Links April Fools Day

Gravity satellite yields ‘Potato Earth’ view BBC

Farmers and Seed Producers Launch Preemptive Strike against Monsanto Cornucopia (hat tip reader furzy mouse)

F.B.I. Seeks Help Cracking Code in Victim’s Notes New York Times (hat tip reader Buzz Potamkin)

Stabilising nuclear plant to take years Financial Times.

Sad corollary: Official: Tens of thousands of evacuees can’t head home for months CNN (hat tip Richard Smith)

WANTED: U.S. workers for crippled Japan nuke plant Reuters (hat tip reader furzy mouse)

The Real Reason Gas Prices Are Soaring DailyFinance (hat tip reader furzy mouse)

The best alternative to a new global currency Joseph Stiglitz, Financial Times. This piece summarizes the statement of “The Beijing Group” and the 16 economists participating in addition to Stiglitz are listed at the end of the article.

The Mellon Doctrine Paul Krugman, New York Times

GE Flubs a Pushback Against The New York Times Columbia Journalism Review

Something to declare: cabin crew in €20m forgery scam Independent (hat tip reader Buzz Potamkin)

Bill Gross on fiscal profligacy and dumping the negative real yields of treasuries Ed Harrison. I had wanted to shred this. One of my money manager correspondents deemed Gross’s latest to be “the shriek of the rentier”.

Buffett: The Secret of My Successor Rolfe Winkler, Wall Street Journal aka Lisa Epstein Under Attack by Nationwide Title Clearing 4ClosureFraud. Wow, NTC’s law firm isn’t very competent at bullying. But it is still unpleasant to be on the receiving end of nastygrams.

It’s SOS for the S.E.C.! Polite Mary Schapiro Polices the Plutocrats Moe Tkacik, New York Observer

Wisconsin’s Professors Unionize in Defiance of Walker’s Law Bloomberg (hat tip Buzz Potamkin)

In A Stunning Turnabout, The US Government Announces That It Will Act In The Best Interests Of The Country Henry Blodgett, Clusterstock

Institute Of International Finance Wins Two Nobel Prizes Simon Johnson

Antidote du jour:

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  1. rjs

    yves, i take it that by your posting of The Real Reason Gas Prices Are Soaring you agree with that analysis…i dont see it…to my understanding of the futures markets, for every long contract, there has to be a short; which means that someone had to have written a contract to sell that imaginary oil to those speculators who buy it…so the speculative bets are equal on each side of any price…ive laid out my delusions about this in the second half of this post:
    if i’ve got it wrong, i’d appreciate it if someone would explain to me how…

    1. poisson d’avri

      gas at the pump has just jumped 25 cents a gallon over the past three days? Perhaps you


      saudis were either unwilling or unable to raise their oil production between 2005 and 2008 when prices spiked to $140


      You bet. Once norteAmericanos are addicted to plenty-cheap-oil-plenty-now-cheap-gasoline there will be hell to pay when each of us is sitting in the 3-mile-long-line at the service station just waiting for our shot at 1/2 gallon of gas plus a few fist fights over the final drop not hitting its mark. Paying more for it now will teach us to pump up the tires on our 2-seat-er 2-wheeler before it starts to rust. Good for you, Goldmann. Good for you for bidding up the price of crude, the price of wholesale gasoline, and the price of gold that we use to buy it. Yes! Gold! the only thing Arabs would accept from us in exchange for our first shot at drilling into their dry rocky soil. Gold! The only thing that they will eventually accept for the final throws of oil’s death. Dollars will buy oil now, but all that won’t last long.

      Just do as you’re told! Pump up those bike tires now. You hear?

    2. John Haskell

      1. If you go back and find an older book, “The Oil Makers,” (1995) you’ll find that at that time, according to North American gas producers, speculators were guilty of making the price of natural gas too low! The one thing you can be sure of is that no matter what the price, producers of the commodity will be angry at financiers for screwing everything up.

      2. I welcome the proposal that the oil futures market “be used almost exclusively as hedging tools.” Producers will always have a liquid market in which to hedge their extremely volatile cash flows. Taking the other side of the market will be… other hedgers? All I know about is producing oil, I don’ know nuthin about all that paper shufflin’ nohow.

    3. Anonymous Comment

      Think of it terms of housing… more people got into investing in housing and the prices went up. The more that people see something as a way to make money, simply by putting their money there, the more the prices go up. It’s called ‘churning’.

      The same is true for anything. If people see something as an investment, rather than as the useful tool it was meant to be, investors themselves want the prices to go up, and up so they can ‘sell at the top’. Many of these same people like other people to believe that this is the way the the prices are supposed to be behaving and ‘you better get in now’ before you are priced out. That is simply so that someone will buy after them and they get their return. But what about the guy who just bought? He NEEDS the price to go-go higher so that he can get his return, and on and on.

      1. rjs

        people who buy houses take possession of a physical property…oil speculators are buying a piece of paper, not taking delivery of oil…whoever sells that paper is betting the price will go down…BP is a big player, holding ten times more paper oil than physical oil…& they can make more shorting the paper than they’ll ever make selling oil…

    4. nonclassical

      You’ve got it wrong-what we have here are remaining big banks mostly, selling “futures” back and forth to one another specifically to raise prices at each “sale”-there’s a loooonnnnngggggg history of such:

      yesterday for example, the statement was made, “Goldman-Sachs can buy and sell some 30 million “shares” of stock per minute on computer trades”….

      needless to say, this isn’t our father’s Wall $treet…

  2. rd

    We are living in the “Age of Global Incompetent Risk Management.”

