2010 Outlook Summary

THE PRAGMATIC CAPITALIST » » THE ULTIMATE GUIDE TO 2010 INVESTMENT PREDICTIONS AND OUTLOOKS

And the American Crony Capitalism

And the worst footnote of 2009 was… | footnoted.org

1999

Food for thought... | FP Passport

Stiglitz: 6 Harsh lessons We Failed to Learn | The Big Picture

Stiglitz: 6 Harsh lessons We Failed to Learn | The Big Picture

Happy New Year

Starbucks “All You Need Is Love” Project | The Big Picture

Rain Man,’ Dies at 58 - Obituary

Kim Peek, Inspiration for ‘Rain Man,’ Dies at 58 - Obituary (Obit) - NYTimes.com

Cost and Outcomes in US healthcare

We know the numbers but neither the causes nor the solution.
The recent Senate bill will not change this curve by much.

American Exceptionalism Strikes Again | Angry Bear

Stimulus timing - Paul Krugman Blog - NYTimes.com

Simple explanation of impact of stimulus on growth.
First derivative is important.

Stimulus timing - Paul Krugman Blog - NYTimes.com

Jonathan Gruber - 'Cadillac' tax isn't a tax -- it's a plan to finance real health reform - washingtonpost.com

A lesson in framing.
The Cadillac tax is not a tax. It is actually an elimination of a tax break on wealthy Americans.


Jonathan Gruber - 'Cadillac' tax isn't a tax -- it's a plan to finance real health reform - washingtonpost.com

“Is Blaming AAA Investors Wall-Street Serving PR?” « naked capitalism

Investment Banks ripped off investors by selling them fraudulently marked bonds.

“Is Blaming AAA Investors Wall-Street Serving PR?” « naked capitalism

The Secret Lives of Amazon's Elves

Part time work at Amazon for Christmas season

The Secret Lives of Amazon's Elves - Amazon - Gizmodo

Tools for Managing Your Online Life After Death

Interesting.

E-Mail - Tools for Managing Your Online Life After Death - TIME

Morgan Stanley Walking Away from Properties

First class  business in a first class way.

What does this say about the CRE market?
What if more homeowners start to do  this? Another leg down in the housing market.

Bonuses Were Paid Fraudulently

Trader and management bonuses were based on fraudulent profits and should be clawed back.
Unfortunately this will not happen.
This is another good reason for a windfall profit tax.


Former Barclays Chief Points Out Bonuses Were Paid Fraudulently « naked capitalism

The Secret Diary of Steve Jobs :

One of the problems of American industry. Lack of vision and run by the numbers mentality.

The Secret Diary of Steve Jobs : A not-so-brief chat with Randall Stephenson of AT&T

Marginal Revolution: Markets in everything

Stocking stuffer.

Marginal Revolution: Markets in everything

FT.com | Money Supply | A windfall tax in the US?

The tax should be on bank's profits, not on the bonuses. This is easier to administer and tougher to defer. Less appealing to vindictive popularists.

FT.com | Money Supply | A windfall tax in the US?

Obama's Big Sellout : Rolling Stone

More on America's Oligarchy from Taibbi.

Obama's Big Sellout : Rolling Stone

DeLong counters.
And a counter.


And Salmon counters the counter.

How The Average U.S. Consumer Spends Their Paycheck | DailyCognition.com

Compare this to your home budget.

How The Average U.S. Consumer Spends Their Paycheck | DailyCognition.com

Marginal Revolution: 99 10 Red Ballloons

Prizes and network technologies.

Marginal Revolution: 99 10 Red Ballloons

Mathematically Correct Breakfast

Try this at home.
Mathematically Correct Breakfast -- Mobius Sliced Linked Bagel

Britain to Levy a One-Time Tax on Banker Bonuses - NYTimes.com

U.K. shows guts. Unfortunately this will not happen in the US. It should

Britain to Levy a One-Time Tax on Banker Bonuses - NYTimes.com

What is Maturity - and Who's Got It?,

From the comments: "It's accepting that there are some things you want but will never have, and that that's ok."



What is Maturity - and Who's Got It?, Bryan Caplan | EconLog | Library of Economics and Liberty: "

FAQ

Chairman Ben S. Bernanke’s Frequently Asked Questions | The Big Picture

NY Fed President Dudley: Still More Lessons from the Crisis

The Fed is learning. They are no longer saying that they will wait for bubbles to pop and then clean them up.

Calculated Risk: NY Fed President Dudley: Still More Lessons from the Crisis

Fundamental Reseaons for the Gold Bubble

Rational explanations of the irrational.

The Oil Drum: Europe | Peak Gold, Easier to Model than Peak Oil? - Part I

Now it makes sense?

Page 28 of a power point presentation for the Afghanistan surge.

For my Netflix queue

I got lots of free time these days.

f250bestmoviesmap_HQ.jpg (JPEG Image, 3507x2160 pixels) - Scaled (43%)

Is Repaying TARP Good for Bank of America (and Taxpayers?) « naked capitalism

"Paying back the Tarp...is looting"

Is Repaying TARP Good for Bank of America (and Taxpayers?) « naked capitalism

What's the Plan for Afghanistan?

There is no plan.

What's the Plan for Afghanistan? | Mother Jones

Public Works

But it's not as though the United States hasn't started some big public works projects over the past decade or so; it just hasn't been doing them here at home. We've spent billions constructing military bases in Iraq and Afghanistan, for example, and another billion or more on a giant embassy in Baghdad and another one in Pakistan. Needless to say, those "public works" projects are a drain on the U.S. economy rather than a source of additional productivity.

Obsidian Wings: But I’ve Been Unfaithful, I’ve Been Traveling Abroad

Ten Ways to Move the Budget Back Toward a Sustainable Path | Jeff Frankels Weblog | Views on the Economy and the World

Ten Ways to Move the Budget Back Toward a Sustainable Path | Jeff Frankels Weblog | Views on the Economy and the World

A More Perfect Union

"What would a better marriage look like? More happiness? Intimacy? Stability? Laughter? Fewer fights? A smoother partnership? More intriguing conversation? More excellent sex?"


