There have been some rumbles about Italy for a while. Italy's budget deficits are relatively modest compared to, say, Ireland, but their debt is about 120% of GDP. The government has passed a plan that will balance the budget by 2014, but as with most such plans, most of the cutting comes later, while the current cuts are small. This may well be sensible fiscal policy, given the current economic climate, but it is not reassuring to the markets. Mike Shedlock estimates that Italy needs to borrow about €356 billion ($500 billion) in 2011 to cover its deficit, and roll over outstanding debt. Their 10-years are now trading at something north of 5%. Most of the estimates I've seen say that a debt death spiral becomes likely when rates hit somewhere between 6-7%, because the debt service costs start blowing up the budget deficits.
If Italy goes, it's not clear that the rest of Europe can save them. In the FT, Neil Dennis says people are talking about doubling the euro bailout fund to €1.5 trillion--or about three times the size of TARP. And you may have noticed that the bailout fund has not actually stopped Greece's descent into debt madness. Italy's public debt is not much smaller than Germany's, even though the latter obviously has a much bigger (and richer) economy. In the event that things really go south on the Italian peninsula, I don't think there's enough money in the rest of Europe to provide a rescue package.
Meanwhile, conditions in the other PIIGSs are worsening. European leaders seem to be giving up on the notion of some sort of voluntary debt swap after the ratings agencies noted that they would be forced to call this what it is: a default. Since the Greek debt load does not seem to be in any way sustainable, they're going to have to do something. Riots in Athens seem to be making it increasingly clear that over the long term, "something" is not going to be indefinitely decreasing their government consumption in order to make debt service payments. That leaves making bondholders take some sort of a haircut, aka default. It sounds as if the continent's financial leaders are starting to decide that if Greece's only option is some kind of default, they might as well bite the bullet and do the thing.
This will not be pretty. For starters, if they default, but stay in the euro, then unless really considerable aid is forthcoming from the rest of Europe, they're going to lose most of the advantages of the euro (low debt premium) while retaining the disadvantages (excessively tight monetary policy for a country that is going to be experiencing capital flight and even deeper recession). Countries like Argentina got at least some tourism and export boost from very cheap prices after they defaulted and went off their currency peg; Greece won't even get that if the euro remains at an ouchy 1.4 to the dollar. (If it doesn't remain there, but instead sinks . . . well, that means the euro zone will be having all sorts of other problems. More on which in a minute.)
Of course, even defaulting and going off the peg is hardly a gateway to paradise. It is true that after an initial period of horrifying double-digit contraction, Argentina boomed . . . but Argentina was an agricultural commodity exporter in an era when soaring Chinese demand was causing rapidly rising prices in many commodity markets. And after playing hardball with their foreign investors, Argentina has had limited access to global capital markets, which means they've had to resort to some desperate measures, like seizing the Argentinian equivalent of 401ks, and running the printing presses, to keep the government's finances in balance. This weekend, the Wall Street Journal informed me that Argentina has now resorted to filing criminal charges against economic consulting firms whose reports indicate that actual inflation exceeds the officially reported numbers by a factor of two to three.
Either way, what Greece does will have implications for the rest of Europe--and for us. As NPR's Jacob Goldstein says, interbank lending between various European nations, and the US, "looks like a web made by an insane spider".
Once Greece defaults, the immediate outcome is crisis, not calm. Within Greece, they'll need to find some way to close their primary deficit, and stem capital flight, while the economy craters. Outside of Greece, Portugal, Ireland, Spain and Italy will face growing pressure on their debt. The euro may plummet--good for German exports, not so good for attracting the kind of capital needed to keep the banking system solvent. And the rest of us will be scrambling to keep the contagion from taking down our banking systems, or our economies. No one wants another Credit-Anstalt. But I'm not sure anyone feels quite confident we can prevent it. As I tweeted yesterday, if the drama continues on both sides of the Atlantic, we may soon get to witness a paradox: where does a capital "flight to safety" go if America defaults while the euro implodes?
He lives near San Francisco, makes more than $50,000 per year, and is voting for the billionaire to fight against political correctness.
For several days, I’ve been corresponding with a 22-year-old Donald Trump supporter. He is white, has a bachelor’s degree, and earns $50,000 to $60,000 per year.
He lives near San Francisco.
“I recently became engaged to my Asian fiancée who is making roughly 3 times what I make, and I am completely supportive of her and proud she is doing so well,” he wrote. “We’ve both benefitted a lot from globalization. We are young, urban, and have a happy future planned. We seem molded to be perfect young Hillary supporters,” he observed, “but we're not. In 2016, we're both going for Trump.”
At first, we discussed Bill Clinton.
Last week, I wrote an article asking why Trump supporters aren’t bothered that their candidate called Clinton a shameful abuser of women who may well be a rapist. After all, Trump used to insist that Clinton was a victim of unfair treatment during his sex scandals. Either Trump spent years defending a man that he believed to be a sexual predator, even welcoming him as a guest at his wedding, or Trump is now cynically exploiting a rape allegation that he believes to be false.