    We are seeing nearly identical scenarios playing out in everything from housing finance, bank finances, health care spending, New Orleans levees, Macondo oil well, nuclear power plants in Japan, etc. etc.

    In all of these, there were clear rational evaluations that said that bad things could happen with simple steps that could prevent them, either on a project-specific basis or on a system-wide basis. In all of these cases, the analyses were blown off in the hunt for short-term profits or alternate spending priorities.

    It is clear that our business and political management training systems are completely failing to teach people to understand what the important things are. Instead, the singular focus has become short-term rewards with virtually no concern for long-term liabilities.

    None of the failures I listed above needed to happen. The technologies and knowledge to avoid them are well established. Instead, it is willful decisions to ignore prudent risk management and these are occurring on a global scale.

    I think one of the major outcomes of the next decade will be a complete rethinking of risk management at all levels as the costs of the current system become evident. Unfortunately, the lesson from the past three years is that it will probably take even bigger crises to actually trigger the rethinking.

      1. lee bronock

        Dear Sufferin;
        They’re going to be French production models: Blue with White trunk lids, and a smurf board rack on the roof. Payments will be denominated in sometimes-Y-roes. Watch out, sometimes dominant currency theorists!

      2. Cedric Regula

        Fiat refers to car buying “by government force”. You know, when we bailed out, or facilitated, the Chrysler-Fiat merger. And when we do it again in the not so distant future.

  3. Sufferin' Succotash

    More seriously, I quite agree that education aimed at promoting more prudent and far-sighted risk management is an excellent idea. I just don’t think that more intelligent risk management will actually happen that way. If it happens, it’ll be because the risk managers will be terrified of going to the guillotine if they don’t handle things intelligently.

    1. MyLessThanPrimeBeef

      I believe there are no un-educated people.

      People are just educated in different things.

      And if you don’t agree with me, you just need to brainwashed, sorry, educated about my view.

      1. MyLessThanPrimeBeef

        In a very rare instant of thinking faster than I can type, I skipped the word ‘be’ – it should be ‘to be brainwashed.’

  4. deeringothamnus

    Regarding GE’s pushback on the NYT story that GE pays no taxes, I have a question. Why tax corporations? Wouldn.t taxing the shareholders and the employees be simpler and more efficient? Is there another reason for corporate taxation? Would eliminating corporate taxes have a bad consequence of encouraging corporations to hoard piles of money? Just curious.

    1. MyLessThanPrimeBeef

      Here is a thought experiment.

      What would happen if we tax corporaitons at negative tax rates?

      Instead of paying to the government for making a profit, the government pays them.

      That ought to make corporations work like mad, headless chickens to innovate and be ever more profitable.

    2. Anonymous Comment

      The thing is… govt revenue has to come from somewhere. Either it can come from those making multi-billions a year, or from those making 25k – 250k a year. Ask yourself: what seems fair? Then count on the powers-that-be doing the opposite.

      1. James

        Didn’t you miss the point? Tax the shareholders extra, thus discouraging profits and dividends, thus encouraging reinvestment (at least theoretically), or at worst, other shenanigans.

        Of course there’s always other considerations. Wily capitalists…

  5. Eureka Springs

    End corporate personhood and the escape from liability which comes with that “special” form of personhood… then talk about risk management.

    End corporate personhood…. three words, pass it on. This ain’t rocket science.

  6. MyLessThanPrimeBeef

    Are those MC Escher cats?

    Is it just me or do those ears turn into Siberian cranes flying over the Hokusai-esque rice fields of Fukushima? Just to the right edge, one can make out faint outline of the Great Wave of Kanagawa, I think…

  7. Illegal Immigrants for Harry Reid

    Not only did the Fed loan money to Belgian & German banks, and even a bank controlled by Libya in 2008 – but apparently they loaned money to a Mexican bank controlled by a socialist drug czar that has strong connections to Nevada real estate. In a bizarre – and frightening twist – Senator Harry Reid is connected to several huge apartment complexes that used the bank to finance their purchase.

    The apartment complexes are Section Eight housing for lower income and house a predominantly Hispanic community with rumors of a large population of illegal immigrants. It does not appear Senator Reid did anything illegal to help the Mexican bank owned by the socialist drug czar get the Fed loan at 0% to save the complex from certain bankruptcy. It is obvious however, that the immigrants voted for Reid in 2010 and played a vital role in his winning his re-election bid.

  8. MyLessThanPrimeBeef

    Speaking of the Noble Prize, I know of many animals trying to bring peace to the world, ending the 200,000 year war (lopsided, if you ask me) between Nature and Homo Not-So-Sapiens Not-So-Sapiens, by practicing non-violent resistance.

    Will any of them win a Peace Nobel or is there some kind of Human-Chauvinism that says no animals can ever win one?

    1. MyLessThanPrimeBeef

      Here, imagine the meek cattle before a slaughterhouse.

      They want peace.

      Or the dead flies on Dalai Lama’s limousine – speed kills.

      When will we stop this violence?

    2. Anonymous Comment

      LOLZ. You crack me up. You seem to be having a very pleasant conversation with yourself. I like that in a blogger. The tipping point: homo-not so sapiens-not so sapiens. Indeed!

      1. Cedric Regula

        I think the direct Latin translation works out to be man-not so intelligent-not so intelligent.

        If MyLessThanPrimeBeef intends a different translation, I’m all ears.

  9. Jack Parsons

    “The best alternative to a new global currency”

    I think the flight crew just found that…

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