A More Perfect Union - NYTimes.com

Contra Max Weber

So the most value I got out of that sociology class was the 9w joke.

Marginal Revolution: Contra Max Weber

Fed: We Will Pop Future Bubbles |

Major change in Fed policy thinking.


Fed: We Will Pop Future Bubbles | The Big Picture

The Amazing Animated Version Of The Tiger Woods Crash

The Chinese are really taking over the world. They have surveillance cameras in Orlando

The Amazing Animated Version Of The Tiger Woods Crash

The Taliban ascendant |

An extra 30,000 is not enough. Which is why it is too many.


The Taliban ascendant | The Best Defense

The Swiss Ban Minarets

Liberal Europe?

The Swiss Ban Minarets - The Daily Dish | By Andrew Sullivan

Does Tom Friedman read his own columns?

He must not. He forgets that he was a proponent of organized violence.

Glenn Greenwald - Salon.com

Time to Stick the Knife In

Markets are good at telling you the current price of things. They are not good at forecasting the future. Non market participants often misinterpret this.

Financial Armageddon: Time to Stick the Knife In

"Independent Does Not Mean Unaccountable"

Thoma channels Bernanke who is defending the Fed against those who would strip it of powers.
He admits the Fed "did not do all that it could have to constrain excessive risk-taking in the financial sector in the period leading up to the crisis."

Economist's View: "Independent Does Not Mean Unaccountable"

Dean Baker is not impressed.

Nor is Naked Capitalism

How Little We Know

Money Quote
"A Martian impartially observing the U.S. financial
system would conclude that it is run to
benefit the executives and protégés of Goldman
Sachs."


Greg Mankiw's Blog: How Little We Know

Yes, Fox News Really Is This Bad

They cannot get the math right

Yes, Fox News Really Is This Bad! - J. Bradford DeLong's Grasping Reality with All Eight Tentacles

Nor can they get history correct.

Or is this worse.?

Happy Thanksgiving

Dating sites use DNA to find your perfect match

Could be another misuse of science.
Dating sites use DNA to find your perfect match

Highways Are Heavily Subsidized

An important fact that is left out of the debate about building a decent high speed rail and urban mass transit is that both highways and air travel are heavily subsidized.

Matthew Yglesias » Highways Are Heavily Subsidized

Troop Levels in Afganistan

It is hard to imagine that 40,000 additional troops will lead to a positive outcome.

Chart Of The Day II - The Daily Dish | By Andrew Sullivan

Price Discrimination

An explanation of Black Friday. I am staying away.

Price Discrimination Explains Everything, Arnold Kling | EconLog | Library of Economics and Liberty

Greg Mankiw's Blog: Healthcare Reform and the Big Tradeoff

Mankiw provides a link to a Federal Reserve Bank of Minneapolis 2004 paper that explains why Americans work harder than Europeans. I am not convinced that it is all about taxes.

Greg Mankiw's Blog: Healthcare Reform and the Big Tradeoff

The Rings of Earth

Mental Health Break - The Daily Dish | By Andrew Sullivan

Relationship Venn -

Combination of Venn and Axis Chart styles

Relationship Venn - Chart Porn

Indianapolis (Highway 74)

Indianapolis (Highway 74) : The New Yorker

Why auditing the FED is a good idea.

Beat the Press Archive | The American Prospect

Visualizing empires decline

Cool look at world history.

Visualizing empires decline on Vimeo

Men married to smart women live longer - Times Online

Another good reason.

Men married to smart women live longer - Times Online

Sadly yes

Oxford Word of the Year 2009: Unfriend : OUPblog

An Economist's Guide to Happier Parenting, Bryan Caplan | EconLog | Library of Economics and Liberty

I can' t get enough of this.
An Economist's Guide to Happier Parenting, Bryan Caplan | EconLog | Library of Economics and Liberty

The Mythology of the Future Job Market ~ Angry Bear

A pessimistic look at the future of employment.


The Mythology of the Future Job Market ~ Angry Bear

and here.

Causes of the Crash

Yet another list
Roger Lowenstein on Financial Reform | The Big Picture

Economics of Contempt: Geithner Vindicated in TARP Watchdog Report

A more nuanced view of the AIG bailout. The FED had no power to get less than par value from the banks. Any power it would have would be the threat of regulatory retaliation.


Economics of Contempt: Geithner Vindicated in TARP Watchdog Report

“Should America Kowtow to China?” « naked capitalism

Best advice on the dollar: "Do nothing". It will not fall dramatically from here because China needs the job machine

and even if it does that is not a problem,

“Should America Kowtow to China?” « naked capitalism

Interfluidity :: Discretion and financial regulation

Interfluidity :: Discretion and financial regulation

Matthew Yglesias » Broder on Afghanistan: Better a Quick Choice Than the Right One

The problem with the right wing is that many thing this way

"Given that reality, the urgent necessity is to make a decision -- whether or not it is right."

Usually they would not be honest enough to admit that fact.

Matthew Yglesias » Broder on Afghanistan: Better a Quick Choice Than the Right One

The All-Inclusive All-You-Can-Eat Buffet Guide « Eating The Road

An American classic: The all you can eat buffet. I prefer the Chinese.

The All-Inclusive All-You-Can-Eat Buffet Guide « Eating The Road

Ayn Rand: The Boring Bitch is Back | The Big Picture

Good news: not every hedge fund manager is Randian.

Ayn Rand: The Boring Bitch is Back | The Big Picture

Japan as No. 1

Thirty years later. Vogel had a point. Just the title was wrong.

A more competitive America, he says, needs a much stronger government, an elite civil service composed of “the ablest young people of their generation” and a White House staffed by these new mandarins. Moral pressure needs to be felt again by Americans to bind their fragmented society together. “In the guise of pursuing freedoms, we have supported egoism and self-interest and have damaged group or common interests...we are more concerned with the rights of the deviant than the rights of the responsible citizen.
"
From the archive: One side of the success story | The Economist

The Right and Terrorists.

"This is literally true: the Right's reaction to yesterday's announcement -- we're too afraid to allow trials and due process in our country -- is the textbook definition of "surrendering to terrorists." It's the same fear they've been spewing for years. As always, the Right's tough-guy leaders wallow in a combination of pitiful fear and cynical manipulation of the fear of their followers. Indeed, it's hard to find any group of people on the globe who exude this sort of weakness and fear more than the American Right."