In the 1990s, A.J. Benza learned first hand how the real-estate developer got his name––and his net worth––in all the New York City papers.
Earlier this month, I heard A.J. Benza, the host of the celebrity-scandal show “Case Closed with A.J. Benza,” tell the podcast host Adam Carolla about his younger days as a gossip reporter in New York City. He hung out with celebrities until the wee hours of the morning, reported out sensational rumors, and constantly traded favors in order to get juicy tidbits for columns at Newsday and the New York Daily News. Most trades involved information he wanted about a particular person at a particular moment––and he would then owe his source a favor in the future.
“Donald Trump was the biggest guy in the world with that,” he said. “Trump spent every morning on the phone with me, with Page 6––he loved to get his name in the paper. As a result, he would drop dimes on other people in every industry he knew dirt on. You put the story in the paper, and then, three days later, you say, ‘Donald Trump was at a Knicks game with this supermodel.’ And he’s happy. That’s all it took.”
Finally, an explanation for Bitchy Resting Face Nation
Here’s something that has always puzzled me, growing up in the U.S. as a child of Russian parents. Whenever I or my friends were having our photos taken, we were told to say “cheese” and smile. But if my parents also happened to be in the photo, they were stone-faced. So were my Russian relatives, in their vacation photos. My parents’ high-school graduation pictures show them frolicking about in bellbottoms with their young classmates, looking absolutely crestfallen.
It’s not just photos: Russian women do not have to worry about being instructed by random men to “smile.” It is Bitchy Resting Face Nation, seemingly forever responding “um, I guess?” to any question the universe might pose.
This does not mean we are all unhappy! Quite the opposite: The virile ruler, the vodka, the endless mounds of sour cream—they are pleasing to some. It’s just that grinning without cause is not a skill Russians possess or feel compelled to cultivate. There’s even a Russian proverb that translates, roughly, to “laughing for no reason is a sign of stupidity.”
Though Baby Boomers may criticize Millennials for being self-centered, careerist, and politically dispassionate, they are really just adapting to the world they live in today.
Graduation season is almost done, and it has brought the usual spate of commencement speeches that urge graduates to follow their passion, be true to themselves, inspire their fellow humans, and save the world. But in recent years there has been a dissenting note to this feel-good rhetoric. In 2012, the speech that became a YouTube sensation—now viewed by 2.5 million people!—was by a then-obscure high-school English teacher to his senior class. The title was “You Are Not Special,” which also gives you a sense of the thesis. It was an elegant essay that was actually gentle in comparison to some of the other characterizations of young people in the media these days. The “Me Generation” was the name given to the Baby Boomers. Time magazine ran a cover in 2013 on the Millennials with the title “The Me Me Me Generation.”
A new study finds that deliberately considering the perspectives of others can help conceited people feel empathy.
Love is great, but it’s actually empathy that makes the world go ‘round. Understanding other peoples’ viewpoints is so essential to human functioning that psychologists sometimes refer to empathy as “social glue, binding people together and creating harmonious relationships.”
Narcissists tend to lack this ability. Think of the charismatic co-worker who refuses to cover for a colleague who’s been in a car accident. Or the affable friend who nonetheless seems to delight in back-stabbing.
These types of individuals are what’s known as “sub-clinical” narcissists—the everyday egoists who, though they may not merit psychiatric attention, don’t make very good friends or lovers.
A conversation about how Game of Thrones’s latest twist fits in with George R.R. Martin’s typically cliché-busting portrayal of disability
In 2014, a few media outlets ran stories diagnosing Game of Thrones’s Hodor as having expressive aphasia, a neurological condition restricting speech. Some aphasia experts pushed back, saying that while Hodor has often been described as “simple-minded” or “slow of wits,” aphasia only affects linguistic communication—not intelligence.
A rock structure, built deep underground, is one of the earliest hominin constructions ever found.
In February 1990, thanks to a 15-year-old boy named Bruno Kowalsczewski, footsteps echoed through the chambers of Bruniquel Cave for the first time in tens of thousands of years.
The cave sits in France’s scenic Aveyron Valley, but its entrance had long been sealed by an ancient rockslide. Kowalsczewski’s father had detected faint wisps of air emerging from the scree, and the boy spent three years clearing away the rubble. He eventually dug out a tight, thirty-meter-long passage that the thinnest members of the local caving club could squeeze through. They found themselves in a large, roomy corridor. There were animal bones and signs of bear activity, but nothing recent. The floor was pockmarked with pools of water. The walls were punctuated by stalactites (the ones that hang down) and stalagmites (the ones that stick up).
Yet the proposal’s Trumpian moniker is not the most significant thing about it. This is an expansive bill, sponsored by a member of the House Republican leadership and a member of the health committee in the Senate, that seeks to enact conservative, market-oriented reforms to the insurance industry but does not—repeat, does not—repeal the Affordable Care Act. Instead, Representative Pete Sessions of Texas and Senator Bill Cassidy of Louisiana are proposing to allow people to leave the Obamacare exchanges and instead receive a $2,500 tax credit (plus $1,500 for each child) to purchase health insurance on the private market or put in a health-savings account.