Article 1
ESL Podcast 947 – Seeing a Circus Performance
[Rephrase 1]
Transcript:
Slow dialog: 1:17
Explanations: 2:46
Fast dialog: 15:46
Paula: Ta-da! We’re here. This is your big surprise.
Roman: We’re going to the circus?
Paula: You got it in one! It’s going to be great. There’ll be clowns and acrobats, trapeze artists and lion tamers.
Roman: I haven’t been to the circus since I was a kid.
Paula: That’s the point. I thought this would be a nostalgic experience for both of us, and let us feel like kids again.
Roman: I’m not sure...
Paula: Come on! We’ll miss the first act. I think there’ll be jugglers, magicians, and tightrope walkers, too.
Roman: Great.
Paula: Listen! I can hear the ringmaster from here. Let’s go!
Roman: When you said that you had a surprise for me that would make me feel young again, this wasn’t exactly what I envisioned.
Paula: I know. It’s even better, right?
Roman: If you say so.
Source: ESL Podcast
http://www.eslpod.com/website/show_podcast.php?issue_id=14347951
Shares lead charge as Yellen backs easy Fed policy
[Time 2]
(Reuters) - World shares traded near five-year highs on Friday after a robust defense of monetary stimulus from the woman set to take over at the U.S. Federal Reserve next year, while Japanese stocks headed for their best week in almost four years.
The Nikkei .N225, made cheap for foreign investors by a falling yen, jumped 1.9 percent to bring its gains for the week so far to a heady 7.6 percent, its biggest weekly gain since December 2009.
Wall Street reached record highs on Thursday after the nominee for Fed Chairman, Janet Yellen, called efforts to boost hiring an "imperative" at a confirmation hearing.
In the to and fro of market expectations on when the Fed will begin to rein in its huge program of bond-buying and cheap money, that was read as a signal it would hold off until well into the new year.
"The market is flourishing from a 'Yellen effect', soothing worries about liquidity to bring back foreign inflows," said Kim Hak-gyun, a market analyst at KDB Daewoo Securities.
The momentum was beginning to fade in Europe, however. The region's shares .FTEU3 gave back modest early gains as Britain's FTSE .FTSE turned flat and Germany's DAX .GDAXI and France's CAC 40 .FCHI dipped 0.1 and 0.2 percent.
Both the euro currency and bond markets were also subdued after a busy 10 days which has seen the European Central Bank deliver an earlier-than-expected rate cut and one policymaker talk openly of Fed-style asset purchases.
The euro was off at $1.3452 after getting as high as $1.3497 on Thursday while there was some mild profit taking on German and other euro zone government debt after a week of steady gains.
"Asia, the Nikkei in particular, enjoyed what Yellen said much more than Europe seems to have, said Daiwa Securities economist Grant Lewis.
"Europe has got it's own particular challenges, the growth numbers in France were pretty poor yesterday... there is paradox at the moment that bad news is good news but ultimately markets want stronger growth."
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[Time 3]
ASIA ROCKS
The Fed finally seems to be convincing markets that even if it does taper, an actual increase in interest rates will still be distant. Short-term debt markets rallied hard as investors pushed the predicted timing of a first hike far into the future.
In just the past couple of days Eurodollar futures have rallied so sharply that they now predict the cost of borrowing dollars will stay near zero out to 2016.
That in turn has helped drag down Treasury yields, with rates on two-year notes at just 29 basis points compared to a peak of 54 in early September.
"Yellen still believes the benefits of QE outweigh the costs - a little tidbit that could have been the most important thing she said market-wise," added William O'Donnell, chief U.S. government bond strategist at RBS Securities.
"She did not strike me, or our economics squad, as somebody ready to roll back on QE3 and even another 200,000-plus print in the next nonfarm payroll number may not sway her."
For once the broader decline in U.S. yields hasn't troubled the U.S. dollar too much, in part because rates in Europe have fallen even more amid the talk of more aggressive ECB easing.
