25 July 2014

If It's Friday, This Must Be Krugman

Well, not this time. He's needling the right wingnuts about various chimera, as usual. No, but today's Business Section of the Times is full of belly laugh quotes, many of the subjects chronicled here in past missives.

Let's start with Amazon's stool dump. As opined here in the past, Amazon can't feasibly make any money unless it manages to monopolize retail trade. Without a price-fixing monopoly, Amazon is hostage to transport costs. There's a reason they've been madly building 'stores', which they euphemistically re-name 'distribution centers'. Which mostly end up being juxtaposed to railheads. Simple fact: the cost of moving a pound of widget by air freighter is at least ten times the cost of moving a tonne of widgets by freight train. So, more localized stores. Just don't call them 'stores', of course. Unless Amazon can get into position to charge the true cost of delivery, which means monopoly, it'll never make any moolah.
Writers are peeved at Amazon. On Thursday, investors became disgruntled too.
"Skepticism is increasing," said Colin Gillis of BGC Partners. "It's hard to have $20 billion in revenue and not make any money. It's a real feat."

Well, no shit Sherlock.

Amazon's new Fire phone has been showered with 'blah' reviews, so I suppose it shouldn't be a surprise that,
[Thomas J. Szkutak, the chief financial officer] declined to say whether Amazon would ever tell investors how many phones it sold. "I can't comment on what we might or might not do here," he said.

Confidence inspiring, that.

"Don't cry for Argentina", I guess. I've not been following the sovereign debt problem really closely, so today's report is awe inspiring. It seems that Argentina and some hedge funds have been arguing over Argentina's right repay on its terms. And this is to be adjudicated in a New York City federal court. Well.
This week's hearing made clear that [judge Thomas Poole Griesa] had not completely understood the bond transactions that he had been ruling on for years.


The entire notion that private, American, hedge funds should have the power of US courts to run the governments of other countries has caused some agita. Now, we find the judge is, essentially, clueless. Just run the link. If ever there were a caricature of a doddering old fool... American jurisprudence: of the 1%, by the 1%, for the 1%.
It is not as if no one had pointed out the issues in the many legal briefs and arguments filed in this case, both before Judge Griesa and before appeals courts. But those arguments seem not to have registered. "For this to come out after this has gone through so much legal process, in the most sophisticated financial jurisdiction in America," Ms. Gelpern [law professor at Georgetown University] said, "has to be astounding."

Of course: only little people have to pay attention.
As Wednesday approaches, the judge has a lot to think about. It would be better if he had done some of that thinking before he issued his order, or if the appeals court or the Supreme Court had forced him to do so.

In a similar vein, is Cyprus. In a nutshell, Cyprus banks got into trouble along with the rest of Europe. What made it different was that the banks stored up Russian oligarch money, so when it all went to hell, the little people were made to pay. In order to determine how much the little people would pay, both Pimco and BlackRock were hired, by different folks at different times, to figure it out. The Pimco number was higher, and the BlackRock report was hidden.
As for the BlackRock analysis, it was kept strictly under wraps. So much so, that in internal communications BlackRock bankers used code: Claire for the Cyprus central bank, Peter for Pimco and Ben for BlackRock.

What's a few billion Euros from the little people, when the banksters might run out of cavier?
"We did not know anything about any BlackRock report," said Michael Sarris, the Cyprus finance minister who led the talks with Europe. "If there was anything that identified flaws in the Pimco report or indicated that we needed less money -- then clearly this should have been brought to the table."

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