Glenn Greenwald - Salon.com

More Lessons from the Crisis - Federal Reserve Bank of New York

More Lessons from the Crisis - Federal Reserve Bank of New York

Omnivore's Dilemma

Jonathan Safran Foer’s “Eating Animals” and vegetarianism review : The New Yorker

And a less nuanced view.

Ten Lessons From The Financial Crisis That Investors Will Soon Forget (If They Haven’t Already!) | The Big Picture

There will be lots of lists of lessons.

Ten Lessons From The Financial Crisis That Investors Will Soon Forget (If They Haven’t Already!) | The Big Picture

U6

NY Times: Unemployment Measure U-6 Highest Since Great Depression

from Calculated Risk by CalculatedRisk

From David Leonhardt at the NY Times: Broader Measure of Unemployment Stands at 17.5% Excerpts:

Officially, the Labor Department’s broad measure of unemployment goes back only to 1994. But early this year, with the help of economists at the department, The New York Times created a version that estimates it going back to 1970.
...
If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.

In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous high was 17.1 percent, in December 1982.

There is much more in the article, but this suggest that the BLS' "Alternative measure of labor underutilization U-6"¹ is now at the highest level since the Great Depression.

¹ "Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers"

On second thought?

Three cheer for college football towns - Nov. 5, 2009

11         Penn State University   State College, Pa. $  309,850         97

On Invoking God to Defend Mammon

Mark you this, Bassanio,
The devil can cite Scripture for his purpose.
An evil soul producing holy witness
Is like a villain with a smiling cheek,
A goodly apple rotten at the heart:
O, what a goodly outside falsehood hath!

On Invoking God to Defend Mammon « naked capitalism

Sympathy for the Treasury

Interesting take. What is the difference between interpersonal relationships and corruption?


Interfluidity :: Sympathy for the Treasury

This also contains hints about how to handle small group meetings with people of disparate backgrounds and how not to answer questions. How does Treasury teach these skills?

Dark Pools and Regulations

More transparency is needed.

AllAboutAlpha.com» Hedge Fund Regulation Today's Post » What lurks for hedge funds beneath the deep, dark waters of dark pools?

The Hubris of Economics |

Economics forgot George E. P. Box’s most basic rule:

“Essentially, all models are wrong, but some are useful”

The Hubris of Economics | The Big Picture

Reconstruction for the USA

We need to be more vocal about this. Defense spending is a long term threat to the national interests of the United States. Why is there not more talk about cost benefit analysis.

Matthew Yglesias » Reconstruction for the USA

Out of the Woods?

Chart of the day | Free exchange | Economist.com

Cell Size and Scale

Great use of graphics to show relative size.
Cell Size and Scale

Where Did the Bush Tax Cuts Go?

The issue is who we are and what we want to be. A lot of the comments concern the fact that of course most of the tax cuts go to the top one percent because they pay the most taxes. The real point should is whether the tax system should be progressive or not. The tax cuts to the top 1% did not have to happen.


Economist's View: Where Did the Bush Tax Cuts Go?

Why do other countries care more about health care cost control?

The difference in spending is so great and the difference in outcome is so small that it is really hard to understand why we tolerate spending more.


Marginal Revolution: Why do other countries care more about health care cost control?

The puzzle of private equity

It is still not clear if private equity adds value to anyone but the private equity managers.

The puzzle of private equity | Buttonwood's notebook | Economist.com

Solar Energy

How many panels would be required to power the world?
The answer is simple the logistics of building panels and grid are daunting.
Also there is the problem of night.

AreaRequired1000.jpg (JPEG Image, 1000x706 pixels)

Fatal Infection | Information Is Beautiful

Now wash your hands

Fatal Infection | Information Is Beautiful

The True value of the Net

Gives us sequences like this.

The Daily Dish | By Andrew Sullivan

What Startups Are Really Like

What Startups Are Really Like

Chinese growth looking strong

Chinese growth is 9 percent. But the stimulus measures account for 15 percent of GDP.

Chinese growth looking strong | Free exchange | Economist.com

And pig farmers are buying up copper.

“Bohemian Bankruptcy”

Bankruptcy to a song.

“Bohemian Bankruptcy” « naked capitalism

Third time lucky

Marriage in America: Third time lucky | The Economist

Lose the maid

The Sex-Housework Link - WSJ.com

Frontline – The Warning? « naked capitalism

Frontline – The Warning? « naked capitalism

Glass Steagall

Why Volcker is wrong and you cannot return to a world of commercial and investment banks.

Paul Volcker, Mervyn King, Glass Steagall, and the Real TBTF Problem « naked capitalism

AllAboutAlpha.com» Featured Post » Fisheries, tipping points, and disease “super-spreaders” in Boston

Global Absolute Return Conference


AllAboutAlpha.com» Featured Post » Fisheries, tipping points, and disease “super-spreaders” in Boston

http://www.global-arc.net/

The Sun That Rises On Shanghai Sets On Tokyo « China Bystander

Tokyo and Japan are losing their place in Asia.

The Sun That Rises On Shanghai Sets On Tokyo « China Bystander

Governments Should Tax Bank Bonuses - WSJ.com

The WSJ is demanding social justice and denying the supremacy of markets.
The gall of the investment banks and banks is too much even for them.

Governments Should Tax Bank Bonuses - WSJ.com

Securitized Loans Are 5X More Likely to Be Delinquent | The Big Picture

A nice visual of the securitization process.

Securitized Loans Are 5X More Likely to Be Delinquent | The Big Picture

*Sigh* Last Post on Superfreakonomics, I Promise - J. Bradford DeLong's Grasping Reality with All Eight Tentacles

If you are going to get Brad DeLong to review your book, make sure it is before your final draft. DeLong rips Levitt and Dubner:

*Sigh* Last Post on Superfreakonomics, I Promise - J. Bradford DeLong's Grasping Reality with All Eight Tentacles

Just when you thought things were getting better.

The white house comment:
A White House spokesman, asked about the case, quipped: “I’ve found that, actually, the children of biracial couples can do pretty good.”

