Links 2/15/09

Global warming ‘underestimated’ BBC

Could ‘liquid wood’ replace plastic? Christian Science Monitor

CBRC Official Says U.S. Bonds Not Only Option, China News Says Bloomberg

Nationalize the Banks! We’re all Swedes Now Matthew Richardson and Nouriel Roubini, Washington Post

Miami banker gives $60 million of his own to employees Miami Herald

Do Androids Dream of Apple-Blackberry Crumble? Ultimi Barbarorum (hat tip reader Richard)

Who would credit the word of banking’s knights-erroneous? Guardian (hat tip reader Richard H, who says he isn’t a fan of this writer, but nevertheless found this piece to be “marvellously scathing and on-the-money”).

Demand for grammar school places surges Financial Times

Radical surgery is required to save this patient Anatole Kaletsky, Times Online

Antidote du jour (hat tip reader Megan):

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26 comments

  1. ndk

    What started as a minor flesh wound – the US sub-prime mortgage crisis of August 2007 – could easily have been cured if regulators, governments and central banks had taken decisive action a year ago, when it was already obvious that this was a problem that private financial markets could not resolve.

    Taken from Kaletsky’s piece, this opinion strikes me as extraordinarily short-sighted and bereft of memory. Does nobody remember our previous deflationary scare in 2002-03? Has nobody noted the persistent decline in inflation and investment? This crisis is not a minor flesh wound that just happened randomly. This problem’s been in the cauldron for a very long time: equilibrium real interest rates have fallen rapidly, and they finally crashed through zero.

    Privatizing banks only makes sense if the bankers are fundamentally unwilling or unable to do their jobs and lend where the risk/reward proposition is appealing.

    I know it’s a contentious position here, but I don’t believe bankers are that dumb and fundamentally incapable of lending in lucrative situations. Sociopaths, certainly, but not dumb. The Fed and Treasury have made it extremely clear that inestimable liquidity is available, so I don’t find “unable” a cogent argument either.

    I still see little evidence that nationalizing the banks will fix a thing, beyond doling out appropriate punishment to said sociopaths.

  2. artichoke

    I agree with ndk here. These “stress tests” can be the equivalent of what happened during FDR’s bank holiday, except that nowadays there are computerized systems and there’s no obvious need to shut down during the examination.

    The treatment of AIG shows that excessive bailouts can continue after nationalization.

    Nationalization is the wrong target. In fact as long as there are no big giveaways to banks, it is not urgent to do anything with them at the moment. Nobody wants to borrow at the moment anyway.

    First we must fill the holes in the balance sheets of consumers and small businesses. That will at least let people survive as new banks emerge or whatever happens in the banking sector over time.

  3. Anonymous

    FDIC, write down or write off screw um. Were talking Big picture stuff, not lifestyle retention and that goes for share and bond holders too. We are all in the cannibals pot, and if we do a frog in cold to hot water event, were cooked. Waters probably just above body temp already and we are already slow cooking. We can start again from a better position, unless we protract the cycle of reduction.

    skippy

  4. Swedish Lex

    “Nationalize the Banks! We’re all Swedes Now”

    This reality – that many/most banks in the U.S. and in Europe would have to be nationalised eventually – dawned on me about a year ago now, when I for the first time saw this slide:

    http://www.comstockfunds.com/files/NLPP00000%5C292.pdf

    It was a really bad morning when I understood that our debt laden tower of Babel was about to crash back to earth.

    Should the debt level in society come back down to its 1950s level, i.e. circa 40% of the current level, at the current rate of economic deceleration, then our societies risk being stretched to the point of snapping, politically, economically and socially. This does not have to happen, but it remains a possibility.

    Nationalisation of the banks – à la suédoise – will only be the end of the beginning. Not the beginning of the end.

  5. Anonymous

    PBS/Nova just ran a special on Skunks. Apparently they make good pets (legal almost only in Ohio..)

    There is a 3600mm high speed shot of a skunk discharging ‘skunk juice’ from its anal gland, which really, is a horrendous squirm-inducing hilarious sight that alone makes the special worth seeing.

  6. Anonymous

    The BBC article states: “Prof Field said fresh data showed greenhouse gas emissions between 2000 and 2007 increased far more rapidly than expected.”

    It would appear that Prof. Field, or the newspaper reporter, has cherry-picked the data. Greenhouse gases may be increasing faster than expected, but the global average temperature has been rising very little since the year 2000, and much less than expected. This discrepancy is not yet resolved. There has been speculation that it may be due to unusual cooling in the surface ocean temperatures.

    Beware of scientists who carefully select data that supports their beliefs.

  7. Anonymous

    Skunk appears to have a tightly formed eye. Currently a category 3, but could strengthen to category 4 or 5.
    Hopefully, it will veer north and avoid land.

  8. M.G.

    We are not all Swedes. I pull out from the chorus for nationalization and say HERE that nationalization is not necessary nor inevitable. GOOD BANKS are inevitable! Actually there might be no need to nationalize banks…something else is possible.

  9. Anonymous

    Yves:
    Well politics does make strange ..er bedpersons
    Now Graham and King are with you (and me) pro nationalization and Schumer is against. (Can’t wait for Shelby to argue for socialization :))
    Well Schumer is the Senator for Wall Street so no surprise but where is Geithner?

    Is Obama playing whitewash my fence? Just can’t see him really opposing bank nationalization???
    Curiouser and curiouser

    Anyways the GM bailout/bankrupcy plans are about due. Which should give us some clues about Obama’s corporate bail-out policy.
    plschwartz

  10. Anonymous

    Slogans

    Can’t take your slogans no more,
    can’t take your slogans no more,
    can’t take your slogans no more,
    can’t take your slogans no more.

