BRICs vs Bitcoin

Via Charlie Stross, I read that "Bitcoin just crashed 50% today, on news that the Chinese government has banned local exchanges from accepting deposits in Yuan." And now I see "Bitcoin operators shut shops in India amid RBI warning".

Shutting down

No, not the blog, just the US government.

With American debt default closer than ever before, I really ought to be posting something here. Perhaps someone will land on this blog and actually click on an ad, and I'll get a few dollars in the mail from Google. (It hasn't happened yet.)

But really, what is there to say? This is all internal American politics. Perhaps the standoff will even drag out to the point that a default will occur, but does anyone believe it would continue for weeks or months beyond that? A default might accelerate certain economic and political processes occurring outside the USA, such as the search for alternative reserve currencies, but those processes would be taking place in any case.

The shutdown is really just about Obama versus the Tea Party. The budgetary process has been broken for a few years now, and both sides are sick of it, but neither side is ready to compromise yet. In fact it's become a battle of wills, to see who will bend first.

Meanwhile, you may wish to read libertarian Jake Witmer on why "There Is No Government Shutdown".

America and Argentina

In the USA, Republicans and Democrats are once again flirting with government shutdown (Oct 1) and debt default (Oct 18), if they can't agree on a continuing resolution for the budget. The main issue seems to be Republican opposition to Obama's health care bill. But I think it's safe to predict that they will compromise and pass a budget.

And apparently Argentina is at risk of default because a US court ruled in favor of some people still owed from the previous default, in 2001.

Detroit

NYT: "Detroit’s Creditors Are Asked to Accept Pennies on the Dollar" 

WSJ has more financial detail: "At most risk is the $11 billion in unsecured debt... Retirees are set to get less than 10% of what is owed them under the plan."

Also, if it does proceed to bankruptcy, it will be "the largest U.S. municipal bankruptcy ever".

Abenomics

I don't know what it's about - something like, printing money to devalue the currency and stave off deflation - but everyone says it's big news so it gets a post.

US budget process

"The most important thing to say about the situation of recent years is that the US federal budget process has completely broken down. Budgets have gone from being passed late to never, with government spending now allocated by some baffling system of continuing resolutions and last-minute “cliffs”. There appears to be nothing anymore like a sensible process for making future plans and sticking to them." -- Peter Woit

Cyprus

I've written nothing about Europe for months, and thought perhaps I should mention Italy (rise of Grillo's 5-Star Movement).

But suddenly Cyprus has the limelight. Eurozone finance ministers imposed a deposit tax in order to fund a bailout; and the popular outrage, and threat of a bank run, has caused a drop in the markets as far away as Australia.

I find this peculiar; Cyprus is a small country. Why should events there have such an effect? Is this just mindless panic - "bad news from Europe!" - that will be forgotten after a few days, or is there actually reason to think that Cyprus matters this much?

I know there's lots of Russian money there; I assume the country has been affected by the Greek crisis. But I still think I'm missing something.

Cliff cut chaos

I chose that tabloid title because posts here about America's fiscal woes are mostly a list of milestone events, to be gathered into the one timeline at a future date; and although the buzzword of the moment is "sequestration", that is so uninformative that I could glaze over and miss it. No, the story is that the fiscal cliff was avoided at the start of 2013 by a deal between Democrats and Republicans; they couldn't agree on everything, so they avoided the cliff while deferring certain issues, by agreeing that big cuts in the budget of government departments would come in automatically, in two months' time; and now it is two months later, and the cuts are about to occur.

edit ZH argues persuasively that this is all still epiphenomenal. 

Symptoms

finem respice places the AIG lawsuit in context. (Yes, it's careless of me to call it "the AIG lawsuit" when it's actually the former CEO suing the US government, and when there are undoubtedly other AIG-related lawsuits out there. But this is the one that interests me.)

FR also provides a nice checklist of ... phenomena ... to be understood: the trillion-dollar-coin debate, playing chicken with the fiscal cliff, the debate over the constitutionality of debt limits - and the AIG lawsuit. They are all just epiphenomena, but, like objects caught swirling in a tornado, tracing their paths can help us to intuitively discern the form of the invisible tempest that guides them.