Obama looks at climate engineering Associated Press
A.P. Exec Doesn’t Know It Has A YouTube Channel: Threatens Affiliate For Embedding Videos TechCrunch (hat tip reader Michael)
He has four wives and he faced 783 counts of corruption Globe and Mail (hat tip reader Gary). No, it’s not about anyone from the Bush or Obama circles.
U.S. to keep lid on bank tests for earnings: source Reuters (hat tip reader Alex G)
Is America repeating Japanese history? Free Exchange. Late to this, but still worth reading.
Changing the Rules of the Blame Game Bill Moyers and Michael Winship
U.S. Imagines the Bailout as an Investment Tool New York Times. Instead of war bonds, it’s now bank rescues. Charming.
Choosing Its Own Path, Ford Stayed Independent. New York Times. Ford hocked all its assets in at the end of 2006 to secure a cash warchest. Might one surmise that Alan Mulally saw the credit frothiness and knew it was going to end soon, and probably badly? If so, he’s too smart a poker player to say so.
US finance pundit Cramer a ‘buffoon’ says leading economist Guardian
Bank Credit Growth Drops Precipitously Jesse
When Meredith Whitney Calls, Should You Listen? Wall Street Journal. A nasty, slipshod piece. I’ve occasionally been passed Whitney’s research, and it is first rate. And she made many more correct calls than the author of this cheap shot article mentions.
Why did the Fed, the Bank of England, the ECB, the Bank of Japan and the Swiss National Bank announce a dubbel openslaande porte-brisée deur? Willem Buiter. Anyone who has the answer goes to the head of the class.
Insight: Gold standard debate roars on Gillian Tett, Financial Times. The fact that Tett is writing about this means it is and will be taken seriously, since Tett is read by central bankers. Matt Dubuque finally being proven wrong.
Antidote du jour (hat tip reader Barbara):
Brother from another mother. Two joeys look out of a mother wallaby’s pouch at the small zoo in Gettorf, northern Germany. One of the two young animals was adopted by the mother.
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Doppelpack. First thought is how cosy it looks in that pouch. But I wonder how it is for the mother? She doesn’t look too uncomfortable though.
I don’t fully understand Obama’s priorities.
It’s better to ignore Cramer than to hammer on him. His ‘buffoonishness’ is part of the/his whole schtick, and I’m sure helps to bring in money, which after all is his job. Fools and their money are eventually parted, and if it’s not Cramer it would be someone else, e.g. market coverage from established houses — you should see some of the stuff I read via my broker.
“Its once-bulging bank account is dwindling as well. Industry analysts estimate that Ford has about a year’s worth of cash left to carry it through a still-depressed car market.”
So, it will default in a short while. Or its debt quietly “retired”, with the resultant hole in the bank sheets filled with taxpayer money in one way or another. It has not been humiliated as much as GM and Chrysler, but other than that, same result. None of these companies will survive as a major manufacturer.
The WSJ article about Whitney is just bizzare. The author of the article states “Ms. Whitney has made something of a living on this mythical call.”
Mythical???? Mythical is something that doesn’t really exist, but only exists in fairy tales. The author himself acknowledges latter in the article that Whiney MADE the CALL, and that it was gutsy.
Can Whitney do no wrong??? Well, of course not. And to the idea that it wasn’t that prescient, well, what the hell does that say about the vast majority of Wall street Analysts? O, they’re cowardly as well as not so bright. Yup.
OOoo! Ooooo! A contest to get to the head of the class by answering Buiter’s puzzle! I always wanted to get to the head of the class, but ended up being the smartass in the back row with my friends. Chance for redemption!
Why all of these redundant announcements? A new strategy is forming – henceforth, all central bank and government officials will issue pointless, lengthy statements on a daily basis, with the intent of absorbing attention that might otherwise be spent noticing the incompetence and looting taking place. This strategy will escalate over time. It’s high point will be when Bernanke announces a press conference and pulls an “Andy Kaufman” – he will simply spend the entire time reading aloud from The Great Gatsby, and when the press corps grows impatient, will ask them if they’d like to hear an important pre-recorded statement he has made. And when the frustrated reporters agree, he will play a recording of him continuing to read The Great Gatsby.
Did I win?
“We are competing against the best in the world,” Mr. Mulally said. “It’s not just with the companies in the U.S.”
Yeah, not just competing with hicks, rubes and duds anymore. No, sir.
The whole NYT business page was sickening this morning.
This ridiculous “bailout bonds” idea (sounds appropriate – that’s what a bail bondsman does – bail out criminals – but he knows how to get his money back) – I guess the Potemkin “private investors” scam isn’t doing the trick politically; bailouts extending through the FIRE sector (now life insurers are too connected to fail); confirmation that the “stress tests” are a fraudulent propaganda exercise; also how they’re still going to build this astronomically expensive, worthless “stealth destroyer” (even the Navy doesn’t want it; this too is looting palin and simple).
And all of it to prop up this unsustainable inverted-pyramid of a financial/economic structure.