It has, however, made steady gains on the yen for three weeks to trade past the 100.00 barrier at 100.30 yen. Against a broader basket of currencies it was a fraction higher at 81.073 .DXY
In commodity markets, Brent crude oil rose for a third straight day on worries about crude supply disruptions in Libya, while gold drew some comfort from the prospect of continued U.S. stimulus as it faced the prospect of a third week in the red.
Brent for December delivery was last up 7 cents at $108.35 a barrel, while U.S. crude added 25 cents to $94.01. Spot gold edged up to $1,283.56 an ounce and away from the week's trough of $1,260.89.
【319】
Source: reuters
http://www.reuters.com/article/2013/11/15/us-markets-global-idUSBRE96S00E20131115
Central bank stimulus is here to stay, but what if it fails?
[Time 4]
If anyone still doubted that central bankers all over the world will keep interest rates at rock-bottom levels, those doubts should have been dispelled this week. Janet Yellen’s statement on Thursday to the U.S. Senate that the Fed has “more work to do” to stimulate employment, and that “supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” capped a series of surprisingly clear commitments to easy money from central bankers this week. On Wednesday Joerg Asmussen, a member of the executive board of the European Central Bank, and Ewald Nowotny, the Austrian central bank governor — both of whom had previously been reported as voting against last week’s surprise ECB rate cut — said that they might in fact support further rate cuts and even negative interest rates, as well as the possibility of breaking the taboo against U.S.-style purchases of government bonds. And Mark Carney, the Governor of the Bank of England, reiterated more strongly than ever that any early increase in British interest rates was out of the question, despite the fact that the outlook for the British economy has turned out to be much better than the BoE had expected.
But what if these zero interest rate policies produce disappointing results in the year ahead, as they have in each of the past four years? What if the world economy fails to spring back to life or just plods along with sub-par growth, despite all this stimulus, as has happened in each of the past four years?
With luck, these questions will not need answering because fiscal austerity has acted as a powerful headwind to economic recovery in the U.S., Europe and Britain and these budget consolidation efforts are now being relaxed. The new records on Wall Street and other stock markets suggest growing confidence among investors that monetary stimulus will finally deliver decent levels of growth next year — and this does indeed seem likely. But what if the optimism turns out to be wrong? What if the U.S. and Britain fail to grow by at least 3 percent next year, and what if Europe stays stuck with sub-1 percent growth and mass unemployment? In that case, the monetary and fiscal policy experiments since the Lehman crisis would have to be judged as failures — and that judgment would open the way to much more radical ideas than zero interest rates and QE. Such radical ideas would be of two opposing types.
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[Time 5]
If there is no significant improvement in growth and unemployment by this time next year, many conservative politicians and economists will argue that the post-Lehman stimulus policies were not just ineffective, but directly counter-productive. The whole approach of the past five years should therefore be reversed: politicians and central bankers should admit that they cannot “manage” employment and economic growth; governments should concentrate on getting their finances in order, stop manipulating interest rates and allow market forces to do their work.
Whatever the theoretical arguments for such reversals — for example, that tougher budgetary policies would boost business confidence, that higher real interest rates would improve credit allocation and purge the economy of inefficient zombie firms — there is no chance in practice that governments in any of the major economies would respond to growth disappointments by doing less instead of doing more. The political risks would simply be too great for any government, regardless of its theoretical leanings, to impose tougher fiscal austerity or higher interest rates in an environment of weak growth and intractable unemployment.
A much more likely reaction to failure of the present stimulus attempts would be bolder experiments with new measures that act directly on consumer demand. The obvious way to do this would be to combine monetary and fiscal policy into a new form of unified stimulus that would put money directly into consumers’ pockets, instead of relying on trickle-down effects from financial markets, where wealthy investors become even richer because the central bank boosts asset prices by buying government bonds.
