Links 2/5/08 « naked capitalism

Thursday, February 5, 2009

Links 2/5/08

Number of alien worlds quantified BBC

Doctors test latest attempt at artificial liver Associated Press

Young Australian Puts a New Spin on Bowling: He Throws Two-Handed Wall Street Journal

Former VP Dick Cheney warns of nuclear attack on United States under President Obama Daily News (hat tip reader Dwight). Wonder how he can be so confident. Is Halliburton providing logistical support? You have to read this for the Dr. Strangelove factor.

Australia facing debt-driven depression Steve Keen ABC (hat tip reader Graeme)

China’s power glut to continue as consumption growth falls to 8-year-low Xinhua (hat tip reader Michael)

In Merrill Deal, U.S. Played Hardball Wall Street Journal. This was one of the cheeriest stories I have read in some time. The officialdom is starting to get the nerve to rein in the bailout beneficiaries.

Curbing a few bankers’ earnings is a small price John Gapper, Financial Times

Volcker Chafes at Obama Panel Delay, Strains With Summers Rise Bloomberg. A better headline would be “Volcker Marginalized”.

It’s Time to Rethink Our Welfare Policy RaceWire

Bailed-out Royal Bank of Scotland bankers set for millions in bonuses Times Online. The US has company.

Full Madoff Client List Released, Published Here Zero Hedge

Financial Crisis: The Failure of Accounting Reform Ludwig von Mies Institute (hat tip reader Kevin)

Magna to “wind down” NPG plant Syracuse Post Standard (hat tip reader John). Yes, just a local piece, but those who think that unions might enjoy a renaissance under Obama might want to think twice. They have a lot of ground to claw back. Some backstory from John:

Magna offered another pay cut and the possibility of sticking around. The union members voted it down. Magna announces a few hours later that they are winding down the plant.

I had one friend who did work there. He was offered 100k last year to just walk away. At the time, I said he was crazy not to take it, the numbers spoke for it. Hours were being cut severely, and there was the constant talk of the plant leaving. I think they just managed to lower their severance costs on the way out.

Dirty pool. Magna is Canadian, and the canadian auto workers are in discussions this week. I think this is just a demonstration to the canadian unions.

The playing off of unions against each other is going to be the next story. How is that BMW plant in South Carloina? I gotta go check on that one. German unions versus southern labor, I am going to go with the Germans.

Antidote du jour (hat tip reader Barbara). A reader asked yesterday if I could provide links to photos in the future. Most are uploaded from my computer (from e-mails, like today’s) but I will comply with the request when I can.

24 Comments:

purple says:

February 5, 2009 at 4:29 am

I imagine the service sector unions (SEIU) will continue doing well. One could even see an explosion of unionizing there.

Manufacturing based unions (UAW, Steelworkers) will have a tough time as long as the sector is struggling.

dearieme says:

February 5, 2009 at 4:36 am

“Stop toying with your food.”

Anonymous says:

February 5, 2009 at 4:52 am

Number of alien worlds quantified BBC… if they receive and understand TV signals, we would be the galactic comedy channel, dark comedy that is.

Skippy

Anonymous says:

February 5, 2009 at 5:59 am

The De Soto article on international accounting standards is superficial and ignores obvious and long-standing arguments against use of historical cost. Given the links between accounting standards and opacity and the financial crisis, I’m surprised you chose to link to this article.

jult52

Anonymous says:

February 5, 2009 at 6:15 am

OT: Why do we want to subsidize new housing ?

Many proposals are being proposed to stabilize the housing market. Most are aimed at inflating housing prices to stem the fall in prices back to the long term trend (or below as Soros worries).

The “price” of a long term asset like housing is a non sequitur. Affordability, defined by the cash flow cost, is composed of the price discounted by the interest rate. A higher price can be justified by a lower interest rate because the cash out-flow is the same.

Deflation of housing prices do severely impact financial institutions who record losses when mortgagees walk away or they take a home back in foreclosure.

The idea of subsidized mortgages has merit except if it attempts to support inflated housing prices. So why subsidize new housing prices and why should the government supply the subsidy.

