Friday 127

Mortgaging the nation

Filed under: Economy, Politics, Society — Tags: , , — zundel @ am

Obsessive Housing Disorder” by Steven Malanga in City Journal Spring 2009

The program could not work because it tried to solve a problem of wealth creation through debt creation.

Sunday 355

Be Nice to the Countries That Lend You Money

Filed under: Economy — Tags: , — zundel @ am

The essential Fallows provides a look over the horizon. (Translation: really high praise—go read it.)

Be Nice to the Countries That Lend You Money” by James Fallows in The Atlantic 2008-12

After we are gone, you cannot just go to the moon to get more money.

About stock market derivatives and their role as source of evil:

If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.

About the $700 billion US financial-rescue plan enacted in October:

Finally, after months and months of struggling with your own ideology, with your own pride, your self-righteousness … finally [the US applied] one of the great gifts of Americans, which is that you’re pragmatic.

Pardon the following, but how often do I get to use it.
“I, for one, welcome our new overlords.”

[from A&LD]

The web, and the moment, seem to serve some magazines well. The Atlantic and The Nation have done some excellent publishing this year. And Arts & Letters Daily provides a nice portal.

Saturday 347

Bubbles happen

Filed under: Economy — zundel @ am

A very good and brief article explaining how bubbles happen:

Pop Psychology” by Virginia Postrel in The Atlantic 2008-12

in laboratory markets that mimic the production of goods and services, prices rise and fall as economic theory predicts, reaching a neat equilibrium where supply meets demand.

First, beware of markets with too much cash chasing too few good deals.

But sometimes the process “can go bananas” and create a bubble, usually when good information is scarce and people follow leaders who don’t in fact know much.

And when you have a bubble, you will get a crash.

[from Arts & Letters Daily]

Saturday 326

Oh, wait. US car companies don’t make a hybrid sub-compact, do they?

Filed under: Economy, Politics — Tags: — zundel @ pm

Saturday morning is the only time I enjoy NPR anymore. Thank you Scott Simon and Peter Sagal.

Lessons in begging for auto executives” by Scott Simon on Weekend Edition Saturday from NPR 2008-11-22

The sight of three major company auto executives flying on plush private jets to Washington D.C. to ask the American people for a $25 billion bailout is a scene from a Christopher Buckley satire — except it’s beyond satire.

Tuesday 322

Long-term albatrosses

Filed under: Economy, Politics — Tags: , , — zundel @ am

Good to read Friedman in these times:

On G-20 and GM: Economics, Politics and Social Stability by George Friedman in Stratfor 2008-11-17

short-run solutions can easily become long-term albatrosses.

So, we can bailout the US car manufacturers and spare the economy the consequences of many unemployed workers and devastated suppliers, but thereby we postpone much too long needed improvements in the industry.

I suspect the difficult, wise, and unlikely approach would come in supporting the employees and suppliers, and letting the industry fall-down to an appropriate size. But GM, Ford, Chrysler, and the UAW want to keep as much as they can, and get as much as they can, though it will saddle the US with an obsolete industry. Does anyone lobby for the wise choice?

(I drive a Toyota.)

Sunday 320

As explained to a Queen

Filed under: Economy — Tags: — zundel @ pm

A nice simple explanation of the financial crisis, and quite funny:

Good question, Ma’am” by Alan Beattie in The Financial Times 2008-11-14

The credit ratings agencies thought—actually, it is pretty hard to work out what in God’s name the credit ratings agencies were thinking…

Saturday 319


Filed under: Economy, Politics — Tags: — zundel @ pm

The Political Nature of the Economic Crisis” by George Friedman from Stratfor 2008-09-30

…when the chips are down, the state trumps the markets.

Wednesday 316

G20 summit

Filed under: Economy, Politics — Tags: , , — zundel @ pm

Emerging economic powers, like China, might get stronger influence at the International Monetary Fund (IMF). Beyond that nothing happens.

G20 summit: New world order?” by Stephen Foley in The Independent 2008-11-12

“The truth is that national regulators failed, but national politicians don’t want to be blamed, and so they blame a lack of international co-ordination and respond by calling an international summit.”

Nation state

Filed under: Economy, Politics — Tags: , , — zundel @ pm

Welcome to the new world order—the old world order.

2008 and the Return of the Nation-State” by George Friedman of Stratfor 2008-10-27

Since the fall of the Soviet Union, there has been a tendency to view the world in terms of global institutions, from the United Nations to the World Trade Organization. In the summer of 2008, none of these functioned. The only things that did function effectively were national institutions.

Tuesday 315

Bretton Woods 2

Filed under: Economy, Politics — Tags: — zundel @ pm

The United States, Europe and Bretton Woods II” by George Friedman and Peter Zeihan from Stratfor 2008-10-20

… gold was actually replaced by the U.S. dollar. … Whereas before, the greatest limiter was on the availability of gold, now it became — and remains — the whim of the U.S. government’s monetary authorities.

Relying on a currency [euro] that is not in the hands of a sovereign taxing power, but dependent on the political will of (so far) 15 countries with very different interests, does not make for a reliable reserve currency.

The net effect would be to create an international bureaucracy to oversee global financial markets.

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