Links 10/07/09

Universe Has More Entropy Than Thought ScienceNews

SEC Probing Biggest Hospital Company Washington Post

U.S. bank M&A slump seen for many more months Reuters

Interest sparked in physical commodities Financial Times. Anodyne headline, but serious implications

Geithner warns of ‘possible hazards’: report Raw Story (hat tip reader John D)

Finding a route to recovery and reform gets tough now Martin Wolf, Financial Times. Some typically very sound observations (my fave ” No bonuses should be paid until banks reach adequate levels of capital.”). But then he indulges the idea that a souped-up IMF is the answer to emerging economies making sure they have large foreign exchange reserves. Huh? The reason the Asian tigers adopted currency pegs post the Asian crisis of 1997 was so they’d never have to go hat in hand to the IMF again.

Fiddling with accounting rules won’t fix the banks Harry Huizinga, Luc Laeven, VoxEU

Japanese Moratorium Will Postpone Collection of Principal and Interest on Consumer and Business Loans Michael Shedlock

Too Big to Live Niall Ferguson (hat tip reader Crocodile Chuck)

Cash for Trash: Better Never than Late Linus Wilson, Baseline Scenario

Antidote du jour:


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  1. BDBlue

    That commodity piece looked more like fear mongering against regulation than anything else. Most of the piece had the industry talking about how serious a threat there is and then at the very bottom, you get this:

    Big investors are more likely to try to buy futures on foreign futures exchanges in London, Dubai or Shanghai, bankers say. The GSCI’s manager, Standard & Poor’s,is exploring a new commodities index based on futures contracts listed outside the US.

    Now, maybe there’s a reason to care about commodity trading going overseas, but that’s not the fear that was being trumpeted in the article. The fear in the article was a rise in cost due to hoarding (even as the article pointed out how very difficult it would be to actually hoard many of these commodities).

    I have no idea about the merits of Gensler’s proposal, including whether it makes sense to apply the same rules across commodities instead of just dealing with the oil problem, but I know anti-regulatory fearmongering by industry when I see it.

  2. MyLessThanPrimeBeef

    I guess the news that the universe has more entropy then though is just too much for this very structured kitty, or perhaps it just discovered how disordered its human house slave’s closet really was.

  3. fresno dan

    “Theoretical calculations have long shown that the entropy of the universe — a measure of its disorder — is but a tiny fraction of the maximum allowable amount.”

    Obviously, their observations do not include my house.

  4. dearieme

    “Universe has more entropy than thought.” “Thought” has never been its strong point.

  5. dearieme

    “Physical Commodities”: do you know the story of Keynes and his grain futures?
    College Fellow: “But Maynard, what if you have to take delivery?”
    John Maynard Keynes: “There’s room in the College chapel.”

  6. MyLessThanPrimeBeef

    OK, let me try one more time.

    The kitty collapsed after hearing ‘Too big to fail’ has been extended to ‘Too stupid to fail’ as well.

  7. Dave Raithel

    From the Niall Ferguson: “There is in fact one simple insight, buried in Secretary Geithner’s testimony, upon which we need to build. Instead of trying to regulate each banker’s compensation or to tax every dollar that moves in financial markets, governments merely need to clarify that public insurance applies only to bank deposits and that bank bondholders will no longer be protected, as they have been in this crisis. In other words, when a bank goes bankrupt, the creditors should take the hit, not the taxpayers.” (pp. 23-24)

    This is where he winds up after minimizing the effect of “deregulated” financial practices and emphasizing that things went to shit in the (ostensibly) most regulated financial sectors (true or false, I really don’t know, everybody has their numbers these days) and juggling various on one hand and on the other hand contemplations.

    So, we need a political theory to get us to the capital-political relations that “empower” (if I may use such a trite and abused term) governments to hold sway over accumulating and centralizing capital such that bondholders are kept in place; and, I would think, some theory of debtor-equity-creditor transparency such that movers and shakers cannot shake down investors and creditors.

    I don’t see how this doesn’t require more “d” democracy; and every time “d” democracy is put up against capital … well, we know how much complaining capital can protest …

    Oh yeah, just say “no”, and don’t worry about condoms or birth control, your kids will do what you tell them. Just be clear about it.

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