News Links: The ugly side of ultra-cheap money

Gresham’s law needs a corollary. Not only does "bad money drive out good," but "cheap" money may as well. Ultra low, zero-bounded central bank policy rates might in fact de-lever instead of relever the financial system, creating contraction instead of expansion in the real economy. Just as Newtonian physics breaks down and Einsteinian concepts prevail at the speed of light, so too might easy money policies fail to stimulate at the zero bound.

Behind the piles of smiley-faced Amazon.com Inc. boxes arriving on doorsteps this holiday season are workers like Ray and Sarann Williams. The retired couple are part of the swarm of seasonal employees taking up temporary residence in this small desert city-home to one of Amazon’s warehouses-to help the online-retail giant fulfill its influx of holiday orders.

The notion that what Wall Street firms did was merely unethical and not illegal is not just mistaken but preposterous: most everyone who works in the financial services industry understands that fraud right now is not just pervasive but epidemic, with many of the biggest banks committing entire departments to the routine commission of fraud and perjury – every single one of the major banks, for instance, devotes significant manpower to robosigning affidavits for foreclosures and credit card judgments, acts which are openly and inarguably criminal.

Bank of Greece reveals that investors fearful of political instability and economic collapse pulled €12.3bn from local banks as Papandreou referendum threatened debt deal

Expectations are that home sales could be revised down anywhere from 10 percent to 20 percent. The Realtors’ chief economist said the revision would be, "meaningful." The revisions will likely not change the fact that last year saw the fewest homes sold on record. They will not change estimates of home prices, nor the home price drop since the 2006 peak, nor will they change inventories of unsold homes in month’s supply (how long it takes to sell that many homes) although absolute inventories will be revised lower. They will not affect monthly or annual percentage changes in sales recently.

the current seasonal adjustment factors may tend to overstate the growth nominal retail sales in the fourth quarter by about 2 percent, at an annual rate, and understate growth in the second quarter by about 1-1/2 percent on the same basis.

Today, content discovery platform Outbrain is announcing it has secured $35 million in Series D funding in a round led by Index Ventures. Existing investors Carmel Ventures and Lightspeed Venture Partners also participated in the round. As a part of the deal, Dominique Vidal, partner at Index Ventures, will join the company’s Board of Directors.

Congratulations, also, on scoring that new refi on your Washington, DC townhouse. I read all about your pad: three bedrooms, 2,100 square-feet and it’s still worth just a wee bit more than the $839,000 you paid for it in 2004. Well done!

According to Flurry, the average consumer uses only 15 apps per week. That means that the majority of the apps installed on the phone are for occasional use. The games you play while killing time, the tip calculator or bill splitter you only pull out when dining with friends, the calorie counter for that diet you began in January (and again June), the garage sale finder, the photo-uploader, and that game that you kid totally loves…you know, the one with the bunnies? What was that called again? And herein lies the problem.

Now, having finished the 600-plus page Steve Jobs biography by Walter Isaacson, I think I finally understand Steve Jobs. Like most of us, his personality had many sides. He could be aloof, super-intense, odd, gross, passionate, creative, driven, unfair, conciliatory and deeply introspective. He lived a rich and unique life. As I read the tome on my Kindle, I highlighted interesting, surprising and relevant passages. Now, as I look back at them I realize that many help illustrate some of the larger lessons we can all glean from Steve Jobs’ remarkable life.

US branches of foreign banks, struggling to tap US markets for short-term funding amid the European debt crisis, are using up their cash at the fastest pace since at least 2006 and seeking infusions of dollars from their home countries. Non-US banks’ cash plunged almost 40 percent, or $420 billion, in the five months before Nov 30, leading to an 18 percent decline in assets, according to Federal Reserve data tracked by Barclays PLC.

A new record-low 11% of Americans approve of the job Congress is doing, the lowest single rating in Gallup’s history of asking this question since 1974. This earns Congress a 17% yearly average for 2011, the lowest annual congressional approval rating in Gallup history.

According to recent research from NM Incite, for 82% of Facebook users, knowing someone offline is reason to add them on the social network. The next most common reason for adding a friend is having many mutual friends, a practice reported by 60% of users. When it comes to why we unfriend, there are more possible explanations. Fifty-five percent of Facebook users call offensive comments cause for removing someone from their networks. The next most common reason is not knowing a friend well (41%) and sales soliciting (39%). The remaining explanations are a variety of social media etiquette SNAFUs.

Apple’s just landed a major victory against HTC in a case where the latter was sued for violating patent  #5,946,647, a patent which details a way to analyze and link data structures at the system level. As this is a core functionality of Android’s, other OEMs are at risk. The final decision was a future ban of imports by the ITC starting in 2012. The ban affects HTC’s devices up to Android 2.2, but 2.3+ devices have not been incriminated yet.