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[Time 6]
As this column has repeatedly argued, the Fed could have delivered vastly more powerful economic stimulus through its QE program if it had sent out a check of $270 every month directly to each of the 315 million U.S. citizens, instead of transferring the same $85 billion monthly to bond investors, as it has been doing now for over a year.
This kind of monetary “helicopter drop” was what Milton Friedman recommended for economies still facing persistent unemployment after interest rates were reduced to zero and Ben Bernanke strongly advocated “helicopter money” for Japan before he became Fed chairman.
Even a few months of free money distributions to ordinary American households would almost certainly have done more to encourage consumer spending and economic activity than years of conventional bond purchases by the Fed. Helicopter money would therefore have revived the economy more quickly and with much less expansion of the Fed’s balance sheet than conventional QE. So helicopter money would actually have been a more cautious form of monetary stimulus than QE, with less inflationary potential.
Why then was helicopter money never seriously considered, either in the U.S., or in Britain and Japan, where central banks have printed even more new money than the Fed, relative to economic size? Apart from the obvious vested interests of bond investors, bankers and other financial market participants who profit by acting as the conduit for monetary stimulus, the main obstacle to helicopter money is an ideological totem: central bank independence.
Helicopter money is economically equivalent to a tax cut that the government finances by selling bonds to the central bank. Monetary and fiscal policy are blended into a single decision and that means the barriers between central bankers and politicians are removed.
Since most central bankers are passionate about protecting their political independence, any discussion of combining fiscal and monetary decisions is today still taboo. But if current monetary policies fail to deliver an adequate economic recovery by next year, political pressure to break the monetary-fiscal taboo could become overwhelming and central bank independence will be doomed. No wonder central bankers are more committed than ever to economic growth.
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Source: reuters
http://blogs.reuters.com/anatole-kaletsky/2013/11/14/central-bank-stimulus-is-here-to-stay-but-what-if-it-fails/
Fouad Ajami: When the Obama Magic Died
[Time 7]
The current troubles of the Obama presidency can be read back into its beginnings. Rule by personal charisma has met its proper fate. The spell has been broken, and the magician stands exposed. We need no pollsters to tell us of the loss of faith in Mr. Obama's policies—and, more significantly, in the man himself. Charisma is like that. Crowds come together and they project their needs onto an imagined redeemer. The redeemer leaves the crowd to its imagination: For as long as the charismatic moment lasts—a year, an era—the redeemer is above and beyond judgment. He glides through crises, he knits together groups of varied, often clashing, interests. Always there is that magical moment, and its beauty, as a reference point.
Mr. Obama gave voice to this sentiment in a speech on Nov. 6 in Dallas: "Sometimes I worry because everybody had such a fun experience in '08, at least that's how it seemed in retrospect. And, 'yes we can,' and the slogans and the posters, et cetera, sometimes I worry that people forget change in this country has always been hard." It's a pity we can't stay in that moment, says the redeemer: The fault lies in the country itself—everywhere, that is, except in the magician's performance.
Forgive the personal reference, but from the very beginning of Mr. Obama's astonishing rise, I felt that I was witnessing something old and familiar. My advantage owed nothing to any mastery of American political history. I was guided by my immersion in the political history of the Arab world and of a life studying Third World societies.
In 2008, seeing the Obama crowds in Portland, Denver and St. Louis spurred memories of the spectacles that had attended the rise and fall of Arab political pretenders. I had lived through the era of the Egyptian leader Gamal Abdul Nasser. He had emerged from a military cabal to become a demigod, immune to judgment. His followers clung to him even as he led the Arabs to a catastrophic military defeat in the Six Day War of 1967. He issued a kind of apology for his performance. But his reign was never about policies and performance. It was about political magic.
In trying to grapple with, and write about, the Obama phenomenon, I found guidance in a book of breathtaking erudition, "Crowds and Power" (1962) by the Nobel laureate Elias Canetti. Born in Bulgaria in 1905 and educated in Vienna and Britain, Canetti was unmatched in his understanding of the passions, and the delusions, of crowds. The crowd is a "mysterious and universal phenomenon," he writes. It forms where there was nothing before. There comes a moment when "all who belong to the crowd get rid of their difference and feel equal." Density gives the illusion of equality, a blessed moment when "no one is greater or better than another." But the crowd also has a presentiment of its own disintegration, a time when those who belong to the crowd "creep back under their private burdens."
