Italian brute force tackling financial markets

The Italian government’s desperation to fight the market is laughable:

As stock and bond markets across the world tumbled on fears about Italy and Spain, it emerged that police acting on orders from prosecutors had raided the Milan offices of rating agencies Moody’s and Standard & Poor’s as part of continuing investigations into their role in the recent financial turmoil.
—SNIP–
A separate inquiry is being conducted by prosecutors in Rome into market panics in June and July. Italy’s stock market regulator, Consob, last month summoned Moody’s and S&P for meetings and urged them not to release their statements during market hours.

Elio Lanutti, president of one of the consumer groups that sparked the inquiry, said: “The three ‘sisters’ – Standard & Poor’s, Moody’s and Fitch – are an erratic danger to state sovereignty in the areas of economics and finance”.

Credit Rating Threat Level Orange

I always found the recent downgrading of U.S. debt to be more theatre than sound analysis. It reminded me of many of those silly terrorism warnings. S&P had to downgrade the U.S., because if they didn’t, and that remote chance of default came through, they’d look really bad – just like all those terrorism threat colours that changed with the bulk of air travel. If you claim that there’s a darned good chance every plane is going to blow up this weekend, and none do, well, good work, CIA. If you don’t make the silly warning, and some weird dude sneaks some malfunctioning bomb material onto a plane in his drawers, you can start packing up your desk.

Anyway, I found this analysis by Noah Millman on the silliness of the downgrade and the potential silver linings quite interesting:

But there is at least a bit of a silver lining: S&P has downgraded American sovereign debt to below AAA for the first time in, to all intents and purposes, forever.

Since the manifest culpability of the ratings agencies in the financial crisis obviously hasn’t done enough to dent their credibility, perhaps this ludicrous decision will be the straw that finally breaks the camel’s back.

Why ludicrous? Because the United States has the strongest credit in the world, as evidenced by the extraordinarily low rates of interest demanded for our debt and by the fact that when there is a financial crisis – even one caused by purported fears of an American default! – investors flee to the safety of . . . American government debt.

Read the whole thing. His predictions may not come true, but I’d say the odds that they do are Double-Aubergine.

Demand US mortgage forgiveness now!

My blood is boiling. I think I am going to pop a vein after reading more of the nonsense coming from the US press.

I am getting fed up (please accept the pun) of hearing about The Fed planning to print more money while the US Administration bumbles about pretending to try to solve the problem of common folks facing foreclosure.

Enough is enough! When are people going to come to their senses?? If there was one ounce of intelligence in the collective brains of the socialists they would figure out that the solution is simple: forgive these loans and stop printing money. Let the proletariat keep their damn houses for free. So what if a bunch of rich parasitic bankers lose their gravy train?

ADDENDUM:
(9 Aug 2011 21:09) Mok commented thusly elsewhere on the internet:

Forgiving someone’s loan to you is equivalent to handing them a fistful of cash. Both are interventions in the machination of the supposed free market. I don’t see a distinction.

To which I respond:
No.
The mortgages are packaged together by the banks and considered assets on their books. These assets allow the banks to lend out even more money.
Whereas, handing over a fistful of cash to the house owner qualifies for a home equity line of credit which pays a bit of interest but nowhere near as much interest the banks charge for lending out the same amount with the houses held as collateral.
On top of that, the banks over-appraise real estate in determining how much to lend. Short version: they are fabricating money and inflating the supply.
I will assume that it is common knowledge that inflating the money supply only leads to price inflation and the loss of savings.
So, the reality is that forgiving someone’s mortgage is equivalent to preventing multiple fistfuls of cash from being thrown into circulation.

Rotating Postal Strike

I think the Canadian Union of Postal Workers has the right idea about holding a rotating strike because Canadians will have a better idea of how much they can do with less of Canada Post’s services. Way to go union!

Return of funeral insurance in Quebec

From the looks of things, the Quebec government plans to reverse a ban on funeral insurance. Not surprisingly, funeral home operators are now worried and wanting to block the legal reversal because their pre-planned funeral arrangements will face stiff competition. For nearly forty years, la Belle Province was the only place in Canada where such insurance was unavailable having been outlawed in the early seventies by a government keen on protecting its populace from being solicited by insurance agents.

