Links 2/21/09

Juan Enriquez: How mindboggling science will outlast the crisis Exchange (hat tip reader doc holiday)

Storm brews between US and Israel Jim Lobe, Asia Times. The headline is not news, but provides some useful detail.

Bloggers fight for Hollywood supremacy Financial Times

Tall Paul is Not Happy! Video of Columbia presentation (hat tip reader Ilja); Volcker: Not Cheering for ‘a Little Inflation’ WSJ Economics Blog and Volcker sees crisis leading to global regulation Associated Press

Dodd, Frank Clash Over Nationalizing Banks to Stem Declines Bloomberg

The return of capital controls Willem Buiter, VoxEU

Career Options for Ex-Wall Street Workers New York Times

High Yield “Time Bomb” EconomPic Data. Simple, but worth keeping in mind.

Task Force on Auto Bailout Meets Wall Street Journal. So Geithner and Summers have made themselves the point men on this one, which could easily have been largely delegated to guys who knew something about the car business. The consequence is that they have less time to spend on what ought to be the top priority, namely, what to do about the financial system.

Soros sees no bottom for world financial “collapse” Reuters

Did Ben Bernanke Pull the TARP Over Eyes? Dean Baker

Antidote du jour (hat tip reader Sima). Baby meerkats born in Taronga Zoo, Sydney (go Sydney!) Read more here.

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  1. doc holiday goes to bed

    … and then, God picked up Geithner and Bernanke in his hands and through them into the ark, where they joined hands in the darkness (below) and rowed towards the light…?

  2. bena gyerek

    some anecdotal evidence on gm’s woes. a salesguy from our local vauxhall dealership knocked on our door last night. vauxhall is gm’s uk subsidiary. he said they were going around offering local homeowners a deal where the customer would get a gbp 450 full servicing for a mere gbp 89, provided that the customer would pay the gbp 89 upfront (they could then book the servicing at their leisure). this is the first time i have ever known anyone to get cold called for a car servicing like this. on further questioning he admitted that the dealership has almost zero car sales right now, and this is the only way they can generate any business. i wonder if the dealership will still be around to actually deliver any of the car servicing they are offering so cheaply.

  3. bg

    I find it shocking that Volcker is using his government platform to seperately push policy. Either his membership in the government is just for show, or he is a loose cannon. Maybe he’s right about inflation worries, but I’m even a little shocked that is not a settled issue for our leaders.

  4. Swedish Lex

    Soros is right until proven wrong, in my view: “Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union”

    This time, we are the Soviets though and it is us who have to re-invent our society.

  5. Richard Kline

    So bena gyerek, that last was my first thought reading your remarks as well, the kicker being ‘book at your leisure’ the stipulated services: that dealership is betting on a fast 89 sterling on the way to bankruptcy, with best of luck being your recourse for services come manana.

    And bg, you have it exactly _wrong_: Tall Paul has far more credibility, competence, and the inklings of a plan than ANYONE currently ensconced in an official government position, including Bo Prez. The fact that Volker _must_ speak on his own only casts in tragicomic relief the fluff, brownstuff, and nonsense coming from sworn officers of the Federal Executive. I mean, the press flack of the Prez is reduced to querilous disputation with a long streak of tongue scrappings fabulating for a minor cable outfit while Volker is actually, y’know, articulating POLICY, or what it should be. I’m not saying he’s my favorite guy, but he’s an 18” cannon mounted on a rubber dinghy in relation to the rest of the ‘deciders’ in this (so far) pipsqueak Administration.

  6. Richard Kline

    *hoo-hooo* Buiter is waxing rich on it all, must have been into the claret enough to be in full flow whilst still staying on song. I do believe he is coming to positively enjoy all of this.

    —And I can but agree! (Almost.) I haven’t enough money that losing it if that should happen would matter. I certainly don’t have enough to retire, but then I’ve never in my life been able to think further than six weeks ahead, unless it’s on millennia length time horizons. I’ve invested twenty years of enterprise in intellectual capital, which fortunately or not so much still remains largely above the neck. I’m employed, and debt-free. Watching towering capitalists rendered into pillars of salt, or stagger about delusionally like Red Death victims whilst pieces of themselves slough off is worth a ticket to this show. There, too, Destiny treads through the tickey-tackey subdivisions built to and beyond all horizons, leaving crushed in its footprints here and here and there another bandwagon dreamer with zero financial acumen and no money down. Beltway pontificators point and buttonpush and gesticulate into the cameras that “Now, the Fix Is In” . . . and nothing happens, rarely a mild squeak behind the paneling of the Technocon 2000 mainframe, or a little pufflet of fumes; nothing; shamefacedly they announce that a further announcement will be announced imminently, and hasten from the podium.

