Market correction
The market rebound. Now they are saying that the market was overdue a correction. What rubbish. When they dont know our experts drag out the correction word. A code for we dont know. Karl Carlile Communism Site: http://homepage.eircom.net/~beprepared/
RE: Market correction
h ... correction has a pretty precise meaning in this context, which technical analysis bores like me would agree is overused, but was probably appropriate in this case. The point is that part of the reason for the fall was that there had been short selling. By yesterday, the shorts had committed almost all of their capital to the market (ie; they had maxed out their margins) and thus couldn't add to their positions any more. They thus have the incentive to close out positions, realising some gains, increasing the equity in their account, and thus increasing the amount of margin and the amount of short positions they can take out next time. To call a sharp rally in a downtrend a correction is actually a very bearish thing to say. That's my understanding of the term correction anyway, but there are considerable differences between US and UK jargon and I suspect the looser use of correction meaning any sharp countertrend movement is the one in general usage. dd -Original Message- From: Karl [mailto:[EMAIL PROTECTED]] Sent: 25 July 2002 07:33 To: PEN Subject: [PEN-L:28463] Market correction The market rebound. Now they are saying that the market was overdue a correction. What rubbish. When they dont know our experts drag out the correction word. A code for we dont know. Karl Carlile Communism Site: http://homepage.eircom.net/~beprepared/ ___ Email Disclaimer This communication may contain confidential or privileged information and is for the attention of the named recipient only. It should not be passed on to any other person. Information relating to any company or security, is for information purposes only and should not be interpreted as a solicitation or offer to buy or sell any security. The information on which this communication is based has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. All expressions of opinion are subject to change without notice. All e-mail messages, and associated attachments, are subject to interception and monitoring for lawful business purposes. (c) 2002 Cazenove Service Company or affiliates. Cazenove Co. Ltd and Cazenove Fund Management Limited provide independent advice and are regulated by the Financial Services Authority and members of the London Stock Exchange. Cazenove Fund Management Jersey is a branch of Cazenove Fund Management Limited and is regulated by the Jersey Financial Services Commission. Cazenove Investment Fund Management Limited, regulated by the Financial Services Authority and a member of IMA, promotes only its own products and services. ___
Blair tempted by Euro
PM may risk euro vote within a year Patrick Wintour, chief political correspondent Thursday July 25, 2002 The Guardian Tony Blair has suggested that he is willing to risk a referendum on the euro in this parliament, even if he begins the campaign with the pro-euro cause seriously trailing in the polls. The Guardian has learnt that the prime minister remains convinced that large swathes of public opinion are open to persuasion once a pro-euro campaign starts. He has dismissed suggestions that there will be a Treasury economic assessment by next June in which the chancellor, Gordon Brown, pronounces that Britain has met some, but not all, the tests. Such an announcement might allow the government to defer a referendum until six to 12 months after the next general election. But the prime minister has dismissed such a scenario, insisting it has not come from him or from others inside Downing Street. He instead is giving the impression to ministerial colleagues and others that he is focused on a major decision on the euro in the next 12 months. Mr Blair accepts that the Treasury's five tests remain paramount, but insists that he is willing to stake his long-term reputation on taking Britain into the euro if the economic conditions have been met, and will accept the consequences for his own premiership if he is defeated in a referendum. The prime minister is also said to be in continuous discussion with Mr Brown over the five tests, rather than waiting for the chancellor to pronounce on the issue. Mr Blair's confidence has been bolstered in recent weeks by a report from his pollster, Philip Gould, suggesting the euro debate is becoming winnable for the first time. But the latest poll by Barclays Capital this week shows that 61% - a majority of 35% - would reject the euro if there was a referendum tomorrow, the strongest anti-euro vote since the poll started in November last year. But the majority against entry falls to 10% if the tests are met and the government recommends entry. Pro-European businessmen warn that deferring the euro referendum until after the election will mean the collapse of the Britain in Europe campaign, the umbrella group trying to generate support for Europe and the euro. There are also signs that some of Labour's financial difficulties are being worsened by the decision of potential donors to wait for the starting signal on the euro campaign. Labour is £6m in debt, and some of the most likely sources of cash are waiting for clearer signals on whether money will also be needed for a euro campaign next year, in either the spring or the autumn. The electoral commission has suggested the referendum should not be held on the same day as elections to the Scottish parliament and Welsh assembly, for a variety for technical and democratic reasons. This makes a spring referendum more difficult, but not impossible. According to some, sterling's fall against the euro makes the case for joining the single European currency easier, but is far from sufficient.
Final Reply to Karl C.
Sé: If the world economy is heading to a period of deflation, then I'm not convinced that the sort of spend that Brown has promised will be sufficient. Karl: I cannot subscribe to your argument. Even if Brown were to increase state spending by a putative sufficient amount it would not necessarily led to real economic growth. Sé: Effectively, you are denying the validity of a Monetary intervention to burn out of recession. I don't think that's right. If Brown could borrow £10 trillion and spend it within the British economy - I'm pretty sure that it would grow GDP to an extent which would pull the economy out of its current dip. Karl: You undermine your own argument. If Brown could BORROW... But then he would borrow. If he does not borrow it is because he cannot borrow. Why should he not borrow on that scale if it is as simple as you suggest. Indeed why should the Tories not borrow too if it as simple as that. If massive borrowing can solve the economic crisis for capitalism then it is the interests of the capitalist class to borrow. Response: My argument is that Brown's intervention is insufficient. You're argument was that it would be ineffective even if he could increase state spending by a putative 'sufficient amount'. To disprove your position, I state that £10 trillion state spending would pull Britain out of the recession. You counter that this is cannot be delivered. The problem is that you are confusing two issues: (a) Whether Governments can spend their way out of recessions - i.e. in your words whether Even if Brown were to increase state spending by a putative sufficient amount it would not necessarily led to real economic growth and (b) Whether it is possible to borrow a 'sufficient' amount - i.e. in your words If he does not borrow it is because he cannot borrow. I think that I have clearly demonstrated the first argument to be true. With limitless or *sufficient* state intervention, an economy will expand - that afterall is quite obvious. Your second *strawman* argument is something I'm not going to disagree with you - the ability to borrow is limited by the ability to pay back. Given New Labour's inability to raise taxes by a sufficient amount, their ability to borrow must be tightly controlled. My initial post explained I felt that Brown's intervention was too little to really impact - I did a calculation on the impact on employment - and I noted it was more for internal consumption than any other reason. I think that you have adopted my arguments but projected them to an outright rejection of state intervention in a capitalist economy - i.e the position that Keynesian economics is entirely worthless to the working class. Your drawing a parallel between Keynesian and Monetarist economics is the corollary. As I have stated before, I am a Marxist not a Keynesian but that doesn't mean I reject state intervention outright in the current situation - particularly if the intervention is beneficial in direction [I'm just not convinced that this is the case]. Your projection is something I can live with but it's implications in terms of strategic orientation is where we differ. Sé _ Chat with friends online, try MSN Messenger: http://messenger.msn.com
Re:remarks on Terminology reform in PEN-L digest 222
ORIGINAL COMMENTS: 1) Hari Kumar wrote: Personally, I think a spade should be called a spade - finding a new term for it is redolent of a white-wash! Quoth he: A Rose by any other name... 2)REPLY FROM J: . However what we have to deal with today is mostly neo-liberal reformism which consists in deregulation and privatisation (more market approach). Almost nothing is left of the social democratic project to address the evils of capitalism with progressive social reforms these days (in Europe and Australasia; in the USA you never had a large social democracy). Indeed it would seem the only ones left arguing for progressive social reforms today are various smaller socialist or socialistic parties, who argue that the erosion of public services and civil rights is against the interest of the working class and the poor. In the course of the 1980s and 1990s, trade union membership was roughly halved, globally. The whole ideological climate has changed - what sociologists refer to as individualisation basically means the erosion of the very concept of social solidarity. In that situation, fulminating against reformism is probably not very helpful, even because the number of people arguing for progressive social reforms as such are rather few. You can of course argue for ... J. HK REPLY: 1) Certainly I any organisation's that I am affiliated with do/does not advocate nothing short of the abolition of capitalism, in which case all reforms are rejected. Naturally reforms have a role in firstly: giving a breathing space for the hard passed exploited workers/peoples; (ii) Showing the class of oppressed that indeed reforms will not ultimately make for a better life in the long run - that sooner or later they are withdrawn /or are inadequate. By the bye - in my view a revolting extension of the rejection of any reform, is the view that fasicsm is progressive because it brings the workers to the brink of revolution. 