Links 4/10/10

Yves Smith Watch: These two posts are MUST reads for anyone concerned about derivatives, systemic risk and regulation. And Yves is mentioned in both!

Debt debacle is not going to go away Merryn Somerset Webb, FT

East Germany’s Forgotten Bunkers: New Research Sheds Light on Soviet Plans for World War III Spiegel

China’s March Trade Deficit — What Does It Mean? Patrick Chovanec

You’re All Wrong. Blame The APPRAISERS For The Mortgage Crisis Business Insider

Broke Cities (including this one) San Diego Reader

Greenspan’s 15% survival formula Rolfe Winkler

Meet Greece’s New Saviour Zero Hedge

Why You Hold On to Clutter Lifehacker (The corollary of the ‘touch/value miscue’ in this article is that Internet no touch shopping devalues products and acts as a persistent form of deflation.)

Citi ‘Negative’ On Subprime Mortgages As Early As 2006, Yet Firm Continued To Pump Out Subprime Mortgage Products (VIDEO) HuffPo

Swedish law gives shelter to controversial Wikileaks site EurActiv

Devastating Drought in Shangri-La Patrick Chovanec

National bank of interventionski FT Alphaville (the sad thing here is that Poland’s central bank head died in a plane crash just today)

Trichet Thwarted as Greece Erodes ‘Mr. Euro’ Status Bloomberg

Antidotes du Jour: Bear of Hope, Goats of Prey



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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. velobabe

    business insider a day late and a dollar short, yes APPRAISERS had a lot to do with it but certainly UW (under writing) of the banks blind eye just enforced all the fraud.
    reading this today in my paper shows some rocks getting turned over:

    little cub, baby.
    colorado is pushing for more bear killing license’s for this year’s kill season. cause they don’t know how to handle the population explosion. causing havoc and breaking into all the rich elites mansions built in the middle of wilderness, being invaded by hungry displaced black bears. it is simply sickening to witness this disturbance over the last two decades. plus one of the biggest elk herds in north america resides in colorado and apparently they are one sick and unhealthy bunch. again, CDW doesn’t know the solution, all slowly dying by the hands of the elites and their voracious need and greed for property and possessions. think of the wildlife’s environment perils via human elites getting wealthy and taking over† i say the original homeland security, native americans, should have a comeback revolt, i will help them. sorry about my grammar.

  2. MyLessThanPrimeBeef

    Thanks for the antidotes.

    I am particularly fond of the little cub doing Zen meditation, with his focus 100% on his navel, counting his breath, being one with the peaceful, tranquil forest he is in at the moment.

    I bet anyone 50 cowrie shells that the young bear is a vegan bear.

  3. KFritz

    Re: Blame an Appraiser (fr. the California market perspective)

    Holy Bull-Bleep, Masked Crusader! Appraisers are hired by realtors. If they give appraisal the realtor doesn’t like they don’t get RE-hired. Some appraisers are all to willing participants in illicit valuations. Most are by temperament a bit pedantic and are really interested in arriving at the correct valuation. If you don’t believe this, do some research and find more than a very select few appraisers who profited from the entire RE debacle as much as mortgage brokers and/or realtors. I promise to eat a properly plucked and roasted crow if incorrect.

    The realtor who wrote this tripe is a lying SHMUCK.

    1. Evelyn Sinclair

      Those are full-sized goats that I photographed while a huge herd of them was eating the vegetation in my canyon area park, in the Oakland, California hills.

      Every year hundreds of goats are put to work reducing flammable material to minimize fire risk. They are put in a huge enclosure made up of a flimsy but electrified fence, and herded by dogs — and one goatherd who lives in a little trailer. There is a solar panel that gathers sunlight to power the electric fence. The goats are thorough, clearing the ground of all weeds and even trimming trees of leaves up to as high as they can reach. Then the whole setup is moved to the next area in our band of hilly parks.

      Sometimes its hard to tell with goats pregnant from just fat, but those two do look to me like they might be carrying young.

      1. EAnderson

        Those goats are probably not pregnant. They are ruminants and when they are full their sides stick out like that.

        1. Evelyn Sinclair

          Goats are truly amazing. They can take trash — weeds no one wants — and convert then into energy in those busy, bulging inner workings, processing them into goat energy, more goats, and little pellets of fertilizer.

          Let’s let the goats loose on the trash the banks keep hiding!

      2. KFritz

        That’s a hoot! I’ve been shocked by that fence. My dad kept goats until I turned seven, and I still love them. When a crowd of, yes, Nubians approached the fence I reached out to pet them…ZAP.

    2. Evelyn Sinclair


      Sorry! Brain crosswired itself for question you did not ask – about pygmy goats, which tend to be wider than they are tall even when not preggers. I think these are Nubians. I have lots of photos of them, plenty with their heads not stuck in the trees, and they do have Nubian features

    1. Yves Smith


      That “story” was broken in MORE detail in Ch. 9 of ECONNED, which went to press at the end of September, which appears to be before Pro Publica started working on the story.

      I’m really quite disturbed at the failure to acknowledge this, and Felix Salmon giving them credit when we had the entire story before Pro Publica was on it in a serious way. Felix knew Magnetar was discussed in ECONNED, because I mentioned it in my post on The Big Short and Salmon commented on my post.

      1. Francois T

        I’ll admit I was very surprised too, since I saw that in your book. BTW, I used the term “fantastic” only because of the good vulgarization they did.

        That said, the team at This American Life is usually quite good in giving credit where it is due. For instance, they gave credit to Tanta and CR when they ran their first show about the economic crisis.

        I don’t know what to say. Your book went to press at the end of September and got published in March. Substract time for post-production and all that jazz and Pro Publica may have started working on this story in what…June?

        One thing is sure tough: It is easy to prove you had the goodies on that one before a lot of cats, if not all cats, out there.

      2. Francois T

        Here’s another surprise regarding Magnetar and yourself; Joe Weisenthal from Clusterstock try to put forth a more “innocent” explanation for the Magnetar stuff…and proceed to quote you in a, ahem, how can I say?, bizarre context.

        It’s easy to think in retrospect that a bet against subprime was implicitly a bet on the entire system collapsing, but that’s ex-post facto thinking. Well after folks became aware of the subprime issue, the general thinking was that subprime itself was too small to cause major waves.

        Take for example this post from Yves Smith written on July 10, 2007, responding to Chuck Prince’s lack of major concern about subprime. And bear in mind that Yves is now known as someone who was critical of Wall Street before it was cool:

        [The] subprime meltdown in and of itself isn’t an event of sufficient magnitude to cause a full blown credit contraction. But there are events on other fronts that are pointing to lessening liquidity: the Japanese finally showing some concern about the carry trade; India, another liquidity provider, going through several rounds of interest rate rises to staunch domestic inflation that has resulted from buying US dollars (buying dollars increases the domestic money supply unless the government “sterilizes” it by issuing domestic bonds to soak up liquidity); the Chinese and Gulf states showing signs of domestic inflation and reluctance to keep buying more dollars.

        So even someone like Yves, a leading critic, figured that subprime issue was too small, but that the undoing of Wall Street could come from Japan, India, or possibly the Gulf states.

        Somehow, me think Joe is full of it.

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