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Contra Club

Here They Go Again: Ratings Dilution, Subprime Explosion, Mega-Deal Madness

The boys in the banks are at it again, and this time their biggest supporters, if not clients, are central banks and treasury departments. If they can bring down investment requirements for pension funds enough from AAA, and they can at the same time – once again – label mezzanine (aka subprime) tranches of complex instruments ‘AAA’, they got it made. How can you go wrong when you have Mario Draghi himself begging you to to play this game?

Daffy House GOP Plan To Fund Syrian Rebels: Report Card On Each, Weapons For All

The Pentagon would be required to list every individual recruited, and would have to provide information on each person’s background, including any possible links to terrorist organizations. But the bill would not prohibit people with links to terrorist groups from actually participating in the program, the aide said. Such a blanket prohibition could make it tougher to recruit people.

The Washington Post’s Neocon Duplicity: Ukrainian Militias Aren’t “Romantics”; They’re Neo-Nazi Storm Troopers

The U.S. mainstream media’s deeply biased coverage of the Ukraine crisis – endlessly portraying the U.S.-backed coup regime in Kiev as “the good guys” – reached a new level of absurdity over the weekend as the Washington Post excused the appearance of Swastikas and other Nazi symbols among a Ukrainian government militia as “romantic.”

Contra News & Views

The Taylor Rule Is Downright Dumb: Just Another Formula For Monetary Central Planning

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Malinvestment bubbles are still possible when the central bank follows Taylor Rules, because by targeting potential output and price inflation the central bank triggers artificial credit expansions. For an example, we need only look to the dot-com bubble which happened even though the federal funds rates were actually significantly higher in the nineties than the most-used version of the Taylor Rule would recommend at that time.

That Time Was Not Different: Recalling Roger Babson’s Sept. 1929 Warning

“[A] crash is coming, and it may be terrific. …. The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt….” Roger Babson, Sept 5th, 1929

How The Sleepwalkers Blundered Into WWI: Lessons For Today

Warmongers in Paris, St. Petersburg, and London were ecstatic. Churchill beamed, “I am geared up and happy.” But Clark demolishes another myth, that of the delirious throngs. “In most places and for most people” the news of general mobilization came as “a profound shock.” Especially in the countryside…… Peasants and peasants’ sons would furnish the cannon fodder…… In thousands of villages there reigned “a stunned silence,” broken only by the sound of “men, women, and children” weeping…….