    . . . This is rich; to rich, too rare; not to be missed. Payback for a generation long self-congratulatory greedfest, played out fast forward. Those of us who on a day to day basis work for a living, have had to do so yesterday, and will tomorrow. Those who thought that their services and place at the table were so . . . exceptional, not for any reason but just because they, Sunday’s child that they are, bothered to show up and cry aye with the crowd, that The Big Guy Up There favored them so that he had bent down and bussed their pointy little head with his transubstantial pecker for grasping the concept of asset appreciation are just now waking up, or more accurately just finally growing up a very little. I loovvvvvve the smell of coupons burning in the morning! *Wheeeeeee!*

  7. Anonymous

    RE; Bloggers fight for Hollywood supremacy Financial Times

    Its nice to that the ‘Culture Control and Shaping Department’ (Hollywood) is getting some new blogs to assist in the ever more transparently contrived; ‘conservative vs. liberal’, distract, deceive, divide and conquer, scheme. One wonders … is there an element of desperation here? Or is it a simple opportunist effort? Or more of the full spectrum dominance press? Or has the divisiveness industry really got so bad that it just feeds on itself? …

    Ah … what a cesspool …

    The Scamerica Show
    —– CANCELED! ——

    Its a sad sad day,
    When they cancel your show,
    But reality is sinking in,
    The tears have begun to flow …

    The world has grown tired,
    Of every day being a Ponzi,
    The Scamerica show has jumped the shark,
    Just like “Happy Day’s” Fonzi …

    The producers are scrambling,
    To keep the show alive,
    But the world’s grown tired,
    Of Scamerican gangster jive …

    They are pissed about the deceptions,
    They will fight now to survive,
    If the gangsters aren’t careful,
    They might not get out alive …

    And the new show that emerges,
    After the crooks all get a spanking,
    Will be interest slavery free,
    With no fractional reserve banking …

    Deception is the strongest political force on the planet.

    i on the ball patriot

  8. Early Withdrawal

    “i wonder if the dealership will still be around to actually deliver any of the car servicing they are offering so cheaply.”

    I had the same question, but was applying to a different service locally. In my case I’ve been looking at a Yoga studio membership where they have slashed the monthly all included price to dirt levels – including a buy three months get the fourth free. But will they be around for members to realize the savings. This must apply to numerous services and be on the minds of consumers.

  9. Early Withdrawal

    Read the Frank and Kyl piece. It’s amusing to hear their tone of confidence in the financial sector and Geithner and Fed plans. It’s like everyone in Washington is Baghdad Bob!

    Frank sounds doped up “he didn’t see the likelihood U.S. banks would be nationalized, and Geithner’s bank bailout plan should be given time to take effect. “If that works, then we don’t have to go beyond it,””

    While Kyl (R – kneejerk freemarketer) ironically seems to view nationalization as some form of socialism saying “nationalizing U.S. banks is “out of the question” and isn’t going to happen “I don’t think it’s something the market has to worry about,””; yet then Kyl cites Treasury and Fed Resv with “There are plenty of tools that we have short of that to deal with the crisis.” So worried about socialism via nationalization, while the government is taking on trillions in liabilities to keep them above water.

    While the Dems seems to have taken all the hope pills it would be nice if the Repubs would just try to get a little consistent about their views on government intervention.

    At this point however I think economic reality has taken over and will drag the banks into oblivion; the politicians will come following after eventually; and voters will completely forget that their representatives made mindless pronouncement after mindless pronouncement and will reelect them yet again.

  10. Ben

    The headline about Frank clashes with Dodd seems wrong to me:

    >> Geithner’s bank bailout plan should be given time to take effect.
    “If that works, then we don’t have to go beyond it,” Frank said in a telephone interview yesterday.

    >> “I don’t welcome that at all, but I could see how it’s possible it may happen,” Dodd, a Connecticut Democrat, said

    Six versus half a dozen.

  11. Keenan

    RE: Anecdotal evidence: I’ve heard somewhat similar reports of at least one cellular service provider ( T-Mobile) phoning some subscribers offering proactive rate cuts of 30% – even without a contract – in an effort to stem the apparently growing wave of customer cancellations.

  12. JP

    ( T-Mobile) phoning some subscribers offering proactive rate cuts of 30% – even without a contract – in an effort to stem the apparently growing wave of customer cancellations.

    and fwiw: ATT is planning on 3% rev growth this year. I think they are whistling dixie past the graveyard while counting their chickens.

  13. Anonymous

    Swedish Lex said…

    ” Soros is right until proven wrong, in my view: “Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union”

    This time, we are the Soviets though and it is us who have to re-invent our society.”

    Yves I quote this inits entirity because Lex is sooo correct.
    And Volker in his old-fashioned way is trying to say the same thing.
    You have to let change happen. If you are lucky it happens little bits at a time and the system, the structure readjusts.
    But the “Financial engineers” in Volker’s terms worked so hard to maintain the structure that it could not readjust. So now the entire pressure built up is exploding the system.
    Our economic system and cultural elements associated with it will have to hit bottom before reorganization can occur. And it will reorganize in relation to the system existent at that time.
    So what Obama is doing both with the economy and GM is useless. He is trying like Canute to maintain a status quote. While not impossible, the result is the Japanese. In the end inability to change results in a living death.
    Bank nationalization is a way to protect certain parts of the economic system, those most important for the general public. So that the other parts can fail and reorganize in a more contemporary structure.