2) J: Point I tried to make is that when Lenin talked about reformism, he was referring to large social democratic parties seeking to use government resources to mitigate the evils of unfettered capitalism, with various projects for national salvation. HK: Well, I would argue that when M E L talked about reformism, they were not simply talking about state sponsored projects for 'national salvation'. They were talking more about an overall tendency to think that minor tinkering with the engine was adequate for better lives. In that sense, their views are certainly not out-dated in my view. 3) J says: However what we have to deal with today is mostly neo-liberal reformism which consists in deregulation and privatisation (more market approach). Almost nothing is left of the social democratic project to address the evils of capitalism with progressive social reforms these days (in Europe and Australasia; in the USA you never had a large social democracy). HK: Well, I beg to differ that in Europe there is no social democratic project. If by this phrase what you mean is the trade union movement linked ot political movements to trigger change - the recent example of the demo in the UK surely must count as a barrier to your statement. If you do not mean that, not sure what you do mean. Finally, it is obviously not the case that the 'social-demcoratic project' has been achieved in Europe - so the impetus for it remains. 4) J says: The whole ideological climate has changed - what sociologists refer to as individualisation basically means the erosion of the very concept of social solidarity. HK: Well - what do you expect the 'sociologists' to say? As a discipline they were founded in a consciously anti-marxist opposition. Besides which, the atomisation of the social being - has always been with us and is a very conscious attempt of all ruling classes to suppress revolt. During the history of the trade union movements at their peak, there are numerous examples of this. When did this however become translated into an immutable fact - that the class of exploited are an unchanging set of individuals? Hari Kumar
Unocal Inks MoU With Major Firms For Natural Gas Supply
The Financial Express Unocal Inks MoU With Major Firms For Natural Gas Supply Prasanna Upadhyay Mumbai, July 23: California-based natural gas and oil exploration major, Unocal Corporation has signed a memorandum of understanding (MoU) with various companies in the northern belt of India for supplying 3.5 billion cubic feet of natural gas annually from Bangladesh. Majority of these are fertiliser companies http://www.financialexpress.com/fe_full_story.php?content_id=13813
Charles P. Kindleberger
WSJ, July 25, 2002 A 91-Year-Old Who Foresaw Selloff Is 'Dubious' of Stock-Market Rally By JON E. HILSENRATH Staff Reporter of THE WALL STREET JOURNAL LEXINGTON, Mass. -- In a well-manicured Boston retirement community, Charles P. Kindleberger has watched the stock-market turmoil unfold during the past two years with a sense that he has seen it all before. Mr. Kindleberger, a retired economist, wrote the 1978 economics classic Manias, Panics, and Crashes: A History of Financial Crises. The book, required reading for many Wall Street trainees and students of economic history, documents four centuries of boom-and-bust financial cycles. It ranges from a fleeting bubble in the market for Dutch tulips in 1636, to rampant speculation and subsequent collapses in railroad shares in 1847 and 1857, to the Depression in the 1930s, to the rise and fall of Japan's property market in the late 1980s and early 1990s. At the age of 91, Mr. Kindleberger, who taught economics at the Massachusetts Institute of Technology for 33 years, is one of the few retirees unshaken by the current market turbulence -- with the Dow Jones Industrial Average down 18% from the start of the year, despite Wednesday's big rally. I'm ashamed to say I enjoy the decline in the stock market, he says. It is what we call schadenfreude, a joy in the troubles of others. Mr. Kindleberger is gloating because he warned readers in the foreword of the third edition of Manias, Panics, and Crashes, released in 1996, of what looked suspiciously like a bubble in technology stocks. Paul Samuelson, a colleague and Nobel prize-winning economist, admonished readers on the book's cover, Sometime in the next five years you may kick yourself for not reading and re-reading Kindleberger's [book]. It is one of the most important books for people on Wall Street to read, says Richard Sylla, who teaches a course on financial history at New York University's Stern School of Business and has his students spend two weeks examining the book. Just knowing that he was right is reassuring, says Mr. Kindleberger. You get to sleep easier. Mr. Kindleberger said he was very dubious that Wednesday's rally signaled much of anything. Investors might rush in to a market in the midst of a downturn, he says, but it takes a more sustained rally to signal a real bottom. Mr. Kindleberger's own savings are in certificates of deposit, money-market funds and bonds. His fortunes are also helped by a recent uptick in sales of his book, according to John Wiley Sons, the book's publisher. A fourth edition was released in late 2000, in the wake of Asia's financial meltdown in 1997 and 1998. Mr. Kindleberger says he would love to write a fifth edition full of details from the latest corporate scandals, or a book about a housing-price bubble he sees developing, but he doesn't feel up to it. Still, he hasn't stopped working. In November, he wrote an essay on how to invest when you're 90 and contemplating death. As you get older, he says, it makes sense to become more risk-averse because there is less time to ride out market volatility. His advice: subtract your age from 100, and that is the percentage you should have in equities. A widower with four children, he still drives a 1989 Ford Escort, which he uses to visit the barber and friends such as 94-year-old former Harvard University professor John Kenneth Galbraith, another giant among economic historians and author of The Great Crash of 1929. A few weeks ago, he met with Mr. Galbraith. I said, 'What should we talk about?' and he said, 'Enron! Enron!' Mr. Kindleberger says, adding: I love that. We all love talking about Enron. Mr. Kindleberger says that history offers little consolation for victims of swindles such as Enron because the victims rarely get their money back. Lawyers get most of it, he says. Manias, Panics, and Crashes lays out the familiar pattern of boom-bust cycles. They start with a fundamental change in the real world, such as a war or new technology, which creates new profit opportunities in some sectors. Investment expands, often fed by easy bank credit. Before long, however, investment becomes speculation, then becomes totally detached from reality and turns into mania, sometimes spreading internationally. Ultimately, he says, it ends in a crash and revulsion in which investors flee falling markets. Authorities are left to wrestle with how to stabilize and then fix the financial system. Mr. Kindleberger's stories of financial crises feature legendary swindlers such as Robert Knight, who helped cook the books of the South Sea Company. The 1720 British equivalent of an Internet stock, it had no profits but big plans for trade in slaves to Latin America. Its shares soared more than fivefold in four months' time and then flamed out as copycat companies multiplied and insiders started selling shares. Knight fled England, ended up in an Antwerp jail and then broke
Re: RE: Market correction
Doesn't the term market correction (rebound) work like the description of the Middle East peace process -- suggesting a hope rather than information? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: Reformism and what Marx stated
The passages presented from Marx Critique of the Gotha Program are rich in content, as is his method or form of presentation. What has been presented thus far, does not exhaust the scope of the content of the Gotha Program, however. In the previous configuration of history what has thus far been presented was sufficient as a theoretical framework. This is no longer true. The reader is asked for indulgence in presenting more material from the Gotha Program. Here is Marx Critique: 4. "The emancipation of labor must be the work of the working class, relative to which all other classes are only one reactionary mass." The first strophe is taken from the introductory words of the Rules of the International, but "improved." There it is said: "The emancipation of the working class must be the act of the workers themselves"; here, on the contrary, the "working class" has to emancipate -- what? "Labor." Let him understand who can. In compensation, the antistrophe, on the other hand, is a Lassallean quotation of the first water: "relative to which" (the working class) "all other classes are only one reactionary mass." In the Communist Manifesto it is said: "Of all the classes that stand face-to-face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry; the proletariat is its special and essential product." The bourgeoisie is here conceived as a revolutionary class -- as the bearer of large-scale industry -- relative to the feudal lords and the lower middle class, who desire to maintain all social positions that are the creation of obsolete modes of production. Thus, they do not form together with the bourgeoisie "only one reactionary mass". On the other hand, the proletariat is revolutionary relative to the bourgeoisie because, having itself grown up on the basis of large-scale industry, it strives to strip off from production the capitalist character that the bourgeoisie seeks to perpetuate. But the Manifesto adds that the "lower middle class" is becoming revolutionary "in view of [its] impending transfer to the proletariat." From this point of view, therefore, it is again nonsense to say that it, together with the bourgeoisie, and with the feudal lords into the bargain, "form only one reactionary mass" relative to the working class. Has one proclaimed to the artisan, small manufacturers, etc., and peasants during the last elections: Relative to us, you, together with the bourgeoisie and feudal lords, form one reactionary mass? Lassalle knew the Communist Manifesto by heart, as his faithful followers know the gospels written by him. If, therefore, he has falsified it so grossly, this has occurred only to put a good color on his alliance with absolutist and feudal opponents against the bourgeoisie. In the above paragraph, moreover, his oracular saying is dragged in by main force without any connection with the botched quotation from the Rules of the International. Thus, it is simply impertinence, and indeed not at all displeasing to Herr Bismarck, one of those cheap pieces of insolence in which the Marat of Berlin deals. [Marat of Berlin a reference to Hasselmann, chief editor of the Neuer Social-Demokrat] (End of Quote.) In my opinion, Marx Critique has a distinct approach. His theoretical presentation is fused with the historical boundary in which it is written and he thus speaks of decaying feudal economic and social relationships. That is to say, his approach "measures" the "distance" or "space" that the capitalist mode of production occupies in relationship to and as it emerges from feudal economic and social relations as he "experienced" and intellectually challenged "this measure." Thus he states: "The bourgeoisie is here conceived as a revolutionary class -- as the bearer of large-scale industry -- relative to the feudal lords and the lower middle class, who desire to maintain all social positions that are the creation of obsolete modes of production. Thus, they do not form together with the bourgeoisie "only one reactionary mass." "On the other hand, the proletariat is revolutionary relative to the bourgeoisie because, having itself grown up on the basis of large-scale industry, it strives to strip off from production the capitalist character that the bourgeoisie seeks to perpetuate." (End of quote.) The historical timeframe and boundary from which Marx speaks is spent and no one argues to the contrary. If one approaches "this spent boundary" from the standpoint of the fundamental completion of the mechanization of agriculture, one can "return" to the period of the formation and consolidation of Soviet socialism as it existed and emerged from the boundary of which Marx speaks. I do not state or imply that MIYACHI TATSUO puts forth a position that Soviet Socialism was a form of capitalism called "state capitalism" or as it was called by the so-called "Young
