The BIS are mad.

The Bank for International Settlements have put out a warning on low interest rates.

Simon Wren-Lewis comments  on the-financial-instability-argument-for-raising-rates.
Kruggers  comments  stability-or-sadomonetarism.

I will merely say that having worked vat a bank for a long time they do not go from risky lending to lending with no risks to risky lending in less than a decade.
the BIS cannot even say they got it all horribly wrong in previous advice either!

A good example of showing up Climate Change Denialists

This is from Climate Science Watch from Around the Traps.

McKitrick tries and fails to move the goalposts on climate action

Posted on June 19, 2014 by Climate Science Watch

In a new Financial Post op-ed (“The Global Warming Hiatus?”), Ross McKitrick continues to try to move the goalposts on climate action with a misleading argument about global climate models, while harping on the tired old “warming pause” meme. In fact, global climate models work well for the purpose they were designed for: evaluating temperatures over long timescales. We already have all the information we need to know that action now is the cheapest and most effective way to avert dangerous climate change.

[Revised June 20]

The following is a guest post by Climate Nexus (text in PDF here):

McKitrick tries and fails to move the goalposts

on climate action

In a June 16 Financial Post op-ed (“The Global Warming Hiatus?”), Ross McKitrick continues to try to move the goalposts for climate action, while harping on the tired old “warming pause” meme. It’s been thoroughly established that short-term variation is not significant in the context of more than a century of warming. It’s also been clearly shown that it makes no sense to view warming solely in terms of surface temperatures, when heat is being stored in the ocean. McKitrick attempts to promote the “pause” while dodging these troublesome facts by asserting that validating climate model predictions is what’s really important. In line with the new mantra of the delayers, he suggests we should just wait and see what happens.

In fact, global climate models work well for the purpose they were designed for: evaluating temperatures over long timescales. We already have all the information we need to know that action now is the cheapest and most effective way to avert dangerous climate change.

Climate models are designed to work over the long term. And over the long term, scientists stand by the models’ projections. Short-term variations can be introduced because the models cannot predict the timing of significant climate factors like El Niño events or volcanic eruptions, although they can correctly model those events if the timing is established. The latest IPCC report concluded that short-term discrepancies did not invalidate models’ usefulness for establishing ranges of future impacts. Others have even found that observed temperature increases may be underreported, greatly reducing the significance of any recent discrepancy.

Climate models project a range of possible temperatures, not one precise temperature. The recent variations in global average temperature remain within the expected range of possible conditions. But a reader wouldn’t know this from viewing the misleading graph accompanying McKitrick’s op-ed. Instead of a range, his graph presents the average path from an ensemble of model results, misleadingly giving the impression that model results can be used to simulate and project year-by-year variations. McKitrick even claims “the black line can be described as the mainstream thinking of contemporary climate science,” a preposterous statement given that official IPCC graphics often present the projected shift in the range that is expected without even including a central trend line.

We have plenty of information now, enough to know we should take action. McKitrick states that there is a “high probability” of information emerging in the next few years that strongly affects long-term climate projections. He doesn’t state what his confident prediction is based on, and it’s difficult to imagine what it might be. Climate science is improving incrementally, but the basics have been established for a hundred years and aren’t likely to suddenly change. Emissions are causing warming. Too much warming and we’re in trouble. Any real game-changing discoveries are much more likely to alter projections for the worse, a fact that the IPCC has acknowledged.

Action is cheap and practical. The IPCC has identified many “low hanging fruits” of climate mitigation, especially through energy efficiency and the rapidly plummeting price of renewable energy technologies. Much of the needed investment could come simply from shifting resources over from fossil fuels, rather than committing additional resources.

Inaction is costly. McKitrick flat-out states that “there is no downside to awaiting this information” while waiting for “crucial facts” could prevent countries from making unspecified “costly mistakes.” This is just wrong: the IPCC, the U.S. National Climate Assessment, and many other exhaustive reports have confirmed that waiting only increases the cost of eventual mitigation, as well as committing us to costly climate impacts. The potential costs of modernizing our energy system (which we would need to do anyway and which carries many co-benefits) pale in comparison to the costs we would face in an unchecked warming scenario.

McKitrick is attempting to appear prudent with his “wait and see” mantra, but his approach fails the test of both science and common sense. His background also doesn’t lend him credibility – he has been openly adversarial to climate science for decades, and is associated with anti-science groups including the now-discredited Competitive Enterprise Institute, Heartland Institute, and Marshall Institute. These groups have opposed scientific research on all fronts, including disputing the connection between cigarettes and cancer. He’s far from a neutral observer and his arguments just don’t hold up.

