The Pool Room–Week Ending Friday 5th June 2009

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Before the Pool Room, a quick com­ment on Aus­trali­a’s recent 0.4% growth in GDP in the first quar­ter of 2009–largely due to a sur­prise growth in net exports–and the sequel the next day of a sur­prise trade deficit.

Briefly, the “text­book” def­i­n­i­tion of GDP is:


GDP equals Consump­tion plus Invest­ment plus Govern­ment spend­ing plus eXports minus iMports”

M fell by 9 bil­lion, X (more on this below) fell by 3 bil­lion, so there was a +6 bil­lion turn­around in the “net exports con­tri­bu­tion to GDP” (as it’s known).

Now for a health­ily grow­ing econ­o­my, all 5 fac­tors (C,I, G, X, and M) would be increasing–including M, since lots of the C+I+G are spent pur­chas­ing them. But sud­den­ly spend­ing on imports has dropped $9 bil­lion in a quarter–that’s of the order of 2% of GDP. That implies that spend­ing has dropped, not risen. This is not what I call a sus­tain­able “growth” pat­tern.

Sec­ond­ly, the increase in the vol­ume of exports that was spruiked when the GDP fig­ures came out was not all that it seemed. Ger­ard Minack of Mor­gan Stan­ley claimed that there had been a change in ABS method­ol­o­gy which led to the vol­ume of com­mod­i­ty exports bring sub­stan­tial­ly over­stat­ed.  That claim has now been reject­ed by the ABS, but as dis­cus­sion of this on Peter Mar­t­in’s site indi­cates, there are still very large prob­lems with esti­mat­ing the vol­ume of exports giv­en the extreme volatil­i­ty in com­mod­i­ty prices and exchange rates.

Part of the ABS’s reply to Ger­ard’s arti­cle in The Age implies that this unre­li­a­bil­i­ty of export vol­ume cal­cu­la­tions will con­tin­ue for some time:

The vol­ume mea­sures of exports of bulk com­modi­ties …  are cal­cu­lat­ed by mul­ti­ply­ing the quan­ti­ties of such exports, as report­ed by exporters in tonnes or some oth­er unit of quan­ti­ty, by the aver­age price of such com­modi­ties, as report­ed by exporters in the ref­er­ence year. For the March quar­ter 2009 vol­ume esti­mates, 2006-07 is the ref­er­ence year for prices. The ref­er­ence year prices are updat­ed annu­al­ly, in the Sep­tem­ber quar­ter accounts. For exam­ple, the Sep­tem­ber quar­ter 2009 accounts will use aver­age prices report­ed in 2007-08.

So the esti­mates for the Sep­tem­ber quar­ter GDP will be based on prices as report­ed in 2007-08… Giv­en the volatil­i­ty of prices in the last four years–a huge increase in our export prices fol­lowed by the recent sharp decline that will doubt­less con­tin­ue for some time–calculations of the real val­ue of exports will be extreme­ly inac­cu­rate for some time to come.

Giv­en all that, I expect that the export­ed ton­nage of com­mod­i­ty exports prob­a­bly fell sig­nif­i­cant­ly across the board in the most recent quar­ter, and the record­ed increase was an anom­aly.

This explains the “huh” fac­tor of the very next day’s announce­ment that we had gone from a sub­stan­tial trade sur­plus to a deficit. How does that tal­ly with the “increase” in exports in the GDP fig­ures? The trade deficit is the dol­lar val­ue of exports minus the dol­lar val­ue of imports–there is no “price deflat­ing” going on.

So putting this all togeth­er (look­ing just at C+I+G+X com­po­nents), the prob­a­ble out­come for real out­put in the last quar­ter was a fall of the order of 1–2%, or an annu­al rate of decline of 5–8%.

Note also that there are severe prob­lems with US data, though not caused by its export prices but the prac­tise fol­lowed by the BLS of mod­i­fy­ing unem­ploy­ment num­bers using its “Birth and Death” mod­el for changes in the small busi­ness sec­tor in the USA that are too small to be cap­tured by sur­veys. This adjust­ment accounts for 220,000 of the jobs cre­at­ed in the USA in the month of May–when aggre­gate jobs actu­al­ly fell by 345,000. So with­out the adjustment–a sta­tis­ti­cal pro­ce­dure to account for a weak­ness in the sur­vey method used to esti­mate unemployment–recorded unem­ploy­ment would have increased by 565,000. This would have turned a “sur­pris­ing­ly good” decline in jobs num­ber there into a “depress­ing­ly famil­iar one”.  See Mish’s site for an excel­lent dis­cus­sion of this.