RE: Charles P. Kindleberger
Title: RE: [PEN-L:28468] Charles P. Kindleberger The Dutch tulip bubble offers another example of how these cycles have played out. It started with the development of exotic new breeds of tulips and was fueled by a booming Dutch economy. At its height, investors traded land, houses, farm animals, paintings and gold for colorful tulips. One Viceroy tulip bulb, writes Mr. Kindleberger, commanded a down payment of eight pigs, a dozen sheep, two oxheads of wine, four tons of butter, a thousand pounds of cheese, a bed, clothing, some wheat and rye, and a silver beaker. does anyone know anything about the following book? - Book Description for Peter M. Garber, _Famous First Bubbles: The Fundamentals of Early Manias_: The jargon of economics and finance contains numerous colorful terms for market-asset prices at odds with any reasonable economic explanation. Examples include bubble, tulipmania, chain letter, Ponzi scheme, panic, crash, herding, and irrational exuberance. Although such a term suggests that an event is inexplicably crowd-driven, what it really means, claims Peter Garber, is that we have grasped a near-empty explanation rather than expend the effort to understand the event. In this book Garber offers market-fundamental explanations for the three most famous bubbles: the Dutch Tulipmania (1634-1637), the Mississippi Bubble (1719-1720), and the closely connected South Sea Bubble (1720). He focuses most closely on the Tulipmania because it is the event that most modern observers view as clearly crazy. Comparing the pattern of price declines for initially rare eighteenth-century bulbs to that of seventeenth-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behavior. In the cases of the Mississippi and South Sea Bubbles, he describes the asset markets and financial manipulations involved in these episodes and casts them as market fundamentals. About the Author Peter M. Garber is Global Strategist at Global Markets Research of Deutsche Bank and Professor of Economics at Brown University. Review from The Industry Standard (from the amazon.com web-page): Now that tech stocks are in a rut, it's comforting to tell war stories from a different era. A favorite is the tale of how market madness in 1636 allegedly drove Dutch citizens to squander enough provisions to last a family a year for a single rare tulip bulb. Indeed, tulip mania has become a catchall for irrational market behavior, particularly since the Nasdaq tanked in April. Such is human nature, as Charles Mackay wrote in his classic Extraordinary Popular Delusions and the Madness of Crowds, that whole communities suddenly fix their minds upon one object, and go mad in its pursuit. Had Federal Reserve Chairman Alan Greenspan been around, he too would have wagged his finger at Holland's irrational exuberance, right? Not so fast, says economist Peter Garber in his slim yet fascinating book Famous First Bubbles. There's almost always a better explanation than crowd psychology for sky-high asset prices, he says. Garber, a Brown University economics professor and global strategist for Deutsche Bank, takes a mere 160 pages to debunk the myths surrounding tulip mania, as well as its sisters in mythology, the South Sea bubble and the Mississippi bubble. There is a difference, Garber writes, between uncertainty about the future - which drives innovators, risk-taking entrepreneurs and eventually markets - and mob psychology. The Netherlands, for example, was a sophisticated trading center, with well-developed commodity markets. That rare varieties of tulip bulbs could fetch high prices among professional traders was not irrational. The tulips could be used to grow many more valuable hybrids and often earned their purchasers far more than they invested. Indeed, this pattern still exists today. In 1987, serious traders paid as much as $500,000 for a new breed of tulip, fully intending to make good on the investment. That highly specialized market is not to be confused with the more speculative futures contracts made by Dutch laymen. Hunkered down in taverns, they traded common bulbs, and for one month in early 1637 provided the basis for all those hair-raising anecdotes. But even those deals, Garber points out, were not spurred by madness. They were nonenforceable gambles on futures contracts by people who knew their margins would never be called. Indeed, when the government suspended all such contracts in early 1637, authorities let buyers off the hook on payment of 3.5 percent of the contract price - hence the legend of a disastrous price decline. This was no more than a meaningless winter drinking game, Garber writes, played by a plague-ridden population... . Indeed, the Dutch economy chugged along, undamaged by the bubble, for another 10 years. Then why the legend of a market gone berserk? Garber does a great job tracing all anecdotes
Re: Re: RE: Market correction
Michael Perelman wrote: Doesn't the term market correction (rebound) work like the description of the Middle East peace process -- suggesting a hope rather than information? No. As DD pointed out, a correction is a move counter to the larger trend. A correction in a bull market is a downdraft of up to 10%; in a bear market, an updraft of no more than 10%. When the move exceeds 10%, you start thinking about redefining the trend. This is all demotic market-speak; many finance academics view this stuff as little better than astrology. Doug
Re: RE: Charles P. Kindleberger
Devine, James wrote: does anyone know anything about the following book? - Book Description for Peter M. Garber, _Famous First Bubbles: The Fundamentals of Early Manias_: I refer to the book [well, the articles on which the book was based] in a section of a new book that I am doing. Here it is. Any comments would be appreciated. Here again, the experience of the Dutch is instructive. In 1634, the Dutch became infatuated with the Tulip, a plant native to Turkey. Because the tulip multiplies asexually, growers could not increase the supply nearly as fast as the demand. Consequently, the value of tulips, measured by their market price, skyrocketed: ##In 1634, the rage among the Dutch to posses them (tulips) was so great that the ordinary industry of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade. As the mania increased, prices augmented, until, in the year 1635, many persons were known to invest a fortune of 100,000 florins in the purchase of forty roots. It became necessary to sell them by their weight in perits, a small weight less than a grain. [McKay 1841, p. 90] A single Semper Augustus fetched a price of 5,500 guilders, equivalent to more than 100 ounces of gold (Garber 1989a, p. 53). The market, of course, eventually crashed. Later commentators referred to this speculative frenzy as tulipomania. Peter Garber began studying this phenomenon shortly after the October 1987 stock market crash. According to Edward Chancellor, another student of speculation, Garber's work was written with the intention of heading off proposed government regulation of stock futures markets (Chancellor 1999, p. 24). Garber attempted to explain that the speculation had a rational basis. However, even he had to admit that the one-month 20-fold price surge for common bulbs in January 1637 does defy explanation (Garber 1989b, p. 556). The lessons of tulipomania were lost on later generations. Periodic euphoria seems to be endemic to market economies. The great dot.com bubble pushed the NASDAQ index to 4,800 in March 2000. Giddy with the success of the stock market, pundits began predicting that the stock market would soon reach even more fanciful levels. Publishers marketed books with titles, such as Dow 36,000 (Glassman and Hassett 1999), Dow 40,000 (Elias 1999), and Dow 100,000 (Kadlec and Acampora 1999). The fortunate run on the NASDAQ market did not last indefinitely. By April 2001, the meltdown had sunk the index to below 1,640. By late March 2001, an estimated $4.6 trillion worth of value that the NASDAQ had enjoyed in March 2000 had evaporated (Vickers 2001). Retrospectively, the eventual collapse of a speculative bubble might seem to offer evidence that in the long run value returns to a level that is consistent with the underlying material basis. Of course, nobody can precisely identify the underlying material basis of value, even in retrospect. The enthusiasts of the dot.com bubble believed that the soaring stocks were justified in terms of material fundamentals. They argued that the computer, the Internet, and modern communications technologies had so revolutionized the productive system that future earnings with more than justify what the skeptics believed to be excessive stock prices. The idea that speculative bubbles occur from time to time and then disappear suggests that rationality is the norm, except for the periodic lapses that cause the bubbles. I know of any grounds for believing that rationality is the norm in speculative markets. In addition, nobody has a firm basis for identifying what the appropriate value of a speculation should be. Even after the NASDAQ market crashed, observers continued to debate whether the market was still overvalued or whether investors had overreacted been driven stock prices below what market analysts considered to be their fundamental values. Economists typically write about bubbles as if they were anomalies. I would argue, instead, that bubbles are extreme cases of a common phenomenon. A thick fog of ignorance and uncertainty engulfs the future. Lacking adequate knowledge, people can only rely on educated guesses or follow others who might seem to have better information. This situation leads to a kind of herd behavior, which is conducive to bubbles. Some bubbles grow to grotesque sizes. Others are more modest and pass unnoticed. But these bubbles are everywhere, not just among stock or bond traders or option dealers. In a market economy, virtually every investment is a speculation, whether opening a restaurant or investing in some complicated financial instrument. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: RE: Charles P. Kindleberger
