Links 12/19/08 (And Happy Birthday to This Blog!)

We are two years old today! Thanks to all you great readers!

AstraZeneca row as corruption claims engulf Nobel prize Times Online

To Avoid Paying $25 Million, Insurance Co Claims Smoke Killing 3 In Fire Was “Pollution” Consumerist

Credit-Card Users Feel Pain as U.S. Banks Reap Gain Bloomberg

Tax Break May Have Helped Cause Housing Bubble New York Times

The Cut That Guts Robert Robert Cyran, BreakingViews (free trial). Argues that the Fed’s super-low rate policy will hurt corporate borrowers.

Gloomy retailers question accuracy of ‘rosy’ sales data Independent

Glencore: credit default swaps suggest something amiss Ed Harrison

Even Winners May Lose Out With Madoff New York Times. We had mentioned, citing Roger Ehrenberg, that Madoff investors who had received distributions of various sorts might be subject to clawbacks.

Law Firm Bonus Cuts. The very tippy top law firms are belt-tightening, both in staffing and pay. See the sordid details for Lathan & Watkins, Cravath (2007 and 2008), Simpson Thatcher, and Skadden Arps.

TARP Rule Could Mean Retroactive Limits, Executive Salary Caps Bloomberg

10 Outrageous Claims From Saxobank FT Alphaville

Madoff Hosed Uncle Sam, Too: $17 Billion Going “Poof” Henry Blodgett, Clusterstock. The IRS is going to be giving monster refunds to defrauded Madoff investors.

Some Credit Suisse Bankers Livid Over New Bonus Plan WSJ Deal Journal. The positive media reaction is apparently not shared by employees.

Fiscal policy and the burden of proof Tyler Cowen (hat tip reader a). Argues that the case for fiscal stimulus has little to no underlying evidence.

Antidote du jour:

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  1. Anonymous

    Happy birthday! – an invaluable source of information – giving a far more realistic and accurate picture that that of your noble politicians!! – Keep up the good work

  2. dearieme

    A birthday so near to Christmas – do you get one superbig present? In fact, do blogs get presents at all? Or perhaps just a small glass of dry sherry?

  3. Anonymous

    piling on here…

    thank you so much yves for all that you do – there are many lurkers out here (myself included) that value your writing a great deal.

    best to you and yours in the upcoming year.

  4. Anonymous


    I wish you many more happy birthdays. Thank you for the gorgus birthday cake.

    I admire you for putting your extraordinary analytical talents and energy to this enterprise and hope you will continue for years to come and with increasing financial returns.

    And thank you also for calling out the scams, crooks and liars for what they are when it is necessary to do so. You do it with such reasoned, thorough and fair argument.

    This blog is an antidote to the scorn for constructive criticism in this culture. Its a trait that seems ominously like political suicide to me.

  5. James

    Many thanks. What a pleasure to read intelligent postings and (usually) intelligent comments.

    One complaint: this “Anonymous” guy or gal posts too often and frequently seems to argue with himself/herself.

    (Seriously, why not require all these smart people to make up their own nom de comment?)

  6. Anonymous

    Enjoy the b-day, and thank you for your efforts, and insights…love your blog, one of the best out here in cyber-world.


  7. Alberto

    Congratulations on your second anniversary Yves.

    Your blog has become a daily “must read” for me, and I’m sure, many others.

    Your insightful, intelligent and honest analyses provides a breath of fresh air in a world sorely lacking them from its traditional sources.

    May you be richly rewarded indeed, and may you continue blessing us with your invaluable contributions.

  8. Anonymous

    Happy Birthday and thanks for your perspective on the financial world. Your writing provides some of us with much succor, knowing that there are similar minds in existence. Please keep saying what is right.

    May you live long and prosper!


  9. IF

    Happy birthday! I hope to see many more. This blog is one of the more intelligent sources on the net and I try to read it every day (and catch up later if I can’t).

  10. Evelyn Sinclair

    You have my admiration and heartfelt thanks for you work.

    I’ve watched the Greenspan bubble contort the economy for years, deeply suspicious of the stock market ever since it failed to deflate after the dotcom bubble (wasn’t allowed to bottom). I read some things about derivatives a few months ago, but still had only a glimmer of understanding of the mechanism and magnitude of the economic malaise. I spent time developing personal hypotheses of what might be going on, leading to a chaos-theory-based analogy based on climate-instability, to why the deflation/inflation outcome is so unpredictable ….

    It didn’t occur to me until around September to REALLY go searching for answers. I have since done compulsive web-searches trying to understand what is happening to the world’s economies. I do “rabbit hole” sessions where I follow searches exhaustively. I think I found your site in a search for something related to derivatives, trying to get a deeper understanding of all the various flavors, and found your article about the Lehman Brothers auction that was then about to happen. You pointed out why it was very significant. You reinforced my dawning hypothesis that the “liquidity crisis” and “mysterious” selloff of stocks and everything else was not a “credit crunch” but a Great Deleveraging.

    Your post gave me news, insight, and backup! I sent it to a friend, who considers my concerns a bit overblown. He wasn’t going to give it much credence because, he said, he did a search, and found that your article was the only REAL mention he could find, that the other search results were merely pointing to your article. So how could your article be important, if it was all alone?

    I followed your links, and found Jessie’s Cafe Americaine. I read a lot of Bloomburg stories. I saw that your analysis helped me make sense of financial news, and that you caught a lot of things I missed, and came up with downright obscure information that gave depth to the more current news.

    Your find of the 1993 Brookings paper, and the way you tied it to the Times article, made me foist it on friends. I told them they didn’t have to read it, but that it was too fundamental and outrageous not to try to share it with them. Lately, I have been thinking of the current situation as a “harvest.”

