic-induced inflation and Russia's invasion of Ukraine
  • State governments across the country have been debating what to do about it, with the most popular choices being slashing fuel taxes or offering rebates to taxpayers.Last week, the governors of Maryland and Georgia signed laws temporarily suspending their state's gas taxes, while Georgia on Wednesday also offered $1.1 billion in refunds to taxpayers in a separate action.California's average gas prices hit a new state record Wednesday at $5.88 per gallon, more than $2 higher than it was a year ago, according to AAA. California has the second-highest gas tax in the country at 51 cents per gallon. But the state's Democratic leaders have been wary of suspending the gas tax because they fear oil companies would not pass along the savings to drivers.
  • RELATED: Are California drivers paying a hidden gas fee?
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  • "This package is also focused on protecting people from volatile gas prices, and advancing clean transportation," Newsom said.Rebates like the ones Newsom is proposing take time to deliver, with the governor's office saying people could see the money by July.Rising fuel prices are a tricky policy issue for Newsom, who is trying to wean the state off fossil fuels. He has signed executive orders aimed at banning the sale of new gas-powered cars in the state by 2035 and halting all oil extraction by 2045.He has proposed a total of $10 billion in funding over six years to boost zero-emission vehicle production and build charging stations.
  • Newsom's plan must be approved by the Legislature, where Democrats dominate both the Assembly and the Senate. Democratic leaders, however, don't like the idea of giving money to rich people.They have been discussing their own rebate proposal, one that would give $200 rebates to every taxpayer and their children with taxable income less than $125,000 for single filers and $250,000 for joint filers. That means a family of five would get $1,000 while a single parent with two children would get $600.
  • A spokesperson for Democratic Assembly Speaker Anthony Rendon called Newsom's idea "consistent with the Speaker's goal of providing targeted financial relief to Californians most in need" but stressed the idea is "in the very early stages."Newsom's plan is similar to a separate proposal floated last week by more moderate Democrats in the state Assembly that would give every taxpayer $400, regardless of income.
  • "People need relief now," said Assembly Republican Leader James Gallagher. "We've got now, like, four different competing plans amongst the Democrats. These guys are going to negotiate against themselves for weeks to months and who knows what we're going to get."
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Why YouTube Has Survived Russia's Social Media Crackdown | Time - 0 views

time.com/...-russia-ukraine-disinformation social russia politics
shared by lilyrashkind on 26 Mar 22 - No Cached
  • In a style part investigative journalism, part polemic, the video’s hosts report that one of President Vladimir Putin’s allies, Russian senator Valentina Matviyenko, owns a multimillion-dollar villa on the Italian seafront. The video contrasts the luxurious lifestyle of Matviyenko and her family with footage of dead Russian soldiers, and with images of Russian artillery hitting civilian apartment buildings in Ukraine. A voiceover calls the war “senseless” and “unimaginable.” A slide at the end urges Russians to head to squares in their cities to protest at specific dates and times. In less than a week, the video racked up more than 4 million views.
  • TV news is dominated by the misleading narrative that Russia’s invasion of Ukraine is actually a peace-keeping exercise. Despite this, YouTube has largely been spared from the Kremlin’s crackdown on American social media platforms since Russia invaded Ukraine nearly a month ago.
  • The app had been a particular venue for activism: Many Russian celebrities spoke out against the invasion of Ukraine in their Instagram stories, and Navalny’s Instagram page posted a statement criticizing the war, and calling on Russians to come out in protest.
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  • On March 11, YouTube’s parent company Google announced that it would block Russian state-backed media globally, including within Russia. The policy was an expansion of an earlier announcement that these channels would be blocked within the European Union. “Our Community Guidelines prohibit content denying, minimizing or trivializing well-documented violent events, and we remove content about Russia’s invasion in Ukraine that violates this policy,” Google said in a statement. “In line with that, effective immediately, we are also blocking YouTube channels associated with Russian state-funded media, globally.”