Regarding the alleged distinction made in the Moyers interview, I see no distinction between a religious fundamentalism regarding how big banks “must” somehow exist, and cynically, intentionally seeking to plunder the people on behalf of the big banks. Both seek the same result; they are objectively identical, and both types of malefactors are therefore identical.
Regarding climate engineering, this is exactly the same thing as bailoing out the big banks. In both cases, civilization must downsize. That’s the only answer, practically, rationally, and morally.
But in bith cases, TPTB seek only to prop up an unsustainable top-heavy, gigantist system.
But all they’re doing is building the Tower of Babel higher.
Yves: Why did the Fed, the Bank of England, the ECB, the Bank of Japan and the Swiss National Bank announce a dubbel openslaande porte-brisée deur? Willem Buiter. Anyone who has the answer goes to the head of the class.
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I think buite’s reasoning is bang on. Foreign banks have an increasing need for US dollars, and the Fed is nervous about the swap lines being viewed as bailouts for foreign banks so it is trying to spin this as helping US banks. If the Fed loses a ton of money helping foreign banks, I think Bernanke and the Fed will face some nasty music.
I have to say that I have been shocked — in a good way — by Alan Mulally’s skill and competence. If you think GM’s an organizational disaster… you have no idea how much of a trainwreck F was before he got there. If they had hit this crisis in the shape they were in in 2005… well, they’d be like Chrysler, without the excuse of having been looted by a former corporate parent. The most important things Mulally has done are the things many outsiders miss, the things that completely overturned F’s upper-management culture and brought the kind of genuine and rapid organizational change that most ostensibly-elite executives can’t do more than give lip service to. Not bad for an overpromoted aircraft mechanic, as somebody (at a ibank, no doubt) called him early on.
“Yves: Why did the Fed, the Bank of England, the ECB, the Bank of Japan and the Swiss National Bank announce a dubbel openslaande porte-brisée deur? Willem Buiter.”
I think Anon 6:47 is close. As I recall there’s been a fair amount of criticism, among the more numbskull set, of the Fed risking billions of dollars in its operations with foreign central banks, because some people didn’t understand what a swap was – the Fed gave dollars, but at the same time it also got back foreign currency. So central banks have reworded the swap to give the other half prominence – Fed *receives* foreign currencies, so now the numbskull set will think foreign banks are at risk.
After seeing how well the “smart” people have done engineering the financial system, is anyone else a bit concerned about unintended consequences from “climate engineering”?
Hi Yves. The deteriorating quality of comments coincides pretty closely with my first commenting here; you have my apologies.
About six weeks ago I suggested that the closing bell on the Friday before Memorial Day would be a great time to announce nationalization plans. It would give everyone a long holiday weekend to calm their nerves and come to grips with the new reality and would give the government enough time after the stress tests for everyone to think the fed was staying the course. (Nationalization won’t work unless it’s a surprise, right?) What do you think about the timing of that? Forget about what’s likely to happen, does something like that make sense to you?
As for the currency announcements, it has more to do with a united stand against the yuan–a symbolic demonstration more than substantive.
As for understanding the Obama administration and their bailout of the banks, look at it this way:
What will drive the economy of the future? The engine was first natural resources, then industrial production. The subsiding of the industrial economy of the US was fortunately replaced by high-tech in the 80’s. As the easy exportation of high-tech was discovered and the US future in high-tech dimmed, the remainimg engine of the economy was in FIRE (finance, insurance, real estate). That is what has increasing driven growth in the economy over the last decade. The collapse of the FIRE economy leaves us with what? A nation of service providers and consumers. A consumer-driven economy with a broke consumer.
Where do we go from here? Can we make it as a nation of nail-salons?
What will be the new engine? Is there a new engine leaving the train shed? I don’t think so.
The new “green” economy? How does that work when the essential goal of “green” is doing more with less and stripping away the non-essential. The whole economy relies on waste and doing more with more.
Look at the corporate profits–financial company profits accounted for over 45% of corporate profits.
I’ve come to the conclusion that this is the only reason behind the apparent willingness to give the financials whatever they want and to save them from collapse. “Cash for trash” or an opaque auction? What does it matter when the only apparent way forward is the engine that just burst a boiler. Patch the boiler and stoke the FIRE!!
And then we can resume being a nation of maids and waiters servicing the FIREmen while they play high-stakes poker in the engine.
What option is there?
The NYT story about from Bowley & Merced is disturbing. Now we have Wall Street, K Street & the White House working together to defuse populist anger via the "Ownership Society" arguments…again. The sucess of this strategy — despite the huge losses to average Americans in retirement funds and poor overall 401(K) returns — will sadly prevail.
Stephen Lins said…After seeing how well the “smart” people have done engineering the financial system, is anyone else a bit concerned about unintended consequences from “climate engineering”?
ahhh…yeah…
shooting pollution into the upper atmosphere…talk about creating a greenhouse effect!
and fake plastic trees???
why not just plant new ones?
i don’t whether to laugh or cry at this point.
we’re so screwed.
tighten your seatbeats and pull out the heat suits.
it’s gonna be a hot one.
This is in response to Peter Hitchens' article on Jacob Zuma, and South Africa. My perspective is that 5 years ago I moved from Boston to Johannesburg, where I now reside.