PS Ger­ard has apol­o­gised for his error–as I not­ed to a dis­cus­sant here when the ABS’s let­ter was brought to my atten­tion, it’s very rare for him to make such a mis­take, and he has since duly apol­o­gised in his Down Under Daily.Here’s what he had to say:

In my com­ment last week on the Aus­tralian GDP report I said that the ABS (Aus­tralian Bureau of Sta­tis­tics) had changed the way it tracked bulk com­mod­i­ty price exports.  It had not.
Sor­ry: this shows the per­ils of doing some­thing on-the-run while over­seas, com­pound­ed by me mis­read­ing some third-par­ty com­ments. 
No excus­es, it was slop­py by me.  The Bureau, right­ly, gave me quite a spank­ing:
As an aside, my mis­take does­n’t change the con­clu­sions in my orig­i­nal com­ments.
Apolo­gies to all.

Now over to Evan’s selec­tion for The Pool Room this week…

THE POOL ROOM – Week End­ing Fri­day 5th June, 2009


Aus­tralia Dodges Reces­sion Bul­let, ABC, 3 Jun
Irre­spec­tive of whether Aus­tralia is in reces­sion or oth­er­wise, it’s a good time to remem­ber that offi­cial GDP growth ignores debt growth. So, yes, maybe Aus­tralia “grew” by 0.4% in Q1 so long as you ignore the unprece­dent­ed gov­ern­ment spend­ing, includ­ing cash hand­outs before Christ­mas. If you or I go mad with a cred­it card, buy a flash car cour­tesy of EZY-Finance Ltd and take out a home equi­ty loan (remem­ber those?) the only thing that grows is our debt bur­den. It appears to be dif­fer­ent for coun­tries who bor­row and – wal­lah! – their GDP has grown and it’s time for the PM to stand on his imag­i­nary air­craft car­ri­er and call a press con­fer­ence. Ger­ard Minack also notes that the ABS spruiked the fig­ures.

Trade Slump Under­mines GDP Opti­mism, ABC, 4 Jun
The bul­lets are start­ing to hit the mark: “Offi­cial fig­ures show a sharp slump in exports has dragged the $2.3 bil­lion trade sur­plus in March to a deficit of $91 mil­lion in April… imports fell 2 per cent to $21.77 bil­lion in April, with cap­i­tal goods, such as trucks and machin­ery, down 1 per cent while con­sumer goods decreased 1 per cent.” Export prices don’t look like improv­ing as today “Glouces­ter Coal has agreed to sell cok­ing coal to its Japan­ese cus­tomers in the com­ing Japan­ese finan­cial year at prices more than 60 per cent low­er than the pre­vi­ous peri­od.”

Ore to Chi­na Not Dri­ven By Demand, The Aus­tralian, 4 Jun
Maybe Chi­na won’t be our great red hope after all. “The record iron ore exports to Chi­na that helped Aus­tralia dodge a reces­sion have been dri­ven by spec­u­la­tion and antic­i­pa­tion of demand by steel­mak­ers that has not yet even­tu­at­ed.” Ring any alarm bells (hint: oil prices last July)? And in anoth­er arti­cle “China’s gov­ern­ment said unem­ploy­ment is wors­en­ing, a quick rebound in trade is becom­ing less like­ly, and the nation is yet to feel the full effects of a glob­al slump”. Michael J Panz­er chips in with some more holes in the Chi­na recov­ery sto­ry. Con­tributed by Mac­ca.

House Prices NOT Tipped To Rise, Michael Pas­coe, SMH, 3 Jun
A bona-fide brick­bat at last, an arti­cle that should pro­duce as much laugh­ter as Gei­th­n­er in front of an audi­ence of Chi­nese stu­dents. Pas­coe lauds the eco­nom­ic mod­el­ling might of the RBA, APRA and Mac­quar­ie Bank because their com­put­ers are big­ger! Yes, that’s the same mob whose intel­lec­tu­al fire-pow­er left them wor­ried about an over-heat­ing econ­o­my about 45 min­utes before the onslaught of the “worst finan­cial cri­sis since the Great Depres­sion”.

