6 March 2015   Leave a comment

Social media has transformed politics in ways that are hard to analyze.  We all suspect that the changes are dramatic but the changes are difficult to measure because of the decentralized nature of the medium.  The Islamic State, however, seems to be quite savvy in using social media, and it has broadcast its message to what think may be a large audience.  Some researchers have gone through Twitter accounts and have determined that the Islamic State used perhaps 46,000 Twitter accounts over a period of time.

Even though most of us are oblivious to much of what goes on in financial markets, it would be hard not to notice that many government bonds in Europe are being sold in Europe at negative interest rates–almost $1.9 trillion worth of bonds.  Essentially, people are paying governments for sovereign debt, exactly the opposite of what usually happens when governments pay interest to people who purchase bonds.  The negative interest rates are the result of a very deliberate strategy of central banks.  They are flooding financial markets with bonds to force people to seek positive interest rates by purchasing corporate equities (stocks).  The logic is that by forcing people to buy stocks in order to make (and not lose) money, they will be stimulating the corporations to make productive investments.  Of course, the strategy also rewards people who have the money to spare to buy stocks–not a very large proportion of the population.

Petrobas, the Brazilian national oil company, is one of the largest oil companies in the world.  It is also deeply involved in political corruption that is shaking the Brazilian political system.  Many top governmental officials are accused of taking bribes in order to facilitate to company’s operations.  The scandal is not only destabilizing Brazilian politics, it is also slowing down the economy by creating tremendous uncertainty among foreign investors.  It is hard to see how President Rousseff can avoid being weakened by the crisis.

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Posted March 7, 2015 by vferraro1971 in World Politics

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