Links 6/9/09

This is Ed Harrison submitting the links for Yves today. It’s the usual economic fare with a few technology, political and science stories to boot. Of course, there is always the antidote du jour.


Citigroup Gains Geithner Backing as Pandit Bucks Bair Bloomberg (hat tip DoctoRx)

The Economy Is Still at the Brink Sandy Lewis and William Cohan, NYTimes

The Swiss economy is in good shape Heinz Eckert (Do you buy this? I am sceptical.)

Supreme Court Delays Sale of Chrysler to Fiat DealBook

Blame Reagan for our financial mess? Bill Fleckenstein (Fleck is not keen on Krugman’s interpretation)

Peter L. Bernstein, Explainer of Stock Risks, Dies DealBook (Bernstein was a great and his book “Against the Gods” was a classic. But what about the Efficient Market Hypothesis? Total nonsense of course. Nonetheless, he will be missed.)

RIM under pressure from rivals Financial Post

Why your brain just can’t remember that word New Scientist

Paul Krugman: Gordon the Unlucky Economist’s View

David Takes On Goliath and Loses: The Ferguson – Krugman Exchange Edward Hugh (I have a lot of Krugnman today)

China: Stimulus – at what cost? Michael Pettis

More on maximum negative convexity Tracy Alloway, FT Alphaville

Annoying Bank Propaganda James Kwak (This is a good look at how banks are NOT lending but trying to present fake statistical evidence that they are.)

Antidote du jour:

Yves here. Thank you Ed! A couple of additions:

It’s time to enshrine Hank Paulson as national hero’ WTF? Matt Taibbi (hat tip reader Steve L)

JPMorgan Is Among 10 Banks U.S. Will Let Repay TARP in Show of Confidence Bloomberg. Can we ban all this confidence talk?

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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. Independent Accountant

    How dare you? Banks would fake statistical evidence? Next, you'll say the banks cook their books!

  2. Independent Accountant

    For my money the Hugh post was a patronizing piece of junk. We have no clue how the Fed will react to anything. Hugh and I live in different worlds.

  3. Imelda Blahnik

    For my money the Hugh post was incisive and interesting. Plenty of investors do think they have a clue about how the Fed will react to things, and they think that the Fed will take actions to prevent runaway inflation, and this expectation (or "clue") that the Fed will raise interest rates to fight inflation drives 10-year rates higher. Investors "take positions in anticipation of expected future hikes in US interest rates, something which sends rates rippling upwards all along the yield horizon." IOW rates are going up because investors believe the US is not and will not become Argentina, or China under the Guomindang.

    (whether they are right or wrong to have that clue is beside the point).

    Hugh also makes the excellent point that a historian such as Ferguson shouldn't make sweeping claims about the annals of history and public debt-to-GDP ratios while ignoring the case of Japan. Sure it's just one data point (!) – but it is the world's 2nd largest economy.

  4. LeeAnne

    Mike Taibbi makes a living trying to channel Hunter Thompson and doing a bad job of it with his ersatz shock-jock style vaulgarisms. The false ring every time he does it is the sound of Republican corruption.

    What Taibbi does very well is judge correctly that the right wing fascist media is desperate for writing even remotely resembling fiery speech on behalf of its positions and will support it financially.

    Dreaming of Limbaugh-level bucks, Mike?

  5. LeeAnne

    Forgive please. I take it back. Mike is Matt's father and Matt is obviously not a poseur -the common vulgarities just drown out the tenor of the discussion and annoys me that he makes a living at it.

  6. Dale

    Ed, the 'antidote du jour', showing cute pictures of puppies and other cutesy creatures, is a girly thing. It's OK when Yves does it, but, you know…

  7. Yves Smith


    I piled Ed with some antidotes. I have lots of readers who say they (or non-finance oriented family members) make sure to look at them daily.

  8. Bruce Krasting

    I was happy to read that the Swiss economy is doing so well. I was getting worried after the SNB announced that it was intervening in the currency market to weaken the CHF. That was a a very dramatic step. It was the source of much critisism at the time.

    The is a quote from the SNB on the currency moves dated 3/7.

    "With these exceptional measures, the SNB is helping to cushion the effects of the economic and financial crisis. The SNB has downwardly revised its yearly GDP growth forecasts to be between -2.5% and -3.0%."

    Did not sound so rosy then.


    PS The last time time the "Swiss Review" had something negative to say about Switzerland was in the June, 1963 edition. That was a story on the poor snow conditions in the Alps that year…

  9. mxq

    corporate profitability in china is a shadow of the top-line growth over the past few months…grantham briefly spoke to this in his morningstar interview (mstar compiled a bunch of interviews from their recent conference onto their website). one stat from the pettis piece, in the above daily links, drove this home:

    "[total annual Chinese] profits of 1.6 trillion yuan versus 35 trillion in capital investment means an annual return rate of only 4.57 percent, below the weighted loan interest rate of 4.76percent we saw in March"

    This is just another symptom of a gutted mercantilist business model, in a post-US consumer world.

  10. Edward Harrison

    Dale and Yves,

    I just caught this exchange (3 days late) and have to laugh. Obviously, I am in touch with my feminine side!


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