I need to read that, but sounds dead on the money! I’m currently very pissed at Obama and the hoax of change …. Xerox, gimmie a break dude!

Great, now I have to chase Buiter…

On Buiter, he is premature in calling the Obama transition team “no change, no hope”, but the criticism of the legal profession in the U.S. is long, long overdue.

anon 2:24 has solid comments, which I would summarize simply as: too many queen bees and not enough worker bees.

Meanwhile, let’s expand on Buiter’s point that there are too many lawyers. So many, that lawyers have destroyed the rule of law.

Also: Way too many economists wedded to rational man and other orthodox economic theory. Result: they’ve destroyed the economy.

Too many journalists who compete for attention through celebrity and ‘narrative’ instead of reporting, accuracy and skepticism. Result: They’ve destroyed journalism.

Way too many politicians far more interested in power than governance. Result: They have destroyed politics and government.

Way too many investment bankers and related flora and fauna. Result: They have destroyed the financial sector.

Too many medical administrators as well as specialized medical practitioners. Result: They’ve destroyed medicine.

… and so on and so on

Both political parties stand for status quo. Political advertising uses the word CHANGE like Exxon uses clean energy-its only a word.
I am not saying Obama is a fake rather he and his adminstration will operate within the scope of what they know and feel confortable with which is 98% within the box thinking. As Buiter has pointed out so well nobody on the team Obama stands for new ideas or change all of them are ingrained into both the political and economic system that has provided well for each one of them, clearly they don’t want any challenge to their own family wealth.

The youth of American that elected Obama is going to get a good lesson in American political theater as the Democratic Congress lumbers about the political landscape talking change and ruling from the middle.

‘Speaking at the company’s annual banking and financial services conference, Mr Thain said while he was cautiously optimistic about the future of the financial services industry, he lacked optimism about the near-term prospects of the US economy and global markets.

“Right now, the US economy is contracting very rapidly. We are looking at a per­iod of global slowdown,” he told investors. “This is not like 1987 or 1998 or 2001. The contraction going on is bigger than that. We will in fact look back to the 1929 period to see the kind of slow­down we’re seeing now.”’

Wow. So basically, translated that is: “Yeah, you know this implosion we (investment banks) caused with our incestuous derivatives? Well I’ve got good news and bad news… The good news is we (investment banks) are going to be fine (thanks to the politicians giving us your money). The bad news is you (everyone else) are hosed. Sorry. Suckers.

Did anyone notice that latest trade stats from China show imports falling faster than exports? So much for that engine of growth…

Wow, I have heard a lot of low opinions regarding lawyers but Buiter takes it to another level!

Buiter’s ire makes one wonder what sort of consequences he has experienced with lawyers in the past. His take on lawyers, although probably true for him, reads as comedy for those that have had the good fortune of avoiding the need for lawyers most of their lives. Buiter is a good economist but he might have also done well in stand up comedy.

This is a reading of yield curve plus increasing cost of CDS (a subject recently brought to our attention by Yves…thank you) on government debt in tandem and what it might mean. Not for the faint of heart…

‘Uncle Sam’s Credit Line Running Out?’

…snip…’The steepening of the Treasury yield curve has been accompanied by an increase in the cost of insuring against default by the U.S. Treasury. It may come as a shock, but there are credit default swaps on the U.S. government and they have become more expensive — in tandem with an increase in the spread between two- and 10-year notes.

This link has been brought to light by Tim Backshall, the chief analyst of Credit Derivatives Research. The attraction of investors to the short end of the Treasury market is “juxtaposed with the massive oversupply and inflationary expectations of the longer end,” he writes.

Backshall is not alone in this dire assessment. Scott Minerd, the chief investment officer for fixed income at Guggenheim Partners, a Los

Angeles money manager, estimates that total Treasury borrowing for fiscal 2009 will total $1.5 trillion-$2 trillion. That was based on $700 billion for TARP, a $500 billion-$750 billion “cyclical deficit,” an additional $500 billion stimulus program and some uncertain amount for the Federal Deposit Insurance Corp.

Minerd doubts that private savings in the U.S. and foreign purchases of Treasury debt will be sufficient to meet those government cash. That leaves the Fed to take up the slack; that is, monetization of the debt.

However it comes about, Backshall’s charts of the yield curve and the spread on U.S. Treasury CDS paint a dramatic picture. Both the yield spread and the cost of insuring debt moved up sharply together starting in September.’…snip…

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