There is a way out. Only subsidize mortgages on existing homes, foreclosed homes, and refi’s from toxic mortgage products. Let the market determine new home prices and mortgage rates.

Subsidized mortgages would be at below market rates sufficient to support the price of bubble housing in competition with falling new home prices. The mortgage would be subsidized by the banks, with the government helping out with guarantees. The catch ? Thirty year fixed, assumable.

Anonymous says:

February 5, 2009 at 6:27 am

PS: On mortgage subsidy:

Make, by law if necessary, the MBS holders subsidize the mortgage with rights of capital gain sharing. In my simple mind, this would rejigger toxic MBS into “good” MBS.

The bankers will fight this like hell. They would prefer detroying the country clawing for public assistance rather than eat their own plate of …..

Anonymous says:

February 5, 2009 at 6:45 am

Re: The Larry Summers Show. O’bama might want to order Summers to invite Volker. Summers has been accused of having a University ego, releat with all the dirty tricks that sociopathic Phd’s can muster.

Not now, please. Especially since Summers plans seem to be running into trouble and Volker’s knowledge and credibility are required. The bankers are not the only flies on the turd. Academia is just as bad.

(Disclosure: I worked at a University)

Anonymous says:

February 5, 2009 at 6:58 am

RE: The Unions

OK, let’s blame the the rape victims for being too sexy.

The Unions are going extinct in the US because of the government supported anti-labor policies. Organized business, with Gov backing, has destroyed any voice labor has.

As long as gulag labor in the third world is a viable option,with frictionless and “free” access to the US consumer, the US wages and standard of living will decline. Let’s build up the infrastructure so goods can be shipped from anywhere in the world more cheaply.

Anonymous says:

February 5, 2009 at 7:45 am

Just an FYI, I don’t think the SC BMW plant has unions. Southern unions is an oxymoron in the south!

Anonymous says:

February 5, 2009 at 7:53 am

I enjoyed the DeSoto accounting article. But I know nothing about accounting. Where could I find a good debate over these ideas, comprehensible to the accounting outsider?

Anonymous says:

February 5, 2009 at 8:23 am

Yves, would you be willing to upload your photos on the Flickr web photo sharing site? It is easy and would let you give people a link. When you post to Flickr, you can choose a license for the photo that says what people can legally do with it.

Adina

Richard Kline says:

February 5, 2009 at 8:35 am

Re: Skippy at 4:32, farce.

_The Half-assed Man with One White Shoe_, or something like that.

Anonymous says:

February 5, 2009 at 8:53 am

@Richard Kline said…. good to see you got out of that chimney OK and with your whit intact, lesser mortals would have gone troppo.

Skippy

Keenan says:

February 5, 2009 at 9:13 am

RE: Antidote
Evokes the scripture of the lamb laying down with the lion.

It seems that Sylvester & Tweety does not necessarily describe aviian / feline relationships.

RE: Cheney
Didn't that B-52 out of Minot land at Barksdale, LA shy one nuke ? Wonder what was in the box that Cheney was moving when he hurt his back.

Anonymous says:

February 5, 2009 at 9:51 am

Love the antidote pics … the last is priceless …

Obama is just another good cop bad cop shill … union members have been snookered …

Deception is the strongest political force on the planet.

i on the ball patriot

tyaresun says:

February 5, 2009 at 11:28 am

We cannot determine the amount of toxic assets on the balance sheets of our banks but why should that stop us from trying to estimate the number of alien worlds.

What arrogance.

ndk says:

February 5, 2009 at 12:24 pm

http://www.bloomberg.com/apps/news?pid=20601103&sid=aaLzJZKNcc6Y&refer=us

Volcker vs. Summers, and Summers is far more arrogant and sharp. It looks like the venerable Volcker is intended as nothing but a ruse designed to attract public support, although he's working to become more.

This really stings, because Volcker was an outspoken, early supporter of Obama's. The domination by the vicious continues in our modern America…

Anonymous says:

February 5, 2009 at 12:42 pm

“Former VP Dick Cheney warns of nuclear attack on United States under President Obama Daily News (hat tip reader Dwight). Wonder how he can be so confident. “

One legitimate way to interpret this is as a coded threat.

