Daily News Roundup 2012: Thursday 3 May

Good morning

The headlines:

1. King says that BOE will risk being unpopular to prevent future crises. I still think that it's funny that the BoE governor is named King. Especially as Kings are famous for making non-populist decisions. I did enjoy the "our job is to take away the punch bowl just as the next party is getting going" metaphor. He continued with a reference to the Central Bank as "the Old Lady of Threadneedle Street". Somewhere in the wordplay was an open threat to the banks. Did anyone else realise that the Bank of England lost the power to regulate British banks back in 1997? There is a bill before Parliament that's attempting to restore that power. I hope it passes. Not because I want less of a free-market system: but because I think that monetary authorities should be making the tough decisions. Governments are far too likely to make short-term fiscal decisions based on voter sentiment. I think that voters tend to be against delayed gratification (except for the Germans). Someone needs to be for it. Otherwise, you kill the beast of burden. And that's the job of Central Banks: making sure that the gratification is delayed by playing with interest rates. Link: How Central Banks Should Be.
2. Aussie Beer Drinking Market goes flat. Either Australians are teetotalling, or they're using more of the hard-stuff. And it seems to be the latter. And the rich folk are drinking more wine. Link: Australia reaches new low.
3. 107 people charged with $452 million in Medicare Fraud. This is all mostly the result of fraudulent receipts and unnecessary tests. What's interesting is that this is the result of investigations in only seven US cities (Miami, Detroit, Chicago, Houston, LA, Tampa and Baton Rouge). And HALF of that came from the seven people investigated in Baton Rouge! What that tells me is that there is probably a lot more of it happening elsewhere. And to me - it seems that the reason that the Baton Rouge people got caught is because they got greedy. I'm not sure how big Baton Rouge is - but I've not heard of them, so they can hardly be a giant US city. And if you suddenly have healthcare costs shooting up by $225 million in a small city - that looks a lot like a red flag for fraud. When you start extrapolating the fraud out - you begin to wonder whether the Republicans don't have a point. State-funding is a buffet of cash for the unscrupulous. And the clever ones will never take enough to be noticed. Link: The Problem with State Welfare.
4. Markets expect Euro Stimulus. Everyone is waiting on the outcome from today's policy meeting. Link: Draghi to signal stimulus?

That's all for now!

Have a good day.