  14. Tortoise

    Wei Jiafu has some news that may dissuade you from jumping off a bridge:

    “STIMULUS plans launched by the Chinese, US and European governments over the past few months are beginning to buoy demand and lift the troubled dry bulk market, the head of China’s largest shipping company said… He directly attributed the recovery in the Baltic Dry Index to the stimulus packages, particularly the initiatives announced by China that focus heavily on infrastructure spending.”

    “Speaking at Cosco headquarters in Beijing, Capt Wei told Lloyd’s List that he thought the worst was over the dry bulk market. ” Thank you Captain!

  15. Anonymous

    The Pettis article mentioned by anon above was interesting and deserves a link. After admitting to getting more ‘political’ Pettis made a couple of very astute observations but did not carry them far enough;

    First this – Excerpt;

    “ For all the problems of the economic contraction, the US will probably suffer less than other countries, it will emerge more quickly than the rest of the world, and it commands by far the largest amount of the most valuable resource in the world: net demand.”

    He is right on with this and I would add a fourth reason it will suffer less; it has the greatest net military power — which is responsible for the first three reasons why it will suffer less.

    Second – Excerpt;

    “One of my good friends in Washington, who is considering accepting a very senior position in the executive branch (surprisingly enough he might not accept it because of the bitterness of the confirmation process), asked me to point out a single bright spot for the US right now. I told him geopolitics – the chance to engineer a new global framework that will allow the US to regain the centrality that was lost in the past eight years while including Europe, China, Japan and the rest of the world as firmly committed members. He smiled dubiously and asked me to write it up.

    However, even if I am right, unless the mood changes dramatically I am not sure that US policy makers are in any position to seize the reins and steer us firmly into a new global institutional framework. Instead I suspect that things will continue drifting downward for the next year or so, until it is that much harder for anyone to work out a reasonable plan that doesn’t involve a great deal of hostility and mistrust. Maybe it is just because I am a little jetlagged, but I am not very optimistic.”

    Pettis is also correct here but has not considered the ‘political’ aspects deeply enough, i.e., the same disingenuous Scamerican policy makers that created the ‘crisis’, that now has Scamerica in a superior geopolitical position, are still firmly in control. Further; they are not concerned about profit, rather they are more concerned about global control. They don’t have a reasonable plan for a reason – they don’t want one! Not with the rest of the world suddenly dealing with population decreasing starvation die off, energy dissipating civil unrest, reduced military spending (Russia just announced a 15% decrease in military spending), increased national tensions that can be more easily exploited, a rapid shrinking of the global middle class, etc. … The ruling elite attitude/plan is, “Let em thrash while we feign ignorance and pretend to create solutions.”

    If you are feeling smug and secure because you are a Scamerican, don’t. You won’t like the new middle class free, two tier, ruler and ruled world, with the ruled class in perpetual conflict with each other. The brown nose ‘head pats’ are over.

    The Scamerican government is not frozen in the headlights, rather they are partying behind the curtain of deception.

    Deception is the most powerful political force on the planet.

    i on the ball patriot

  16. Anonymous

    Law firm Sidley Austin was humiliated today, when Tribune Bankruptcy Judge Kevin Carey publicly chastised Sidley’s bankruptcy practice for blatantly representing the stereotype of greedymoneygrubbing lawyers, demanding the highest known legal hourly fee ever of $1,100 per hour and limited the company to a maximum hourly compensation of $925.

    Carey stated that any lawyer who tries to charge $1,000 an hour will need to prove he or she is worth that much.

    “To the extent that this applicant or any other hits that mark I will require evidence in support of that rate,” Carey said.

    Bankruptcy law firms have been on a vulture bonanza as they seek to charge exorbitant hourly fees and participate in every bankruptcy case en masse. As we wrote, there ware roughly 513 lawyers involed in the Lehman bankruptcy case alone. In the Lehman case, advisors are expected to collect $1.4 billion, while main restructuring advisor Alvarez and Marsal had charged $400,000/day in its most recent request for compensation approval.
    Sphere: Related Content

  17. Anonymous

    From Volcker’s comments on Friday we have this gem: “The most important “innovation” in banking for most people in the last 20 or 30 years is the automatic teller machine”

    30 years of banking, after everything else, can be summed up in that one sentence.

    Masters of the Universe… bah they aren’t even Masters of the Playground. I’ll predict that in playgrounds of the future, children will call each other “banker” as a high insult during negotiations over rights to the swings.

  18. A REAL American

    Regarding Volcker’s comment about the ATM machine… This just proves how old and out of touch he is. He must still have the quant idea that what matters most is what the average citizen benefits the most from. Someone should tell him about the last 20 years and the rise of the oligarchy in `mmmrica. Paul baby, it’s the nobility and the peasants now. And, best of all, the `mmmrica peasants WANT it this way.

  19. Anonymous

    Hows your head today Richard Kline, lots of B12 will help. Nice post tho and concur, we can do better than this, if control can be wrest from the straw men.
    Studies and invention is much more engaging than this monopoly game.


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