Links: 2013-05-22
Why Rational People Buy Into Conspiracy Theories – NYTimes.com
““The best predictor of belief in a conspiracy theory is belief in other conspiracy theories,” says Viren Swami, a psychology professor who studies conspiracy belief at the University of Westminster in England. Psychologists say that’s because a conspiracy theory isn’t so much a response to a single event as it is an expression of an overarching worldview.”
IMF Sounds Warning on U.K. Austerity – WSJ.com
“The International Monetary Fund on Wednesday urged the U.K. government to ease back on its austerity program to avoid inflicting long-term damage on the nation’s growth prospects.
Launched in 2010, the austerity program is the government’s cornerstone policy, and Chancellor of the Exchequer George Osborne has already indicated that he won’t change course.”
Portugal plunders pension fund to tackle debt cliff | Capital City | IFRe
“The Portuguese government plans to tap nearly all of its state-owned pension fund to ease it over the hump of a hefty €27.5bn of financing needs over the next two years, according to domestic news reports.”
Austere Illusions by Robert Skidelsky – Project Syndicate
“Keynes believed that we cannot all cut our way to growth at the same time. To believe otherwise is to commit the “fallacy of composition.” What is true of the parts is not true of the whole. If all of Europe is cutting, the United Kingdom cannot grow; if the entire world is cutting, global growth will stop.
CommentsIn these circumstances, austerity is exactly the opposite of what is needed. A government cannot liquidate its deficit if the source of its revenues, the national income, is diminishing. It is deficit reduction, not debt, that is profligate, because it implies wastage of available human and physical capital, quite apart from the resulting misery.”
IMF warns over strong capital inflows into Asia – FT.com
“Strong capital inflows into Asia have increased the risks stemming from rapid credit growth and rising asset prices, the International Monetary Fund said on Monday.
In its annual report on Asia, the IMF sounded an optimistic tone on the economic outlook for the region, which it expects to lead a “global three-speed recovery” with growth of 5.75 per cent this year.”
Dudley Says Decision on Taper Will Require 3-4 Months – Bloomberg
“Federal Reserve Bank of New York President William C. Dudley said policy makers will know in three to four months whether the economy is healthy enough to overcome federal budget cuts and allow the central bank to begin reducing record stimulus.
“I don’t really understand very well how the tug-of-war between the fiscal drag and the improving economy are going to sort of work their way out,” Dudley said in an interview with Michael McKee airing today on Bloomberg Television. “Three or four months from now I think you’re going to have a much better sense of, is the economy healthy enough to overcome the fiscal drag or not.”
Dudley’s remarks underscore that Fed officials have yet to reach consensus on when or how to dial back their $85 billion monthly bond-purchase program designed to spur growth and lower unemployment.”
Swiss Franc Falls as SNB Chief Holds Firm – WSJ.com
“The Swiss franc sank to a two-year low Wednesday after Thomas Jordan, president of the country’s central bank, said that he was open to the idea of weakening the currency further and would consider negative interest rates if such moves were necessary.”
Toll Brothers profit rises 46 percent | Reuters
“Toll Brothers Inc posted a 46 percent rise in quarterly profit as the largest U.S. luxury homebuilder sold more homes at higher prices, indicating that the housing recovery is spreading across the industry.
Record-low interest rates and rising rents have encouraged people to buy homes. Ground-breaking to build new homes in the United States rose 7 percent in March to the highest level since June 2008.”
Sir Mervyn King outvoted on QE for fourth month – Telegraph
“Sir Mervyn King continued to call for more money printing to stimulate the British economy this month, despite recent glimmers of hope for growth.”
The relentless charm of Nigel Farage
“We are approaching a significant moment in our national history. And somehow the hitherto fringe figure of Nigel Farage is at its centre. Yes, the UK Independence party, for all the farrago of its local election successes, is still a minor party; but it has become the point around which the debate on Europe and immigration is now revolving. Ukip does not have to win a single seat in the 2015 election to change the course of British politics. It has already set the terms. It has caused the current spread of Conservative fissures and pushed David Cameron to propose legislation guaranteeing an in-out referendum on membership of the European Union. And it has inflamed the one debate that even our Gilbert and George coalition might not survive. Meanwhile, Ukip is making the Labour party react—and nervously so. How has this happened? To begin with, the answer is best understood by watching its leader, Farage, in his element: on the campaign trail.”
Multinationals’ Scanty Tax Pay Angers U.K. – WSJ.com
“The storm brewing over Apple Inc.’s tax practices in the U.S. has already rained down hard in the U.K., where multinationals including Starbucks Corp., Amazon.com Inc. and Google Inc. have drawn public scorn for the paucity of taxes they pay here.
But while the opprobrium has dented the companies’ reputations, and the U.K. government has pledged to take up tax avoidance with international bodies such as the Group of Eight leading nations, little has yet been done to change the rules.”
