Links 2/9/08

Death toll climbs to 130 in Australia’s worst-ever fires Times Online. This is awful, and no end in sight.

Plunging price of carbon may threaten investment Independent

Dissecting China’s GDP Yields … Confusion WSJ Economics Blog

Swiss banks to announce massive losses Brieitbart (hat tip reader Dwight)

China Institute Proposes Weaker Yuan to Boost Growth Bloomberg. We were saying before it was fashionable that China should want to weaken the yuan. The big reason not to is they risk massive retaliation, which as a big time exporter, will hurt them more than trade deficit countries like the US.

An Open Letter to my Two Mortgage Companies Franciine Hardaway. This post seems to be getting some attention, but it leaves me oddly unmoved. It may be because it is too much about why she is deserving and not enough about why there is a win-win here that the bank is not delivering. Conceptually, there are a lot of people overextended who could use a break, such as businesses whose credit lines are being restricted or the price has increased where the enterprise is viable or credit card borrowers who got themselves in the 25+% interest rate and are slowly drowning.

Good Bank/New Bank vs. Bad Bank: a rare example of a no-brainer Willem Buiter. Except his model (which is sound as far as it goes) conceives of banks as traditional lenders, when credit intermeidation had shifted to investment banks and commercial banks with big investment banking operations (Barclays, UBS, Deutschebank, SocGen, to name a few). It isn’t clear how they fit in this picture. If we envision a world where we have less market credit intermediation, we need much more equity in the banking system (ie, banks collectively will need much bigger balance sheets)

Ben Stein Watch: February 8, 2009 Felix Salmon

Saks Upends Luxury Market With Strategy to Slash Prices Wall Street Journal. Deflation, big time.

Antidote du jour:

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  1. mft

    Yves, I want to thank you for doing something that is very different from what Clive Crook is criticising in today’s FT. He writes: “The web, for all its blessings, is an aggravating factor. Many of the most successful economics blogs promote communication within political groupings, not across them. On the web you best build an audience by organising a claque and stroking its prejudices. Extend elaborate courtesy to people you agree with and boorish contempt to those who do not get it. Celebrate exasperation and incivility as marks of intellectual authenticity – an attitude easier to tolerate in teenagers under hormonal stress than in professors at world-class universities.”

  2. Anonymous

    Summers/Geithner don’t want to cram down the bondholders. They want to bail them out, and know the public is against that. Their tactic is to push through a pork laden stimulus plan to buy the votes in Congress to support their bondholder bailout of Pimco, and the rest.

  3. russell1200

    Ms. Hardaway (based on a sparse Wiki entry) has had a long and varied carrier. It is nice to see that she had such a nice run of success.

    But when after only a year, she left Intel to run the marketing of “Innovative Environmental Products” you can pretty much say she was beginning to buy into the self-created myth that many people have that they are uniquely competent and bullet proof in their endeavors. All success are their own, all failures are due to extenuating circumstances.

    Having worked in a commercial construction for most of my adult life I am familiar with the territory. I suspect that in marketing (like construction) if you can get a good seven year run with a company you have done very well for yourself. Re-testing the waters too many times is not a recipe for success-although it can be unavoidable.

    So the odds have finally caught up with Ms. Hardaway. They are catching up with a lot of people. It is really unfortunate that they caught up with her at this stage in life.

    At the near retirement age of 65 buys a house that she can only put down 10% on with a variable interest rate note, and spends another 5% on ‘fixing it up’. Presumably she planned to pay off the house when she was 95?

    The economic boom would have needed to run for a good portion of time, and she would have had to catch a good number of breaks to make that scenario work out.

  4. Anonymous

    Just heard a great one, biblical although, but befitting.

    “The years of plenty have ended, the improvident have wasted the bounty and live in want, in the years of dearth”

    Satyajit Das/Risk Analyst
    Four corners ABC broadcasting Australia


    With the fires in Victoria, life is precious not material goods. One can be replaced, but not the other. It seems many stayed to fight and lost all. My thoughts are with all that have suffered and will struggle to over come this event.


