Parisian women and behavioral economics Tyler Cowen
Boredom is a Killer h+ (hat tip reader Sugar Hush)
The IMF Has “a long history of stabilizing economies and solving global financial problems”? Dean Baker
Waste Management: Congress Pushes Surge in Ongoing War Against Iran Chris Floyd
ObamaCare and New Coke Pat Caddell and Scott Miller
Friend to Wall Street, Schumer Is Suddenly Quiet New York Times and A Wall Street Ally Balances Loyalties Wall Street Journal. As Joe Cotello noted, “On the same day, the Journal and NYT both have an article on how Wall Street’s best Senator is torn between his benefactors and God and country. Someone should call and congratulate his press operation anyway.”
Rating Agency Data Aided Wall Street in Mortgage Deals Gretchen Morgenson and Louise Story. This is “dog bites man” for anyone who has been paying attention. I’m stunned that some bloggers find this to be news. It’s widely known they handed out their models to facilitate deal structuring.
Text of Selected Goldman E-mails Released by the Senate Subcommittee on Investigations New York Times. The problem is some were scanned so badly as to be extremely hard to read (the NYT has a “text” feature but it did not seem to work for me). A subset (more readable) is here. Goldman’s response to the Senate release can be found here.
Deep into Fantasyland: White House touts GM loan repayment DoctoRx
Fight On, Goldman Sachs! Frank Rich, New York Times
A Tale of Carriers: Investing in Slide Rules Fred Reed (hat tip reader Hubert). Today’s must read.
Antidote du jour:
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Re: Fred Reed, A tale of Carriers.
Any 100+MM or +BB dollar capital ships are just a bad case of the Admiralty engaging in…Pimp my Ride.
Good to see Fred On Everything make it into NC!
Morgenson’s column today is a strong brief for breaking up the bank rackets. She makes a good argument that the sham bill will actually intensify the oligopolist pressure and trend.
http://www.nytimes.com/2010/04/25/business/economy/25gret.html?ref=business
It reads like a direct riposte to Krugman’s pro-racket shilling.
The comparison with “New Coke”:
Yes, after the rising backlash Obama should have dumped his nefarious health racket bailout plan and gone for something minimal. That would’ve been vastly smarter politics, while on a policy level a minimalist bill would’ve been useless but basically innocuous. It would’ve just left the bad status quo in place but not sought to make it much, much worse. Instead the bill they passed is both worthless and malevolent and likely to be incredibly destructive.
Regarding Carrier tales: I long ago read (can’t even remember the year, sadly, let alone the reference) where in war games as long aso as the late Seventies entire main force fleets were sent to the bottom by one (1) missle firing submarine. That happened more than once . . . then, they stopped doing the wargames. For more than a generation, it’s been stone obvious that main force fleets, most especially carrier battle groups, were mass coffins which would be blown to flinders in any shooting war with a First World military opponent. And the missle technologies to achieve this have been _vastly_ improved since then. This is one reason why most other countries in the world have ceased to pour money into said main force fleets.
So why does the US persist in funding, staffing, and deploying such fleets and such carrier groups? Imperial force projection, plain and simple. So that Haiti, and Libya, and Iran, and Venezuela know that we can, when and as we should desire, bomb their infrastructure assets flat, and casually carpet bomb their human collateral. Should we so desire. Maintining these groups isn’t irrational, nor is it a matter of military knotheaddedness: it’s straightforward imperialism, the Great White Fleet 4.0. We’ll know that the US is out of the empire business when we decommission these ships, not before.
Cough…N. Korea.
Yup… and only a modicum of paranoia is required to suspect China. I suspect at this point only party incompetence in China can save Taiwan.
Richard:
The war game scenario you reference was a small part of the storyline of the novel “Warday” by Strieber & Kunetka written in 1984. The book was widely acclaimed when written.
I once asked a Royal Navy chum “Why do we have any ships other than submarines?”. He said “I’ll tell you after I retire”. But he hasn’t retired yet.
