Today marks a potentially watershed moment in global finance as the US Federal Reserve under chair Janet Yellen makes a policy announcement concerning the Federal Funds rate. The punditry and trading data points to an expectation of a rate hike, widely expected to be 0.25%, and the first hike since 2006. (The rate was lowered to zero in 2008 in the wake of the financial crisis.) In my opinion, it’s also the day the Fed has been most dreading because it has finally been backed into a corner it knew was coming but could do little about. The fact is, the Fed doesn’t want to raise rates because the economic recovery it and wide swathes of the financial press have been touting for years hasn’t actually happened and the data on which the Fed never tires of telling everyone it is dependent shows that fairly clearly. So, like typical politicians, the Fed has for years been engaged in an exercise of saying one thing while doing another.
Ran across this bit of media hilarity the other day in the Financial Post. The Post, which is very much pro-oil sands, ran the following article on OPEC’s decision not to rein in production:
The article is syndicated from Bloomberg from which the Post these days seems to source 50% or more of its homepage business content (I’d guess as a result of the never-ending cutbacks at the Post). Quite the testy header, huh? Well, here’s how the article appeared in its original form on Bloomberg:
The content is identical with no apparent edits made by the Post, but the header is … different. Which isn’t unusual in the world of syndication, but that Post header is LOL, not least of all because the OPEC it denigrates as a bully is the same OPEC it has been praying for over a year now would go back to its historic role of cartel price-fixer—which is to say, a bully. What the Post perhaps hopes readers will miss is that Canada’s oil sands depend for their profitability on the same artificially high price enforced by, you guessed it, OPEC. Every non-OPEC producer has until now been what is called in economics a “free rider”—in this case benefiting from OPEC’s “bullying” without having to be a member of the unseemly gang. Now that OPEC has effectively dissolved itself and true market forces are at play, it turns out that Canadian oil sands aren’t economical or profitable at all.
So what the Post is effectively saying with its petulant headline writing (which should have been confined to the opinion pages, but whatever) is that it’s against free markets. Oops.
I rushed to Asda at 5 am. There was such a queue, I fought my way through it like a trapped rat escaping from its cage. I was even bitting [sic] anyone that stood in front of me and urinated to mark my ground.
In the end I just grabbed what I could: several bags of suntan spray. I paid for it. Got home.
Then I thought: but why do I need suntan spray? I am black!
I will sell on eBay and make money on it.
Capitalism: nailed it.
—”BlackChineseMan,” November 28, 2014 in “Black Friday fever: police deal with desperate shoppers,” The Guardian reader comment
In the midst of the Ukraine/Crimea situation, you can’t get very far into any mainstream media story these days about current events and not see Russia casually and routinely described pejoratively (in straight news reporting, never mind opinion pieces) as a land of oligarchs. True enough. Although it’s probably also at least equally irrelevant since none of the voices say this because they particularly care that such is the case. After all, most of them hail from another land of oligarchs, but refuse to use the word. In fact, this reality was further cemented into law just today. This in the U.S. where the Supreme Court voted along ideological lines to strike down caps limiting how much an individual can contribute to federal candidates in a two-year cycle. Somehow, none of the reporting, from Bloomberg, to the New York Times, to the Wall Street Journal, to the Washington Post and beyond manages to note that this development de facto enshrines oligarchy as a legal force. It’s an observation left instead to the thousands of commenters lamenting the “death of democracy,” etc. They’re right.
Wait till Putin starts the “Move your business to Russia” campaign. More natural resources, better educated workforce, fewer regulations, lower taxes and they know how to treat green peace, strikers, and “Occupiers.” The USA has the most onerous corporate tax and the largest number of regulations in the world, That is one reason they move off shore to begin with. Small wonder they want to lower their tax legally, which is exactly what they are doing.
—”jabusse,” March 12, 2014 in “Cash Abroad Rises $206 Billion as Apple to IBM Avoid Tax,” Bloomberg reader comment