  5. Stephen Lins

    Re: The quote cited by mft about some econbloggers’ incivility. Anyone else think of Brad DeLong as they read this?

  6. Anonymous

    Has anyone seen any recent research or reports regarding the future of the auto industry with its declining sales and overcapacity. Any forecats? I am very interested of the subject but hasnt found anything really.

  7. Keenan

    MarcoPolo and all – RE Feb 2 Broad Wing Hawk – update

    The wildlife biologist I had contacted replied to me that a number of similarly anomalous sightings have been reported this year. As of February 5 he had personally seen towhees and turkey vultures in the vicinity of Wheeling, WV. Turkey vultures, the most common buzzard of the eastern states, are harbingers of spring. As San Juan Capistrano, California has its swallows about March 19, Hinkley, Ohio has its buzzards. It seems they will be early this year.

    Groundhog “Punxsutawney Phil” maybe wrong in his forecast.

  8. Anonymous

    Regarding this; “An Open Letter to my Two Mortgage Companies Franciine Hardaway. This post seems to be getting some attention, but it leaves me oddly unmoved.”

    You might be unmoved because the slaves never go deeper in their discourse than the mindset of their propaganda allows.

    I think this article/blog post is a perfect example of the tip of the iceberg of the intentional perpetual conflict that is being instilled in the masses now rearing its ugly head. The prudent slaves, and the not so prudent slaves — who drank the “shop till you drop” neocon bubble kool aid at the urging of the commander in thief — are fighting. The perpetual conflict begins. And it is all by design.

    A better letter would be one that questions the masters right to own the slaves. Then we might get to the real deception. The aggregate generational purchasing of the ‘rule of law’ by the wealthy elite slave owners. I will spare you the litany of examples.

    The ‘rule of law’ in scamerica is a farce that now favors only the wealthy few. Power has been condensed to a small handful of arrogant psychopathic gangsters and their sell out cheerleaders. The sad thing this time around is that the slaves have been so conditioned to love their masters and their non existent illusionary decoys; ‘freedom’, ‘free markets’ and ‘capitalism’. Will the slaves awaken in time? Not if they continue in the blame the victim, blame each other game!

    You are what you’ve been through, but now and the future are up to you …

    Bumbling idiots,
    Or clever elite?
    The marks never question,
    The truth at their feet …

    If you want to find,
    The cause of the trouble,
    You have to pop,
    The deception bubble …

    Deception is the strongest political force on the planet.

    i on the ball patriot

  9. dearieme

    “an attitude easier to tolerate in teenagers under hormonal stress than in professors at world-class universities”: yep, that sounds like Broad DeRound. You might expect better of a roly-poly middle-aged chap.

  10. lineup32

    “The nation should also increase purchases of commodities from abroad and build up energy reserves to offset pressures on the Chinese currency to rise, said the report, published today in the Shanghai Securities News.”

    Both sides U.S. and China march along their economic well worn trail with no idea how to find or locate an alternate route. China if the BDI is any indication has taken up buying commodities while the U.S. seeks to reinflate the housing bubble somethings never change.

  11. Anonymous

    ” Crisis ‘more serious than 1930s’ “

    a former economic adviser to Gordon Brown, said the global recession would be the most serious for “over 100 years”,….

    The financial crisis will be “more extreme and more serious than that of the 1930s”, cabinet minister Ed Balls has predicted.

  12. purple

    Currency devaluation is needed by both China and the US to employ their populations. One country, or the other, could spiral into a real depression without devaluation. Therein lies the problem, as it becomes beggar thy neighbor.

    China’s role as the jet fuel to international capitalism, via productivity gains in labor cost, seems near the end. Capitalism without ongoing productivity growth is highly combustible on many fronts.

  13. purple

    Has anyone seen any recent research or reports regarding the future of the auto industry with its declining sales and overcapacity.

    Protectionism, mass bankruptcies, or both.

    Building a car industry became the safe idea for growth through exports.

    Way too many cars in the world. Way too many car companies, given the number of potential customers.

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