Fam­i­lies Pros­per From Tar­iff Cuts, Mark Davis, SMH, 1 Jun
“The study by the Cen­tre for Inter­na­tion­al Eco­nom­ics also pre­dicts that if gov­ern­ments around the world suc­cumb to pro­tec­tion­ist pres­sures and increase tar­iffs on imports to pre­serve local jobs they will only make the glob­al reces­sion worse.” So the de-indus­tri­al­i­sa­tion of Aus­tralia is set to con­tin­ue. Why pro­duce phys­i­cal goods when you can rely on glob­al whole­sale finance to fund the debt bub­ble, “hot mon­ey” inflows to keep the cur­ren­cy and stock mar­kets strong and the sell­ing off of pri­ma­ry indus­try to foot (some of) the bill? Both the Libs and Labor sup­port this view.

Cred­it Law Revamp Could Cost Jobs, Glenn Milne, Sun­day Tele­graph, 31 May
“The key change is that the onus for prov­ing cred­it wor­thi­ness will shift from the cus­tomer to the lender. So if you sign up to a cred­it deal which you clear­ly can­not afford it will be the bank, or retail­er that has to repay the loan.” An impor­tant and under-report­ed sto­ry spun as a threat to jobs by Har­vey Nor­man, PwC and the sub-edi­tors. Appar­ent­ly the large insti­tu­tion­al inter­ests want to pro­tect small busi­ness­es and trades­man from a new law – now there’s a red flag if ever I’ve seen one. In bygone days it was con­sid­ered self-evi­dent that cred­i­tors need­ed to share respon­si­bil­i­ty with debtors for debt issuance. Not any­more.

Australia’s For­eign Debt – Data & Trends, Tony Kryger, Aus­tralian Par­lia­men­tary Library, 7 May
Con­tributed by blog mem­ber Bull­Turned­Bear. Extreme­ly use­ful research paper exam­in­ing Aus­tralian debt. Key fig­ures: total gross for­eign debt in 2008 was $1.07 tril­lion ($600b net) hav­ing risen from only $8b in 1976; over the same peri­od for­eign debt has sky­rock­et­ed from 9% to 95% of GDP; 74% is owned by finan­cial insti­tu­tions; the largest cred­i­tors are the UK (23%) and the US (22%; 39% is denom­i­nat­ed in AUD, 31.5% in USD, and 13% in euro; 48% has a term less than 1 year, includ­ing 37% which is due with­in 90 days.

Big Is Bet­ter For Super, SMH, 4 Jun
More delu­sion­al tub-thump­ing by the Ponzi crowd. “[Deloittes] said the bet­ter per­for­mance from big­ger funds could be attrib­ut­able to bet­ter edu­ca­tion of mem­bers, which allows them to man­age their hold­ings more wise­ly. “ You couldn’t make it up. One fact is beyond ques­tion: “Big Is Bet­ter” for com­mis­sions.


Con­sumer Spend­ing Falls As Amer­i­cans Boost Sav­ings, Bloomberg, 1 Jun
Defla­tion watch. Despite those green shoots this show is run­ning right on script. The US sav­ings rate was neg­a­tive at the height of the hous­ing bub­ble. Now it’s shot up to 5.7% – at the expense of mar­gin­al con­sump­tion and short-term GDP. Now some May spend­ing data has emerged and, yes, same-store con­sumer spend­ing fell 4.6%.

From the Sub-prime To the Ter­rage­nous, Land Val­ues Research Group, Gavin R. Put­land, 1 Jun
Excel­lent research paper pro­vid­ing strong evi­dence that a down­turn in the domes­tic prop­er­ty mar­ket is a lead­ing indi­ca­tor of reces­sions. Con­tains use­ful hous­ing bub­ble and reces­sion data for 32 coun­tries.

Mort­gage Melt­down, More Pain To Come, Mike Shed­lock, 31 May
If these graphs don’t fright­en you, noth­ing will. Check out the sub-prime resets, Alt‑A resets (“there are $2.4 tril­lion of Alt‑A resets and they are most­ly ahead of us”); and option ARMs. Note that “Wall St mort­gages are 15% of all mort­gages, but are 51% of all high­ly delin­quent mort­gages.”