    I read several other blogs. (I have winnowed it down to that relative few.) Yours is the one I could least do without, if I had to pick just one.

    This is WHY I thank you so much; saying “Thank you so much” doesn’t really do.

    If I could offer one suggestion — How about possibly putting together a set of “fundamental” articles, for those who come late to the game, but really really want to catch up? Maybe a set of your own posts that give insights that people need to build on before they can understand the “news;” AND a pile of outside links to primers, videos, whatever seems best suited to offering relatively quick enlightenment. You could consider asking your contributors to pick some of their favorite “educational” pieces.

    Good cheer to you and to us all —


  11. Michael Fiorillo

    Congratlations and thanks for the integrity and excellent quality of your blog. I read it frequently and occasionally contribute to the comments section.

    I come to the site from a labor/left perspective, but frequently find better information and argument here than on sites that are ostensibly more attuned to my worldview.

    Mazel tov, and long life to you.

  12. Tortoise


    Now, to the analysis of “Tax Break May Have Helped Cause Housing Bubble”

    There is no question that tax policy favors homeownership and is thus partially responsible for this bubble. However, this particular piece of legislature is OK for the following reason: capital gains in real estate are, in the long term, mostly due to inflation and thus illusory. Thus, a general capital gains tax on real estate is unjustified and unfair. (Different matter if appreciation is due to some major improvement for which the government has invested, like a transportation system.)

    Having said that, I believe that the tax burden should be increased on housing and decreased on income. For example, proposition 13 in California should be rescinded because it is unfair and also very bad for the economy. It contributed to both expensive housing (hence cost of living) and higher income taxes. How can businesses and young people make it in this environment? Prop 13 is largely responsible for this horrible economic mess California is in. My advice to fellow Californians: Let us do the economy and ourselves a favor for abolishing prop 13 and state income tax.

  13. mundanomaniac

    Your blog, dear Yves, presents to me a piece of Weltgeist, which doesn’t exist unless in the strong heart of mindful persons.
    The yellow and red cards, which you offer accidentally, seem to prevent the commentator ship of this blog from the vanity which to me is the most dangerous vice of those who deal with all kinds of leadership. But maybe this is a special European notion …
    I line up with all of your commentators who call naked capitalism ‘priceless’ and thank you deeply for giving the opportunity to meet a lot of grown up Americans with an ability of shame, which is a revolutionary virtue according to Karl Marx.
    As I am an astrologer living way out in the Bavarian Oberland I dare to present you the chart of * 19.12.2006, New York, UTC 15:58 First Blog of Naked Capitalism. Maybe there is somewhere a good friend of you who can read and tell what is tells.
    The only thing I want to say: in the moment of birth of naked capitalism the horizon is meeting Pisces ascending in the east. Pisces is the sign of cleaning and new beginning.
    I wish you all the power, health an inspiration, necessary to keep the child growing.


  14. Citizen Bagholder

    We are so deeply grateful to you, Yves, for all the hard work and time you put into this blog. You stand out as one of the few voices that is knowledgeable, clear, and honest in this crisis.

    Congratulations and thank you!

  15. macndub

    A birthday so near to Christmas – do you get one superbig present?

    Try it. And make sure you have a getaway car handy. My wife was born around this time, and when we first started dating, I went the superbig present route. Big. Mistake. [shudder]

    Happy birthday, NC!

    Quick question: why is the media pleased with the CS bonus plan? It’s levered 5:1!!! It’s still a call option payoff, with very little downside. I suppose that any downside is a relief, but still.

  16. David Pearson


    Happy birthday to NC and congratulations on a great blog. You have built something of lasting value as a result of your insight, intelligence and independence. I have recommended your blog to many people only to hear later that they “swear by it,” or “check it every day”. Unlike myself, these are people with no connection to the markets. They just want to stay informed and have chosen your blog as the vehicle for doing so.

    In my case, I’m a retired money manager (and ex-consultant), and I’ve been investing on my own for the past three years without accessing Wall Street research — just blogs like yours and Calculated Risk. I have been successful beyond my most optimistic expectations, and I am grateful for your help.

  17. Merry-will-go-round

    AstraZeneca row as corruption claims engulf Nobel prize! Maybe I wasn’t being to cynical in wondering whether the fix wasn’t in for Economics this year?

  18. Glen

    Awesomeness! Happy birthday Naked Capitalism and thanks for being that sparkle in the rain.

    James: One complaint: this “Anonymous” guy or gal posts too often and frequently seems to argue with himself/herself.

    Of course – it’s an economics site! When an economist isn’t arguing with themselves they’re arguing with everyone else.

  19. Anonymous

    It has to be more than two years …. or maybe you just made an impact amazing quickly. i remember well the day elisa parsisi of RGE told me that i had to take a look at a financial blog she had just come across.


  20. When's the next bus to Oswego?

    Happy birthday to an awesome blog! Naked Capitalism is a daily visit for me, and was a partial inspiration of sorts for me to start my own blog on the economic and financial crisis,
    Which is heavily indebted to this one.
    My wife and daughter love the Antidotes du Jour, btw.

  21. When's the next bus to Oswego?

    Happy birthday to an awesome blog! Naked Capitalism is a daily visit for me, and was a partial inspiration of sorts for me to start my own blog on the economic and financial crisis,
    Which is heavily indebted to this one.
    My wife and daughter love the Antidotes du Jour, btw.

  22. Anonymous

    Happy Birthday NC! So, so glad to have stumbled across you quite a while back.

    Your integrity, honour and intellect shine though.

    You give hope for the rest of us.


  23. doc holiday party pooper

    H A P P Y B I R T H D A Y doesn’t cut it, because you can’t have a birthday for a blog, I’m friggn sorry, but this is an anniversary! No cake either!!!

    Great job on holding your own Yves, et al, keep up the fine work!!!!

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