The insurance companies should be free to insure anything they want but the funeral homes are being shafted. The banks/insurance companies have an unfair advantage because they print money. Economically, the funeral companies will be competing with the banks which are nothing more than tax-payer subsidized competitors. Soon, the insurance companies will be able to expand their base upon which their devious accounting tricks hide the inflation of the money supply.

It Almost Makes Me Want to Boycott Canadian Music

Did you hear the one about a favoured industry that is up in arms because they’re not getting all the money they want from the government?  Oh, sorry, I should be more specific:

Tony Clement, iPhone owner and federal Industry Minister, is unmoved by a renewed call for a federal fee on smart phones and handhelds to compensate artists for file-swapping.

…

He considers the recommendation – made most recently by an artists’ group this week – a dinosaur of an idea.

Mr. Clement says it’s up to artists to find a new way to make money in the age of Internet distribution.

For eight years, Canada has levied a charge on the purchase of compact discs that is supposed to compensate artists for the private copying of music. But fewer and fewer people use CDs to share music. The levy – currently 29 cents per compact disc – collects only $15-million a year now.

I’ve been a touch harsh on Tony Clement this past year, but I’m with him now.  I’m all for protecting intellectual property – up to a point – but a cash grab based on the assumption of guilt is a bridge too far.  It’s bad enough that they’re leaching off our CD purchases;they shouldn’t be allowed a windfall on the backs of iPhones and Androids.

Pop Quiz: How to Earn More Money

If you want to earn higher income, what should you do?

A. Work, labour and toil for longer hours.
B. Go to law, business, or medical school.
C. Get a second job.
D. Speak two languages.

Answer: here.

On the Census, School Choice and Social Engineers

I’m sure everyone has been, by now, fully inundated with the census debate.  The idea of a voluntary long form is pretty dumb… almost as dumb as citizens being threatened with fines or imprisonment for not bending to the whims of politicians and bureacrats.  Anyway, I want to address the issue of the census as a means for social engineers to control our lives, and, thus, that doing away with the census fights back against this grave menace.

Look, the argument is bunk.  How many people actually think that these “social engineers” will stop if they have no census data?  Do we really think that the politicians, activists and bureaucrats who are trying to run our lives will just give up their mission if they don’t have acurate statistics?  If North America’s social engineers were that concerned with data, every jurisdiction would have some form of school choice by now, and we’d be rid of the tyranny of teachers unions.

So sure, let’s ditch the long form census; it’s offensively intrusive, but let’s not fool ourselves into thinking that this will actually strike a blow againts interventionist goverment.

(P.S. I’m not suggesting that only left wing politicians are guilty of ignoring data; politicians of every stripe ignore, use and abuse data as it suits them.  A pox on all their houses.)

No free lunch yet for Federal engineers

Engineers working for the federal government want more freebies but the government is holding strong against a Federal Court ruling that insists the tax-payer gets shafted. We would not want these poor engineers to do without:

The union urges engineers to pay their fees — even though the federal government doesn’t require them to be registered — or they will be unable to work as engineers if they leave the public service.

now, would we?

Michael Den Tandt, clueless about globalization

In his editorial today, Michael Den Tandt demonstrates his ignorance of his fellow man as it relates to basic economics by printing this mindless tripe:

Anyone who bothers to crack an economics text will know that globalization and free trade have lifted more human beings out of poverty than any other idea in history.

The reason is that trade creates wealth and jobs. Jobs allow people to feed their families and buy extras, produced by other people, which in turn employs those people. And on it goes.

I invite him to read my blog post: Everything we ignore about Free Trade which explains the falsehood of his economic faith. However, since he has demonstrated publicly his ignorance in economic principles, I will now summarize his ignorant mistake: He does not know whether the people in third world countries are freely choosing to participate in trade.

Michael Den Tandt should be blogging instead of wasting printed paper.

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