Louisiana Justice of the Peace Denies Marriage License to Interracial Couple - Associated Content - associatedcontent.com

Not the pride of Harvard Class '83.

http://tpmlivewire.talkingpointsmemo.com/2009/10/vitter-refuses-to-comment-on-justice-who-wont-marry-interracial-couples.php

Nine Months into the Obama Administration: A Look - J. Bradford DeLong's Grasping Reality with All Eight Tentacles

Nine Months into the Obama Administration: A Look - J. Bradford DeLong's Grasping Reality with All Eight Tentacles

The Simple Life: Infantrymen maintain, improve austere Afghanistan FOB

"It's like being at summer camp."

The Simple Life: Infantrymen maintain, improve austere Afghanistan FOB

Economist's View: "How the Servant Became a Predator: Finance’s Five Fatal Flaws"

What is wrong with finance.

Economist's View: "How the Servant Became a Predator: Finance’s Five Fatal Flaws"

And I thought it was kinda pretty...

"In South Kent, about 13 miles into the trip, we stopped to examine the covered bridge at Kent Falls, which was gray and unadorned and paved with cement. It was, I’m guessing, the least exciting covered bridge in the world."
NYT travel

Vernon Smith on Elinor Ostrom

On Nobel prize winner Elinor Ostrom.
The commons are not always tragic.


Marginal Revolution: Vernon Smith on Elinor Ostrom

Cost Cuts Lift Profits but Hinder Economy - WSJ.com

"Things are better, but compared to what"
How will the economy grow with private net investment at -0.1 percent of gdp?
Cost Cuts Lift Profits but Hinder Economy - WSJ.com

The Root Causes of Divorce:

Add another one:
"Increase in opportunity cost of maintaining marriage".
The Root Causes of Divorce: The Usual Suspects, Bryan Caplan | EconLog | Library of Economics and Liberty

The Problem with Economics

Much of economic papers in behavioral science are "awful amateur-hour sociology".


D-squared Digest -- FOR bigger pies and shorter hours and AGAINST more or less everything else

Rebuilding employment

The most important economic problem facing the US today: how to grow jobs.There are only three ways to do it:
to expand employment in existing companies, to stimulate the creation of new businesses, and to recruit relocation of existing businesses from other regions.

UnderstandingSociety: Rebuilding employment


But the room for policy is not clear. The best, but long term effort, is to increase the number of highly educated employees in the area.
"The goal of increasing the percentage of baccalaureate-level adults in a region is a crucial element of our future economic success"

A CRE News Summary

Vacancy in commercial is growing. This means that banks will be forced to take another round of writedowns. Are they ready for it?

Calculated Risk: A CRE News Summary

Why do women have sex? |

Why do women have sex? | Salon Life

WeeklyClaimsOct8

People are saying that this is a good number?
Still a lot of job losses compared to normal times.

WeeklyClaimsOct8.jpg (image)

Outsourcing

Why outsourcing is good for the average worker.

More American Workers Outsourcing Own Jobs Overseas | The Onion - America's Finest News Source

U6

U6 reaches 17 percent

Table A-12. Alternative measures of labor underutilization

Strip Mall Vacancy Rate Hits 10.3%, Highest Since 1992

Jim the Realtor is obviously not looking at commercial. Disconnect now between resi and commercial


Calculated Risk: Reis: Strip Mall Vacancy Rate Hits 10.3%, Highest Since 1992

"No shortage of buyers"

Jim the Realtor turns bullish.
But the question is whether the tax credit is the impetus or is there pure demand.
Jim thinks that the demand is real.

Calculated Risk: Jim the Realtor: "No shortage of buyers"

Fed Worries about CRE Grow

The next shoe to drop. Although it seems that much of this is already priced in the market, banks will have another round of bad earnings related to CRE. Vacancy rates reached 16%.

Calculated Risk: Fed Worries about CRE Grow

China's 60th Anniversary national day - timelapse and slow motion - 7D and 5DmkII on Vimeo

Happy
60th
China's 60th Anniversary national day - timelapse and slow motion - 7D and 5DmkII on Vimeo

Progress

Change in car safety has been dramatic since 1950. Remember that when wingnuts call for government to get off of their backs.


Marginal Revolution: Progress

New England Foliage Map

Fall in New England

New England Foliage Map - Yankee Foliage - Your Source for New England Fall Foliage

Susquehanna

Profile of what makes a good trader. This could be about any one of the principals of quant trading firms by only changing a few details:
- Discipline
- Understanding of probability
- Willingness to take bets.
- Ability to lose money.

Philadelphia Magazine:

Two Suicides Shake the World of Wealth - The Wealth Report - WSJ

"They were both Harvard Men"

Two Suicides Shake the World of Wealth - The Wealth Report - WSJ

Wealthcare | The New Republic

Chait on Rand

Wealthcare | The New Republic

Tennis

Best tennis point ever?

The Daily Dish | By Andrew Sullivan

Disagreeing With Andrew, Pete, Bruce, and Krugman On The Failure Of Economists | Capital Gains and Games

Krugman is not always right.

Disagreeing With Andrew, Pete, Bruce, and Krugman On The Failure Of Economists | Capital Gains and Games

And John Cochrane.

Bankers Trust and the Birth of Modern Risk Management

Where does Var come from?

Alea | Bankers Trust and the Birth of Modern Risk Management

A Rising, and Not a Setting Sun...

A Rising, and Not a Setting Sun...

Economist's View: "The Economic Impact of the American Recovery and Reinvestment Act of 2009"

Only 151 billion has been spent.

"As of the end of August, $151.4 billion of the original $787 billion has been outlaid or has gone to American taxpayers and businesses in the form of tax reductions"

Economist's View: "The Economic Impact of the American Recovery and Reinvestment Act of 2009"

I know I know nothing;

Sometimes knowing what you do not know is a good thing.


FT.com | Willem Buiter's Maverecon | I know I know nothing; but at least I know that

A brilliant healthcare speech

Should be watched in full.



Delivering a brilliant healthcare speech - Credit Writedowns

[Our predecessors] knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter – that at that point we don’t merely lose our capacity to solve big challenges. We lose something essential about ourselves.

