Tuesday, September 11, 2018

Thoughts from Galicia, Spain: 11.9.18

Spanish life is not always likeable but it is compellingly loveable.
- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here. Garish but informative.

Matters Spanish
  • Is it really a year since things rather blew up in Cataluña?
  • From The Local, Spain's breathtaking national parks.
  • I have to admit I wasn't at all surprised to read this morning that the incidence of lung cancer has gone down in Spanish males but it still rising in women. So much so that it now takes more of them than breast cancer. Still seen as an effective appetite suppressor and – even more misguidedly – as a sophisticated activity, I suspect.
  • Talking of sad deaths . . . I was surprised to read that Spain's suicide rate – at 3,500 t0 4,000 a year – is only marginally less bad than that of the UK. Some rates:-
Lithuania 31.9 whatever
Russia 31.0
South Korea 26.8
France 17.7
USA 15.3
Portugal 14.0
Germany 13.6
Australia 13.2
Holland 12.6
UK 8.9
Spain 8.7
  • Two or three decades ago, it was conventional thinking in the pharma industry that levels of depression were much lower in Latin than in Anglo societies. Things appear to have changed.
  • Yesterday was one those rare things in Spain – a totally successful morning. My daughter and I repaired early to the offices of one of our several notaries and were attended to immediately. And then given the opportunity – under Galician law – to make a transfer of funds free of taxes to either of us. I say it was successful but the notary had to call someone to check if I, as a foreigner, was really entitled to this largess. And then, having got confirmation of this, warned me that the regional tax office sometimes 'got confused' and might come at me for some tax. In which case, he would go with me to their offices and argue the toss with them. As it happens, there was no initial problem when – after paying the notary's extortionate bill – we hied to the tax office of the Xunta and presented the documents for stamping. We live in hope.
Matters Global
  • Can anyone now really doubt that the EU policy on people movement, combined with German government initiatives in its own regard, have led to the continent-wide wave of resurgent 'populist' right wing parties? The latest, of course, being in liberal Sweden. Just one consequence – albeit a major one - of having idealogical bureaucrats running things. Here's Simon Jenkins of the Guardian on the subject. Things have reached a pretty pass when this impeccably liberal-left paper is compelled to publish such an opinion. Can anyone have much confidence that Brussels knows how to deal with this? What chances a revision of its Utopian dream?
  • In a comment on yesterday's Plutocracy article, reader María predicts the polishing-up of pitchforks across the developed world. By coincidence, Wall Street on Parade refers - in the article below - to JPMorgan's fear of the (re)appearance of these items in due course. Must get mine down from the loft.
Matters Galician and Pontevedran
  • They are repairing the walkway on one our main bridges between Pontevedra and the barrios on the other side of the river Lerez. Two nights ago someone filched the temporary lights there, a mere 2 hours after they'd been installed. At €2,000 a throw.
  • And last night someone robbed the till of my regular bar, as well as those of a nearby café and the museum. Perhaps selling drugs is not as profitable as it was.
Finally . . .
  • The average British lunch, says El País, lasts for 40 minutes, compared with 102 minutes in Spain. But, then, the latter is the main meal here.
© [David] Colin Davies, Pontevedra: 11.9.18

THE ARTICLE

JPMorgan Is Thinking Pitchforks and Fed Stock Buying in the Next Financial Crash: By Pam Martens and Russ Martens, Wall Street on Parade.

If you thought the U.S. outlook could not get any more dystopian, think again. JPMorgan Chase issued a report earlier this week to mark the 10th anniversary of the 2008 Wall Street crash and provide its outlook for what’s ahead. JPMorgan suggests that the next financial crash may be so cataclysmic that the Federal Reserve may have to enter the market to buy up stocks – something which the central bank has never done before in the U.S. or, at least, acknowledged doing, because stock ownership is heavily skewed to the one percent.

JPMorgan further suggests that if the Fed did take this unprecedented step, it might lead to pitchforks in the street (our phrase) as a class war breaks out. (Imagine the Occupy Wall Street protests in 2011 and 2012 and then amplify that by years of pent up anger.)

This is how Marko Kolanovic, a JPMorgan analyst writing in the report, puts it:

“It remains to be seen how governments and central banks will respond in the scenario of a great liquidity crisis. If the standard interest rate cutting and bond purchases do not suffice, central banks may more explicitly target asset prices (e.g., equities). This may be controversial in light of the potential impact of central bank actions in driving inequality between asset owners and labor.”

Kolanovic adds this about the social unrest:

“The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968. In 1968, TV and investigative journalism provided a generation of baby boomers access to unfiltered information on social developments such as Vietnam and other proxy wars, civil rights movements, income inequality, etc. Similar to 1968, the internet today (social media, leaked documents, etc.) provides millennials with unrestricted access to information on a surprisingly similar range of issues. In addition to information, the internet provides a platform for various social groups to become more self-aware, polarized, and organized. Groups span various social dimensions based on differences in income/wealth, race, generation, political party affiliations, and independent stripes ranging from liberal to alt-right movements to conspiracy theorists and agents of adversary foreign powers. In fact, many recent developments such as the U.S. presidential election, Brexit, independence movements in Europe, etc., already illustrate social tensions that are likely to be amplified in the next financial crisis.”

Notice what “social tension” the JPMorgan analyst is leaving out: the actual battle cry of the Occupy Wall Street protesters who chanted “Banks got bailed out, we got sold out” as they staged sit-ins at the mega Wall Street banks, marched on the New York Fed, and camped outside of Goldman Sachs’ CEO Lloyd Blankfein’s Central Park West luxury residence.

It’s the height of audacity for JPMorgan Chase, a bank that has spent tens of billions of dollars buying back its own stock over the years in order to goose its stock price, to now suggest that the U.S. central bank might need to become the buyer of last resort when the stock market melts down as a result of malinvestment.

This is not the first time that a Wall Street savvy guy has looked into his crystal ball and seen pitchforks in the future. In 2014 venture capitalist Nick Hanauer, an early investor in Amazon, bylined an article at Politico with the title: The Pitchforks Are Coming…For Us Plutocrats. Hanauer warned his fellow plutocrats as follows:

 “…I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

“If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”

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