OK, I guess “Mr. 100 Years” is trying to find a place where the occupation is more popular than in the good old USA, and this is it.
Year: 2008
Krugman Says Bailout In Evitable, We Need to Go Swedish
I think that it is likely that a taxpayer funded bailout would be the only viable option, as Paul Krugman says in his NY Times OP/ED. He also notes that while the whether to bail out is settled, the how is not:
The U.S. savings and loan crisis of the 1980s ended up costing taxpayers 3.2 percent of G.D.P., the equivalent of $450 billion today. Some estimates put the fiscal cost of Japan’s post-bubble cleanup at more than 20 percent of G.D.P. — the equivalent of $3 trillion for the United States.
If these numbers shock you, they should. But the big bailout is coming. The only question is how well it will be managed.
As I said, the important thing is to bail out the system, not the people who got us into this mess. That means cleaning out the shareholders in failed institutions, making bondholders take a haircut, and canceling the stock options of executives who got rich playing heads I win, tails you lose.
In his NYT blog, he also notes that when one looks at financial meltdowns, the Swedes handled it best, with the handling of their financial problems in the early 1990s”.
He points us to Justin Fox of Time, who in turn quotes Merrill Lynch Economist David Rosenberg from his “morning call notes” (sorry, can’t find a link, any hints?):
The Japanese credit crisis is usually cited as the benchmark for what not to do. But few cite Sweden’s crisis as a template on what might actually work. … the Swedish authorities realized early on that a banking crisis cannot be resolved until the problem is properly defined. That means assessing who the “bad” and “good” houses of issues are and be willing to allow the “bad houses” to fail (as an aside, “good houses” do not necessarily imply “big” houses).
… Sweden established a Bank Support Authority to undertake “reality testing” on the loan books of Sweden’s largest banks and had a “board of valuation” experts go in and value the assets on the books of all the lenders. Call it invasive if you will, but then again, the government was doing the work that market players could not or would not do – value the collateral and do it quickly. This is similar to what Barney Frank is proposing in the US mortgage sector today. …
It should also be noted that it was Sweden’s equivalent of the US Treasury, and not the central bank, that played the primary role in this crisis management stage (though the Riksbank maintained an accommodative monetary stance and lowered interest rates right through to December 1993, more than a year after the markets had bottomed). And, it obviously required the heavy hand of government intervention; there are solid grounds for this when there is market failure in the private sector, in this case, insufficient information regarding the quality of financial sector balance sheets. …
I would add that my post on Dean Baker’s proposal of a stock transaction tax, along with my suggestion that it more generally cover financial instruments (here) is both a good way to cover the budget hit and a good way to discourage excessive arbitrage.
Dean Baker Has a Great Idea, But it Needs to go Further
Dean Baker suggests that we implement a stock transfer tax. He mentions that the UK has a stock transfer tax of 0.25%, and London is second only to New Work as one of the great financial capitols of the world.
He notes that it would generate $150 billion/year in revenue.
While I agree, I do not think that this goes far enough. It should apply to all financial transactions, stocks, bonds, derivatives, hedging, futures, etc.
I would have an exception for initial purchase, but not resale, of government bonds, but that’s it.
In addition to generating a lot of revenue, it also makes increasing level of arbitrage increasingly more expensive, which is also a good thing.
Wanker of the Day: Newsmax’s Ronald Kessler
Bill Kristol used his report that he was sitting next to Obama when the infamous Reverent Wright sermon was given, which no turns out to be a flat out lie.
Then, when the entire false news thing was entered into his Wikipedia profile, he edited the profile to cover up the fact that he makes sh$# up.
He works for Newsmax, and he’s a Wanker, but I repeat myself
Economics Update
It’s late, and I’m lazy, so basically, it’s Bear Stearns, the dollar hits a record low vs the Euro and a Dollar sinks to near 13-year low vs. yen – Mar. 17, 2008, and the cost of a barrel of oil is bouncing around like a frog on a hot plate.
Tomorrow, when the Fed meets, will be really interesting.
Speaking of Political Prosecutions…
Well, for those of you who were wondering if the corruption case against, “Celebrity pathologist Cyril Wecht” was politically motivated, the fact 24 of the counts filed against Wecht involve the sum of $3.06.
Nope….Not missing a decimal point. Three dollars and six cents. Not three hundred dollars, not three millions, three dollars.
Nope, nothing political here.
He had some people working for both his private practice, and for the county, and this is a Federal case, because he is a Democrat.
The crux of their case:
Wilson noted the work of Eileen Young, who was Wecht’s top administrative aide in the coroner’s office. Despite being paid a county salary, Wilson said Young spent the bulk of her time in the county office as “office manager” for Wecht’s private practice.
