Fed officials, hawk and dove, agree: no more easing

Two top Federal Reserve officials - one with a dovish, employment-focused bent, and the other a self-avowed inflation hawk - on Monday both said they see no need for the central bank to ease monetary policy any further.
But the comments, from San Francisco Fed President John Williams and Dallas Fed President Richard Fisher, do not mean they believe the central bank should quickly move to raise rates, which it has kept near zero for more than three years.
The economy grew at a 2.2 percent pace last quarter, down from its 3 percent growth rate in the final three months of the year. Recent economic data, including a gauge of business activity in the Midwest, signal growth may slow further this quarter.
"I don't think we are ready to exit yet," Fisher, an inflation hawk, told Reuters at the Milken Institute Global Conference in Los Angeles.
Fisher said he would oppose the extension of Operation Twist, the Fed bond-buying program that is set to end in June, but stopped short of calling for outright monetary tightening.
"We'll have to see how the year works out," he said.
Speaking to the German financial daily Handelsblatt, San Francisco Fed's Williams suggested the Fed might need to push rates still lower if the U.S. unemployment rose substantially and growth slowed.

Read more: http://www.reuters.com/article/2012/05/01/us-usa-fed-idUSBRE84004G20120501

Trust But Verify

There is an urgency to humanitarian response that Tina Rosenberg ("The Body Counter," March/April 2012) and her subject, Patrick Ball, do not seem to appreciate. Representative numbers are important in the human rights field, but only to the extent that they actually improve people's lives. The U.S. Marine Corps used the SMS data mapped on the Ushahidi-Haiti platform to save hundreds of lives after the 2010 earthquake. Something is wrong when self-styled human rights defenders attack lifesaving volunteer work.
Ball does not typically work with representative samples. He simply applies methods that assume he has nicely behaved random samples. Validation studies are needed to demonstrate that a technique can perform well despite substantial real-world violations of its assumptions. Validation works by applying the technique to a case with an already known answer to test whether one gets the right answer. There are, unfortunately, few validation studies in Ball's area of work. Many of his studies therefore ride entirely on assumptions.
In the case of Haiti, we actually have a strong validation study. This research was produced independently by the European Commission's Joint Research Center and survived a peer-review process, which is how scientific work is validated. The Ushahidi data provided a truer guide to the damage in Haiti than Ball's alternative -- a map of buildings -- would have. (Note that no such map existed at the time anyway.)
Ball and Rosenberg also appear to be confused about the Ushahidi platform, which is simply an information collection and visualization tool that is equally usable for either representative or nonrepresentative data. Columbia University researchers Macartan Humphreys and Peter van der Windt, for example, used Ushahidi to collect and visualize representative cell-phone data in their Voix des Kivus project in eastern Congo.
Finally, Rosenberg states that I "ultimately retreated to a narrower set of claims" after defending the European Commission's analysis. Absolutely not. I fully stand by my original arguments.

Read more: http://www.foreignpolicy.com/articles/2012/04/23/trust_but_verify

The Coming Depression in Spain: 22 Reasons Why

What happens when debt-fueled false prosperity disappears? Just look at Spain. The 4th largest economy in the eurozone was riding high during the boom years, but now the Spanish economy is collapsing with no end in sight. When a debt bubble gets interrupted, the consequences can be rather chaotic. Just like we saw in Greece, austerity is causing the economy to slow down in Spain. But when the economy slows down, tax revenues fall and that makes it even more difficult to meet budget targets. So even more austerity measures are needed to keep debt under control and the cycle just keeps going. Unfortunately, even with all of the recently implemented austerity measures the Spanish government is still not even close to a balanced budget.
Meanwhile, the housing market in Spain is crashing and unemployment is already above 24 percent. The Spanish banking system is a giant, unregulated mess that is on the verge of a massive implosion, and the Spanish stock market has been declining rapidly. The Spanish government is going to need a massive bailout and so will the entire Spanish banking system. But that is going to be a huge problem, because the Spanish economy is almost 5 times as large as the Greek economy. When the Spanish financial system collapses, the entire globe is going to feel the pain and there will be no easy solution.
So just how bad are things in Spain at this point?
The following are 22 signs that the collapsing Spanish economy is heading into a great depression….