  • That could leave many millions of Russians cut off from independent news and content shared by opposition activists like Navalny’s team. (It would also effectively delete 75 million YouTube users, or some 4% of the platform’s global total—representing a small but still-significant portion of Google’s overall profits.)
  • Today, YouTube remains the most significant way for tens of millions of ordinary Russians to receive largely uncensored information from the outside world.
  • Part of the reason for YouTube’s survival amid the crackdown is its popularity, experts say. “YouTube is by far and away the most popular social media platform in Russia,” says Justin Sherman, a non-resident fellow at the Atlantic Council’s cyber statecraft initiative. The platform is even more popular than VK, the Russian-owned answer to Facebook.
  • Still, Sherman says the situation is volatile, with Russia now more likely than ever before to ban YouTube. For an authoritarian government like Russia’s, “part of the decision to allow a foreign platform in your country is that you get to use it to spread propaganda and disinformation, even if people use it to spread truth and organize against you,” he says. “If you start losing the ability to spread misinformation and propaganda, but people can still use it to spread truth and organize, then all of a sudden, you start wondering why you’re allowing that platform in your country in the first place.” YouTube did not respond to a request for comment.
  • On the same day as Navalny’s channel posted the video about Matviyenko, elsewhere on YouTube a very different spectacle was playing out. In a video posted to the channel of the Kremlin-funded media outlet RT, (formerly known as Russia Today,) a commentator dismissed evidence of Russian bombings of Ukrainian cities. She blamed “special forces of NATO countries” for allegedly faking images of bombed-out Ukrainian schools, kindergartens and other buildings.
  • “YouTube has, over the years, been a really important place for spreading Russian propaganda,” Donovan said in an interview with TIME days before YouTube banned Russian state-backed media.
  • In July 2021, the Russian government passed a law that would require foreign tech companies with more than 500,000 users to open a local office within Russia. (A similar law passed previously in India had been used by the government there to pressure tech companies to take down opposition accounts and posts critical of the government, by threatening employees with arrest.)
  • The heightened risk to free expression in Russia Experts say that Russia’s ongoing crackdown on social media platforms heralds a significant shift in the shape of the Russian internet—and a potential end to the era where the Kremlin tolerated largely free expression on YouTube in return for access to a tool that allowed it to spread disinformation far and wide.
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Opinion | We're in a Fossil Fuel War. Biden Should Say So. - The New York Times - 0 views

www.nytimes.com/...ossil-fuel-climate-change.html
shared by marvelgr on 24 Mar 22 - No Cached
  • Russia’s invasion of Ukraine is a war enabled and exacerbated by the world’s insatiable appetite for fossil fuels.
  • Russia is a petrostate — its economy and global influence are heavily reliant on its vast reserves of oil and natural gas — and Vladimir Putin its petromonarch, another in a line of unsavory characters whom liberal democracies keep doing business with because they’ve got something we can’t live without.
  • The way out of this bind would also appear obvious and urgent. By accelerating our transition to cheap and abundant renewable fuels, we can address two grave threats to the planet at once: the climate-warming, air-polluting menace of hydrocarbons and the dictators who rule their supply.
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  • yet American politicians on the left sure seem incapable of drawing out this connection
  • In his State of the Union address shortly after Russia’s invasion, President Biden whiffed on a major opportunity to revive his stalled climate change agenda by underlining the geopolitical dangers of fossil fuels. His references to climate change — what he has previously called an “existential threat” to the planet — were buried under, rather than connected to, his comments about the war.
  • pundits on the right have had a field day with the notion that Russia’s invasion somehow points up the folly of focusing on climate change. The Wall Street Journal’s editorial board blamed “the Biden Administration’s obsession with climate” for making “the U.S. and Europe vulnerable to Mr. Putin’s energy blackmail” and wrote that “the climate lobby has made Mr. Putin more powerful.”
  • This could have been a moment for moral clarity on the dangers of fossil fuels — but so far, Democrats have fumbled that message.
  • “This narrative has not been out there — that this war is why we need to get off of fossil fuels,”
  • “More groups need to be connecting the dots, making the case that true energy independence is about running on sunshine, because sunshine is free and abundant and cannot be controlled by dictators.