*    *    *

Earlier posts:

Setting the temperature record straight: The last 11,300 years explained

"The Hockey Stick and the Climate Wars" -- Now in paperback, highly recommended

Deep Climate investigation of denialist and "skeptic" attack on Hockey Stick temperature record

Around the Traps 27/6/14

It is time for Around the Traps again.
Peter Martin is back. I have been a bit lax on Kaiser Fung's excellent contributions as well.
Hard drive problems again so I do not know when I will update but will try


Aussie,Aussie,Aussie,Oy,Oy,Oy

• Peter Martin on reality-check-working-one-month-just-to-pay-for-welfare, newsflash-cigarette-sales-are-sliding, treasury-super-costs-us-three-times-what-it-should, fofa-why-is-weakening-labors-financial-advice-rules-is-urgent, petrol-excise-how-greens-blew-it, looking-for-job-vacancies-dont-try-mining, its-reigning-men-how-our-convict-past-explains-our-glass-ceiling
• John Quiggin on this-is-a-job-for-the-freedom-commissioner
• Mumble on a_stubborn_stain, the_great_equivalence , stuntmen_at_20_paces , oecd_jumps_the_shark
• Ross Gittins on economists-face-criticism-over-poor-ethics , no-handouts-for-miners-not-paying-enough-tax , why-weaker-demand-means-lower-pay-rises
• Greg Jericho on rba-member-argues-its-far-from-doom-and-gloom-after-mining-boom
• The Kouk on the-rba-to-hike-or-cut-that-is-the-question

Northern America

• Calculated Risk on comments-on-existing-home-sales , feds-mike-bryan-torturing-cpi-data,comments-on-housing-and-new-home-sales , house-prices-real-prices-and-price-to-rent-ratio-decline-slightly-in-April,the-future-is-still-bright
• Mike Bryan on torturing-cpi-data-until-they-confess-observations-on-alternative-measures-of-inflation-part-2 , torturing-cpi-data-until-they-confess-observations-on-alternative-measures-of-inflation-part-3
• Mark Thoma gives us Tim Duy on fed-watch-inflation-hysteria
• Kruggers on british-lessons-on-inflation-hysteria, zero-for-six
• Menzie Chinn on imminent-wage-increases
• Frances Diebold on the-first-quarter-us-gdp-contraction-was-less-severe-thasn-you-think thanks Mark

Europe

• Simon Wren-Lewis on triangulation-miliband-and-inequality, uk-fiscal-policy-from-2015
• Tim Harford on a-good-economic-bet 
• Chris Dillow on  in-praise-of-betting ,austerity-in-the-mainstream, 
• Jonathon Portes on setting-record-straight-factchecking-uk-press

Asia
nuttin
Wonk

• Robert Waldeman on consumption-income-wealth-and-expectations
• Philip Lane on rethinking-imf-approach-to-sovereign-debt-crises
• Edward Lambert on silly-confusion-over-potential-gdp, attractor-states-in-biz-cycle , projecting-the-path-of-the-next-business-cycle
• Simon Wren-Lewis on real-wages-monetary-policy-and-innovation, was-neoclassical-synthesis-unstable , monetary-policymakers-as-boyfriends
• Noah Smith on libertarians-are-remembering-importance-of-good-government, limits-to-arbitrage-are-real-yo
• James Hamilton on energy-demand-and-gdp
• Nick Rowe on repeat-after-me-people-cannot-and-do-not-spend-money
• Lord Keynes on keynes-and-is-lm , when-hicks-recanted-is-lm , keynes-letters-to-john-hicks-and-is-lm
• David Andolfatto on excess-reserves-and-inflation-risk-model Thanks Mark
• Jim Rose on the-schumpeterian-view-of-business-cycle 
• Kruggers on stagflation-and-the-fall-of-macroeconomics

General

• Noah Smith on go-easy-on-silicon-valley-nerds, single-industry-clusters-and-deregulation
• Nick Gruen on open-data-and-the-g20
• Kevin O'Rourke on ww1-and-international-migration
• Scientific American on why-tau-trumps-pi Thanks Mark
• Steve from Brisbane on bells-theorum-confusion
• Chris Dillow on when-ignorance-is-power
• John Quiggin on the-100-years-war

Climate

• Brave New Climate on where-do-you-want-nuclear-waste
• Tamino on anthony-watts-and-the-bottom-of-the-barrel
• Rabett Run on ethon-rtfr-and-is-pleased , 
• the Science of Doom on radiative-atmospheres-with-no-convection
• Climate Science Watch on ross-mckitrick-fails-to-move-the-goalposts 
• Joanna Foster on one-quarter-of-india-desert 
• Kruggers on depression-economics-and-climate-policy
• Harry Clarke on prisoners-dilemmas-ethics-courage

Andrew Gelman (Mainly Stats)

• smullyan-randomistas
• linear-true-curious-case-jens-forster
• randomistas
• estimating-customer-satisfaction-regression-asking-subset-predictors-person
• quantifying-luck-vs-skill-sports
• useless-algebra-inefficient-computation-opaque-models
• Kaiser Fung on another-pr-effort-to-scare-you-into-clicking. , what-the-dst-researchers-actually-found , binge-reading-gelman, how-to-read-big-data-studies

Dave Giles (Econometrics)

• more-on-celebrating-trgve-haavelmo
• new-zealand-association-of-economists  come to OZ Dave!

