Shameless! Meet 7 Congressmen Who Joined Lobbying Firms Less Than A Month After Leaving Office

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Less than a month after leaving office, at least five former House members and one U.S. senator are already on the payroll at firms that make millions lobbying their congressional colleagues. The findings, provided to Vocativ by the Center for Responsive Politics, a government watchdog group, also show that a second senator who left office at the beginning of January, Alaska’s Mark Begich, took the extra step of starting his own public affairs consulting firm, which has already secured clients in health care and aviation.

Shunned Greece Agrees To Boost Economic Cooperation With Russia

It’s been an odd few days for Greece’s new PM Alexis Tsipras. From being lambasted by Jeroen Dijsselbloem, shunned by Angela Merkel’s henchmen, holding hands with Jean-Claude Juncker, and losing a key funding channel from Mario Draghi; Tsipras’ anti-austerity platform has been ‘supported’ by Barack Obama and he has been invited for a visit to Russia by Vladimir Putin, and reminded that Russia is willing (and able) to provide financial aid if asked by finance minister Anton Siluanov. So headlines this evening from ekathimerini should not be entirely surprising that Putin and Tsipras have agreed to boost cooperation in the economy and energy, tourism, culture and transport sectors; and discussed the possible creation of a pipeline to carry natural gas from Russia to Europe via Turkey and Greece.

Time For #GreekLivesMatter

Submitted by Yves Smith via Raul Ilargi Meijer's The Automatic Earth blog,

This is a post by Yves Smith at Naked Capitalism, who shares my worries (and quotes me) – as well as Syriza’s, of course – about what’s happening in Greece. She’s dead on in making the connection between #BlackLivesMatter and #GreekLivesMatter. What’s being done to Greece in this Chicago School style experiment is reprehensible and immoral. Europe is busy creating its own generation of gutter dwellers, first in Greece, and its own Untermenschen, yet again, just 70 years after WWII ended. Shame on them, and shame on you for letting it happen. Don’t!

If you are not part of the solution, you are part of the problem an accomplice.

The Troika’s willingness to turn Greece into a failed state first, as a side effect of its “rescue the French and German banks” operation, and now, as part of its German hegemony protection racket, is killing people and in the longer term will only accelerate the rise of extreme right wing elements in the Eurozone. As Ilargi wrote last week:

In what universe is it a good thing to have over half of the young people in entire countries without work, without prospects, without a future? And then when they stand up and complain, threaten them with worse? How can that possibly be the best we can do? And how much worse would you like to make it? If a flood of suicides and miscarriages, plummeting birth rates and doctors turning tricks is not bad enough yet, what would be?

The Fed’s Stunning Primer For Life In A Negative Interest Rate World

With the Danish central bank earlier today cutting the deposit rate further into unprecedented, negative territory, taking it lower for the 4th time in 3 weeks to a record low -0.75%, after both the European and Swiss Central banks did the same, leading to a monstrous $3.6 trillion, or 16% of total, in global government debt trading with a negative yield.

Which brings us to this blast from the not so distant past. Our question to readers: who said the following?

if rates go negative, the U.S. Treasury Department’s Bureau of Engraving and Printing will likely be called upon to print a lot more currency as individuals and small businesses substitute cash for at least some of their bank balances. I might even go to my bank and withdraw funds in the form of a certified check made payable to myself, and then put that check in a drawer. If bank liabilities shifted from deposits to certified checks to a significant degree, banks might be less willing to extend loans, because certified checks are likely to be less stable than deposits as a source of funding. As interest rates go more negative, market participants will have increasing incentives to make payments quickly and to receive payments in forms that can be collected slowly if interest rates go negative, the incentives reverse: people receiving payments will prefer checks (which can be held back from collection) to electronic transfers

And the punchline:

we may see an epochal outburst of socially unproductive—even if individually beneficial—financial innovation

If you said, the Federal Reserve Bank of New York, feel free to issue a $1 billion negative interest rate bond and retire with the proceeds.

* * *

Here is the full post, courtesy of Kenneth Garbade and Jamie McAndrews of the NY Fed:

If Interest Rates Go Negative . . . Or, Be Careful What You Wish For

Reserve Bank cuts growth forecasts and leaves door open for another rate cut

RBA now predicting growth of 2.25% in the year to June, down from 2-3%
Economists predict further easing in borrowing costsASX200 benchmark stock market index rises for the twelfth day running

The Reserve Bank of Australia has cut its forecasts for growth as the struggling economy continues to adapt to life after the mining boom.

After cutting the cash rate to a record low amid a gloomy outlook for the economy, the RBA forecast growth of 2.25% in the year to June in its latest quarterly statement on Friday, compared to its November forecast of 2-3%. Its forecast for the year to December was downgraded to 2.25-3.25% down from 2.5-3.5%.

Related: Australian stocks surge to new seven-year high on rate cut optimism

Continue reading…

The End Of Guitar Center (And An Irrational Addiction To Growth & The Scourge Of Unregulated Structured Finance)

Authored by Eric Garland,

This is an obituary for Guitar Center, a chain of big box musical instrument stores that was captured and infected by private equity during a national trend of greed and reckless expansionism in the late-1990s and early-2000s. The company started as a Los Angeles organ store, became a successful purveyor of guitars after the Beatles arrived in the United States, evolved into a national competitor over a period of decades, and shall finish, with sad poetry, as the symbol of everything dysfunctional about American corporate finance, management, and retail in the modern age. Its demise is really the end of a generation of business managers, illustrating how they lost their moral compass as well as any ability to lead individual companies or national economies into a stable, rational, prosperous future. This story will focus on the final days of this one company, but it is really about our painful transition to an economic system that obeys objective reality and serves people in a durable, holistic manner.

The original sin, and events leading to collapse

I have been tracking the evolution of this company for over a year now, and the evidence is incontrovertible: the corporate entity known as Guitar Center, Inc. is in the midst of irreversible collapse dynamics and will cease to hold its position as the industry leader in the short-term. In the mid-term, the company may cease to operate as a going concern and will be reduced to a group of trademarks, service marks and patents that will be sold to a buyer with considerably different plans for the company. Its days as the national industry leader are over.

I shall support my thesis with easily accessible public information, though I also possess considerable insights from industry insiders who prefer not to be named. The idea that this is a doomed entity which can only submerge deeper into dysfunction and, ultimately, oblivion is not widely held. The vast majority of the musical instrument industry exhibits what we intelligence analysts call “normalcy bias,” the attraction to a worldview that things are normal and will remain normal, despite considerable evidence to the contrary. People refer to Guitar Center as “too big to fail,” despite the fact that the firm shares absolutely no characteristics