Some think the hot nukes that mysteriously got through dozens of security protocols to end up mounted to the wings of a B-52 in 2007 are evidence of an internal power struggle in mil/gov.

http://www.legitgov.org/minot_afb_nukes_oddities.html

If you find this hard to swallow, consider that today we find ourselves living in a world where the SEC/FINRA/DTCC have every appearance of colluding with criminals to steal billions. There should be no doubt America is a nation run by criminals.

Doug says:

February 5, 2009 at 12:46 pm

Yves, I'm surprised at your comment on the WSJ BofA-Merrill article. Yes, it's good that offialdom is doing some reining in of bailout beneficiaries, but Paulson and Bernanke basically forcing Ken Lewis & BofA to purchase Merrill Lynch is not the sort of reining I had in mind. It sounded pretty close to extortion from what I could tell.

Forcing one large bank with a modest toxic asset problem to buy another with a severe toxic asset problem to create an even more toxic too-big-to-fail superbank is something we've already seen too much of. The right thing for Ken Lewis to do would have been to walk away from the deal, as he should have done with the Countrywide deal.

Anonymous says:

February 5, 2009 at 12:55 pm

regarding that abc article: here is a link where Steve Keen explains in details how we are going through a rerun of the depression and how futile the efforts of Bernanke are to stop it.
http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

It seems a lot of economic theory can be put in the garbage bin as a result of this crisis.

holiday news service says:

February 5, 2009 at 2:16 pm

FYI:
SIFMA Asks for Muni Help
In identical letters sent to House Financial Services Committee chairman Barney Frank, D-Mass., and Senate Banking Committee chairman Christopher Dodd, D-Conn., SIFMA said the federal government should also consider: developing a commercial paper purchase facility to buy muni debt, similar to the Federal Reserve’s Commercial Paper Funding Facility, which is currently closed to tax-exempt paper; authorizing $200 billion to start new state revolving fund programs for municipal financings; modifying restrictions on pension fund investments in in-state tax-exempt bond funds; and appointing a contact at Treasury to monitor the economic functioning of the muni market.

In addition, they ask the federal government to find a way, through a conduit, to finance the purchase of outstanding Federal Family Education Loan Program loans to thaw the frozen market for student loan bonds.

“Today, most ARS auctions continue to fail and many thousands of investors are holding securities which offer no liquidity and cannot be sold,” the group said.

SIFMA called for Treasury to use funds under the Troubled Assets Relief Program to purchase ARS. It also said the government should: develop a federal liquidity facility to write standby letters of credit for ARPS; allow ARPS to be used as collateral for the Fed’s discount window; and create develop a temporary federal guarantee program for ARPS.

In its letters, SIFMA warned that the lack of liquidity in the muni market, and in the ARS market in particular, has made it difficult for state and local issuers to meet their financing needs. It has threatened the viability of small regional broker-dealer firms and left individual investors holding onto illiquid securities, the securities group said.

“The municipal bond market is experiencing a significantly low level of liquidity,” the group said. “State and local issuers are facing a critical need for reliable long-term credit enhancement, making it difficult to bring issues to the market.”

Also, see, hear and feel in your aging bones:
House Of Cards

Anonymous says:

February 5, 2009 at 5:18 pm

RE: Summers and Volcker – why should Summers pay any attention to Volcker, Summers knows he’s at least twice as smart.

Shoot, why should Summers pay any attention to Obama, either . . . . . . snark

Yves Smith says:

February 5, 2009 at 6:39 pm

Adina,

With all due respect, doing what you suggest takes more work. I already am spending more time on this blog than I ought to. Putting photos somewhere will take time away from generating new content, which is a far higher priority.

I do not understand why you cannot snapshot a screen image. I do that with some of the photos I use here.

Anonymous says:

February 6, 2009 at 12:01 am

Yves

Your pictures are great. Even my girlfriend who does not interested in economics, check your blog everyday for the new pictures.

Thanks again

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