BBC News – UK retail sales hit by bad weather again
“Retail sales in April were 1.3% lower than in March as bad weather continued to dent spending.
The Office for National Statistics (ONS) also said retail sales volumes last month were 0.5% higher than a year earlier, much less than expected.
The ONS said that sales of garden furniture and barbecue food were especially hard hit last month.
Total food sales plunged 4.1% in April, their largest monthly fall in almost two years.”
Nigel Farage’s biggest problem is Ukip doesn’t do details – Telegraph
“Like other parties of its kind, it is patriotic and anti-immigration, but unlike them it doesn’t indulge in endless banker-bashing, big business bating or tirades against free trade.
It is not a libertarian party: while it is uncensorious towards some aspects of personal morality, especially those involving alcohol, tobacco and heterosexual sex, it supports some authoritarian policies, would end the free movement of people within Europe, opposes gay marriage and many of its members are disgruntled social conservatives. For free-market liberals, younger neo-Thatcherites and the majority of business and City leaders, these are major stumbling blocks and help to explain why many still back the Tories, despite despairing at their lack of courage.
Cameron’s decision to embrace corporatism, high taxes, endlessly cheap money and state-directed credit – and jump into bed with big business – has alienated his base. Farage has an opportunity to outline a more traditionally Thatcherite approach to the economy – but he needs to reach out to business groups and recruit some serious figures. Most important of all, he needs to sort out the detail of his policies – at the moment, they simply do not stand up to detailed scrutiny.”
Sterling slides as retail sales soften – Telegraph
“Sterling sank against the dollar on Wednesday after official figures revealed an unexpected decline in retail sales last month, led by a sharp fall in food sales.”
ekathimerini.com | Greece’s public debt rose slightly to 168.6 percent of GDP in Q1 of 2013
“Greek central government debt rose 3.8 billion euros or 1.3 percent to 168.6 percent of GDP in the first quarter of 2013, according to the Finance Ministry.
Total debt stood at 309.4 billion euros at the end of the first quarter, compared to 305.6 billion at the end of 2012.
The average maturity of Greece’s debt is 15.4 years.”
ekathimerini.com | Greek current account deficit down 42.5% y-o-y to 1.3bln euros in March
“The current account balance showed a deficit of 1.3 billion euros in March, down by 952 million euros or 42.5 percent year-on-year, the Bank of Greece said on Wednesday.”
Bank of Japan vows market steps to curb bond turbulence | Reuters
“The central bank upgraded its assessment of the economy for a fifth straight month, saying it “has started picking up,” as Prime Minister Shinzo Abe’s policy prescription of aggressive fiscal and monetary stimulus has boosted sentiment and a weaker yen has halted a decline in exports.
As expected, the policy board voted unanimously to stick with April’s massive quantitative easing, in which it pledged to vanquish 15 years of entrenched deflation by doubling its Japanese government-bond holdings in two years as it expands the supply of money at an annual pace of 60 trillion ($583 billion) to 70 trillion yen.
While the government’s aggressive policies have sent stocks soaring to 5-1/2-year highs and the yen tumbling to a 4-1/2-year low against the dollar, turmoil in the Japanese government-bond market in recent weeks has cast a cloud over the effectiveness of the BOJ’s easing, a key element of “Abenomics” that is showing early signs of lifting the world’s third-largest economy from a two-decade funk”
Bank of Japan vows market steps to curb bond turbulence | Reuters
“The central bank upgraded its assessment of the economy for a fifth straight month, saying it “has started picking up,” as Prime Minister Shinzo Abe’s policy prescription of aggressive fiscal and monetary stimulus has boosted sentiment and a weaker yen has halted a decline in exports.
As expected, the policy board voted unanimously to stick with April’s massive quantitative easing, in which it pledged to vanquish 15 years of entrenched deflation by doubling its Japanese government-bond holdings in two years as it expands the supply of money at an annual pace of 60 trillion ($583 billion) to 70 trillion yen.
While the government’s aggressive policies have sent stocks soaring to 5-1/2-year highs and the yen tumbling to a 4-1/2-year low against the dollar, turmoil in the Japanese government-bond market in recent weeks has cast a cloud over the effectiveness of the BOJ’s easing, a key element of “Abenomics” that is showing early signs of lifting the world’s third-largest economy from a two-decade funk”
Japan exports disappoint, full benefits of weak yen yet to show | Reuters
“Japan’s exports rose less than expected in April from a year earlier due to weak demand from Europe and China, highlighting the challenges confronting the world’s third-biggest economy as policymakers try to engineer a sustained revival.
The 3.8 percent annual increase in exports in April was below the median estimate for a 5.9 percent rise and followed a 1.1 percent increase in the year to March.
The result also underscores the limitations of a weak yen in bolstering the trade sector, especially as external headwinds crimp demand for exports.”