More Prime Fore­clo­sures, More Re-defaults, Mike Shed­lock, 31 May
More of the same. “The prob­lem is not on that “front-end” ratio [mort­gage repay­ments], but on the back end, which is all of the bor­row­ers oth­er debt (cred­it cards, car loans, stu­dent loans, etc.)… oth­er debt is so high that most of today’s trou­bled bor­row­ers can­not afford any loan pay­ment at all, even at a very mod­est debt-to-income ratio.”

Pend­ing Home Sales: Watch the Birdie, Den­ninger, 2 Jun
In his inim­itable style, Den­ninger cal­cu­lates the impact of ris­ing retail mort­gage rates on the US hous­ing mar­ket. Now con­trast this to an arti­cle in the SMH this week: “April Pend­ing Home Re-sales Surge 6.7% In US”. Zero Hedge thinks that the future of the Nation­al Asso­ci­a­tion of Real­tors must be real­ly, real­ly, real­ly bad. And on 4 Jun Bloomberg reports that US mort­gage rates jump to high­est since Decem­ber, to 5.29 from 4.91 per­cent a week ear­li­er.

The Hous­ing Rebound As Trad­ed By An Insid­er, Zero Hedge, 3 Jun
“… [home­builder Toll Brothers’s] chair­man decid­ed to pro­vide some opti­mism dur­ing his Q1 2009 earn­ings call and then pro­ceed­ed to dump stock not once, not twice, but sev­en times in a span of one month.” It’s Enron all over again.

US Auto Sales: Worse and Wors­er, The Big Pic­ture, 3 Jun
Look at the data in the link above and then look at this head­line cour­tesy of the SMH: “US Car Sales Sta­bilise”. It con­tains such gems as: “Total US car sales were down 33.7 per cent at 925,824 vehi­cles com­pared with May 2008… but car­mak­ers took com­fort in the fact that the sea­son­al­ly adjust­ed annu­alised rate of 9.91 mil­lion was the indus­try’s best per­for­mance this year.” Sim­i­lar delu­sions led to the demise of the US car indus­try.

The Big Mess [GM], Dai­ly Show, 3 Jun
Anoth­er bril­liant must-see seg­ment from Jon Stew­art at Com­e­dy Cen­tral. Much more infor­ma­tive than Bloomberg. If you missed it the first time, also watch Stew­art take out Jim Cramer – part one, two, three (hit “replay” if the video doesn’t work the first time).

Oba­ma Sav­ing GM Need­ed Deal­mak­er Team to Break It In Bank­rupt­cy, Bloomberg, 1 Jun
Pos­si­bly the worst case of MSM pro­pa­gan­da in the his­to­ry of the GFC. Oba­ma calls in his Wall St donors to restruc­ture GM, as they were so awe­some­ly suc­cess­ful in their day jobs. “We were told from the start to impose the same com­mer­cial rig­or on this restruc­tur­ing as we would have done in the pri­vate sec­tor.” “The tools Oba­ma was ask­ing the task force lead­ers to use were honed over their years of deal­mak­ing.” “For these kinds of restruc­tur­ings, it makes per­fect sense to bring in the peo­ple who know how to exe­cute.” Don’t read before eat­ing. More from GM.

Span­ish Slump Stokes Debt Dilem­ma as Job­less Ris­es, Bloomberg, 3 Jun
Defla­tion watch with pael­la. “As Spain sinks deep­er into reces­sion and the job­less rate heads for 20 per­cent, the high­est in Europe, employ­ers are telling work­ers to accept wage cuts if they want to stay com­pet­i­tive. That’s mak­ing it hard­er for house­holds to tack­le a debt load built up dur­ing the country’s eco­nom­ic boom and equiv­a­lent to 18,000 euros per per­son.”

U.K. House Prices Unex­pect­ed­ly Jumped by 2.6% in May, Bloomberg 4 Jun
Sta­tis­tics 101: when it suits your argu­ment, adjust for sea­son­al trends; when it doesn’t (like now), ignore sea­son­al trends like the usu­al jump in house sales com­ing into the sum­mer months. Alter­na­tive head­line: “In the three months through May, prices fell 16.3 per­cent from a year ear­li­er.”

Oil Jumps on Bull­ish Gold­man Fore­cast, Dow Jones, 5 June
Bank­ing 101: get bailed out by your ex-CEO sit­ting in Wash­ing­ton; help your­self to $12.8 tril­lion; col­lude with your mates and use the bailout mon­ey to hire tankers to store oil while the price is cheap and to reduce sup­ply; then have your research depart­ment talk up the price; sell lat­er; enjoy bonus. It also helps to buy influ­ence.

