The man who smuggled himself into Auschwitz BBC (hat tip reader Jack)
Susan Boyle tops charts with fastest selling debut album Telegraph
DARPA Funds Nano-UAV Hummingbird h+ (hat tip reader Sugar Hush)
Tying pirates in knots The Engineer
An Empire at Risk Niall Ferguson, Newsweek
As Sales Vanish, Alligator Skins Stay on Gators New York Times
Unemployed Line Up To Reenact Job Loss Scenarios In Clooney Film IMB (hat tip reader John D)
History Lesson John Jansen. Congrats to Jansen on his joining TD Bank, but I am pretty certain this means the loss of his blog (big and even small financial institutions are not too comfortable with the concept).
Japanese Industrial Production Up, but Disappoints EconomPic Data
Harvard ignored warnings about investments Boston Globe (hat tip reader John D). The title is wrong. It should be “Summers ignored warnings about investments.” And it is not critical enough. For instance, one party rationalizes the losses by saying Harvard still earned 8.9% on its cash account. But Harvard committed to a long-term building program and ramped up other operating costs, yet kept putting the money at risk. If the university had invested more conservatively, it is less likely that it would have gone on a big spending campaign. I am hearing the budget cuts are large and wide-ranging, including no more hot breakfast for undergrads.
Holiday shoppers shunned credit cards: survey Reuters
Buyers Take a Pass on Some Failed Banks Wall Street Journal
Professor advises underwater homeowners to walk away from mortgages Los Angeles Times (hat tip reader LeeAnn)
The Jobs Imperative Paul Krugman
Best Buy, Krugman and the Carry Trade Bruce Krasting
Antidote du jour (hat tip reader Jack):
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And now for something completely different: After being offline for a week I would like to read older articles. While I have been a reader for nearly two years I have never figured out how to browse NC articles in chronological fashion. Neither “Older Entries” on the bottom of the main page, nor the November 2009 links bring me to the 3 to 8 day old articles. How to get there without playing games on Google?
One way to do it is to go on Twitter and get Yves’ page there. All the recent posts are listed:
http://twitter.com/yvessmith
Somewhat unsatisfactory but functional. Thank you.
I thought the same of the bear pit at first faze Ranger School Darby Camp, that lesson servers me well to this day.
Skippy…Pointed elbows in the leaning rest between the grout lines of tiles for an hour will do too.
I queried this a few weeks ago. Yves Smith said there is a glitch on the site and she hoped to get it fixed.
Sorry about this, it’s the result of not having found a webhost, which is a more serious issue than you might think. WordPress does NOT scale, it isn’t well suited to high traffic blogs, and so is a resource hog, even with hypercaching. Although quite a few high traffic sites nevertheless run WP, they have their own servers and T-1s. I’m not at a level where that makes sense, and I have no interest in being in the IT business. So it’s running on the server of the guy who managed the transition to WP, and we have a headroom issue that shows up with the older posts.
And Ed Wright, who has been helping me make these decisions, has cancer and is undergoing chemo, so I am stranded right now.
“In addition, he said, “there’s a moral dimension to this as homeowners who simply abandon their homes contribute to the destabilization of their neighborhood and community.”
Bullsh*t, Bullsh*t, BULLSH*T
The moral dimension is the banksters, rating agencies, and fiance industry, as well as the alphabet soup of regulatories who didn’t know what was going on.
A free enterprize system is premised on choice – with both the buyer and sell believeing that the purchase is in their own best interest. When bubbles of years duration occur, logical valuations go out the window. But having mortgagees overpaying for YEARS is not the way to rebalance the economy (paying twice the going rate for a house makes that money unavailable for other purchases or savings) – the buyers have to take hits, as well as the lenders. Than houses can be bought and sold at valuations that are realistic. Businesses go bankrupt all the time – American history is replete with stories of business men who failed time and time again, and than suceeded magnificently. The same should apply for mortgage buyers.
heres what the airforce wants to use those hummingbirds for: Air Force Bugbots
Dubai Government will not guarantee Dubai World’s debts say top finance official:
Since its citing Reuters, this may have been in one of the other Dubai articles linked, but I hadn’t remembered anything this blunt being said.
D’oh. It’s it’s, not its.
Sheeesh … Sell out, pro Nafta, Krugman, who was instrumental in creating the current intentional neocon financial coup, all of a sudden wants an emergency jobs program.
Nice picture of him here …
http://upload.wikimedia.org/wikipedia/commons/3/3d/Bos_taurus_taurus_turd_.jpg
Deception is the strongest political force on the planet.
It is a good point about Krugman, his free trade days, NAFTA, and jobs. He is right about jobs. Funding to states, especially for education job creation, and a straight jobs program are good ideas. But we need more. In particular, a strategic policy of sustainable industrialization, which is to say that we need to direct jobs into where we want the country to go.
Krugman gets a lot right but he enough wrong to be irritating, as in the following:
“Yes, the recession is probably over in a technical sense”
Why the hell can’t he just say the recession isn’t over, instead of this gibberish? It’s like saying, except for the depression, the economy is recovering normally.
I agree with the professor. I don’t think that the “hardships” of a strategic default are that horrible, especially if you plan it properly. Also, I do not believe there is any moral obligation to society to pay off the debt, because the terms of walking away from your mortgage are stipulated out in the actual mortgage contract, ie. the bank gets to keep the house. That is laid out in the contract, so your moral obligations are satisfied. As long as you don’t burn down the house and leave the banks with nothing, it is a fair transaction. Wall Street and businesses do this all the time, why shouldn’t Main Street have access to this as well?