    Wipe out the paintings of slogans
    all over the streets (ooh, ooh, ooh),
    confusing the people
    while your asphalt burns our tired feet.
    I see borders and barriers,
    segregation, demonstration and riots (ooh, ooh, ooh),
    a-sufferation of the refugees,
    oh-oh, when, when will we be free?

    Oh-oh-oh, we can’t take your slogans no more,
    can’t take your slogans no more,
    can’t take your slogans no more,
    no more sweet talk from-a pulpit,
    no more sweet talk from the hypocrites.

    So we know we can’t take your slogans no more,
    can’t take your slogans no more,
    can’t take your slogans no more,
    no more sweet talk from-a pulpit,
    no more sweet talk from the pulpit.

    No more sweet talk from-a pulpit,
    no more sweet talk from the hypocrites (oh, no hypocrites!),
    no more sweet talk from-a pulpit (wo-ah yeah),
    no more sweet talk (no-no-no-no sweet talk) from the hypocrites (hey!),
    no more sweet talk from-a pulpit,
    no more sweet talk (no-no-no-no sweet talk) from the hypocrites (no-no-no-no hey!).

  11. asphaltjesus

    The piece on the iphone is built on a bunch of wrong assumptions.

    1. Open Source does not beat proprietary apps. Consumer devices come down to Marketing and Sales budgets. The biggest advertiser usually wins. Plus the stigma of ‘Free’ contaminates OSS regardless of features. FYI, I’m writing this on the pinnacle of Free software, the Debian distro. I’m a sys-admin in a win32/Linux shop.

    2. Apple captured the high-end consumer handset market and added a meaningfully better custom application environment. Mission accomplished.

    3. Apple doesn’t discount. Look for discounts at the end of a product cycle, just before a new one. That’s about it.

    4. The Apple OS can scale down quite easily because it’s a BSD based OS.

    5. The author doesn’t understand the economics of U.S. wireless. The carriers control everything. That’s why you can’t make payments with them despite the decade-old capability. you can’t develop a single application for many phones either.

    Apple is doing fine. The google phone will be for the teeny-tiny geek-niche.

  12. Anonymous

    But those who have seen some of the bill’s details worry that it’s too focused on fulfilling a Democratic wish list of social initiatives built up over the last 15 years of Republican domination of Congress.

    “I think (doing) nothing would have been better,” investment analyst Ed Yardeni told the McClatchy news service. “It’s unfocused. That is my problem. It is a lot of money for a lot of nickel-and-dime programs.”

    “Fixing the credit markets is just stabilizing the situation, rather than reviving growth,” said Edward Yardeni, an independent market analyst, as the Dow Jones industrial average tumbled 382 points and investors flocked into Treasurys.

    What do I think of the deal? Honestly, I’m not overly impressed, the reason relates to a quote I heard from Ed Yardeni, a good economist in my book (is good economist an oxymoron?), one who has a pretty decent history of pointing out longer-term trends. I remember him being one of the champions of the global boom in the early 1990s, after the Soviets folded up their tent. And he was one of the first this decade to talk about how China will drive the world economy. Of course, I also remember he was all about Y2K pitfalls, but hey, nobody’s perfect.

    Anyway, Yardeni’s quote that stuck in my mind was: “We need to stimulate a boom, not just stabilize a bust.” I think he’s got it right, and nowhere can that be seen more than in the stimulus bill.

    The problem is that, as more companies hunker down, demand may weaken further, spurring another wave of downward pressure on prices that would usher in a prolonged period of deflation.

    “The combination of credit-crunch deflation and recession is forcing companies to conserve cash by firing workers and slashing capital spending,” said investment strategist Ed Yardeni. “That should work for one company, but when they all do it, it just exacerbates the situation by cutting demand all over again.”

  13. Anonymous

    Anatole Kaletsky is the same anti-savings moron who wrote in favor of a deposit tax a couple weeks back, so I’m not surprised to see that his latest offering is similarly uninspired drivel.

  14. Anonymous

    Here is a good example of the entitlement mentality that bank shareholders and holders have:

    “Why, after all, should the taxpayer subsidize the shareholder or bondholder of a mega bank? You mean to tell me that these shares and bonds in which I have invested my savings – my 401(k) as well as my taxable account – over the course of my working life will now become wallpaper? I’d like to stick around for the chance to ride these shares and bonds back up. An expropriation down here might have – what’s the word? – revolutionary effects.”

    Dude, that’s crazy talk. The big banks are insolvent, and he wants a bailout of his risky investments. Every 10 or 20 years, there have been waves of bank failures, where lots of banks get thrown into receivership and worked out by the FDIC. There’s no reason his banks should be treated special just because they are “big”.

    Crazy, man. I’d like to see these bankers prove why Bagehot and his progeny were wrong in wanting banks to hold easily understandable assets, given that they are funded with short-term deposits? I’ll bet their prop trading only appears to add value and the prop trading profits are really attributable to the Fed’s implicit guarantee of their activities and the Fed’s discount window that lets them borrow cheap. Once you back out those 2 huge benefits, it wouldn’t surprise me if prop traders at the big banks created very little value add, especially after backing out their big bonuses.

  15. Anonymous

    Conservatives have found the soft-spot in Obama’s armor: Tim Geithner and the Wall Street buddying of the Dems. If I’m a Republican strategist, I tell them to hammer at this: Americans will quickly shift to Republicans on this issue if they play it right.

  16. Juan

    before rushing out to purchase a pet skunk
    remember they are nocturnal and can
    (will) do damage while you sleep

  17. VangelV

    Global Warming Underestimated?

    We haven’t seen any global warming for a decade and seem to have gone into a cooling trend.

Comments are closed.