Devine, James wrote: does anyone know anything about the following book? - Book Description for Peter M. Garber, _Famous First Bubbles: The Fundamentals of Early Manias_: The jargon of economics and finance contains numerous colorful terms for market-asset prices at odds with any reasonable economic explanation. Examples include bubble, tulipmania, chain letter, Ponzi scheme, panic, crash, herding, and irrational exuberance. Although such a term suggests that an event is inexplicably crowd-driven, what it really means, claims Peter Garber, is that we have grasped a near-empty explanation rather than expend the effort to understand the event. In this book Garber offers market-fundamental explanations for the three most famous bubbles: the Dutch Tulipmania (1634-1637), the Mississippi Bubble (1719-1720), and the closely connected South Sea Bubble (1720). He focuses most closely on the Tulipmania because it is the event that most modern observers view as clearly crazy. Comparing the pattern of price declines for initially rare eighteenth-century bulbs to that of seventeenth-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behavior. In the cases of the Mississippi and South Sea Bubbles, he describes the asset markets and financial manipulations involved in these episodes and casts them as market fundamentals. About the Author Peter M. Garber is Global Strategist at Global Markets Research of Deutsche Bank and Professor of Economics at Brown University. Review from The Industry Standard (from the amazon.com web-page): Don't know the book, but I read a journal article with a similar title by the same author that was pretty ludicrous. It's pretty funny that Amazon cites a review from a magazine that died with the boom. Tulipmania might have had few economic consequences, but former Industry Standard employees might not embrace the implied parallel. Doug
RE: Re: RE: Charles P. Kindleberger
Title: RE: [PEN-L:28474] Re: RE: Charles P. Kindleberger I know of any grounds for believing that rationality is the norm in speculative markets. shouldn't there be a not in there somewhere? Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -Original Message- From: Michael Perelman [mailto:[EMAIL PROTECTED]] Sent: Thursday, July 25, 2002 8:55 AM To: [EMAIL PROTECTED] Subject: [PEN-L:28474] Re: RE: Charles P. Kindleberger Devine, James wrote: does anyone know anything about the following book? - Book Description for Peter M. Garber, _Famous First Bubbles: The Fundamentals of Early Manias_: I refer to the book [well, the articles on which the book was based] in a section of a new book that I am doing. Here it is. Any comments would be appreciated. Here again, the experience of the Dutch is instructive. In 1634, the Dutch became infatuated with the Tulip, a plant native to Turkey. Because the tulip multiplies asexually, growers could not increase the supply nearly as fast as the demand. Consequently, the value of tulips, measured by their market price, skyrocketed: ##In 1634, the rage among the Dutch to posses them (tulips) was so great that the ordinary industry of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade. As the mania increased, prices augmented, until, in the year 1635, many persons were known to invest a fortune of 100,000 florins in the purchase of forty roots. It became necessary to sell them by their weight in perits, a small weight less than a grain. [McKay 1841, p. 90] A single Semper Augustus fetched a price of 5,500 guilders, equivalent to more than 100 ounces of gold (Garber 1989a, p. 53). The market, of course, eventually crashed. Later commentators referred to this speculative frenzy as tulipomania. Peter Garber began studying this phenomenon shortly after the October 1987 stock market crash. According to Edward Chancellor, another student of speculation, Garber's work was written with the intention of heading off proposed government regulation of stock futures markets (Chancellor 1999, p. 24). Garber attempted to explain that the speculation had a rational basis. However, even he had to admit that the one-month 20-fold price surge for common bulbs in January 1637 does defy explanation (Garber 1989b, p. 556). The lessons of tulipomania were lost on later generations. Periodic euphoria seems to be endemic to market economies. The great dot.com bubble pushed the NASDAQ index to 4,800 in March 2000. Giddy with the success of the stock market, pundits began predicting that the stock market would soon reach even more fanciful levels. Publishers marketed books with titles, such as "Dow 36,000* (Glassman and Hassett 1999), "Dow 40,000* (Elias 1999), and "Dow 100,000* (Kadlec and Acampora 1999). The fortunate run on the NASDAQ market did not last indefinitely. By April 2001, the meltdown had sunk the index to below 1,640. By late March 2001, an estimated $4.6 trillion worth of value that the NASDAQ had enjoyed in March 2000 had evaporated (Vickers 2001). Retrospectively, the eventual collapse of a speculative bubble might seem to offer evidence that in the long run value returns to a level that is consistent with the underlying material basis. Of course, nobody can precisely identify the underlying material basis of value, even in retrospect. The enthusiasts of the dot.com bubble believed that the soaring stocks were justified in terms of material fundamentals. They argued that the computer, the Internet, and modern communications technologies had so revolutionized the productive system that future earnings with more than justify what the skeptics believed to be excessive stock prices. The idea that speculative bubbles occur from time to time and then disappear suggests that rationality is the norm, except for the periodic lapses that cause the bubbles. I know of any grounds for believing that rationality is the norm in speculative markets. In addition, nobody has a firm basis for identifying what the appropriate value of a speculation should be. Even after the NASDAQ market crashed, observers continued to debate whether the market was still overvalued or whether investors had overreacted been driven stock prices below what market analysts considered to be their fundamental values. Economists typically write about bubbles as if they were anomalies. I would argue, instead, that bubbles are extreme cases of a common phenomenon. A thick fog of ignorance and uncertainty engulfs the future. Lacking adequate knowledge, people can only rely on educated guesses or follow others who might seem to have better information. This situation leads to a kind of herd behavior, which is conducive to bubbles. Some bubbles grow to grotesque
Re: state gov't spending
In a message dated 7/24/02 9:08:42 PM Pacific Daylight Time, [EMAIL PROTECTED] writes: I know that government spending has been a major factor in maintaining demand, but now the state governments are in deficit and will prepare major cutbacks. Any idea about how much of a factor that will be? -- Michael Perelman Economics Department California State University Chico, CA 95929 I am incapable of quantifying the above, which requires studying the matter carefully and mathematical models outside my ability and scope. I fear for the worse without a strong movement for reform. Perhaps 6 months ago I was sent some material outlining an uncoordinated growing national movement across America to fight collapse of local governments and the societal infrastructure. Where I live - small city surrounded by Detroit, the city government has utterly collapsed. The cost of water was raised 40% and my bill every three months is roughly $400 (four hundred dollars). The city police and fire department is gone. Two month ago a house caught fire in the adjacent block and three houses burned by the time help arrived and the fire was put out. The story played on the local news station. Virtually impossible to get home insurance at any price. Auto insurance is astronomical. This means roughly $3000 (three thousand a year - not a misprint). The State police and Sheriff department patrol the main streets. Citizens violence has not increased. Repeat: citizens violence against one another has not increased. New configuration surfacing into the public awareness. How can I put this: almost everyone is female or rather the proletariat is female. I am watched by the children everyday going to work. No one bothers are family or anything like that. Two weeks ago the neighbors held their annual yard party. Many of us have huge adjacent yards where homes once sat (urban decay or rather capital decay), meaning roughly 200 people can be entertained. Moved our cars off the street into the yard to leave room for parking on both sides of the street. Perhaps 300 people showed up for the party during a 10 hour period and no less than 200 were women. The wife and I sat on the porch listening to music occasionally dancing on the porch and sidewalk. The flavor of the music has shifted away from "Rap" to what is called "old school music." I know the technical basis for the emergence of Rap - as it emerged and underwent transumation as the "Motown Sound" declined, but the bravado of the period of speculation and the speculative boom is descending. Age of folks ranged from a low of say 20 years old to maybe 40. The "women Question" is the proletariat(?) (I take that back and let me leave this issue alone. Sorry). Methadone treatment has increased or shifted. Wife is administrator at Methadone Clinic. Increase in clients are from better paid sector of the industrial work force, many from the auto industry. Many receiving pension. Their medical coverage allows access. When auto takes another "it" its going to get seriously ugly. "Dollar stores" everywhere with products from everywhere meaning China. Chinese restaurants everywhere and this explosion entered the mass consciousness here maybe 5-7 years ago. The Casino industry raised personal bankruptcy by 800% over the last 36 months (not a misprint). Not just homeowners and industrial workers but small business owners, many who tend to be "Arab," Chinese and Korean. Casino is the most multinational area of gathering in the state of Michigan. To much material - information overload in progress, can't absorb the pace of events. Capital is ruining the country at an accelerated pace. Melvin P.