"As Quora has grown, we’ve learned that people want to read the most interesting content regardless of whether it happens to be in question and answer format or not." D’Angelo tells me that this shift fits in better with Quora’s new goal, "to connect you with everything you want to know about." Its old goal was described as "a continuously improving collection of questions and answers."

The world of patent litigation seems less and less connected to the real world as the rate of change and development outpaces the rate at which companies can patent new technologies, or even, as BT shows, sort through their existing ones. The amount of infringement lawsuits in play right now is mind-boggling, and while some have some common-sense merit, others simply don’t have a veneer of legitimacy. BT’s new lawsuit against Google, alas, seems to fall into the latter category.

During a recent interview with the eminent historian of economic thought, Philip Mirowski, I raised a series of questions relating to how mainstream economists had dealt with the crisis on an intellectual level and what this might mean for the discipline in the coming years. I asked if he thought that they could hope to recover their bearings and, under the tutelage of a figure like Paul Krugman, might re-establish the neoclassical research program by simply tacking on some watered-down Keynesianism, just as Paul Samuelson had done in the post-war era. Mirowski said that he did not want to answer these questions. "Of course," he wrote, "I am interested in all of them, but I have been trying to bring the application of history and philosophy of science a bit closer to the earth when it comes to the crisis."

The obvious question is, with consumer demand relatively weak, what motivated all that investment? And the answer, to an important extent, is that it depended on an ever-inflating real estate bubble. Real estate investment has roughly doubled as a share of G.D.P. since 2000, accounting directly for more than half of the overall rise in investment. And surely much of the rest of the increase was from firms expanding to sell to the burgeoning construction industry. Do we actually know that real estate was a bubble? It exhibited all the signs: not just rising prices, but also the kind of speculative fever all too familiar from our own experiences just a few years back – think coastal Florida. Now the bubble is visibly bursting. How much damage will it do to the Chinese economy – and the world?

City of London Police have sparked controversy by producing a brief in which the Occupy London movement is listed under domestic terrorism/extremism threats to City businesses.

Spain’s new premier Mariano Rajoy has launched a fresh blast of fiscal austerity at his inauguration, describing the national outlook as "desolate" and his task like that of a father feeding four hungry mouths with bread for two.

Indonesia has recovered the investment grade status for its sovereign debt at Fitch Ratings after 14 years, putting the country on the same level as India.

If Android has the numbers, why aren’t more developers flocking to Android? The answer is simple. They make more money on Apple devices. MG suggested as much in a recent post based on anecdotal evidence, but now we have some real data to back that up as well. Flurry, which has 135,000 apps across both Android and iOS using its analytics, just released some very interesting comparison numbers. It looked at a sample of in-app purchase data from apps with more than a million daily active users with versions on both Android and Apple. Flurry found that the Android apps produced only 24 percent as much revenue as the same apps on iOS.

The revolving door to and fro.  And this is just one firm in one country, folks

Verizon Communications Inc. (VZ), the second-largest U.S. phone company, is "very serious" about a bid to acquire online movie provider Netflix Inc. (NFLX), an investment banker said. Verizon may kick off a bidding war for streaming-video pioneer Netflix that could result in a sale by Easter for about $4.6 billion, said Porter Bibb, managing partner at Mediatech Capital, in a television interview yesterday on "Bloomberg West," citing unnamed people within Verizon.

The markets on Monday reacted poorly to another summit of European leaders aiming to fix the crisis. If confidence isn’t restored, banks will soon hit a cash crunch.What happens next would be a panic. Some banks may not survive.

While the residential real estate sector is definitely slowing, pent up demand and lack of debt among homeowners will ensure a soft landing. However, the commercial side, which makes up 20 percent of China’s real estate sector, is starting to show signs of a bubble. Blocked by government restrictions on the residential side, developers are rushing into ill-conceived commercial projects.

How overweight is the UK banking industry? The Financial Times estimated that the UK banks’ total liabilities were about the same size as the whole of the economy. This alone might give one pause. Yet we are learning or, in some cases, revisiting how the UK’s lighter-touch regulation has encouraged U.S. entities to set up shop and go hog-wild in a move known as regulatory arbitrage.

The good news: If you have a credible, trusted domain name, you’ve got an advantage, as searchers really do pay attention to the URL in search results before deciding to click. And this is true regardless of the position of the URL on a search result page.The bad news, of course, is that it’s more difficult these days to acquire "credible" domains now that most single or even double word domains are in use or reserved.