Dianne Coyle (Quirky + Book Reviews)

• the-financial-crisis-and-post-structuralism , taking-information-seriously-in-economic-policy , the-case-for-militantly-moderate-incrementalism, foucault-heavy-going-and-light-relief , cautious-giant-leaps , the-dog-ate-my-homework ,how-free-is-homo-economicus
• Chris Dillow on liam-plunkett-the-tragedy-of-social-science

Vox wonk

• discounting-very-distant-future
• credit-ratings-and-regulatory-risk-weights
• changes-migration-policies-after-1914
• do-capital-controls-deflect-capital-flows
• global-banks-and-liquidity-risk-transmission
• through-looking-glass-ceo-pay-chinas-listed-companies
• low-interest-rates-secular-stagnation-and-debt
• greek-debt-restructuring-lessons-learned
• self-fulfilling-eurozone-debt-crises-and-draghi-put
• trade-policy-through-2013-signs-improvement-new-policy-concerns
• uk-productivity-and-job-puzzle
• financial-markets-and-sme-investment-dearth

Carbon prices and the US economy

Last night we had the extraordinary performance of Clive Palmer.

Peter Martin believes he has saved the furniture! Alas he has been wood-ducked. Clive wants to abolish the existing ETS which has a fixed price on carbon and hope some time later an ETS with a flexible price will be introduced. We keep the Climate Change Authority. fine. We keep the renewable energy targets and the Clean Energy Finance Corporation.However without either an ETS or a carbon tax both become meaningless.
What political parties should do is simply bring forward the flexible price on the existing ETS and see what Palmer does!
Remarkably Sinclair Davidson gets it right! Yes that's right. Mark it down ladies and gentlemen.

M0nty chimes in


The US economy contracted in the March quarter. Severe winter weather in the primary cause. Seasonal adjustment factors simply do not pick this up.
Katesy believes this is all about Keynesian economics. Err the public sector is detracting from growth. Obama is in fact doing exactly what Katesy wants!! Another own goal from a person who cannot GDP statistics.

tobaccy agin

M0nty has done us all a favour and shows up the lies and ignorance of the Catallaxy crowd.
I am astounded, positively astounded that Davidson and Ergas cannot and do not understand basic ABS statistics!

What we have here is also the huge hypocrisy of the Catallaxy crowd. Try and see if you can comment over there and offer a different point of view!
You cannot yet they claim to believe in free speech.

You say the tightest budget we have ever seen is expansionary then they agree. you say that Treasury under-estimated the impact on the CPI of the ETS when it over-estimated then they believe you.
If you say the ABS cannot measure substitution effects when it can they will believe you.

It is the blog for Forrest Gumps!

Wow how did I miss THIS from Bill Mitchell.
The IPA really have no standards at all which is very simlar to Catallaxy

Around the Traps 20/6/14

It is time for Around the Traps.
Updates maybe on Monday. Busy with football on Saturday and have visitors on Sunday!

Aussie,Aussie,Aussie,Oy,Oy,Oy

•  The Kouk on the-carbon-price-is-working-perfectly-households-are-consuming-less-energy,ms-sloan-and-the-volume-of-tobacco-consumed, smoking-fact-deniers-out-in-force
• Harry Clarke on plain-smoking-policies-and-poor-journalism
• Ross Gittins on were-nation-of-stay-at-homes
• Matt Cowgill on what-is-absolute-poverty , should-we-depoliticise-tax-policy
• Jim Rose on percentage-of-the-new-zealand-population-on-a-welfare-benefit-since-1970
• Mumble on the_australian_way, newspolls_nine_months_in, labors_country_caucus
• Kevin Bonham on turnbull-pm-not-likely-any-time-soon
• John Quiggin on treating-australians-as-parasitic-leaners-is-a-grave-mistake Thanks Steve from Brisbane, lifters-and-leaners
• Andrew Elder on breaking-news
• Don Arthur on is-the-struggle-for-equality-of-opportunity-over

Northern America

• Mark Thoma gives us Tim Duy on fed-watch-fomc-preview
• Mark Thoma gives us Dave Jacobs on income-inequality-politics-or-economics
• Calculated Risk on key-inflation-measures-show-increase-in-may, a-few-comments-on-housing-starts, merrill-lynch-inflation-bump-up-or-bust
• Brad De Long on morning-must-read-mike-konczal-neoliberal-vs-social-democratic-safety-nets,noted-for-your-morning-procrastination-for-june-17-2014 health care focussed.
• James Hamilton on iraq-oil-markets-and-the-u-s-economy, gasoline-price-calculator
• Menzie Chinn on sunk-costs-and-considering-intervention-in-iraq
• Mark Thoma gives us Tim Duy on fed-watch-still-a-dove, fed-watch-janet-yellen-the-hawk
• David Andolfatto on how-far-are-we-from-trend
• Dave Altig and Pat Higgins  on the-wrong-question