That large-heartedness – that concern and regard for the plight of others – is not a partisan feeling. It is not a Republican or a Democratic feeling. It, too, is part of the American character. Our ability to stand in other people’s shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand. A belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgement that sometimes government has to step in to help deliver on that promise

Cheating In The Context Of Marriage And Coase | The Distributed Republic

Cheating In The Context Of Marriage And Coase | The Distributed Republic

Joseph E. Stiglitz: Rethink GDP fetish

If you are measuring wrong, outputs will be wrong.


Joseph E. Stiglitz: Rethink GDP fetish

The Evolution of Divorce

"now that the institutional model has lost its hold over the lives of American adults, sex, children, and intimacy can be had outside of ­marriage. All that remains unique to marriage today is the prospect of that high-quality emotional bond -- the soul-mate model. As a result, marriage is now disproportionately appealing to wealthier, better-­educated couples, because less-educated, less-wealthy couples often do not have the emotional, social, and financial resources to enjoy a high-quality soul-mate marriage."


The Evolution of Divorce > Publications > National Affairs

Boston Review — Malpractice

Dean Baker's proposal for healthcare reform.

Boston Review — Malpractice

Total 10 Year Job Gains: Negative 203k |

More than housing, more than the deficit, this is the biggest problem facing our economy.

Total 10 Year Job Gains: Negative 203k | The Big Picture

Movie Animation

What we take for granted now.

The Longest Way 1.0 - one year walk/beard grow time lapse on Vimeo

The Longest Way 1.0 - one year walk/beard grow time lapse on Vimeo

Broader Unemployment Rate Hits 16.8% in August - Real Time Economics - WSJ

U-6 is at record highs.
The index began in 1994.

Broader Unemployment Rate Hits 16.8% in August - Real Time Economics - WSJ

How Did Economists Get It So Wrong? - NYTimes.com

Krugman sums up the debate on economics.

How Did Economists Get It So Wrong? - NYTimes.com

It's not you

It's the network.

IPhone Users Love the Device, but Hate Its Slowness - NYTimes.com

Two Views on Monagamy

Savagely Exploding Monogamy

Against Human Weakness

Todd S. Purdum on Henry Paulson | vanityfair.com

Todd S. Purdum on Henry Paulson | vanityfair.com

Hpergamy

Another data point:

"Among the women, those with the greatest number of spouses were themselves considered high-quality mates, the hardest working..."


Marginal Revolution: Serial monogamy and hypergamous women

What If She Were Always in the Mood? | Psychology Today

What If She Were Always in the Mood? | Psychology Today

“The Savings Rate Has Recovered…if You Ignore the Bottom 99%” « naked capitalism

The top .01% of US (14,000 families) had a total savings of 171 billion. Half of all savings.
Stunning income distribution. And Republicans argue that slightly higher taxes will make these guys work less?


Guest Post: “The Savings Rate Has Recovered…if You Ignore the Bottom 99%” « naked capitalism

New evidence on international trade, offshoring, and US wages | vox - Research-based policy analysis and commentary from leading economists

This is a better interpretation than Krugman's "too soon to tell" explanation.
Less educated and lower wage US workers are hurt by globalization. The inverse is true for Chinese workers.


New evidence on international trade, offshoring, and US wages | vox - Research-based policy analysis and commentary from leading economists

Ted Kennedy: A Man in Full

Money quote:
"Whatever you think of Teddy's private morality, he is a publicly moral man."

RealClearPolitics - Ted Kennedy: A Man in Full

What he accomplished.

Cross-Country Road Trip

It is not how you travel, it is who you travel with.


A Couple Takes a Cross-Country Road Trip by Van - NYTimes.com

Nation's Unemployment Outlook Improves Drastically

That is why vacations are so good.


Nation's Unemployment Outlook Improves Drastically After Fifth Beer | The Onion - America's Finest News Source

Edward Moore Kennedy

On torture.

Edward Moore Kennedy

Financial Armageddon: A Member of the Delusional Set Slips Up

Finally people are starting to look at the real unemployment number:
U6.

Reality is that which, when you stop believing in it, doesn't go away.



Financial Armageddon: A Member of the Delusional Set Slips Up

If the Median Economist Set Health Care Policy, Arnold Kling | EconLog | Library of Economics and Liberty

Reasonable solutions that are not being proposed.


If the Median Economist Set Health Care Policy, Arnold Kling | EconLog | Library of Economics and Liberty

Economist's View: "The Dangers Ahead for Bernanke"

Economist's View: "The Dangers Ahead for Bernanke"

Economist's View: The Size of the Bush Tax Cuts vs. the Cost of Health Care Reform

Ethical choices versus moral choices.

Economist's View: The Size of the Bush Tax Cuts vs. the Cost of Health Care Reform

Why Poach Another’s Mate? Ask An Expert - TierneyLab Blog - NYTimes.com

Mate Poaching.

Why Poach Another’s Mate? Ask An Expert - TierneyLab Blog - NYTimes.com

How Shazam Works « Free Won’t

Sometimes Occum's razor does not apply.


How Shazam Works « Free Won’t

Matthew Yglesias » The Work Goes On

"The Dream shall Never Die"


Matthew Yglesias » The Work Goes On

More Parent-Child Quality Time? Thank Harvard - Economix Blog - NYTimes.com

Why are you spending so much time with your kids?
Early on I decided mine were not going to Harvard.

More Parent-Child Quality Time? Thank Harvard - Economix Blog - NYTimes.com

Is the Fundamental Attribution Error Fundamental or Even An Error?, Bryan Caplan | EconLog | Library of Economics and Liberty

It is not who, it is what the circumstances are?



Is the Fundamental Attribution Error Fundamental or Even An Error?, Bryan Caplan | EconLog | Library of Economics and Liberty

Cash for Clunkers

Waste of resources. Not good for the environment either.
I am keeping my 94 jeep.

YouTube - Cash for Clunkers- 2001 Mazda B3000 5spd 75k WASTE!

Matthew Yglesias » Barney Frank’s Townhall

Barney Frank: How to respond to town hall idiots.