  • such a message is likely to resonate with people. A study she and a co-author published online in 2017 examined the political factors that led to clean energy policies. “What we found was, overwhelmingly, these policies were passed during energy crises,”
  • the Democrats have yet to aggressively make the case for their proposals in the new context of war — to point out that climate policy is not unrelated to foreign policy, and that freeing ourselves from other people’s fuels is the best long-term solution to skyrocketing energy prices.
  • the ways in which fossil fuels make energy prices far more volatile and put us at the behest of powers and leaders that can act in ways that are dangerous and unjust” has rarely been more obvious.
  • “I started to think about the parallels between climate change and this war and it’s clear that the roots of both these threats to humanity are found in fossil fuels,” Krakovska said in the interview. “Burning oil, gas and coal is causing warming and impacts we need to adapt to
  • And Russia sells these resources and uses the money to buy weapons. Other countries are dependent upon these fossil fuels; they don’t make themselves free of them. This is a fossil fuel war. It’s clear we cannot continue to live this way; it will destroy our civilization.”
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The Only Crypto Story You Need, by Matt Levine - 0 views

www.bloomberg.com/...2022-the-crypto-story
shared by Javier E on 17 Dec 22 - No Cached
  • the technological accomplishment of Bitcoin is that it invented a decentralized way to create scarcity on computers. Bitcoin demonstrated a way for me to send you a computer message so that you’d have it and I wouldn’t, to move items of computer information between us in a way that limited their supply and transferred possession.
  • The wild thing about Bitcoin is not that Satoshi invented a particular way for people to send numbers to one another and call them payments. It’s that people accepted the numbers as payments.
  • That social fact, that Bitcoin was accepted by many millions of people as having a lot of value, might be the most impressive thing about Bitcoin, much more than the stuff about hashing.
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  • Socially, cryptocurrency is a coordination game; people want to have the coin that other people want to have, and some sort of abstract technical equivalence doesn’t make one cryptocurrency a good substitute for another. Social acceptance—legitimacy—is what makes a cryptocurrency valuable, and you can’t just copy the code for that.
  • A thing that worked exactly like Bitcoin but didn’t have Bitcoin’s lineage—didn’t descend from Satoshi’s genesis block and was just made up by some copycat—would have the same technology but none of the value.
  • Here’s another generalization of Bitcoin: Satoshi made up an arbitrary token that trades electronically for some price. The price turns out to be high and volatile. The price of an arbitrary token is … arbitrary?
  • it’s very interesting as a matter of finance theory. Modern portfolio theory demonstrates that adding an uncorrelated asset to a portfolio can improve returns and reduce risk.
  • To the extent that the price of Bitcoin 1) mostly goes up, though with lots of ups and downs along the way, and 2) goes up and down for reasons that are arbitrary and mysterious and not tied to, like, corporate earnings or the global economy, then Bitcoin is interesting to institutional investors.
  • In practice, it turns out that the price of Bitcoin is pretty correlated with the stock market, especially tech stocks
  • Bitcoin hasn’t been a particularly effective inflation hedge: Its price rose during years when US inflation was low, and it’s fallen this year as inflation has increased.
  • The right model of crypto prices might be that they go up during broad speculative bubbles when stock prices go up, and then they go down when those bubbles pop. That’s not a particularly appealing story for investors looking to diversify.
  • one important possibility is that the first generalization of Bitcoin, that an arbitrary tradeable electronic token can become valuable just because people want it to, permanently broke everyone’s brains about all of finance.
  • Before the rise of Bitcoin, the conventional thing to say about a share of stock was that its price represented the market’s expectation of the present value of the future cash flows of the business.
  • But Bitcoin has no cash flows; its price represents what people are willing to pay for it. Still, it has a high and fluctuating market price; people have gotten rich buying Bitcoin. So people copied that model, and the creation of and speculation on pure, abstract, scarce electronic tokens became a big business.
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