Fall In Pri­vate Bor­row­ing, Brad Setser (CFR), 2 Jun
US con­sumers are trad­ing con­sump­tion for sav­ing (up from neg­a­tive in 2004 to over 5% now). The US gov­ern­ment has stepped in to keep the Ponzi scheme from col­laps­ing. This sup­ports Doug Noland’s view that the US gov­ern­ment is try­ing to replace the hous­ing bub­ble with the Gov­ern­ment Finance Bub­ble.

Pro­file of a Col­laps­ing Bub­ble, sourced from Jesse’s Amer­i­cain Cafe, 4 Jun
Looks like we’re at “Return to nor­mal”. Good time to pile back into the ASX. The Aus­tralian con­tained a sen­si­ble dis­cus­sion on stock mar­kets this week (no, not from Char­lie Aitken).

Naked Short Sell­ing Redefin­ing Sys­tem­at­ic Risk, Deep Cap­ture, 6 May
Anoth­er fan­tas­tic video (under 20 mins) from In places like India they pay off politi­cians with paper bags full of cash (lit­er­al­ly). In the west they do it this way (the arti­cle is from 1994 and will only make sense after watch­ing the video and under­stand­ing the role of REFCO.)

Job­less Ben­e­fit Rolls Fall, Ini­tial Claims Dip, Yahoo Finance, 4 Jun
More green shoots psy­chol­o­gy. For­get the GM bank­rupt­cy and the impact on one of America’s last remain­ing pro­duc­tive indus­tries because “the tal­ly of first-time claims for job­less ben­e­fits declined to a sea­son­al­ly adjust­ed 621,000 from the pre­vi­ous week’s revised fig­ure of 625,000.” The SMH even insert­ed claims of pro­duc­tiv­i­ty improve­ments into their head­line. Watch out for next month when the May job­less fig­ure is “adjust­ed” upwards, just like every oth­er month – here’s an exam­ple.

The Chica­go School Is Eclipsed, The Week, Brad Delong, 29 May
Excel­lent arti­cle. “Richard Pos­ner, leader of the Chica­go School of Eco­nom­ics, uses his new book, “A Fail­ure of Cap­i­tal­ism,” to try to res­cue the Chica­go School’s foun­da­tion­al assump­tion that the econ­o­my behaves as if all eco­nom­ic agents and actors are ratio­nal, far-sight­ed cal­cu­la­tors. In some sense, Pos­ner must try. For with­out this under­ly­ing assump­tion, the clock strikes mid­night, the state­ly brougham of Chica­go eco­nom­ic the­o­ry turns into a pump­kin, and the ana­lyt­i­cal hors­es that have pulled it so far over the past half- cen­tu­ry turn back into lit­tle white mice.” “The litany of finan­cial luna­cy is longer than even the East­ern Ortho­dox litany of the saints.”

Roubi­ni On the Fail­ure To Pre­dict Finan­cial Fail­ure, RGE Mon­i­tor, 1 Jun
An arti­cle and a 51 minute video deliv­ered in a “wonky and aca­d­e­m­ic and high brow” style. Roubi­ni claims that the GFC was pre­dictable, unlike some cen­tral bankers. Con­tributed by Bruce.

Holes In the Chi­na Recov­ery Sto­ry, Huff­in­g­ton Post, Michael J. Panz­er, 3 Jun
Is the Chi­na recov­ery sto­ry all it’s cracked up to be? No. In anoth­er arti­cle “China’s gov­ern­ment said unem­ploy­ment is wors­en­ing, a quick rebound in trade is becom­ing less like­ly, and the nation is yet to feel the full effects of a glob­al slump”.

Chi­na To Increase Sub­sidy For Auto, Home Appli­ance Replace­ments, Chi­na View, 19 May
“Chi­na will increase sub­si­dies for con­sumers who sell their cars and home appli­ances in order to pur­chase new ones, in an effort to spur domes­tic con­sump­tion.” When Chi­na pumps up domes­tic con­sump­tion the mon­ey is used to buy Chi­nese goods. Lucky for Chi­na. When Aus­tralia pumps up domes­tic con­sump­tion the mon­ey is used to buy Chi­nese goods. Lucky for Chi­na.