RE: Re: Re: RE: Market correction
h careful ... the finance academics who believe that technical analysis is literally nonsense, the equivalent of astrology, are very much the old guard, and are clinging to the principle in the face of mounting evidence that there is something to it. Andrew Lo and Craig McKinlay of MIT have even published a book entitled A Non-Random Walk Down Wall Street. This sort of phenomenon has now been pushed down into microstructure theory, the idea being that the push and pull of supply and demand, the stuff which tape-reading is made of, can be quarantined as being equivalent to a tatonnement process which does not affect the conclusion that stock market investors in general set prices rationally. dd -Original Message- From: Doug Henwood [mailto:[EMAIL PROTECTED]] Sent: 25 July 2002 16:42 To: [EMAIL PROTECTED] Subject: [PEN-L:28473] Re: Re: RE: Market correction Michael Perelman wrote: Doesn't the term market correction (rebound) work like the description of the Middle East peace process -- suggesting a hope rather than information? No. As DD pointed out, a correction is a move counter to the larger trend. A correction in a bull market is a downdraft of up to 10%; in a bear market, an updraft of no more than 10%. When the move exceeds 10%, you start thinking about redefining the trend. This is all demotic market-speak; many finance academics view this stuff as little better than astrology. Doug ___ Email Disclaimer This communication may contain confidential or privileged information and is for the attention of the named recipient only. It should not be passed on to any other person. Information relating to any company or security, is for information purposes only and should not be interpreted as a solicitation or offer to buy or sell any security. The information on which this communication is based has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. All expressions of opinion are subject to change without notice. All e-mail messages, and associated attachments, are subject to interception and monitoring for lawful business purposes. (c) 2002 Cazenove Service Company or affiliates. Cazenove Co. Ltd and Cazenove Fund Management Limited provide independent advice and are regulated by the Financial Services Authority and members of the London Stock Exchange. Cazenove Fund Management Jersey is a branch of Cazenove Fund Management Limited and is regulated by the Jersey Financial Services Commission. Cazenove Investment Fund Management Limited, regulated by the Financial Services Authority and a member of IMA, promotes only its own products and services. ___
market socialism -- an offer
For people who are interested, here is a one-day offer. I have an excellent pdf article (not mine) which I can share with interested people. This is a one day offer only. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: Query: WorldCom and Internet
Rob Schaap wrote: G'day all (perhaps especially Ravi), There was a bit of indignation in parts European when KPNQwest went under, as parts of their Ebone operation (referred to as 'internet backbone') were duly shut down. Why won't this happen to WorldCom's UUNet (also referred to as 'intenet backbone' and credited with accommodating half the world's net-traffic)? Is there enough redundancy in the otherwise bloated telecommunications infrastructure of metropolitan America to take the slack? What is the technical nature of this backbone (do they refer to the switches, proprietory protocols ... )? Are any arguments about consigning basic infrastructure to the vagaries of 'the market' (eg. a couple of executives, a finance engineer or two, mebbe a pet auditor and a few million 'investing' ignorami)? Have words like 'natural monopoly' and 'public good' come up? hi rob, i will attempt an answer to some of your questions. yes, if uunet ceases to function there will be significant disruption of the internet. the term 'backbone' is a bit old. in the days when the NSF ran the internet there was a single backbone that at various times was built/run by merit/sprint/bbn/mci/others. now, various high level network service providers have their own backbones which they connect to the backbones of other NSPs using private peering arrangements or using public exchange points. nonetheless, uunet being a pioneer (the uu part - unix to unix - shows their history back to the days when at end points you often connected systems to the internet through them using uucp), a lot of traffic runs on their network and this can cause disruption in connectivity between various endpoints of the internet. additionally MCI still runs the MAE* exchange point facilities which are exchange points for ISPs to interconnect: http://www.mae.net/mae_services1.htm and the above is used by a significant number of tier2 network providers. here's a really good page that provides info on the internet backbone ISPs etc: http://navigators.com/isp.html from a technology point of view, network backbones do seem to be a natural monopoly. new technologies that attempt to use redundant bandwidth by moving traffic around, are emerging, but suffer limitations. you are also right about the excessive capacity now available. while thats true for network capacity (fibre layout etc) i am not sure about exchange points and switches. so, transferring the usage from UUNET to other carriers and switching points might be a difficult process. which makes uunet an attractive acquisition i suppose and hence perhaps it will survive the bankruptcy? for uunet's coverage: http://www1.worldcom.com/us/about/network/maps/ http://www1.worldcom.com/global/about/network/maps/northam/ here's an interesting if crowded map of net coverage: http://www.cs.bell-labs.com/who/ches/map/ the place to look for internet data: http://www.caida.org/ http://www.nanog.org/ hope i touched on some useful stuff in my long-winded response! --ravi
Re: RE: Re: Re: RE: Market correction
everyday i hear/read pundits (financial analysts, market analysts, MBAs, consultants, commentators, etc) speak forth on the stock market collapse caused by the tech bubble that we (as they say) all fell prey to. but iirc it was they that created the bubble and assured us that it was justified. why is it that we continue to listen to them correcting themselves, all the while maintaining their expert demeanour and certainty of belief? cannot one of you experts do a sokal on these people? --ravi
RE: market socialism -- an offer
Title: RE: [PEN-L:28479] market socialism -- an offer I'd like to see this pdf file. (For some reason, I can't correspond with Michael directly.) Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -Original Message- From: Michael Perelman [mailto:[EMAIL PROTECTED]] Sent: Thursday, July 25, 2002 9:43 AM To: [EMAIL PROTECTED] Subject: [PEN-L:28479] market socialism -- an offer For people who are interested, here is a one-day offer. I have an excellent pdf article (not mine) which I can share with interested people. This is a one day offer only. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
The Invisible Robert Rubin (and Enron)
Title: The Invisible Robert Rubin (and Enron) from SLATE: chatterbox The Invisible Robert Rubin He's in Citigroup's upper management. Why don't the scandal stories say so? By Timothy Noah Posted Wednesday, July 24, 2002, at 2:53 PM PT Monday's New York Times story alleging Enron-related financial improprieties by Citigroup neglected to mention that former Treasury Secretary Robert Rubin is a director and member, office of the chairman at Citigroup (which encompasses Citicorp and Citibank). So did today's follow-up in the Times, and so did today's stories in the Washington Post and the Wall Street Journal. Indeed, in a Nexis database search, Chatterbox could find no news article anywhere that contained both Rubin's name and the word prepay, the practice that has come under scrutiny. During the past few days, Rubin's name has been all over the newspapers and newsmagazines, but these all appear to be adulatory references bemoaning the fact that America must face financial turmoil with Paul O'Neill, not Robert Rubin, running the Treasury Department. (Rubin wrote one of these stories himself.) Citigroup's (and J.P. Morgan Chase's) prepaid contracts with Enron were very complex, and none of the papers has done an especially good job at explaining precisely what the scandal is. Possibly there is none. But once the editorial decision was made to give this story major play, there was no justification for airbrushing Rubin out of it, especially given what's known about Rubin's previous, ethically questionable attempt to get the Bush Treasury Department to bail Enron out. Rubin's free ride won't last because Republicans won't allow it. The Republican National Committee today spammed a research briefing to reporters headlined Rubin, Citibank Enron, and Senate Minority Leader Trent Lott told reporters that the Governmental Affairs subcommittee, whose hearings this week prompted the Citicorp stories, may want to call in Mr. Rubin and others. He continued: I don't know Mr. Rubin's involvement. I-you know, I think he did a lot of good things when he was secretary of Treasury, and I'm not alleging anything improper, but I do think, if they were involved in this kind of operation, I think it needs to be explored. You can't ask questions on one side if you're not going to ask questions on the other side if something like this is done, which looks-you know, it looks on its face suspicious. Chatterbox expects that, in the face of this pressure, financial reporters will make at least passing reference to Rubin in future stories. It's pretty appalling, though, that they've protected him so blatantly thus far. Chatterbox chalks it up not to liberal media bias, but rather to Rubin's membership in the bipartisan Society of Media Darlings, whose other members include James Baker and John McCain.
Re: Re: RE: Re: Re: RE: Market correction
At 12:52 PM 07/25/2002 -0400, you wrote: everyday i hear/read pundits (financial analysts, market analysts, MBAs, consultants, commentators, etc) speak forth on the stock market collapse caused by the tech bubble that we (as they say) all fell prey to. but iirc it was they that created the bubble and assured us that it was justified. why is it that we continue to listen to them correcting themselves, all the while maintaining their expert demeanour and certainty of belief? cannot one of you experts do a sokal on these people? What's a sokal? It is the job of experts to be experts...even, or particularly when, they're wrong. What must continue is the belief that the people who run things know what they're doing (even when they don't) and that we must continue to follow. On the other hand, things might be getting interesting. I should start watching some T.V. Joanna
Baker and Kar on SS
Pardon if others have already seen this, but I am shocked that their argument partly includes the position that However, the increase in the government deficit, due to the loss of Social Security tax revenues during a transition period, can lead to serious financial problems. They argue that if Argentina had not privatized it Social Security system in 1994, and done everything else exactly the same, it would have run a budget surplus in 2001. Are we to assume it is understood that budget deficits are always harmful and surpluses helpful? Or is this a case of expected political expediency overriding economic logic? Mat - Defined Contributions from Workers, Guaranteed Benefits for Bankers: The World Bank's Approach to Social Security Reform By Dean Baker and Debayani Kar July 16, 2002 EXECUTIVE SUMMARY In the last decade the World Bank has actively promoted the partial or complete replacement of public Social Security systems with systems of individual accounts. While proponents of such accounts had originally hoped that they would boost growth by increasing national saving, the evidence to date has convinced even most advocates of individual accounts that the net effect on national saving will be minimal. However, the increase in the government deficit, due to the loss of Social Security tax revenues during a transition period, can lead to serious financial problems. In the case of Argentina, the current budget crisis can be attributed largely to the decision to privatize its Social Security system. The lost tax revenue, plus the interest resulting from the additional incurred expenditure, exceeded its central government budget deficit in 2001. In other words, if Argentina had not privatized it Social Security system in 1994, and done everything else exactly the same, it would have run a budget surplus in 2001. This paper compares the administrative costs associated with individual accounts, measured as a share of contributions to the system, with the costs of operating an efficient public Social Security system like the one in the United States. Among the findings: 1) According to data from the World Bank, the administrative cost of running privatized systems of individual accounts is between ten and fifty times as much as the administrative cost of running the public Social Security system in the United States. These additional fees are direct transfers from workers' retirement income to the financial sector. 2) According to data from the World Bank, the cost of the running the public agency that supervises the operation of a system of individual accounts (the equivalent of a Securities and Exchange Commission for these accounts), is between 62 percent and 400 percent of the administrative cost of running the entire Social Security system in the United States. In most countries, the cost of running this oversight body is far greater than the cost of actually running the whole Social Security system in the United States. 3) The cost of converting funds accumulated in individual accounts into an annuity that provides a lifetime stream of earnings is between 11 and 22 times the cost of operating the Social Security system in the United States. These fees are direct transfers from workers' retirement income to the financial sector. 4) Proponents of individual accounts have failed to consider the opportunity cost to workers, in the form of the time needed to oversee their accounts. If the time required to manage these accounts is equal to half an hour per year, the opportunity costs would be between 55 percent and 280 percent of the administrative costs of the Social Security system in the United States.