While there is a lot of truth in Hitchens' article, he unfortunately exaggerates [in a similar manner as Ambrose Evans-Pritchard does in the Telegraph, but even more so]. One of the things I have discovered here is that one can paradoxically have despair, and hope, at the same time, regarding the future of South Africa.
The positive side revolves around several considerations: first, the economic problems, while difficult, are less severe than in the developed world, although the political ones are more worrisome- as the article points out. Secondly, Zuma did not get South Africa to where it is today, rather Thabo Mbeki did. And a number of us think [& hope] Zuma will be a much better president than Mbeki was in his disastrous reign. Thirdly, there is a thriving, vocal and critical newspaper industry, and the courts still function reasonably well, although not perfectly. Fourthly, much of the unemployment and crime come from the 5-8 million 'illegal' immigrants [10-15% of the population] from Zimbabwe and southern Africa, who cannot find jobs in their own countries, or in South Africa. If Zimbabwe can ever be turned around, it will take substantial pressure off South Africa.
For every individual story of despair, cruelty and corruption, there is also one of kindness, charity and sacrifice. South Africa is a stunningly beautiful country, which has serious problems, but which also has wonderful potential. Only time will tell how its future will turn out.
On "U.S. May Enlist Small Investors in Bank Bailout"
The PIHD plan (pile It Higher an Deeper) plan is designed for the current OWNERS of bad "assets" to profit from – period.
This video explains why the PIPP plan is not a good bet for actual "private investors" except for the banks that own the Toxic Waste that's being subsidized. For the banks, it makes perfect sense to buy & sell their own 70%-worthless CDOs. However, this plan is designed to benefit NO ONE but the owners of the garbage "assets."
This video does the math, and shows you on a blackboard:
http://www.youtube.com/watch?v=n-arbfLTCtI&feature=player_embedded
khanacademy March 23, 2009 – More on the Geithner Plan. The problem of banks buying the assets from themselves.
Securitizing the bailout! They want to have bailout-brokers (like the old mortgage-brokers) and hype this stuff to the moon.
It’s an especially bad candidate for securitization because it’s very opaque stuff that insiders might have special knowledge of. They’ll peddle the garbage to the public, keep the good stuff for themselves. It will be worse than the mortgage securities industry.
No, the only thing we need is transparency, and we are all getting quite tired of the avoidance thereof by those who should be working for us.
There is significant doubt that the globe is actually warming, and it would be nice to be able to see what’s in the sky.
They should not do a new “chemtrails” program!
Yves,
I`m trying to understand foreign reserves. When a country decides they are going to devalue their currency, they sell their currency and buy a foreign one.
Is the composition of the foreign reserves held by China, Japan Korea etc. simply the result of currency manipulations?
How do you end up with a couple of trillion in foreign reserves, it is a staggering number!
Thanks,
Chris
If life survived early Earth atmosphere consisting mostly of nitrogen and carbon dioxide (maybe also hydorgen), it will survive global warming. If humans don’t make it, well, too bad.
One very simple fix I read a long time ago and never saw since would be to mix titanium dioxide (the same stuff they used in old fashioned sunblocks) into all paving surfaces (there is something even cheaper that is 60% as reflective that you’d use in the third world). You get offices with flat topped buildings to also put the reflective material in them.
That has the same effect as reflecting the sun back at the polar icecaps does, would reduce absorption of sun’s rays and lower the related heating. Done on such a scale, the effect would be material, and not mess up the environment. And look at the jobs it would create in this downturn!
Actually, there are probably cheap ways to affect the earth’s climate that make some scientific sense. I believe these might be preferable to carbon taxes. I’m not convinced of the need or wisdom of doing anything at this point. We would be messing in things we don’t adequately understand yet.
Another solution to counter global warming is to speed up the angular velocity of our orbit around the Sun. With the added speed, we can afford to be a few feet further away from the central furnace and perhaps we will be less radiated.
Can we do it? Can we speed up our angular velocity? I think a few billion well positioned and powerful rocket boosters might do it.
Where would Obama store the carbon dioxide? Underground? Water+CO2 = carbonated water… = acidic…. = it will eventually etch through whatever they store it in. Sounds like a good idea to me.
Indeed all these CO2 sequestration schemes are simply preposterous.
Green science is still science. 30 years ago one never heard such ridiculous ideas in science. Or science fiction for that matter, no respectable sci fi writer would propose such an idea, except as an example of what not to do.
Yes, how about we plant a lot of trees. What a concept! Nah that would be too simple …
(I’m the anon at 9:31) Just curious. Have we ever had a President of the U.S. that would have been considered to be a “Scientist,” at some point in his career? I’m thinking, but I can’t think of anyone. Just a bunch of [*insert adjective here] lawyers.
Yves et alia:
A link to a HBS class by one of the authors of the paper you recently cited can be picked up here:http://www.3quarksdaily.com/
The climate crisis dwarfs the economic crisis by several orders of magnitude, so on this front I’m quite glad Obama’s in the White House. He’s proven remarkably serious at tackling the threat of climate change.
James Lovelock’s geoengineering suggestion is here (interview by New Scientist).