Bernanke Sees End of Reces­sion Soon, Yahoo Finance, 3 Jun
“In tes­ti­mo­ny to Con­gress, Bernanke sound­ed more con­fi­dent that the U.S. reces­sion would end this year than he had just one month ago, and he said the risk of a dan­ger­ous down­ward spi­ral in prices had reced­ed.” It’s a shame there are no Chi­nese stu­dents in Con­gress. Does the end of the reces­sion imply that there will be less than one in nine Amer­i­cans on food stamps?

Fis­cal Options For the UK, Willem Buiter, FT, 2 Jun
Long, aca­d­e­m­ic arti­cle fea­tur­ing the impact of long-run­ning deficits on the sol­ven­cy of the UK. Buiter fears that using infla­tion to remain sol­vent is a pos­si­bil­i­ty. Con­tributed by Greg.

Ukraine Econ­o­my Down 21 Per­cent In Q1,, 4 Jun
“The leg­is­la­ture’s Audit Cham­ber said such a severe eco­nom­ic down­turn calls for amend­ing this year’s bud­get, which is based on a gov­ern­ment fore­cast of 0.4 per­cent growth.” So they were close enough I guess. The Inter­na­tion­al Mon­e­tary Fund fore­casts an 8 per­cent con­trac­tion for the entire year. Con­tributed by ak.

The States vs Fed­er­al Schism, Zero Hedge, 4 Jun
“By now if you don’t know the tra­jec­to­ry that the fed­er­al gov­ern­ment has set on with mon­e­tiz­ing vir­tu­al­ly any­thing and every­thing, you must be liv­ing some­where deep in the green shoot for­est with only enough WiFi/cable cov­er­age to get CNBC.” ”The report con­firms all fears about just how grue­some the fis­cal cat­a­stro­phe is at the state lev­el.”


Gei­th­n­er Tells Chi­na Its Dol­lar Assets Are Safe, Reuters, 1 Jun
Zeit­geist watch. Geithner’s ridicu­lous com­ment drew loud laugh­ter from the stu­dent audi­ence. It’s the 20 year anniver­sary of the Tianan­men Square mas­sacre too… looks like the stu­dents have select­ed a State-sanc­tioned tar­get this time, rather than the State itself. Shame no one threw a shoe at him. Speak­ing of oppos­ing the State, Bloomberg orig­i­nal­ly report­ed this sto­ry but lat­er pulled it. Click here to watch a very frank dis­cus­sion on Chi­na, US trea­suries and the USD (note the hosts try­ing to close down con­tro­ver­sial debate).

Lat­vian Debt Cri­sis Shakes East­ern Europe, Tele­graph (UK), 3 Jun
“Latvia has become the first EU coun­try to face a sov­er­eign debt cri­sis after fail­ing to sell a sin­gle bill at a trea­sury auc­tion worth $100m (£61m), prompt­ing fears of a fresh storm in East­ern Europe as cap­i­tal flight tests cur­ren­cy pegs.” Looks like a repeat of the 1997 cri­sis in SE Asia. Soon it will be time for the big mon­ey to come in and pick up the pieces at pen­nies on the dol­lar – stan­dard oper­at­ing pro­ce­dure after they’ve stacked the coun­try with debt and short­ed the cur­ren­cy. More from Zero Hedge (check out the graph!).

Lessons From Ecuador’s Bond Default, Felix Salman, 29 May
A small nation beats the klep­toc­ra­cy for once.

Get­ting Real About Gold, The Aus­tralian, 3 Jun
“Amer­i­ca’s third largest life insur­er, North­west­ern Mutu­al Life Insur­ance, has been in exis­tence for 152 years. It has nev­er in all those years bought gold — until now.” Good news for the gold bugs who, among oth­er things, believe that cen­tral banks are manip­u­lat­ing gold down­wards to encour­age con­tin­ued faith in fiat cur­ren­cies.

Merkel Lash­es Out at Cen­tral Banks, Busi­ness­Week,
Trou­ble with­in the ranks of the elite. “What oth­er cen­tral banks have been doing must stop now. I am very scep­ti­cal about the extent of the Fed’s actions and the way the Bank of Eng­land has carved its own lit­tle line in Europe.” Off-the-radar parts of the blo­gos­phere have long talked about the divi­sions between the Anglo Sax­on coun­tries on the one hand and the cen­tral Euro­zone, Chi­na and Rus­sia on the oth­er. Con­tributed by Christo­pher.

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