Five years on, we can still recall how the Obama coalition was formed. There were the African-Americans justifiably proud of one of their own. There were upper-class white professionals who were drawn to the candidate's "cool." There were Latinos swayed by the promise of immigration reform. The white working class in the Rust Belt was the last bloc to embrace Mr. Obama—he wasn't one of them, but they put their reservations aside during an economic storm and voted for the redistributive state and its protections. There were no economic or cultural bonds among this coalition. There was the new leader, all things to all people.
A nemesis awaited the promise of this new presidency: Mr. Obama would turn out to be among the most polarizing of American leaders. No, it wasn't his race, as Harry Reid would contend, that stirred up the opposition to him. It was his exalted views of himself, and his mission. The sharp lines were sharp between those who raised his banners and those who objected to his policies.
America holds presidential elections, we know. But Mr. Obama took his victory as a plebiscite on his reading of the American social contract. A president who constantly reminded his critics that he had won at the ballot box was bound to deepen the opposition of his critics.
A leader who set out to remake the health-care system in the country, a sixth of the national economy, on a razor-thin majority with no support whatsoever from the opposition party, misunderstood the nature of democratic politics. An election victory is the beginning of things, not the culmination. With Air Force One and the other prerogatives of office come the need for compromise, and for the disputations of democracy. A president who sought consensus would have never left his agenda on Capitol Hill in the hands of Harry Reid and Nancy Pelosi.
Mr. Obama has shown scant regard for precedent in American history. To him, and to the coterie around him, his presidency was a radical discontinuity in American politics. There is no evidence in the record that Mr. Obama read, with discernment and appreciation, of the ordeal and struggles of his predecessors. At best there was a willful reading of that history. Early on, he was Abraham Lincoln resurrected (the new president, who hailed from Illinois, took the oath of office on the Lincoln Bible). He had been sworn in during an economic crisis, and thus he was FDR restored to the White House. He was stylish with two young children, so the Kennedy precedent was on offer.
In the oddest of twists, Mr. Obama claimed that his foreign policy was in the mold of Dwight Eisenhower's . But Eisenhower knew war and peace, and the foreign world held him in high regard.
During his first campaign, Mr. Obama had paid tribute to Ronald Reagan as a "transformational" president and hinted that he aspired to a presidency of that kind. But the Reagan presidency was about America, and never about Ronald Reagan. Reagan was never a scold or a narcissist. He stood in awe of America, and of its capacity for renewal. There was forgiveness in Reagan, right alongside the belief in the things that mattered about America—free people charting their own path.
If Barack Obama seems like a man alone, with nervous Democrats up for re-election next year running for cover, and away from him, this was the world he made. No advisers of stature can question his policies; the price of access in the Obama court is quiescence before the leader's will. The imperial presidency is in full bloom.
There are no stars in the Obama cabinet today, men and women of independent stature and outlook. It was after a walk on the White House grounds with his chief of staff, Denis McDonough, that Mr. Obama called off the attacks on the Syrian regime that he had threatened. If he had taken that walk with Henry Kissinger or George Shultz, one of those skilled statesmen might have explained to him the consequences of so abject a retreat. But Mr. Obama needs no sage advice, he rules through political handlers.
Valerie Jarrett, the president's most trusted, probably most powerful, aide, once said in admiration that Mr. Obama has been bored his whole life. The implication was that he is above things, a man alone, and anointed. Perhaps this moment—a presidency coming apart, the incompetent social engineering of an entire health-care system—will now claim Mr. Obama's attention.
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Source:Wall Street Journal
http://online.wsj.com/news/articles/SB10001424052702304243904579196440800552408