Wilson said the evidence showed that, for 2004 alone, the correspondence Young mailed or faxed brought $790,000 in revenues to Wecht’s private practice.
So, Wilson might have made some faxes or phone calls on county time, and they are literally trying to make a federal case out of this.
This is the sort of thing where the local DA gets him removed, and he gets a fine, if it’s true.
I’m still trying to get my head around the whole concept of “celebrity pathologist” thing though.
I really don’t want to know what a “celebrity proctologist” is.
Bush Political Show Trial Overturned
I’m not normally on the side of overpaid chief executives, but Joe Nacchio is the exception.*
Nacchio was convicted of insider trading, but this has ju
st been overturned by the appellate court, and remanded back to the lower court, with a the old judge being removed from the case.
This is noteworthy, because much of the financial problems resulted from Qwest refusing to execute surveillance against the American public when requested to do so in February 2001, a full 7 months before the attacks on the Pentagon and WTC.
Basically, the judge excluded a number of arguments improperly, and he got seriously reamed out by the appellate court.
I believe that the prosecution was intended as a warning shot to other Telco executives by Bush and His Evil Minions™, “You do whatever we tell you, and f%$# the law, or you sleep with the Fishes.
It was 2-1 decision, with one ultraconservative Bush II appointee, Jerome Holmes, siding with a Bush I appointee who dropped 3 grand at a strip club one night, and may have patronized an “adult dating service”. He also parks in handicapped parking, and threatens people who complains.
We really are going to have to “debushify” our government when this is all over.
*Full disclosure, Qwest is my long distance carrier. I dumped AT&T and signed on with them about a year ago, specifically on the illegal surveillance issue.
Shorter Nicholas Kristof: Women Cannot Be Trusted With Their Bodies
Damn, this is really a day for incoherent NY Times editorials.
Along with the rest of the anti-sex anti prostitution crowd who think that and sex is icky.
Slowly, here is the equation: Pimps exist because prostitutes need them to protect them from a criminal justice system that victimizes them.
How is their job any different from bull semen “extractor”?
As to whether or not it’s “voluntary”, the claim that because of economic need, it’s not voluntary, means that I’m a slave.
I need the money.
Fire Bill Kristol
Yes, he’s wrong on everything, but this time, it’s not poor judgement, like Iraq, he says that Obama heard Rev. Wright’s notorious sermon, when a quick google says that he was over 1000 miles away, as would a call to the campaign.
This was for an article in the New York Times, which has to start fact checking its editorials.
Good Point, Hubris Sonic
He has a post on the Group News Blog, where he asks the following question:
How come, the Feds didn’t have a clue that this GOP fella took $1 million out of the NRCC? But they busted Spitzer in less than a month.
My answer, because IOKIYAR.
We’re Number Two!!!! We’re Number Two!!!!
Due to the US slump, and the fact that the dollar is falling like a loogie hocked off the Empire State Building, U.S. economy is now number two in the world, after the Euro Zone, which does not include Britain.
What Technically Competent ISPs Do to Provide Service
Verizon is investing resources in a technology called P4P, a PEER TO PEER technology which promises to reduce the burden on ISPs with regard to the distribution of commercial and licensed high bandwidth products.
This is what Bit-Torrent was designed to do. It was developed for things like Linux distros, and the idea was that when you released an upgrade, you would get the downloaders to share amongst themselves, so your server would not be vomiting blood.
Ars spoke with Verizon senior technologist and P4P workgroup co-chair Doug Pasko, who tells us that Verizon observed download performance improvements of approximately 200 percent during tests conducted with Pando. The performance boost can climb as high as 600 percent in some cases. Verizon believes that P2P technology is moving into the mainstream and is being legitimized for large-scale commercial content delivery. The company sees P4P as a way to enable broader commercial adoption of P2P tech while unclogging the tubes and relieving network congestion.
Since the efficacy of the P4P protocol largely relies on the availability of network topology information, Verizon and the P4P workgroup aim to make the new protocol an industrywide standard and convince other carriers to share their own data and participate. “Quite frankly, any carrier should benefit from this,” Pasko told Ars. The initiative has drawn support from a number of ISPs, including Comcast, which is currently facing scrutiny for impeding peer-to-peer traffic on its own network.
This is not to say that Verizon is not evil, after all they are the phone company, but they are not evil and stupid as ComCast is.
Over There
Cheney cites 'phenomenal' Iraqi security progress as bombing kills 40.
I’m not sure that I can top that headline, courtesy of McClatchy, except to say, “Better that he (Cheney) is there, and not here”.
Shorter Alan Greenspan
He is unhappy because people are blaming him for the upcoming catastrophe.
As I’ve said before, the idea that the noble entrepreneur must be allowed to innovate, no matter how many people it hurts, is simply delusional Randroid bull#$it.