Re: Re: RE: Re: Re: RE: Market correction
- Original Message - From: ravi [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, July 25, 2002 9:52 AM Subject: [PEN-L:28481] Re: RE: Re: Re: RE: Market correction everyday i hear/read pundits (financial analysts, market analysts, MBAs, consultants, commentators, etc) speak forth on the stock market collapse caused by the tech bubble that we (as they say) all fell prey to. but iirc it was they that created the bubble and assured us that it was justified. why is it that we continue to listen to them correcting themselves, all the while maintaining their expert demeanour and certainty of belief? cannot one of you experts do a sokal on these people? --ravi == Why Sokal them when what needs to be done is hacking the PA system - aka 'the media' - of these lounge singers of casino capitalism. Ian
RE: market socialism -- an offer
Do we have to promise not to discuss it on Pen-L? -Original Message- From: Michael Perelman [mailto:[EMAIL PROTECTED]] Sent: 25 July 2002 17:43 To: [EMAIL PROTECTED] Subject: [PEN-L:28479] market socialism -- an offer For people who are interested, here is a one-day offer. I have an excellent pdf article (not mine) which I can share with interested people. This is a one day offer only. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901 ___ Email Disclaimer This communication may contain confidential or privileged information and is for the attention of the named recipient only. It should not be passed on to any other person. Information relating to any company or security, is for information purposes only and should not be interpreted as a solicitation or offer to buy or sell any security. The information on which this communication is based has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. All expressions of opinion are subject to change without notice. All e-mail messages, and associated attachments, are subject to interception and monitoring for lawful business purposes. (c) 2002 Cazenove Service Company or affiliates. Cazenove Co. Ltd and Cazenove Fund Management Limited provide independent advice and are regulated by the Financial Services Authority and members of the London Stock Exchange. Cazenove Fund Management Jersey is a branch of Cazenove Fund Management Limited and is regulated by the Jersey Financial Services Commission. Cazenove Investment Fund Management Limited, regulated by the Financial Services Authority and a member of IMA, promotes only its own products and services. ___
Latest McKinsey poll on corporate governance
http://www.gcgf.org/docs/Global%20Investor%20Opinion%20Survey%202002.pdf
Re: Market correction
At 07:33 AM 07/25/2002 +0100, you wrote: The market rebound. Now they are saying that the market was overdue a correction. What rubbish. When they dont know our experts drag out the correction word. A code for we dont know. Karl Carlile Communism Site: http://homepage.eircom.net/~beprepared/ Where's the mystery? Bull markets correct down; bear markets correct up. The only question is (for those betting): is it a temporary rally or is it a correction? To me, it looks and behaves exactly as it did during the bubble...except it's going ... ssin the other direction. The patterns seem to be the same. Joanna
Re: state gov't spending
Marta Russel has recently documented the fact that CA's shortfall will affect $$ for health care. I thin ZNet ran that article a few weeks ago. Joanna At 09:08 PM 07/24/2002 -0700, you wrote: I know that government spending has been a major factor in maintaining demand, but now the state governments are in deficit and will prepare major cutbacks. Any idea about how much of a factor that will be? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: Charles P. Kindleberger
Crying bubble is the easy way out, Garber says, preferred by those who believe individuals are not to be trusted in determining the value of markets - Greenspan's famous irrational exuberance is a perfect example. But without the kind of speculation seen today and, yes, in 1636, there would be no new economy, because millions of investors have to bet on the next new thing to push along those few companies who ultimately succeed. ...and as we all know, the only way forward is through wasteful and destructive speculation. We HAVE to built 98% more fiber-optic capacity than we need because that's how innovation and investment work. Huh? Is this why they call capitalism efficient? Joanna
Sokal (verb)
Title: Sokal (verb) What's a sokal? Alan Sokal is a physicist who embarrassed the post-modernist journal SOCIAL TEXT by getting them to publish total nonsense that he'd written (about reality not being real, etc.) It seems that their editorial board simply assumed that because Sokal was a physicist and his conclusions fit their world-view (and perhaps because he cited _their_ work), the article must have been valid even though they probably didn't understand most of the article. It seems a case of the if it's hard to read, it must be profound phenomenon that boosted Talcott Parsons to the top of the sociology charts back in the 1950s and encourages the popularity of much mathematical economics. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -Original Message- From: joanna bujes [mailto:[EMAIL PROTECTED]] Sent: Thursday, July 25, 2002 10:10 AM To: [EMAIL PROTECTED] Subject: [PEN-L:28485] Re: Re: RE: Re: Re: RE: Market correction At 12:52 PM 07/25/2002 -0400, you wrote: everyday i hear/read pundits (financial analysts, market analysts, MBAs, consultants, commentators, etc) speak forth on the stock market collapse caused by the tech bubble that we (as they say) all fell prey to. but iirc it was they that created the bubble and assured us that it was justified. why is it that we continue to listen to them correcting themselves, all the while maintaining their expert demeanour and certainty of belief? cannot one of you experts do a sokal on these people? What's a sokal? It is the job of experts to be experts...even, or particularly when, they're wrong. What must continue is the belief that the people who run things know what they're doing (even when they don't) and that we must continue to follow. On the other hand, things might be getting interesting. I should start watching some T.V. Joanna
Re: Sokal (verb)
Devine, James wrote: What's a sokal? Alan Sokal is a physicist who embarrassed the post-modernist journal SOCIAL TEXT Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change Doug
Re: Re: Sokal (verb)
At 02:12 PM 07/25/2002 -0400, you wrote: Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change Doug Are you serious? Joanna
Re: Re: Re: Sokal (verb)
joanna bujes wrote: At 02:12 PM 07/25/2002 -0400, you wrote: Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change Doug Are you serious? Completely. They had a big ad in the NY Times the other day, with an impressive load of signatures. Doug
Re: The new EU
At 24/07/02 09:40 -0400, Louis Proyect wrote: Chris Buford: But it is not the case that there is nothing in the EZ that conforms to the progressive interests of working people, just because it is a victory for the ruling class. For one thing they generally appreciate the benefits of a large market, as Lenin noted, in an aside on the national question. Lenin never said anything of the sort. That is a confident statement considering it is hard to prove a negative. Lenin wrote a lot. Chris Burford
Re: Re: The new EU
That is a confident statement considering it is hard to prove a negative. Lenin wrote a lot. Chris Burford Actually Lenin was quite specific on questions that are extremely germane to that under discussion: On the Slogan for a United States of Europe: But while the slogan of a republican United States of Europe -- if accompanied by the revolutionary overthrow of the three most reactionary monarchies in Europe, headed by the Russian -- is quite invulnerable as a political slogan there still remains the highly important question of its economic content and significance. From the standpoint of the economic conditions of imperialism -- i.e., the export of capital and the division of the world by the advanced and civilised colonial powers -- a United States of Europe, under capitalism, is either impossible or REACTIONARY. Of course, temporary agreements are possible between capitalists and between states. In this sense a United States of Europe is possible as an agreement between the European capitalists... but to what end? Only for the purpose of jointly SUPPRESSING SOCIALISM IN EUROPE, of jointly protecting colonial booty against Japan and America, who have been badly done out of their share by the present partition of colonies, and the increase of whose might during the last fifty years has been immeasurably more rapid than that of backward and monarchist Europe, now turning senile. Compared with the United States of America, Europe as a whole denotes economic stagnation. On the present economic basis, i.e., under capitalism, a United States of Europe would signify an ORGANIZATION OF REACTION to retard America's more rapid development. The times when the cause of democracy and socialism was associated only with Europe alone have GONE FOREVER. http://www.marxists.org/archive/lenin/works/1915/aug/23.htm
victory for Jim D.