Kyle Bass bets on full-blown Japan crisis – FT.com
“Mr Bass, though, predicts more than higher yields: “They will have a bond crisis in the next couple of years. A bond crisis doesn’t mean spread widening. It means they lose control of rates and their currency.”
Yet Mr Bass is no kook or perma bear, the investing equivalent of a stopped clock. He has form as one of the select group who predicted and profited from the housing crash in 2007. According to investors, his $1.5bn hedge fund has averaged after-fee returns of 25 per cent a year since 2006.”
Abenomics will only damage Japan’s neighbours – FT.com
“Since December the yen has lost about 25 per cent of its value against the US dollar and even more against the Chinese renminbi and the South Korean won. As a result Japan’s exports have accelerated and were responsible for almost half of its annualised 3.5 per cent growth in gross domestic product in the last quarter. The faster rate of exports has driven up expected earnings of large companies and, accordingly, the index of the Japanese stock market by 50 per cent. But core consumer prices remain lower than they did a year ago. Rather than raise expectations of inflation, Abenomics has simply generated expectations of further devaluation.”
Osborne’s deficit continues to grow
“Despite no shortage of austerity, borrowing was £1.3bn higher in April than in the same month last year.”
Nokia Lumia 521 (T-Mobile) Review & Rating | PCMag.com
“The Nokia Lumia 521 for T-Mobile is a good smartphone for a great price, as long as you don’t mind Windows Phone’s lack of apps.”
“Yet another serious escalation of the Obama administration’s attacks on press freedoms emerges”
Fed officials dampen talk of imminent bond buying cutback | Reuters
“New York Federal Reserve Bank President William Dudley and St. Louis Fed chief James Bullard, both of whom will vote at the June 18-19 meeting, made clear further economic progress was needed before they would support curtailing bond purchases.”
Housing recovery boosts Home Depot results; outlook raised | Reuters
“For the first time since 2008, sales to contractors and professional customers grew at a faster pace than those to regular homeowners and other shoppers, Chief Executive Officer Frank Blake said on a conference call.
“This quarter’s outperformance from the pro segment is a positive sign” of a housing recovery, Blake said.”
Europe faces lost decade, says Mark Carney – Telegraph
“In words that will underline his status as a monetary activist and fuel speculation that he will try to relaunch quantitative easing (QE) when he arrives in the UK, Mr Carney applauded Japan’s “bold policy experiment” to boost dramatically its own QE programme.
He said: “Europe can draw lessons from Japan on the dangers of half measures… Europe remains in recession. Deep challenges persist in its financial system. Without sustained and significant reforms, a decade of stagnation threatens.””
Annals of the Security State: More Airplane Stories – James Fallows – The Atlantic
“”My dad fought a war so this can never happen in America. I will not dishonor my father’s memory by giving up what he fought for. No, sir. With all due respect, I will not consent to a search without a proper warrant.””
Samsung Galaxy S4 performance is top-notch
“The Samsung Galaxy S 4, one of the most advanced Android smart phones ever, is our new top-rated smart phone. The S4 delivered top-notch performance in the most critical areas of our tests, including the camera.
It dethrones the LG Optimus G, which occupied the top spot in our Ratings for several months.”
Samsung Galaxy S4 is Consumer Reports’ Top Rated Smartphone – Droid Life
“After months of remaining on the top of Consumer Reports’ list of best rated smartphones, the LG Optimus G has been dethroned. Taking its place is the Samsung Galaxy S4 (our review), not the HTC One or white Nexus 4 LTE with 32GB of storage (couldn’t help myself, since it doesn’t exist but the media wants it to). Thanks to the “oodles” gesture and sensor-based tools, along with the “excellent” 5-inch HD Super AMOLED display, and its multi-tasking abilities, the GS4 garnered a score of 81, which tops the Optimus G and One with scores of 79. The Galaxy S3 remains in third place with a score of 78, while the iPhone 5 rounds out the top 5 with a score of 77. “
Samsung Galaxy Mega 6.3 release date gets clearer, price confirmed
“The “6.3″ in its name comes from its screen size, of course, but some might be disappointed to find out that this phone will only have 720p resolution. It still seems to be a very solid device, though, with its 1.7GHz dual-core processor, 1.5GB of RAM, Android 4.2.2, 16GB of internal storage, 8 megapixel rear camera with a 1.9 megapixel front camera, WiFi, NFC, Bluetooth and more.”
New Rival Emerging for Bloomberg Chat – WSJ.com
“Thomson Reuters Corp. and Markit, rival data providers, have teamed up with investment banks to build a new messaging service to challenge competitor Bloomberg LLP, according to Financial News.
Banks including Goldman Sachs Group Inc.and Deutsche Bank AG are helping to set up the project, called the Open Federated Chat initiative, according to people familiar with the plans.”
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