Ayn Rand was a person to whom great evil was done, by a thoroughly evil and corrupt, much like Leo Strauss. Rand by the Bolsheviks, Strauss by the Nazis.
Their response was to create, and aggressively promote their own personal sort of evil, and both have proved, and will continue to prove disastrous.
Speaking as an Existentialist Jew, and yes they are compatible, when you create philosophies in which people are made unpeople, and in which the concept of personal responsibility for the world one creates is an anathema, you create another template for evil.
Of course, you could read his article in the Financial Times, but there may be some side effects:
Republican Congressional Staffers Should be Drowned at Birth
Witnesses were called to testify before the House Financial Services Subcommittee on Consumer Credit regarding changes to the terms of their credit cards for what appear to be completely arbitrary reasons, and the Republicans on the committee demanded that they sign releases allowing the credit card companies to release their complete credit records on any public forum.
My question is why the Republicans were given veto power over witnesses. They are no longer in the majority.
The answer appears to be that they would have:
Their removal, however, was more the result of political gamesmanship than it was a legitimate legal move. That is, the Democrats could have attempted to seat the consumer panel even without the members signing the waivers. But, according to a Democratic staffer familiar with the dance, the Republicans, in that case, would have presented a number of procedural roadblocks that would have stalled the hearing indefinitely. Rather than waste the entire morning fighting endless motions to adjourn, Democratic committee leaders Barney Frank (Mass.) and Carolyn Maloney (N.Y.) decided to scrap the first panel and salvage some of the hearing.
I think that a better understanding of Republicans, that they have no interest in the legislative process, and thus should be accorded no courtesies whatsoever, is needed.
The Waivers read as follows:
I hereby authorize Chase Credit Card Services to publicly discuss my Chase credit card account(s) in connection with the March 13, 2008 and April, 2008 credit card hearings by the U.S. House of Representatives Subcommittee on Financial Institutions and Consumer Credit.
Translated, this means that if they thought it was “in connection with the March 13, 2008 and April, 2008 credit card hearings by the U.S. House of Representatives Subcommittee on Financial Institutions and Consumer Credit, they could release their account numbers, SSNs, mother’s maiden names, and passwords for online access.
Brazil, France, and Argentina In Cooperation for Development of Nuclear Submarines
The interest in developing a nuclear submarine, is being driven by a desire to prevent US, and in the case of Argentina UK, CV battle groups from being able to deploy forces off the Atlantic coast of Latin America.
The picture below is from France’s DCNS Barracuda Class SSN. I’m not sure how accurate it is, but the lack of forward bow planes, and the nose mounted torpedo tubes are of interest.
In most SSNs, the torpedoes are located amidships, to allow for a larger sonar array in the nose.
France would have no involvement in the reactor design, which would be a Brazil-Argentina joint venture.
Will the Trinity United Church of Christ in Chicago Please STFU??
Yes, Obama’s church has Just put out a press release (below), condemning the contraversy regarding Reverend Wright as an “an attack on the legacy of the African American Church”.
This is ill conceived for a number of reasons:
- It serves to keep Rev. Wright’s statements alive.
- It is a “crying racism”. The statements made by Dr. Wright are clearly not acceptable under normative standards of political discourse.
- It undermines the message of the church, and its most prominent member.
So, please, follow the advice of Abraham Lincoln, “Better to remain silent and be thought a fool then to speak out and remove all doubt.”
Statement from Trinity United Church of Christ
“AN ATTACK ON OUR SENIOR PASTOR AND THE HISTORY OF THE AFRICAN AMERICAN CHURCH”
Chicago, Ill. (March 15, 2008) — Nearly three weeks before the 40th commemorative anniversary of the murder of the Reverend Dr. Martin Luther King Jr., the Reverend Dr. Jeremiah A. Wright Jr.’s character is being assassinated in the public sphere because he has preached a social gospel on behalf of oppressed women, children and men in America and around the globe.
“Dr. Wright has preached 207,792 minutes on Sunday for the past 36 years at Trinity United Church of Christ. This does not include weekday worship services, revivals and preaching engagements across America and around the globe, to ecumenical and interfaith communities. It is an indictment on Dr. Wright’s ministerial legacy to present his global ministry within a 15- or 30-second sound bite,” said the Reverend Otis Moss III, pastor of Trinity United Church of Christ.
During the 36-year pastorate of Dr. Wright, Trinity United Church of Christ has grown from 87 to 8,000 members. It is the largest congregation in the United Church of Christ (UCC) denomination.
“It saddens me to see news stories reporting such a caricature of a congregation that has been such a blessing to the UCC’s Wider Church mission,” said the Rev. John H. Thomas, UCC general minister and president, in a released statement. “ … It’s time for us to say ‘No’ to these attacks and declare that we will not allow anyone to undermine or destroy the ministries of any of our congregations in order to serve their own narrow political or ideological ends.”