Europe

• Simon Wren-Lewis on does-politics-dominate-economics-in-eurozone-crisis-management, the-race-to-raise-interest-rates, the-imf-apology-nonsense
• Tim Harford on theres-more-to-life-than-money
• Edward Lambert on productivity-in-the-uk-is-not-such-a-mystery
• NIESR on all-together-impact-tax-and-spending-decisions-gender-disability-ethnicity-and-age
• Chris Dillow on the-poor-white-problem, milibands-managerialism
• Long and Variable on andrew-haldanes-spin  Thanks Mark

Asia
nuttin

Wonk

• Chris Dillow on militarism-and-growth,yes-there-is-a-confidence-fairy
• Jim Rose on jacob-viner-and-the-ambiguous-welfare-effects-of-preferential-trade-agreements, austrian-economics-labour-economics-and-the-economics-of-unemployment
• David Glasner on  further-thoughts-on-capital-and-inequality
• Michael Perelman on the-ideological-fraud-of-adam-smith  Thanks Mark
• Simon Wren-Lewis on fiscal-rules-politics-and-economics
• Nick Rowe on house-prices-and-inflation-targeting 

General

• Ed Dolan on good-economic-research-needs-good-translation-to-have-any-real-impact-on-policy Thanks Mark
• Mark Thoma on does-culture-matter-for-economic-growth
• Chris Dillow on historys-winners

Climate

• Steve from Brisbane on stern-on-inadequacies-of-economic-modelling-of-climate-change
• Benjamin Preston on euroclima-reports
• Graham Palmer on germany-energiewende-oz-critical-review
• The Science of Doom on on-uses-of-a-4-x-2-arrhenius-the-last-15-years-of-temperature-history-and-other-parodies
• Jeff Spross on stern-updated-climate-model-economic
• Andreas Schmittner on recent-lessons-from-the-past

Andrew Gelman( Mainly Stats)

• answer-write-little-program-simulate
• chris-hedges-extra
• hurricaneshimmicanes-extra-problematic-nature-scientific-publication-process
• lie-statistics-example
• jeremy-freese-adds-new-item-lexicon
• judicious-bayesian-analysis-get-frequentist-confidence-intervals
• whats-algorithm-kenneth
• combining-forecasts-evidence-relative-accuracy-simple-average-bayesian-model-averaging-predicting-social-science-problems
• matching-regression-matching-regression
• race-top-nyt-columnists-edition
• Chris Blattman on quantitative-versus-qualitative-measurement-comparison Thanks Mark 

Dave Giles ( Econometrics)

• an-extreme-publication-lag
• Jim Rose on examples-of-spurious-relationships
• David Hendry and Grahaym Mizon on why-standard-macro-models-fail-in-crises

Dianne Coyle ( Quirky + Book reviews)

• slow-demise-of-the-economist-ex-machina, serendipity-complexity-and-loneliness, people-robots-and-sustainability, resources-on-complexity-economics , 
• Frances Woolley on yes-academic-administrators-do-have-to-alienate-people , all-you-can-eat-sushi-restaurants-should-not-exist-why-do-they
• Chris Dillow on affluence-art, cognitive-biases-in-football-punditry
• Kruggers on stressed-out
• Noah Smith on big-ideas-in-macroeconomics-book-review, big-ideas-in-macroeconomics-book-review (4th part), big-ideas-in-macroeconomics-book-review, big-ideas-in-macroeconomics-book-review, kartik-athreya-responds-to-my-review
• Barkely Rosser on reviewing-noahs-review-of-big-ideas-in-macroeconomics
• Maggie Mahar on the-cholesterol-con-eggs
• Nick Rowe on regression-towards-th
• e-mean

Vox wonk

• global-value-chain-participation-risks-and-opportunities
• search-house-price-bubbles
• why-does-inequality-grow
• value-electricity-transmission-evidence-power-plant-closure
• culture-persistence-and-evolution
• macro-stabilisation-and-tax-rebates
• eurozone-mired-recession-pause
• india-s-female-economic-participation
• why-standard-macro-models-fail-in-crises
• are-large-headquarters-unproductive
• central-bank-transparency-and-committee-deliberation
• scottish-independence-interdependent-world-new-evidence

Recent Lessons from the past. World Temperatures

Andreas Schmittner has THIS paper which looks at world temperatures for a very long time.
Notice what has occurred in the last thirty years?