Matthew Yglesias » Barney Frank’s Townhall

Donkeylicious: The Flowchart

Healthcare in powerpoint.
Simple version.

Donkeylicious: The Flowchart

Don Wildman Profile - The Circuit - Esquire

Training never ends.

Don Wildman Profile - The Circuit - Esquire

road-to-recovery-large.gif (GIF Image, 912x662 pixels)

Scary comparison chart.

road-to-recovery-large.gif (GIF Image, 912x662 pixels)

RealClearMarkets - Tough Lessons for Harvard and Yale

RealClearMarkets - Tough Lessons for Harvard and Yale

TheMoneyIllusion » A Tale of Two Provinces

A look at China.

TheMoneyIllusion » A Tale of Two Provinces

Postpartum Depression and Fathers - Motherlode Blog - NYTimes.com

Dads get it too:
"one could imagine that fathers with chronic depressive symptoms are less sensitive to their children, make less effort to comfort their children, and could also react with irritability or aggression toward their children"


Postpartum Depression and Fathers - Motherlode Blog - NYTimes.com

Obesity in 1956

This was the definitive fat American of 1956.


650_trixie.jpg (JPEG Image, 650x506 pixels)

Great Obits

"Remus Reid was a famous cowboy in the Montana Territory. His business empire grew to include acquisition of valuable equestrian assets and intimate dealings with the Montana railroad. Beginning in 1883, he devoted several years of his life to government service, finally taking leave to resume his dealings with the railroad. In 1887, he was a key player in a vital investigation run by the renowned Pinkerton Detective Agency. In 1889, Remus passed away during an important civic function held in his honor when the platform upon which he was standing collapsed."

Read the full story

Smile for the week ~ Angry Bear

Advice on writing research articles - Statistical Modeling, Causal Inference, and Social Science

Good review for both papers and presentations.

Advice on writing research articles - Statistical Modeling, Causal Inference, and Social Science

Marginal Revolution: Gompertz Law of Mortality, or, your body wasn't built to last

Probability of dying doubles every 8 years.


Marginal Revolution: Gompertz Law of Mortality, or, your body wasn't built to last

Generation B - Bikeathon Organizer Cites Determination as Critical Element of His Career - NYTimes.com

210 miles this weekend.


Generation B - Bikeathon Organizer Cites Determination as Critical Element of His Career - NYTimes.com

Line of the Day: Delong on Sotomayor « Ducks and Economics

Wise Latina's

Line of the Day: Delong on Sotomayor « Ducks and Economics

Paul Kedrosky's Infectious Greed

Paul Kedrosky's Infectious Greed

Posted using ShareThis

Rummy

“I’m not an apologist for Secretary Rumsfeld,” he said. “He’s a son of a bitch. And I told him that.”

FT.com / Books / Non-Fiction - Known knowns of Rumsfeld’s reign

Googland: [G] Google Latitude for iPhone

One word of advice: Never.
Never, ever think about adding this to your iphone.
But I have a feeling this is in the future for Ken and Gene.

Googland: [G] Google Latitude for iPhone

Creative Destruction: What's Next?, Bryan Caplan | EconLog | Library of Economics and Liberty

I have noticed that there is an explosion of restaurants and other service businesses in empty retailing spaces.


Creative Destruction: What's Next?, Bryan Caplan | EconLog | Library of Economics and Liberty

Greg Mankiw's Blog: Trust

Who do you trust?

Greg Mankiw's Blog: Trust

L'Affaire Gates and Honor

Obama can admit when he is wrong and fix it.


The Reality-Based Community: L'Affaire Gates and Honor

The Crisis in Song

The Financial Crisis: A Different Approach, Arnold Kling | EconLog | Library of Economics and Liberty

Why I worry

And forget bad things

Marginal Revolution: Tall people are happy

When to stop reading a book

That stack of unread books on my shelf shows that I am economically rational.
What would a philosopher say?

Marginal Revolution: When to stop reading a book

Endowment Model

And how it can work for individuals.

What a Difference a Year Makes! Endowment, Buy and Hold, and Tactical Returns – World Beta – Engineering Targeted Returns and Risk

Afganistan

Franklin Spinney: The Taliban Rope-a-Dope

Marginal Revolution

There are many definitions of "sexy"

Marginal Revolution: *In Fed We Trust*

What Makes Health Care Different?,

Three points about why people are adverse to paying for health care.

1. Paying for health care is like paying for sex. People want healing to come as a gift, and paying for it demeans its value.

2. People who need health care are suffering. When someone is suffering, to compound their suffering by demanding payment feels immoral. I have noted the similarities with usury--which was deemed morally repugnant because back in the day the borrower was likely somebody who was having trouble feeding his family, not somebody who was trying to develop a fancy shopping mall.

3. Robin's view is that health care is something we want to give to others. It isn't so much whether your terminally ill grandmother wants hip surgery or not. You want her to have the best quality of life possible in what little time remains. Robin would say that, even more important, you want to signal to her and to others that you want this.

What Makes Health Care Different?, Arnold Kling | EconLog | Library of Economics and Liberty

Back to Business - A Second Act in the Mortgage Disaster - Series -

Never mind...

Back to Business - A Second Act in the Mortgage Disaster - Series - NYTimes.com

The State of MS

Mean Street: What Springsteen Can Teach Morgan Stanley’s John Mack - Deal Journal - WSJ

The psychology of overconfidence : The New Yorker

Confidence

The psychology of overconfidence : The New Yorker

Prenuptial Cohabiting Can Spoil Marriage - Yahoo! News

Prenuptial Cohabiting Can Spoil Marriage - Yahoo! News

The Lens of Hypergamy

Are you Hypergamous?
Economist tries to explain something best left to philosophers.

The Lens of Hypergamy: An Application, Bryan Caplan | EconLog | Library of Economics and Liberty

The Great American Bubble Machine : Rolling Stone

On Goldman

The Great American Bubble Machine : Rolling Stone

Explaining the growth of Healthcare Spending

Because we can.


