Dear patient readers,
I wish I were on a holiday schedule, and hope many of you are by now, but I am making changes on the index and having my final go at page proofs! So apologies for the thin posts. I hope to provide a tad more Tuesday evening, but no guarantees, but should be closer to normal programming by Wednesday evening.
Social unrest ‘on the rise’ in China BBC (hat tip reader Paul S)
Potatoes, algae replace oil in US company’s plastics Raw Story (hat tip reader John D)
Taxpayers Help Goldman Reach Height of Profit in New Skyscraper Bloomberg (hat tip reader Vinny G). I am told by the boyfriend of a Goldman employee that it it is a very nice new building, so we should all be pleased our money was so well spent.
Collapsed Lehman pays out big bonuses Financial Times
If Wall Street Ran the Airlines … James Kwak. He wants you to read it for the quote by a Goldman trader at the end, but I think the AEI “oh, if customers didn’t want to be imprisoned on airplanes, the market would have provided it” rubbish (everyone affiliated with the AEI clearly was sleeping when their teacher covered material like “barriers to entry”) is equally true to dubious form.
John Taylor says that the Fed could sell its MBS without having a material impact on interest rates Richard Green. He has yet to read the paper, and I have not yet either…apologies…
Uncharted Waters David Merkel. This is Greenspan on steroids. He engineered a steep yield curve in the wake of the S&L crisis to recapitalize banks on the cheap.
US Treasury – Deep Thinking? Bruce Krasting. Be sure to look at the memo, it’s hysterical.
Leadership, Obama Style, and the Looming Losses in 2010: Pretty Speeches, Compromised Values, and the Quest for the Lowest Common Denominator Drew Westen, Huffington Post (hat tip Marshall Auerback). Today’s must read.
Antidote du jour:
My company in Santa Clara has switched to bio degradable plastic cutlery, cups and trash bags. (Well, most trash bags just disappeared from the cubes.) The bio degradable plastics are more sensitive to heat and are softer than regular. I also think they will leak after a day or two of standing moist. Don’t know if they really degrade in three months, I should bury some of it in the flowers.
But price competitive? As long as agriculture uses so much oil, I somewhat doubt it.
Uncharted Waters David Merkel “The greater worry from my angle is the US pursuing Japanese solutions that have failed miserably over the past 20 years.”
I have been saying this for quite a while – I don’t know if that is the best we can do, but it may be the best we can do in a democracy. It is a all too human trait to postpone unpleasent eventualities.
The key to understanding Obama is that he’s a corporatist by ideology (as opposed to being one just out of regular personal greed motives).
What this means is that he believes the purpose of a society and the wealth the people create is to have that wealth expropriated for the benefit of a few big corporations, and that the people should then be allowed to receive only whatever trickles down. (So Obama was being totally serious when he fawned over the memory of Reagan, who truly was his ideological mentor.)
Perhaps in theory Dems want a little more to trickle down than Reps do, but both agree that the wealth of the country belongs to a few feudal interests by right, that the people have no rights to the wealth they create, and that they should only ever get back whatever the feudalists decide is best for themselves.
If you doubt this, compare it to any action Bush or Obama has undertaken, and see if any other theory can better explain all the actions.
The health racket bill is the best example yet. For anyone who actually believes the purpose of the health care system is to provide better health care services, let alone that basic decent care is a human right, and at any rate that the purpose of a society is the well-being of its human people, anything other than single-payer would be a non-starter. Nor would there be any debate about the very existence of the health insurance racket, let alone how much it should be allowed to plunder.
(And the only people would be human people, while there wouldn’t be any such thing as corporate “persons”. How sickening is it to even have to come up with a phrase like “human people”?)
But as we saw, right from the start Obama’s leading priority has been to ensure ever greater extortions by these corporate racketeers. This was indeed the one and only reason he and the Dems even took up health insurance “reform” in the first place, let alone made this unconstitutional and reactionary mandate the centerpiece of the policy, the only part which was always inviolable, the one and only line in the sand.
This is nothing but the gangster mandate bill, ornamented with some potemkin trappings. That’s all. It’s corporatism at its most purely distilled.
That’s what makes it the defining Obama policy.
Pretty much my sentiments in a nutshell.
I hope there are at least a handful of principled Democrats left that will vote down this travesty called healthcare “reform.”
What’s coming out of the Senate is truly an abomination.
Truly the GI prophylactic after a Viagra meth alcohol filled over night down range over seas and left on the dark floor.
re: Social unrest ‘on the rise’ in China…
Pretty thin summary on BBC: no citation, no link to study (not posted on CASS). I’d really like to see the whole study, personally.
Re: your link yesterday on Chinese Housing/Building Glut:
You made no mention whatsoever of China’s countermeasures intended to “curb speculation”. There was summary on pg. C4 of yesterday’s WSJ, but that only touched on it.
I read the John Taylor blog entry (not the entire paper). I think he misses the main objective of the MBS purchases. It is quite well known and widely reported that the Fed MBS purchases did not have a material impact on the market interest rates (see Calculated Risk posts for example). I believe that the main point was to pay 100 cents on the dollar for those MBS securities. Also, I think the Fed will have trouble selling back those securities at the prices they paid. I believe these securities are permanent guests on the Fed balance sheet.
I just skimmed it, and it does seem the main argument is that (as you cite from Clusterstock) the purchases do not explain the close of the spreads on mortgage rates – “Movements in prepayment risk and default risk explain virtually all of the movements in mortgage spreads.” (p. 24) It is, of course, a statistical argument that neither the announcement to purchase nor purchases in turn affected those other movements.
But I’m one of those people who believes that time has a direction, things aren’t symmetrical in history, and so even if one has good evidence that purchases had no measurable (or significant – there’s a possible 30 basis difference depending on one’s standard reference) effect, selling them is just different. Certainly, capital used to purchase an existing MPS is capital no longer available to fund new mortgages. But I got no statistics on that ….
China has a long history of rebellions.
The Qin Dynasty of the First Emperor ended with the entire empire in revolt.
Then you have the Yellow Turban rebellion in the following dynasty.
The Huang Chao rebellion in the 9th century that killed millions, including a large foreign population in Guangzhou, among them Jews and Arabs, pretty much finished off the mutli-cultured, but perhaps not Post-Modern Tang Dynasty that saw blonde Tocharian sing-song girls at the cheap wineshops along the eastern wall of the capital at Xian frequented by poets like Li Bo.
More recently, they had the Taiping Rebellion whose leader, perhaps the missionaries succeeded all too well, claimed to be a brother of Jesus and President Lincoln at one time was on the verge of recognizing this rebel nation.
The Capitalist Party of China, sorry,the Communist Party of China came to power taking advantange of social unrest in the 20’s, 30’s and 40’s, so I am sure they are well equipped to deal with it.
To think a few silk worms could have such a effect on a nation upon leaving.