Economic Populist: Nuts & Bolts for Premium Notes

I recently discussed an alternative to Consol Bonds

Now, I was addressing a proposal by Matt Lavine at Bloomberg, and as a result, the explanation was not necessarily the simplest possible explanation. So here, I'm looking at just my proposed 10 year 100% coupon note, and going through the nuts and bolts.

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Hellraisers Journal: Mother Jones Remembers Virden Martyrs at Union Miners' Cemetery in Mt Olive

You ought to be out raising hell. This is the fighting age. Put on your fighting clothes.
-Mother Jones

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Tuesday October 13, 1903
Mt Olive, Illinois - Mother Jones speaks at at Union Miners' Cemetery

Mother Jones gave a speech yesterday at the Union Miners' Cemetery in Mt. Olive, Illinois. She was one of the featured speakers along with Ben Hanford, of the Typographical union, at a memorial service for miners massacred at Virden on October 12, 1898. Mother spoke in support of the Union Miner's Cemetery which was established in 1899. Four of the fourteen Virden Martyrs were from the town of Mt. Olive. Those four were originally buried in the town cemetery, but the owner of that land disliked the mass ceremonies held there each year. Therefore, the bodies of our fallen brothers were moved to the Union Miners' Cemetery in 1899 when an acre of land was purchased for that purpose. More land was acquired in 1902.

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Sunday Train: eBikes & Green Austerity

About a week ago, the following story caught my eye:

For the first time on record, bicycles have outsold cars in Spain.

 
Higher taxes on fuel and on new cars have prompted cash-strapped Spaniards to opt for two wheels instead of four. Last year, 780,000 bicycles were sold in the country — compared to 700,000 cars. That's due to a 4 percent jump in bike sales, and a 30 percent drop in sales of new cars.

And this is not primarily about a wave of government policies promoting cycling, or an outbreak of climate activism among the young ... its the result of the crisis. As this NPR story concludes:

"We are learning every day, about the crisis. Maybe it's not changing the things that we thought at the beginning would change — the politicians, the banks, that kind of things. But it's changing our minds," says Juan Salenas, another cyclist at the Bici Crítica rally. "We spend less. We try to live with [what we have, and be] more happy. And we try to keep what we have, because maybe we will lose it tomorrow."

Spain is experiencing a shift in which both conventional and eBike sales are increasing, but as The Economist reports, in Germany, France and the Netherlands, where transport cycling culture is more entrenched, the shift is within bicycle sales:

In the Netherlands one bicycle in six sold is an e-bike. In Germany the cycle industry expects electric-bike sales to grow by 13% this year, to 430,000 (the most sold in any European country), and to account for 15% of the market before long. In France sales of traditional bicycles fell by 9% in 2012 while those of e-bikes grew by 15%.

 
E-bikes are catching on as people move to cities and add concern about pollution and parking to worry over petrol prices and global warming. Frank Jamerson, who produces the Electric Bikes Worldwide Reports, estimates sales at around 34m this year and perhaps 40m in 2015. China buys most of them and makes even more, with European sales of 1.5m in second place.

So, as events in DC have unraveled to the point were the outcome that the Democrats are fighting for is to fund the government at austerity "sequester" levels, this Sunday Train looks at Electric Bikes.

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Hellraisers Journal: As the coal operators ship in machine guns, Colorado miners prepare for attack.

You ought to be out raising hell. This is the fighting age. Put on your fighting clothes.
-Mother Jones

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Monday October 12, 1903
From the International Socialist Review: "The Legal Fiction of Equality."

In a long article for this month's Review, Comrade Clarence Meily writes about the capitalistic courts and the struggle of the working class for true democracy, industrial democracy. We quote only a small section here to focus on what the employers are fond of calling "assumed risk." Meily begins the article with a quote from Judge Gray:

"There are no classes In America. I hate the name!" Judge George Gray, quoted in the "Outlook" of July 4, 1903.

Meily then goes on to discuss "assumed risk," which leaves the employer free of legal responsibility when employees are killed or injured on the job, concluding:

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Economic Populist: Premium Bonds Would Disarm Default Threat

Just as the GOP Shutdown was getting underway, 2 October, Matt Levine at Bloomberg was calling on the administration to Mint the Premium Bonds!.

The creepy trick that has swept the nation* is the platinum coin option, in which Treasury mints a $1 trillion platinum coin, deposits it at the Fed, and suddenly has an extra $1 trillion of money to spend without incurring any debt (and, thus, without breaching the debt ceiling). This is a good trick as tricks go, and it's been extensively advocated by Josh Barro, Paul Krugman, Matt Yglesias, Joe Weisenthal, basically every economics blogger really. I am unaware of any good arguments that the platinum coin wouldn't work, but it does have the problem that it is really really really really obviously a trick. I mean, it's a trillion dollar coin, come on. So it's sort of sub-optimal symbolically, and would make people really mad. It's a crisis-enhancer, although with the benefit of avoiding immediate default.