Greg Mankiw's Blog: Keeping Animial Spirits Alive

What makes NY great

The Reinventive City by Edward L. Glaeser, City Journal 13 July 2009

US Airways Flight 1549: Anatomy of a Miracle | vanityfair.com

Management in a crisis

US Airways Flight 1549: Anatomy of a Miracle | vanityfair.com

Palin and Her Enemies - NYTimes.com

A balanced elitist view of Sarah, by the NYT no less.


Op-Ed Columnist - Palin and Her Enemies - NYTimes.com

The Two Trillion Dollar Solution: Saving Money by Modernizing the Health Care System

A Serious look at health care savings.

The Two Trillion Dollar Solution: Saving Money by Modernizing the Health Care System

Marriage Stands Up for Itself - NYTimes.com

Marriage Stands Up for Itself - NYTimes.com

Big Squeeze on Ivy League Endowments - Barrons.com

Big Squeeze on Ivy League Endowments - Barrons.com

Coffee Breath is Good Breath - The Skeptical Hypchondriac

Coffee Breath is Good Breath - The Skeptical Hypchondriac

CRA Thought Experiment | The Big Picture

CRA did not cause the housing bubble.

CRA Thought Experiment | The Big Picture

Following the Same Path

They could add me in the P.

Financial Armageddon: Following the Same Path

Naps, Learning and REM : The Frontal Cortex

Naps, Learning and REM : The Frontal Cortex

Partners

The Atlantic | Nov 1986 | Intimate Partners | Scarf

Let’s Call the Whole Thing Off

Money quote:
"If high-revving women are sexually frustrated, let them have some sort of French arrangement where they have two men, ... occasional fun-loving boyfriend the kids never see."

Let’s Call the Whole Thing Off - The Atlantic (July/August 2009)

Nerd Tourism

Nerd Tourism

The Case for Taxing Height

Do you really want to tax ability? | vox - Research-based policy analysis and commentary from leading economists

Rebalancing is Already Happening

Project Syndicate

Greg Mankiw's Blog: Height and Happiness

Greg Mankiw's Blog: Height and Happiness

Obama Drastically Scales Back Goals For America After Visiting Denny's | The Onion - America's Finest News Source

Obama Drastically Scales Back Goals For America After Visiting Denny's | The Onion - America's Finest News Source

Peter L. Bernstein, Explainer of Stock Risks, Dies - DealBook Blog - NYTimes.com

Bernstein's most famous book was published when he was 77.
It is never too late to become a writer.


Peter L. Bernstein, Explainer of Stock Risks, Dies - DealBook Blog - NYTimes.com

Why has Japan been so hard hit by the global crisis? | vox - Research-based policy analysis and commentary from leading economists

Why has Japan been so hard hit by the global crisis? | vox - Research-based policy analysis and commentary from leading economists

60% of Chinese exports to the US are from foreign-owned corporations

I have been looking for this stat for a long time.
This is higher than I expected.


EconoSpeak: 60% of Chinese exports to the US are from foreign-owned corporations

Why Fed Actions are not all that Inflationary

Accrued Interest: SMACKDOWN WEEK: Now consumers are all but extinct

Rational Markets

"The markets resemble the Star Wars bar scene more than they do the economics faculty lounge at Princeton."

Reminder from Theodore Roosevelt

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”

"Citizenship in a Republic,"
Speech at the Sorbonne, Paris, April 23, 1910

anatomy-of-a-crash

The history of the crash in one Picture

anatomy-of-a-crash.png (PNG Image, 1029x792 pixels) - Scaled (82%)

Graduation Day

Ken in front of the his 8th and 9th year dormitory.

Economist's View: "The Fall of the Mall"

Great graphical display of information.

Economist's View: "The Fall of the Mall"

The Cost Conundrum:

Annals of Medicine: The Cost Conundrum: Reporting & Essays: The New Yorker

Googlenomics:

Secret of Googlenomics: Data-Fueled Recipe Brews Profitability

Crazy Compensation and the Crisis - WSJ.com

Crazy Compensation and the Crisis - WSJ.com

Drew Gilpin Faust and the Incredible Shrinking Harvard - Boston Magazine

Drew Gilpin Faust and the Incredible Shrinking Harvard - Boston Magazine

FRB: Speech--Bernanke, Commencement address--May 22, 2009

Key thought:
I do not even remember that he spoke at Harvard last year. All I remembered was J.K. Rowling and the gay wizard. Central bankers did not matter in the late spring of 2008.

Key paragraph

So, my advice to you is to stay optimistic. Things usually have a way of working out. My second piece of advice is to be flexible, even adventurous as you begin your careers. As I have tried to illustrate today, you are much less able than you think to foresee how your life, both professional and personal, will play out. The world changes too fast, and too many accidents and unpredictable events occur. It will pay, therefore, to be creative and open-minded as you search for and consider professional opportunities. Look most carefully at those options that will give you a chance to learn new things, explore new areas, and grow as a person. Think of every job as a potential investment in yourself. Will it prepare your mind for the opportunities that chance will provide?




FRB: Speech--Bernanke, Commencement address--May 22, 2009

The Crisis and How to Deal with It - The New York Review of Books

The Crisis and How to Deal with It - The New York Review of Books

The Day in 100 Seconds: Dueling Speeches | TPMTV

Obama vs Cheney
The contrast has never been clearer.

The Day in 100 Seconds: Dueling Speeches | TPMTV

The Wreck of Modern Finance

Title says it all.

PrudentBear

Economist's View: FRBSF Economic Outlook

San Francisco Fed says that this recovery will be slower than others.

Economist's View: FRBSF Economic Outlook

The Paradox of Declining Female Happiness"

Some readers have complained that there are too many finance posts. A good gender society post with an economic twist.

A good summary:

And the original paper

Economist's View: "The Paradox of Declining Female Happiness"

And Mankiw's interpretation:
Women's rights movement was a mistake.

New Search Engine

Wolfram|Alpha

Why China Buys Treasuries

It is not as an investment.

Beat the Press Archive | The American Prospect

Job Loss

Great graphical display of information: job loss.