Read more: http://econintersect.com/wordpress/?p=21578

Clinton heads to China and into dissident drama

Secretary of State Hillary Clinton left on Monday on a high-stakes trip to Beijing, where a blind dissident is reportedly holed up in the U.S. embassy in a drama threatening to overshadow top-level meetings between the two governments.
Dissident Chen Guangcheng, according to one of his helpers, will demand to stay in China and press on with his campaign for reform, adding to tension between Beijing and Washington that poses risks for both governments as well as to relations between the world's two biggest economies.
Both governments have scrupulously avoided official comment on the Chen case and neither has confirmed that he is under U.S. protection in Beijing.
Chen's audacious escape from house arrest, under the watch of the world's largest domestic security apparatus, was a "miracle" of planning and endurance, said Guo Yushan, a Beijing-based researcher and rights advocate who has campaigned for Chen and helped bring him to the Chinese capital after his escape.
But he said the 40-year-old, self-taught lawyer wants to stay in China and campaign for reform.
"He was adamant that he would not apply for political asylum with any country. He certainly wants to stay in China, and demand redress for the years of illegal persecution in Shandong and continue his efforts for Chinese society," said Guo on Monday, speaking in his first long interview since he was released from days of police questioning.

Read more: http://www.reuters.com/article/2012/05/01/us-china-usa-diplomacy-idUSBRE83S01V20120501

Ron Paul Just Went To Battle Against Paul Krugman—Here's What You Missed

Two polar economic opposites, Ron Paul and Paul Krugman, just faced off on Bloomberg TV.
You can read the full text below, but here are some key points:

• Naturally, the two of them didn't agree on virtually anything and mostly talked past each other.
• Ron Paul said his goal wasn't to end the Fed, but to create competing currencies. Basically he wants to end the Fed's monopoly.
• Krugman says that in the modern era, there's no separating the government from monetary policy. And Krugman denied that he's somehow anti-markets or anti-capitalism. But he says, depressions are bad things, and that they're bad for capitalism if we don't intervene to fix them.
• Paul says the worst problem in the economy is the debt because we're wasting all of our money paying off the debt.
• Krugman says trying austerity to cut the debt only makes the debt worse.

In the end, it was mainly two guys who were talking so far past each other, there wasn't much of a "debate." Think: Two boxers standing in the far corners of the ring: Nobody lands a blow.

But it was fun!

Read more: http://www.businessinsider.com/ron-paul-vs-paul-krugman-on-bloomberg-tv-2012-4#ixzz1tc1fNuRM

Obama's Chicago-Style Campaign

Barack Obama has a take-no-prisoners approach when it comes to waging political campaigns.  But perhaps he has taken a step too far this time around.  Not content to attack his opponent, his campaign is going after his opponent's supporters.  Kimberly Strassel, columnist for the Wall Street Journal, gives us one more reason not to vote for Barack Obama: he is a thug who has disgraced the office of the president of the United States  by engaging in behavior more befitting of the dictator of a banana republic.
Strassel writes of the Obama's campaign's latest efforts to smear and attack donors to Mitt Romney.  She projects what happens when one exercises one's right in a democracy to support a candidate:

[...] Barack Obama, the most powerful man on the planet, singles you out by name. His campaign brands you a Romney donor, shames you for "betting against America," and accuses you of having a "less-than-reputable" record. The message from the man who controls the Justice Department (which can indict you), the SEC (which can fine you), and the IRS (which can audit you), is clear: You made a mistake donating that money. [...]
Any president who targets a private citizen for his politics is de facto engaged in government intimidation and threats. This is why presidents since Nixon have carefully avoided the practice.

Read more: http://www.americanthinker.com/2012/05/obamas_chicago-style_campaign.html#ixzz1tc1G0BI4

BP profit falls as oil spill costs still weigh

Oil producer BP Plc (BP.L) reported a bigger-than-expected 13 percent drop in underlying quarterly profit, as production fell after the group was forced to sell fields to pay for the Gulf of Mexico disaster, offsetting an increase in crude prices.
BP said on Tuesday output would continue to decline in the second quarter as it unveiled plans to sell a number of mature fields in the Gulf.
A spokesman denied the company was making a more general pullback from the region, saying the disposals reflected a new strategy of churning assets more quickly and focusing on larger, younger projects.
The London-based group also said it would have to spend more than earlier expected to clean up America's worst-ever offshore oil spill, although this was offset by a drop in the expected cost of paying out claims after the company agreed a settlement with impacted individuals and businesses.
BP shares traded 2.7 percent lower at 432.85 pence at 0739 GMT, against a 0.2 percent drop in the STOXX Europe 600 Oil and Gas index .SXEP.
"There is little in the numbers for the bulls," analysts at Nomura said in a note to clients. Investors have been frustrated at how BP's shares have struggled to recover from the spill and the stock last week touched its lowest since November.
Europe's second-largest oil group by market value said its replacement cost (RC) net profit reached $4.93 billion in the quarter, compared with $5.61 billion in the same period last year.
Stripping out one-off items such as the profit on asset sales, the result was down 13 percent to $4.80 billion, below an average forecast of $5.10 billion from a Reuters poll of nine analysts.

Read more: http://www.reuters.com/article/2012/05/01/us-bp-idUSBRE84009T20120501