So there is an alternative that Matt Levine is putting forth:

Instead of just rolling those Treasuries -- paying them off at 100 cents on the dollar by issuing new Treasuries at 100 cents on the dollar -- it should pay them off at 100 cents on the dollar by issuing new Treasuries at 275 cents on the dollar and using the extra money to pay its bills. The 10-year yield today is around 2.6 percent, so you could sell a 10-year with a 23 percent coupon for 275 cents on the dollar.**** The 30-year is about 3.9 percent, so a 14 percent coupon should get you there. Etc. Math here.

Now, given my previous writing on Fixed Interest Payment Consol Bonds ... would this work too?

Yes, in a functional sense, of course it would. Its a similar, though not identical, answer, but it goes through the same loophole. Premium bonds are, by law, counted on their face value. So any bond with a face value substantially below its issue price that is used to roll over maturing long term bonds would "roll back" the debt ceiling count.

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Hellraisers Journal: $olidarity from the miners of British Columbia for the miners of Michigan

You ought to be out raising hell. This is the fighting age. Put on your fighting clothes.
-Mother Jones

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Sunday October 11, 1903
Chicago, Illinois - Colorado Labor Official Warns of Socialism and the W. F. of M.

W. H. McDonald, Colorado commissioner of labor, gave a lecture yesterday in Chicago wherein he warned the good citizens of Chicago about the dangers of the Western Labor Movement. Mr. McDonald claims that the Western Federation of Labor and the American Labor Union exist, not to promote trade unionism, but to advance socialism.

In Colorado and other Western states the labor movement has been diverted from its lawful purpose to the task of pushing the propaganda of Socialism.

We are left to wonder when the Socialist Party of America was made "unlawful." And we would like to point out to the Labor Commissioner that members of unions have the same rights as anyone else in any other organization to vote as they so please.

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DOJ sues Texas RV park for violation of Fair Housing Act (evicting transwoman)

Eric Holder has filed a lawsuit putting the federal government behind the discrimination claim of a transwoman against a Texas RV park.

On October 3 the suit was filed in the Eastern District of Texas (Tyler Division) against George Toone and his company, In Toone Services. In Toone Services owns Texas RV Park in Athens, TX.

Roxanne Joganik filed a complaint with the US Department of Housing and Urban Development in June 2012, alleging that Toone discriminated against her on the basis of sex, violating the federal Fair Housing Act. Joganik and her roommate, Darlina Anthony, moved into the park on a month-to-month lease in April of 2011. In Toone Services acquired the property in May of 2012, 5 days after Joganik had paid her rent through the month of June. Joganik informed Toone that she was transgender and asked him if he would have a problem with her wearing female clothing in the common areas of the RV park. Toone said it would be a problem because "there are children around the pool." So Joganik refrained from doing so.

A week later Toone distributed copies of the new park rules, requiring residents to sign them along with their service agreements. The rules said that management "reserved the right to refuse entrance to anyone for any reason other than 'race, religion, handicapped (sic), color or national origin.'" The new rules did not include sex or family status, which are protected classes under the FHA. So Joganik refused to sign the rules.

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Hellraisers Journal: Gunthugs attack Ludlow Tent Colony once again, shoot and kill Mack Powell

You ought to be out raising hell. This is the fighting age. Put on your fighting clothes.
-Mother Jones

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Saturday October 10, 1903
Denver, Colorado - Governor Peabody's court-martial board to convene in nine days.

Governor Peabody has appointed a court-martial which is set to convene on October 19th at 10:00 a. m. Many charges against high officers have been brought to the Governor's attention, reaching as high as General Chase, according to some reports. General Chase remains in Denver at this time.

General Bell has released several statements over the last few days. This is an example:

I offer the following moral to the Citizen's Alliance, the Mine Owners' Association, the Western Federation of Miners, and all other organizations: Moral-Attend to your own business affairs and don't in any manner or way interfere or mix in the military operations and conduct of the troops, and, incidentally, with the management and operation of the military affairs in the Cripple Creek district.

Bell further states that the organizations so-named should pin that moral into their hatbands. In other words, the citizens should shut their mouths and open their wallets to foot the bill for Bell's shoddy management of the Colorado National Guard in the Cripple Creek District.

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Hellraisers Journal: Michigan Copper Striker shot by deputy and close to death in Hancock Hospital

You ought to be out raising hell. This is the fighting age. Put on your fighting clothes.
-Mother Jones

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Friday October 9, 1903
Cripple Creek District, Colorado - The Women in the Strike Zone Form Auxiliaries

The women of Cripple Creek, Victor and Anaconda are organizing themselves to stand beside their union men. Known as the Women's Auxiliaries to Organized Labor, they will be receiving charters from the Colorado Federation of Labor. Already the women are making their influence felt with the local area business men. Local shop keepers have been quick to sever their ties with the Citizens Alliance when informed that the women will not patronize any business so affiliated. The Auxiliaries are also involved in relief work throughout the strike zone.

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