Trinity United Church of Christ’s ministry is inclusive and global. The following ministries have been developed under Dr. Wright’s ministerial tutelage for social justice: assisted living facilities for senior citizens, day care for children, pastoral care and counseling, health care, ministries for persons living with HIV/AIDS, hospice training, prison ministry, scholarships for thousands of students to attend historically black colleges, youth ministries, tutorial and computer programs, a church library, domestic violence programs and scholarships and fellowships for women and men attending seminary.
Moss added, “The African American Church was born out of the crucible of slavery and the legacy of prophetic African American preachers since slavery has been and continues to heal broken marginalized victims of social and economic injustices. This is an attack on the legacy of the African American Church which led and continues to lead the fight for human rights in America and around the world.”
Dr. Martin Luther King Jr. preached the Christian tenet, “love thy neighbor as thyself.” Before Dr. King was murdered on April 4, 1968, he preached, “The 11 o’clock hour is the most segregated hour in America.” Forty years later, the African American Church community continues to face bomb threats, death threats, and their ministers’ characters are assassinated because they teach and preach prophetic social concerns for social justice. Sunday is still the most segregated hour in America.
H/T, TPM.
A GBU-57 Theory
You may recall my linking to a blog post by Stephen Trimble about a mystery bomb, the GBU-57, for the USAF is letting out a contract for integration with the B-2.
While cleaning out my pockets, I came across an article from the Defense Technology International January/February Issue, there is an article on page 14 (no direct link because of the oddball way it displays pages) about three new/old bomb technologies.
Specifically, the use of ES-1 super hard “Eglin Steel”, the “precise time of arrival munitions, where multiple bombs dropped are given flight paths which will result in simultaneous detonation, and “skip bombing”, the Marnes Wallis’ technique used by the Dam Busters. in WWII.
It may still be some sort of MOP integration for a sneak attack on Iran, though how they can ask for bids when Congress has specifically forbidden spending money on this is beyond me.
A Note on Bear Stearns
It was purchased at $236 million, and the value of its Madison Avenue headquarters is assessed at $1.2 billion.
The End is Nigh, One of My Predictions Has Come True
Yep, it’s the end of the world, I got a prediction right. On August 2, 2007, I predicted that, “Bear Stearns will cease to exist. It will either be forced to liquidate, or it will be bought out in a fire sale”.
I never get my predictions right. I look at my predictions on the HD-DVD/Blu-Ray fight.
So, after the Fed lends Bear Stearns $200 billion, JP Morgan buys Bear for 236 million, and they look to be ditching off the risk on the Federal Reserve:
Shareholders of New York-based Bear Stearns will get stock in JPMorgan equivalent to about $2 a share, compared with $30 at the close on March 14, the two companies said in a statement today. The U.S. Federal Reserve will provide financing for the transaction, including support for as much as $30 billion of Bear Stearns’s “less-liquid assets.”
Normally, when I say the end is nigh, I’m joking. I’m not joking now, and it has nothing to do with whether or not I got a prediction right.
It has to do with the fact that in Asia, where it’s Monday already, markets imploded. The Nikkei the Hang Seng have so far fallen by more than 4%, and the Korea Composite Stock Price Index by more more than 3%.
What’s more, on this side of the international dateline, the Fed cut the discount rate by 25 basis points, from 3.5% to 3.25%:
The central bank approved a cut in its lending rate to financial institutions to 3.25% from 3.50%, effective immediately, and created another lending facility for big investment banks to secure short-term loans. The new lending facility will be available to big Wall Street firms on Monday.
That was done on Sunday. When the last time that you’ve heard of the Fed doing anything on a weekend, much less a Sunday.
People are now talking about this in terms of being 1929 bad, not 1970s bad:
Wall Street fears for next Great Depression
….One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed’s emergency funding procedure was first used in the Depression and has rarely been used since.
….
In the UK, Michael Taylor, a senior market strategist at Lombard, the economics consultancy, said on Friday night: “We have all been talking about a 1970s-style crisis but as each day goes by this looks more like the 1930s. No one has any clue as to where this is going to end; it’s a self-feeding disaster.” Mr Taylor, who had been relatively optimistic, has turned bearish: “It really does look as though the UK is now heading for a recession. The credit-crunch means that even if the Bank of England cuts rates again, the banks are in such a bad way they are unlikely to pass cuts on.”
I think that they are very nearly right on this, at least for the US.
Unlike during the great depression, the US is no longer an exporter of oil, nor does it have the most vibrant and advanced manufacturing base in the world.
It may be bad world wide, but it’s going to be hideous here.