Stung by Jim's e-mail about Adelphia's hypocricy, the WSJ today reports that the company will now allow sexually explicit material to be broadcast. The paper forgot to credit Jim. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Turkey
http://www.eurasianet.org IMF AGENDA LIKELY TO PREVAIL IN POST-ELECTION TURKEY Mevlut Katik: 7/25/02 A EurasiaNet Commentary Ailing and forced into lame-duck status by a restive parliament, Turkish Prime Minister Bulent Ecevit shot back at his country's financial markets on July 25 by warning that the early elections he endorsed this summer would hurt the Turkish economy. Turkey's November 3 election will come as the legislature is scrambling to pass reforms to support its application for membership in the European Union. Ecevit warned on July 25 that those reforms would be very hard to achieve during a change in government, worrying investors who believe that EU membership will boost Turkish markets and sales. Some observers also wonder if Turkey's $16 billion loan commitment from the International Monetary Fund, whose disbursements also depend on economic reforms, can survive amid the political clutter. The IMF has made itself indispensable to whatever party governs Turkey. After a serious financial crisis erased thousands of jobs and sank the Turkish lira by about 50 percent, the IMF signed a standby agreement with the government in February 2001 that triggered a series of reforms. On evidence of these reforms, the Turkish economy and lira began to recover. Yet the current political crisis has thrown the future of the program into doubt, not least because it might yield a government without influential economy minister Kemal Dervis. Ecevit, who grudgingly endorsed early elections after his cabinet threatened to dissolve the government, has promised that EU-directed reforms will continue. IMF-related reforms, which involve privatization of industry and anticorruption measures, support elements of the EU bid. But as Turkey enters a political breach with a precarious economy in a volatile world, those reforms will extract increasing amounts of sacrifice from the public. A new government will have the tough task of instilling these reforms while solidifying a political base. Turkey's economy looks ill prepared for major changes. [For background, see the Eurasia Insight archives]. Interest rates have touched 75 percent while growth hovers around three percent. While the government still aims to halve annual inflation to the IMF target of 35 percent by December, it needs to figure out how to manage high borrowing costs while persuading investors that its currency will improve. The country runs a deficit, and manufacturing wages fell in 2001. The Turkish government divorced the Central Bank from political ups and downs in 2001, but a future government might re-emphasize patronage and partisanship in guiding financial policy. Steadfastness from Dervis and the IMF have bolstered investors' confidence since the winter of 2001. After elections, though, this confidence may evaporate. Fitch Ratings affirmed the stability of Turkey's long-term international currency on July 1. In its latest report, Fitch noted that the government is unlikely to face debt repayment problems in the immediate future. However, it warned that things could change if the political impasse is not resolved after a possible election. Economy Minister Dervis also warned after a July 16 meeting with IMF European Executive Director Willy Kiekens and Turkey desk chief Juha Kahkonen that domestic debt due to rising interest rates and political uncertainty caused problems, but pledged the nation to an IMF-blessed macroeconomic course. The budgetary figures released by the Finance Ministry on the same day also recorded an increase in primary surplus, which Finance Minister Sumer Oral said boded well for the overall annual surplus. But as Dervis himself noted, uncertainty can erode economic optimism. The entire IMF loan has coincided with political bickering. Members of Ecevit's coalition did not like the idea of appointing independent commission members for supervisory bodies, and some ministers lost their jobs over the issue. While privatization is likely to remain on track, the enthusiasm of a future government on this issue would determine privatization's pace and breadth. Privatization revenue could buoy a new government by reducing the need for expensive foreign debt. In a shaky global economy, though, investors may not flock to newly independent Turkish companies. The government will have to keep installing regulatory bodies and widening regulation over the nation's troubled banks in order to capture whatever enthusiasm a favorable review by the EU could spark. At the same time, no political party wants to aggressively claim ownership of these sorts of policies. Tight fiscal policies mean higher taxes and potentially higher unemployment, while more populist strategies that weaken the economy can also hurt political parties. As a result, political parties who prevail after elections can cite the IMF program as a necessary source of life and money injection for the economy. New leaders
critiques of Vandana Shiva
Could some one direct me to good, solid critiques of Shiva's position? Thanks. Anthony Anthony P. D'Costa Associate Professor Ph: (253) 692-4462 Comparative International Development Fax: (253) 692-5718 University of WashingtonBox Number: 358436 1900 Commerce Street Tacoma, WA 98402, USA xxx
Re: RE: market socialism -- an offer
I'd like to see a copy, too. Christian
RE: Baker and Kar on SS
Title: RE: [PEN-L:28486] Baker and Kar on SS Mat writes: Pardon if others have already seen this, but I am shocked that their argument partly includes the position that However, the increase in the government deficit, due to the loss of Social Security tax revenues during a transition period, can lead to serious financial problems. They argue that if Argentina had not privatized it Social Security system in 1994, and done everything else exactly the same, it would have run a budget surplus in 2001. Are we to assume it is understood that budget deficits are always harmful and surpluses helpful? Or is this a case of expected political expediency overriding economic logic? Mat - In the case of Argentina, and other poor countries, government deficits should be avoided. They typically lead to external debt, which leads to IMF dictatorship, etc. Also, it makes sense to me that a country would rather its government spend its budget on stuff that's really needed rather than on administering an inefficient pension plan. The way that budgetary analyists say this kind of thing is terms of the government budget constraint. In any event, Dean Baker regularly makes assertions based on dubious theories that are generally accepted by economists. Awhile back, in his _Economic Reporting Review_, he used the bogus aggregate production function (a Cobb-Douglas one at that) in order to make a point against some policy perspective he rejected. Still his ERR is useful (while to ERR is human). JD Defined Contributions from Workers, Guaranteed Benefits for Bankers: The World Bank's Approach to Social Security Reform By Dean Baker and Debayani Kar July 16, 2002 EXECUTIVE SUMMARY In the last decade the World Bank has actively promoted the partial or complete replacement of public Social Security systems with systems of individual accounts. While proponents of such accounts had originally hoped that they would boost growth by increasing national saving, the evidence to date has convinced even most advocates of individual accounts that the net effect on national saving will be minimal. However, the increase in the government deficit, due to the loss of Social Security tax revenues during a transition period, can lead to serious financial problems. In the case of Argentina, the current budget crisis can be attributed largely to the decision to privatize its Social Security system. The lost tax revenue, plus the interest resulting from the additional incurred expenditure, exceeded its central government budget deficit in 2001. In other words, if Argentina had not privatized it Social Security system in 1994, and done everything else exactly the same, it would have run a budget surplus in 2001. This paper compares the administrative costs associated with individual accounts, measured as a share of contributions to the system, with the costs of operating an efficient public Social Security system like the one in the United States. Among the findings: 1) According to data from the World Bank, the administrative cost of running privatized systems of individual accounts is between ten and fifty times as much as the administrative cost of running the public Social Security system in the United States. These additional fees are direct transfers from workers' retirement income to the financial sector. 2) According to data from the World Bank, the cost of the running the public agency that supervises the operation of a system of individual accounts (the equivalent of a Securities and Exchange Commission for these accounts), is between 62 percent and 400 percent of the administrative cost of running the entire Social Security system in the United States. In most countries, the cost of running this oversight body is far greater than the cost of actually running the whole Social Security system in the United States. 3) The cost of converting funds accumulated in individual accounts into an annuity that provides a lifetime stream of earnings is between 11 and 22 times the cost of operating the Social Security system in the United States. These fees are direct transfers from workers' retirement income to the financial sector. 4) Proponents of individual accounts have failed to consider the opportunity cost to workers, in the form of the time needed to oversee their accounts. If the time required to manage these accounts is equal to half an hour per year, the opportunity costs would be between 55 percent and 280 percent of the administrative costs of the Social Security system in the United States.
Re: Re: Sokal (verb)
Devine, James wrote: What's a sokal? Alan Sokal is a physicist who embarrassed the post-modernist journal SOCIAL TEXT Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change How so? He always said he was on the left. He was just one of them flat headed scientific realist leftist types, like one V.I. Lenin and and K. Marx. Not to mention moi, and since I didn't don't say I did. jks Doug _ Send and receive Hotmail on your mobile device: http://mobile.msn.com
RE: victory for Jim D.
Title: RE: [PEN-L:28498] victory for Jim D. Michael Perelman writes:Stung by Jim's e-mail about Adelphia's hypocricy, the WSJ today reports that the company will now allow sexually explicit material to be broadcast. The paper forgot to credit Jim. -- Michael, I thought that we'd agreed to keep my background secret (along with the fact that the film Boogie Nights is a thinly-disguised biography of me). speaking of which, I know that size doesn't matter, but how is my font showing up? Jim
Re: RE: victory for Jim D.
Devine, James wrote: speaking of which, I know that size doesn't matter, but how is my font showing up? it could use some viagra. --ravi
Re: Re: RE: victory for Jim D.
- Original Message - From: ravi [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, July 25, 2002 2:29 PM Subject: [PEN-L:28505] Re: RE: victory for Jim D. Devine, James wrote: speaking of which, I know that size doesn't matter, but how is my font showing up? it could use some viagra. --ravi Or the Austin Powers Font Enlargement [TM] software. Ian
Re: Re: Re: Sokal (verb)
Justin Schwartz wrote: How so? He always said he was on the left. He was just one of them flat headed scientific realist leftist types, like one V.I. Lenin and and K. Marx. Not to mention moi, and since I didn't don't say I did. jks Alan Sokal has nothing in common with Lenin or Marx on the question of science. He is social democrat whose ideas on science have more in common with 19th century Positivism than Marxism. If you want to understand how Marxists view science, check the articles by Levins and Lewontin that appeared in the infamous Social Text issue on the science wars. When I made a disparaging remark about Sokal's long-time cothinker Norman Levitt in something I posted about Chomsky to the Science-for-the-People email list, he got into a brief exchange with me. To put it bluntly, Levitt is a reactionary in the Living Marxism vein. The hostility to postmodernism is not coming from the same place as Aijaz Ahmad or Ellen Meiksins Wood. It is closer to the New Criterion and Virginia Postrel's libertarian Reason Magazine. Postrel was a key figure at the Spiked/LM conference on science versus anti-science (ie., opposition to DDT, nuclear power, etc.), where Levitt and Sokal were ubiquitous figures--! although neither spoke. When Sokal was asked to review a Monthly Review book (originally published by Pluto) on the science wars written by a couple of LM nuts, John Bellamy Foster stepped in when he found out the book contained a virulent attack on Rachel Carsons. Those who are opposed to postmodernism are not necessarily on the side of the angels. Louis Proyect www.marxmail.org
RE: victory for Jim D.