In addition, with the millions of people who currently had their houses foreclosed on, we are heading into a generation of people with bad credit. There is no way the system can survive with millions of people ineligible for credit, so guess what will happen: banks and lending institutions will lower their standards. I guarantee this, based on everything we have seen in the past year. In about 3 years, people who walked away from their homes will not suffer any consequences from this, because banks will be too desperate to lend to them.
The question is, what about the tax implications of walking away from your mortgage? If your mortgage is huge, and you walk away from it, don’t you have to pay the tax on the amount of the mortgage? That might present a huge problem for a lot of people, especially if its in the hundreds of thousands of dollars.
Willem Buiter Will Join Citigroup as Chief Economist
http://www.bloomberg.com/apps/news?pid=20601087&sid=avRXYvOOfA1s&pos=5
Well as Yves would say, Quelle surprise! Summers has made a career out of screwing things up and moving on to bigger and better things.
That’s interesting about Buiter. I didn’t know he was a consultant to Goldman. The last paragraph about his predecessor is funny though and is just so utterly typical of this Administration:
“Alexander, who had worked at Citigroup since 1999, left in March to become a counselor on domestic finance issues to Treasury Secretary Timothy Geithner. He was paid $2.4 million by Citigroup in 2008 and the first months of 2009, according to his financial-disclosure form filed with the Treasury. In December 2007, he predicted the U.S. would probably avoid a recession.”
I predicted there would be a recession in the Fall of 2007. They could have paid me half what they did Alexander because as we all know being right doesn’t pay that well these days.
There is nothing immoral about examining the contract and then using its terms. The penalties for default are spelled out in the contract — it isn’t as though the risk never occurred to anyone. The bank won’t hesitate to use the contract against the mortgagor, so I see absolutely no reason why the mortgagor shouldn’t use the terms of the contract as a sword against the bank. I would argue that the American public is under no moral obligation to be the patsy of last resort to the financial establishment.
As for the credit cards, they declared war on their customers. I foresee that increased use of credit will suddenly be highly correlated with bankruptcy: it’s institutional loan sharking at this juncture, and to be used only as a last resort. Perhaps that is healthy for the economy, but it should shock no one. Meredith Whitney is right: the lines of business that were profitable for the banks in the past are dead, and the banks themselves killed them.
I’m glad Niall Ferguson finally came out of the closet and showed us his true colors, which are neoconservative and neoliberal to the core.
Each American needs to ask herself what it is that is most important: taking a high-stakes roll of the dice at a long-shot effort to preserve American empire; or providing jobs, social security and healthcare to rank and file Americans.
Ferguson, with comments like the following, leaves little doubt as to which he would do:
•But if the United States succumbs to a fiscal crisis, as an increasing number of economic experts fear it may, then the entire balance of global economic power could shift.
•Indeed, serial default and high inflation have tended to be the surest symptoms of imperial decline.
•As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure.
•This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force.
•But cutting the deficit in half is simply not enough. If the United States doesn’t come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.
•Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
And to complete his thought on one passage you lifted:
“This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America’s debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president’s first term should be the administration’s most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority.”
I ‘spose it just sounds less offensive in that mellifluous furrin accent.
I used to spend some time reading Thomas P. M. Barnett (http://en.wikipedia.org/wiki/Thomas_Barnett), as I once or twice caught his “core-periphery” “New Rules Set” lecture on C-SPAN years ago. Not sure where his thinking is exactly these days, but he used to say – in paraphrase – the rest the world will buy America’s debt in exchange for America being the top cop on the beat. We provide protection, they pay for it.
Should he send a note to Niall?
Dave,
I used to be swayed by poll results, but I’ve about come to the conclusion that, at least when it comes to these low-quality polls whose results are made available to the general public, one can find a poll to bolster just about any position one wants to argue.
For instance, the most recent Gallup poll shows the “Top Specific Issues Mentioned as Most Important Problem”:
Economy in general 31%
Healthcare 22%
Unemployment/Jobs 20%
Wars/War in general 8%
Dissatisfaction with government 8%
Federal budget deficit 6%
Situation in Afghanistan 4%
Lack of money 4%
Ethics/Morals 3%
Education 3%
Situation in Iraq 3%
http://www.gallup.com/poll/124298/Economy-Picks-Up-Again-Most-Important-Problem.aspx
Looking at the results of this poll, the top priorities in FergieWorld—waging war and cutting jobs and social welfare spending to the bone—don’t seem to be shared by many Americans.
As to the US being “top cop on the beat” and others being happy to pay for this “service,” Ferguson recently made that argument in a recent article. But again, that’s a half-truth at best. For more info see:
http://www.nytimes.com/2009/09/30/world/asia/30china.html
http://www.amazon.com/China-Iran-Ancient-Partners-Post-Imperial/product-reviews/029598631X/ref=dp_top_cm_cr_acr_txt?ie=UTF8&showViewpoints=1
If Niall Ferguson didn’t appeal to the worst imperialistic impulses of the US ruling class, he would have to go home and teach High School. There have always been people of his ilk orbiting around the centres of imperial power and patronage, and doing well out of sycophancy.
I think Harvard should move their undergraduate campus to somewhere near Lowell National Park, away from all that urban distractions so the students can concentrate on studying and pay less for lodging. They can then eliminate faculty members all those expensive living- allowances and also sell the valuable real estate to raise some much needed hot breakfast money. Moving back to a rural setting would be like returning to their roots…to their Puritan days.
And while we are at it, Aristophanes notwithstanding, perhaps professors can look up to Socrates and teach without pay, although I read somewhere that he did accept goat milk, eggs, etc. I guess that would be alright – professors have to eat too.
That’s an absolutely adorable picture, by the way.