Deep into Fantasyland: White House touts GM loan repayment DoctoRx
“I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn’t from earnings. … It’s actually from another pool of TARP money that they’ve already received,” he said Wednesday. “I don’t think we should exaggerate it too much. Remember that the source of this money is just other TARP money.”
Hmmm…wasn’t that the premise of the old TV show “Run for your Life?” The guy was dying, so he lived it up on one credit card, than paid off that credit card with another credit card, all the while increasing his credit worthiness because he was so good at paying off his credit cards? – well no, it was Mad magazine’s explanation of where the funds came from (I imagine the credit card companies back than would be unamused by letting the public in on the scam – although it appears that this is how modern finance in fact works).
But I would say GM is in a run for your life situation.
It is worth pointing out that the New Coke/Classic coke introduction was a PR coup in more ways than one – when the “Classic” product was “re-“introduced, it was with HFC (High Fructose Corn Sweetener), replacing the sugar that had been in the original formulation. This was of course cheaper, plus it brought them into line with Pepsi, which was already using it. (The other main objective was to make the soda sweeter, since this tested better in blind experiments. I’m certain they dialed the sweetness back with “classic” vs. “new”, but I don’t know if it wasn’t still a bit sweeter than the original. Any food scientists in the house?)
I’m obliged to stretch the analogy back to the topic, so I’ll say that even if changes are made to the health care “reform” we’ve been given, they will be modest, and not change the true substance of the legislation, which has already been accomplished. In fact they may use any changes as an opportunity to achieve other perverse, somewhat covert objectives, as has been done with financial reform.
The idea that New Coke was a clever ploy to get HFCS into soft drinks is a pretty widespread urban legend, but a false one. http://snopes.com/cokelore/newcoke.asp
Incidentally, the main reason HFCS is used in American soft drinks is due to idiotic protectionist measures undertaken for the benefit of domestic corn and sugar beet growers. Coke with real cane sugar is common in Europe, Africa, and Asia.
The duck appears to be unsinkable…maybe not to the last little duckie.
Dead Carriers: the blogger omitted this gem from 2007, in which a Chinese attack sub popped up undetected next to the USS Kitty Hawk during live exercises.
http://www.dailymail.co.uk/news/article-492804/The-uninvited-guest-Chinese-sub-pops-middle-U-S-Navy-exercise-leaving-military-chiefs-red-faced.html
Like many of America’s chronically unsolved problems, this one is simply stated. Anti-ship missiles are about 30 times faster, 100 times smaller, and 1000 times cheaper than carriers. As a result, it is inherently far easier to sink a carrier than to defend one. In the real world, with human error and uncertainty, sooner or later the ship loses.
The strategic weakness the the replacement cost and time. They are easy to sink, but take years and billions to replace. This strategic uselessness may help explain why the Navy is advertising its anti-piracy efforts lately. They need a reason for being.
Re: Goldman’s Response to Senate Release
“It is critical to remember that the decline in value of mortgage-related securities occurred as a result of the broader collapse of the housing market. It was not because there were any deficiencies in the underlying instruments.”
This is a flat-out lie. The underlying instruments were deficient and Goldman knows it.
Borrowers do not default merely because their home has declined in value. Borrowers default because they cannot make their monthly mortgage payments – and they cannot sell their property because of their negative equity position.
Goldman and others have repeatedly defended their so-called inability to foresee the crash by claiming that they had no idea “houses prices would drop everywhere at once.”
The defense is disingenuous.
The fact that Goldman recognized declining property values as a contributor to the crash means that they also recognized homeowners would need to refinance their loans in order to maintain their homes. The loans were essentially balloon loans dressed up to look like 30-year terms with scheduled rate and payment adjustments.
So, the mortgages were deficient, as were the bonds that bundled them, and so were the CDOs that were designed as toxic waste repositories from the very outset.
If one thinks Crime and Punishment is boring, best to throw in the towel.
And that’s bs about Parisian women. They really do look fantastic — bien dans sa peau.