Devine, James wrote: speaking of which, I know that size doesn't matter, but how is my font showing up? ravi replied, it could use some viagra. Or maybe some verdana? Tom Walker 604 254 0470
garber v. Kindleberger
I thought Garber was an attempt to reply to the rise of behavioral finance explanations like those of Shiller and Kindleberger but instead it seems to rest on rather dubious distinctions about uncertainty and risk that I think are all attempts to justify entrepreneurial return (i.e. where does the so-called productivity of capital come from - assuming you do not want to invoke labor power - and who deserves the return). This is just a guess. Stephen F. Diamond School of Law Santa Clara University [EMAIL PROTECTED]
Big K
Doug wrote: The U.S., Japan, and the EU are all relatively closed economies, with imports only around 10% of GDP. The leakage argument is overdone. Probably you are right about that, I am biased probably because I lived in economies heavily dependent on foreign trade and sensitive to foreign investment. While I am sympathetic to left-Keynesianism, the pitfall in it is that you cannot force investors to invest where they don't want to. And if they don't like your redistributive policies, they shift their capital somewhere else. By the way, when I commented on the Gallup survey I wasn't trying to knock you or LBO, I just thought it was a badly worded question than creates nonsense statistics, that's all. Many social scientists accept data as a given and write something about it, but I have actually been involved in the (admittedly tedious) production process of the data, and then you don't look at data in the same way anymore, you become more critical of what people present as objective facts. I am not a professional economist nor do I have much interest in neo-classical economics, because it does tell you much about real economic life that is useful, and it doesn't ask the questions that need to be asked. I am only really interested in empirical economics and economic policy, and in people like K. Marx, W. Leontief, G. Schumpeter, M. Kalecki, A. Shaikh, F. Louca, C. Freeman, M. Perelman and people like that. I would like to do more quantitative empirical research in economics at some stage, but I don't have the time for that at present. A lot of economic questions can be resolved imo by recourse to some relatively straightforward empirical research, which puts things in proportion, but curiously the economists often don't do that, and to get a better grip on the real story you often have to resort to people who aren't even professional economists ! So anyway I think LBO is useful stuff. Regards J.
Final Reply to Karl C.
Hi Sé Sé: I think that I have clearly demonstrated the first argument to be true. With limitless or *sufficient* state intervention, an economy will expand - that afterall is quite obvious. Karl: If, as you seem to suggest, there cannot be limitless state intervention then it makes no sense to claim that with limitless state intervention an economy will expand. If limitless state intervention were possible then there could be no capitalism. Consequently the issue would not arise. Notwithstanding this you are, in effect, claiming that state spending, in principle, based on borrowing is a solution to economic crises under capitalism. The point is that borrowing cannot dissolve economic crises. The cause of such crises are located within the production process. Consequently the solution must be correspondingly found within the production process. To suggest that (limitless) state spending can dissolve capitalist economic crises is to misrepresent the nature of capitalism. An economic crises is essentially the product of the inability of the production process to exploit labour power on a scale that produces a quantity of surplus value that serves as an effective counterweight to the tendency of the general rate of profit to fall. To achieve a rate of exploitation of labour power that to lifts capital out of recession requires an increase in the productivity of labour. Productivity increases can only take place by increases in the technical compostion of capital on a scale that leads to sufficient increases in the organic composition of capital. Neither borrowing nor state spending can achieve this. This is because they are activities that are independent of the process of production. Indeed state spending under capitalism generally entails a deduction from surplus value. State deductions from surplus value tend, in generl, to accelerate falling profitability thereby intensifying the economic crisis. This is why the bourgeoisie call for lower taxes. Tax constitutes a deduction from the bosses purse. It constitutes a deduction from surplus value (total profit so to speak). Obviously is not because the bosses care about the prols that they call for tax cuts. You say that state spending based on borrowing, in principle, can dissolve crisis. Yet other bourgeois ideologues argue that it has been massive borrowing that has led to what they call the recent equities bubble and even the general economic downswing itself. Some would argue that there has been limitless spending based in borrowing and that this has been the problem. Yet for you state spending based on borrowing is the solution. For them it is the problem. Some would argue that it makes no essential difference as to whether this particular borrowing is based on state or private spending. For them large scales spending based on borrowing whether public or private has essentially the same adverse effect. Karl Carlile Communism Site: http://homepage.eircom.net/~beprepared/
Re: Re: Query: WorldCom and Internet
That was beaut, Ravi! As for Worldcom's chances - UUNET might ultimately get 'em through, but it seems it all depends how much corporate clientele they lose in the (very) mean time. Many thanks, Rob. hi rob, i will attempt an answer to some of your questions. yes, if uunet ceases to function there will be significant disruption of the internet. the term 'backbone' is a bit old. in the days when the NSF ran the internet there was a single backbone that at various times was built/run by merit/sprint/bbn/mci/others. now, various high level network service providers have their own backbones which they connect to the backbones of other NSPs using private peering arrangements or using public exchange points. nonetheless, uunet being a pioneer (the uu part - unix to unix - shows their history back to the days when at end points you often connected systems to the internet through them using uucp), a lot of traffic runs on their network and this can cause disruption in connectivity between various endpoints of the internet. additionally MCI still runs the MAE* exchange point facilities which are exchange points for ISPs to interconnect: http://www.mae.net/mae_services1.htm and the above is used by a significant number of tier2 network providers. here's a really good page that provides info on the internet backbone ISPs etc: http://navigators.com/isp.html from a technology point of view, network backbones do seem to be a natural monopoly. new technologies that attempt to use redundant bandwidth by moving traffic around, are emerging, but suffer limitations. you are also right about the excessive capacity now available. while thats true for network capacity (fibre layout etc) i am not sure about exchange points and switches. so, transferring the usage from UUNET to other carriers and switching points might be a difficult process. which makes uunet an attractive acquisition i suppose and hence perhaps it will survive the bankruptcy? for uunet's coverage: http://www1.worldcom.com/us/about/network/maps/ http://www1.worldcom.com/global/about/network/maps/northam/ here's an interesting if crowded map of net coverage: http://www.cs.bell-labs.com/who/ches/map/ the place to look for internet data: http://www.caida.org/ http://www.nanog.org/ hope i touched on some useful stuff in my long-winded response! --ravi
Re: Re: Sokal (verb)
Doug Henwood wrote: Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change No change, Sokal certainly was along side Social Text all along, he must have loved those guys in the first place to tease them so wickedly, so intimately. Yours mr. heatstroke
Re: Re: Re: Sokal (verb)
Justin Schwartz wrote: Sokal has now joined with ex-Social Text'er Bruce Robbins in a campaign to get American Jews to sign a petition critical of Israeli policy. Times change How so? He always said he was on the left. He was just one of them flat headed scientific realist leftist types, like one V.I. Lenin and and K. Marx. In several conversations with Sokal, I concluded that he had almost no political or ideological analysis of science, nor any glimmering that the Frankfurt guys had a critique of instrumental reason of relevance to the science wars. Just because Stanley Aronowitz - the Green candidate for NYS gov, by the way - doesn't know what he's talking about doesn't mean that science studies is worthless, or a critique of the instrumental bourgeois mind is worthless. But the news in the Robbins-Sokal rapprochement is just that they once were enemies of sorts and now they're allies. It's not Page Six material, like Justin Timberlake's flirtations with Christina Aguilera, which has Britney all in a rage. Doug
Re: Re: Re: Re: Sokal (verb)
At 07:29 PM 07/25/2002 -0400, you wrote: It's not Page Six material, like Justin Timberlake's flirtations with Christina Aguilera, which has Britney all in a rage. Are you the father of a pre-teen? Joanna
Russia worried by U.S. film onslaught
The Hindu Thursday, Jul 25, 2002 Russia worried by U.S. film onslaught By Vladimir Radyuhin MOSCOW JULY 24. The Russian Government and filmmakers are concerned over the domination of Hollywood movies in the Russian cinemas, where Russian films account for a paltry seven per cent. Russia produces about 30 feature films a year, one-fifth of the number made in the Soviet Union, where all film making was financed by the State. The system collapsed when the Soviet Union broke up in 1991 after which the number of films plummeted to just a handful. Even though today the Russian film industry is on the way to recovery it finds it hard to compete with American blockbusters. The Russian Cabinet discussed the problem at a special session this week, after the President, Vladimir Putin, called for measures to support the Russian filmmakers. The Culture Minister, Mikhail Shvydkoi, said he was working on a programme to produce at least 100 new Russian films every year and bring the share of Russian films in circulation to at least 25 per cent. However, filmmakers demand more drastic measures.The head of Russia's biggest film studios Mosfilm, Karen Shakhnazarov, called for imposing a legislative limit on the number of Western films allowed to be shown in Russia. ``Quotas on U. S. movies alone can help the Russian cinema to get back on its feet,'' Mr. Shakhnazarov, who is also a successful film director and head of head of Russia's biggest film studios, Mosfilm, said. The Culture Minister, Mr. Shvydkoi said he opposed quotas, but the proposal may win the support of legislators as a good popularity-boosting measure in the run-up to parliamentary elections next year. Copyright © 2002, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu
