Monthly Archives: February 2008

Thomas Palley: "The Debt Delusion"

Economist Thomas Palley has of late been discussing what he believes to be an insufficiently-acknowledged cause of our current financial woes, namely, a shift in government policy away from emphasizing wage growth as a key objective. Another shift was a lack of concern about trade deficits. Now one can argue that combatting trade deficits means […]

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Links 2/27/08

Diebold Accidentally Leaks Results Of 2008 Election Early The Onion What to Get for Your First Monoline Bailout Johnny Debacle, Long or Short Capital In Defense of the Patriot Employer Act Felix Salmon Why is the NYT So Opposed to Free Trade in Professional Services? Dean Baker Regulating sovereign wealth funds: does the US have […]

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Olympics Worsening Water Crisis in China

Fresh water is increasingly scarce, particularly in China. The average annual supply, per capita, is 348 cubic meters. The UN defines anything below 1000 as a water shortage. Beijing residents have only 250 cubic meters. Plans to divert water from the northeast provinces to Beijing and some hydropower projects will have dire consequences for millions […]

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Another Off-Balance Sheet Time Bomb: VIEs

Despite the sudden flurry of worry in the press, triggered by the release of Citigroup’s 10K, VIEs, or variable interest entities, have been around for some time. They were a favorite device of Enron’s. SIVs are a subset of VIEs. With such an illustrious history. it’s a wonder they haven’t gotten more inquiring coverage until […]

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MBIA Aaa Affirmed by Moody’s

This development takes the bond insurers out of the headlights for now, although Moody’s still rates MBIA as having a negative outlook. Credit default swaps on the monoline have fallen 240 basis points to 615, according to Bloomberg. Note also that the rating agency is cool on the idea of a split. From Reuters: Moody’s […]

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Are High International Capital Flows a Bad Thing?

In “We must curb international flows of capital,” Dani Rodrik and Arvind Subramanian make what many might consider to be a radical argument: too much money sloshing around internationally leads to trouble. It’s not quite a hot money argument (unstable and rapidly moving investments were the proximate cause of the 1997 emerging markets crisis). Instead, […]

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Governors to Lobby Congress for Muni Debt Assistance

To paraphrase the late Senator Everett Dirksen, a handout here, a handout there, and pretty soon it adds up to real money. The latest supplicants looking for alms from the Federal purse are state governors on behalf of local governments hit by the auction rate securities debacle. So far, they have not developed a proposal. […]

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The Sham of Sovereign Wealth Fund Negotiations

The Wall Street Journal reports today in “U.S. Pushes Sovereign Funds To Open to Outside Scrutiny,” that the US Treasury Department talking to two large sovereign wealth funds, Singapore’s Temasek and the Abu Dhabi Investment Authority, as the first steps in a process to “”draft rules to oversee the behavior of such funds, without discouraging […]

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"$60bn Qatar fund to shun US banks"

Notice that this article in Arabian Business chose to put a provocative headline on this Reuters story. Qatar’s stance, at least in public, that it is holding off on US banks for now, is consistent with other reports of Gulf State sovereign wealth funds having cooled to US banks’ fundraising efforts. But note also that, […]

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Links 2/26/08

The Un-Credible Fed William Fleckenstein. Minyanville The Most Expensive Air Crash in History Cactus, Angry Bear Make plants talk! They’ll Twitter you when they need to be watered Make. A project for the geek in your life. UBS Board of Directors 2009 Cassandra Does Tokyo Is Mark-to-Market a Doomsday Machine? Felix Salmon FDIC to Add […]

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"Antidepressant drugs don’t work"

The headline above comes from the UK’s Independent. I could have picked number of variants (BBC, “Anti-depressants ‘of little use‘,” Financial Times, “Antidepressants ‘have no impact‘”), but what is interesting is that as of this hour, this study, published by the University of Hull, is getting MSM coverage solely in the UK and Commonwealth countries. […]

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MBIA "Questions" 2007 Preliminary Reports, Plans to Split, Pause in ABS

A bit late to this item, which appeared on Bloomberg. Remarkaby, their headline does not mention the most newsworthy item, which is the possible recanting of the preliminary earnings announcement. At a minimum, this would seem to raise questiona about the quality of controls. The decision to stop writing asset-backed securities guarantees for six months […]

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Real Estate Porn

In a departure from our usual programming, I thought I would introduce a real estate opportunity (yes this is an ad of sorts). But as you can see, it is particularly attractive and also presents an interesting case example of the issues involving the marketing of unique and illiquid assets. The asset in question is […]

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