Saturday Reads Around The Internets - Spain Erupts

Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.


Spain Erupts

The people of Spain are protesting over this never ending taking from the poor and giving to the rich, now with the IMF and austerity heading their way. It's getting violent.



Here are some pictures of the violence and why are the police causing 121 injuries? To clear the square over a soccer match:

The demonstrators, who call themselves los indignados -the indignant ones -began gathering on May 15, in a movement known variously as "M-15", "Spanish Revolution" or "Real Democracy Now," to register dissent at the country's economic crisis, which has pushed youth unemployment to 45 per cent. Inspired by the Arab Spring revolts, the protests swelled ahead of regional elections last Sunday, in which Prime Minister Jose Luis Rodriquez Zapatero's socialist party suffered a resounding defeat.


Republicans Cannot Do Math or Economics

As usual, we get fictional nonsense out of Republican leadership for job creation. Economist Chinn rips their agenda to shreds, although he never mentions the trade deficit.


Paul Krugman Calls Out the OECD

About time. Paul Krugman whips out the graphs to show the OECD is full of it with their latest economic report:

The latest OECD Economic Outlook is a remarkable document — and I mean that in the worst way. I’ve already pointed to the report’s insistence that we must raise interest rates, because foofa grrzt bumble shazam — OK, that’s not quite what the report says, but it makes at least as much sense as the justification the report does offer.

More broadly, what the report does is to encapsulate in a particularly pure form the can’t-do spirit that has gripped much of the world’s policy elite.


Oil Speculator Civil Suit Analyzed

Economist Chinn also analyzed the CFTC oil manipulation case:

The Commodity Futures Trading Commission on Tuesday filed a civil enforcement action alleging that Nicholas Wildgoose and James Dyer, who worked as traders for Arcadia Petroleum Ltd. and its affiliates, profited by manipulating the price of oil and oil futures in early 2008. I was interested to take a look at the details of the CFTC allegations.


Public Whipping of Ryan's Medicare Destruction Plan

Ezra Klein does the latest exposure that the U.S. has the most expensive health care system and Ryan is fiction.


NYSE Rolling out Cease and Desist Letters

Seems the NYSE is trying to intimidate Journalists and Bloggers from saying anything bad about them:

That’s from one of the most ridiculous nastygrams I’ve seen in a long time, sent by NYSE chief counsel Kendra Goldenberg to Talking Points Memo. If Goldenberg really believes what she’s saying here, none of us is even allowed to mention the name NYSE if we’re not authorized to do so by the NYSE itself — let alone show a photograph of it.

Wow, I am not an intellectual property attorney but somehow I don't think a photo of the NYSE™ amounts to trademark violation. Can you imagine this? Anyone who writes about the New York Stock Exchange cannot because it's trademarked?


Ban Speculation on Food Commodities

I can add to this a ban on speculation for a host of economically critical commodities, but here's a pretty good post on food.

I have been asked by many readers to explain how banks and hedge funds manipulate commodity prices to their advantage. This has been a recurring theme over the last several years and these activities were a principle reason why inflation rates increased in the period leading up to the crisis. Major international organisations like World Development Movement have associated these speculative forays with rising starvation. Their The Great Hunger Lottery report shows how such speculation on food has impacted on the poor around the world. Hunger and starvation escalated between 2007 and 2008 with over 1 billion people considered chronically malnourished at the time they prepared the Report. The major players in creating this havoc are Goldman Sachs, Bank of America, Citibank, Deutsche Bank, HSBC, Morgan Stanley and JP Morgan. In my view, this speculation creates no widespread good and should be declared illegal. We should ban financial speculation on food prices.


A Call Out on Lobbyists' Spin "Article" Plants

We need more of this. Economist Dean Baker calls out the New York Times for publishing oil industry lobbyist's article plant claiming more oil drilling with create millions of jobs. We see so many of these spin agendas, presented as articles in the press, when they are fiction and not actual fact or even reporting.

Baker also calls out an research paper for doing mathematical cherry picking, in order to justify their conclusion. We've seen this as well. Even Academic research is busy setting a few mathematical variables to zero in order to reach some philosophical view. That's not economics folks, it's public relations.

With an exercise like this, you always have to worry about the problem of cherry picking. It is very easy to run 1000 regressions in an hour. Inevitably, you find 4 or 5 of these 1000 that show you almost anything. (Our standard of significance is a result that you would not get by random chance more than 10 times in a hundred. This means that if you ran 1000 regressions of things that had nothing to do with each other, you would expect 100 of them to have statistically significant results.)

This particular kind of spin is scary because it takes someone to actually read their paper, instead of waving it around claiming the results are valid, in order to find the major logic or statistical flaw. Congressional staffers do not read economics like papers even though lobbyists flood them with white paper spin.