An interactive map of vanishing employment across the country. - By Chris Wilson - Slate Magazine

And Bridgewater says that unemployment is now a leading indicator:
Normally, labor markets lag the economy because incremental spending transactions are financed via debt, stimulated by interest rate cuts. But as long as credit remains frozen, spending will require income, and income comes from jobs. And debt service payments are made out of income. Therefore, in a deleveraging environment job growth becomes an important leading, causal indicator of demand and other economic conditions.
“… The bounce in the economy and the stabilization in markets reflect government actions that are big enough to impact near-term growth rates, but are not sufficiently directed at the root problem of excessive indebtedness to produce permanent healing. The deterioration in employment markets will continue because companies’ profit margins are so deeply damaged that a little bounce in growth won’t do much to alter their need to cut costs. This deterioration in labor markets will undermine demand and continue to pressure loan losses, which will keep the pressure on the banks and elevate the cost of capital for tentative borrowers, inhibiting credit expansion.”

Different conceptions of China’s future role in the global financial system

Brad Setser: Follow the Money » Blog Archive » Different conceptions of China’s future role in the global financial system

Story Time for the Economy

Is it the end of the beginning or the beginning of the end of the downturn.

Khaleej Times Online - Story Time for the Economy

Rapt

Rapt

This is a book about secular meditation. Focus on things that foster contentment and not the things that cause worry. As William James said wisdom and a satisfied life is about knowing what to overlook. Our only weapon against stress is to choose one thought over another. Experience depends on what you pay attention to. Remember Rashomon.

The difficulty arises about how to manage one's attention. "It is impossible to communicate with, much less bond with someone you cannot, or will not, focus your attention on."Slow down, focus on relationships, focus on people. Relationships take work.

Try to focus on the small pleasures of everyday life.

Amishi Jha
Posner and Rothbart
Omega Institute for Holistic Studies

William Seidman

Bill Seidman
Banks will always find ways to lose money.


Calculated Risk: William Seidman

What Makes Us Happy?

That the only thing that really matters in life are your relationships to other people.

Is the U.S. Military Profession in Decline?

Fighting the last war?

Why don't people have more sex?

Who knew?

Priorities

Is is good not to be too rich?
Only if you have kids.

Why The Financial System Collapsed

Why it always does: not enough capital in reserve against risky loans.

National Journal Magazine - Why The Financial System Collapsed

New Home Inventory is droppng

Three reasons:
- Less construction
- Sales of existing inventory
- And this

Calculated Risk: New Homes Demolished in Victorville, CA

The real issue with Health Care costs.

We all want expensive care.

THE PRESIDENT: Exactly. And I just recently went through this. I mean, I’ve told this story, maybe not publicly, but when my grandmother got very ill during the campaign, she got cancer; it was determined to be terminal. And about two or three weeks after her diagnosis she fell, broke her hip. It was determined that she might have had a mild stroke, which is what had precipitated the fall.

So now she’s in the hospital, and the doctor says, Look, you’ve got about — maybe you have three months, maybe you have six months, maybe you have nine months to live. Because of the weakness of your heart, if you have an operation on your hip there are certain risks that — you know, your heart can’t take it. On the other hand, if you just sit there with your hip like this, you’re just going to waste away and your quality of life will be terrible.

And she elected to get the hip replacement and was fine for about two weeks after the hip replacement, and then suddenly just — you know, things fell apart.

I don’t know how much that hip replacement cost. I would have paid out of pocket for that hip replacement just because she’s my grandmother. Whether, sort of in the aggregate, society making those decisions to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill is a sustainable model, is a very difficult question. If somebody told me that my grandmother couldn’t have a hip replacement and she had to lie there in misery in the waning days of her life — that would be pretty upsetting.

And it’s going to be hard for people who don’t have the option of paying for it.

China: The Next Great Bubble?

Is China a vendor financing scheme in its last throes or can it stimulate sustainable growth with new investment?

The government is stimulating hard and fast and will not give up easily.

The Next Great Bubble? | The Big Picture

Decline from Peak.

Case Shiller.
What does this mean for NY and Boston. I would suspect there is more downside.

CSselectedCitiesFeb2009.jpg (image)

Can Billions of Parents Be Wrong?,

Yes. Parenting is not only hard, it is ineffective. One answer: boarding school.
Best line: nagging is not cumulative.

Can Billions of Parents Be Wrong?, Bryan Caplan | EconLog | Library of Economics and Liberty

Luck and Taxes

Thank god we have been lucky.
If nothing else, luck means having the right parents and being born in the right place.


Economist's View: Luck and Taxes

Political Partisanship

New England Republicans were more like New England Democrats than Mississippi Republicans. Now there are no longer any New England Republicans in the House.

EzraKlein Archive | The American Prospect

Also an interesting note on partisanship bias. Republicans liked Bernanke under Bush. They do not like him under Obama. Dems also reversed their views.

America's Shame

How could we have let this happen?


Memo Sheds New Light on Torture Issue - New York Times

Just remember: Things could be worse

dilbert041609.gif (image)

Merton Lecture

Observations on the Science of Finance in the Practice of Finance | MIT World

Kids

I hate David Dellifield. The one from Ada, Ohio. | Penelope Trunk's Brazen Careerist

Why Health Care Reform is Hard,

American health care is expensive because that is how we want it.


Why Health Care Reform is Hard, Arnold Kling | EconLog | Library of Economics and Liberty

Bernanke

Four Questions about the Financial Crisis | The Big Picture

the gall that is wall street

How to Puff Up Earnings, Goldman Sachs Style | The Big Picture

Backward, Christian soldiers

Happy Easter

Backward, Christian soldiers | Democracy in America | Economist.com

There is no such thing as a black swan free life

Stuff happens.
Learn to deal with it.

A black swan-free life | Free exchange | Economist.com

Ten principles for a Black Swan-proof world

Sensible advise from Taleb

FT.com / Comment / Opinion - Ten principles for a Black Swan-proof world

Predicting the Present with Google Trends

The answer to your question about what Google is going to do with all your data.
Who knew that Google even had a Chief Economist?

Official Google Research Blog: Predicting the Present with Google Trends

Turning Japanese?

What are the lessons of Japan?



Turning Japanese? | Foreign Affairs

Second opinions

Always try to get opinions on big issues from third parties.

Baker suggests second opinions ~ Angry Bear

Worse than the Great Depression

You do not often hear this phrase, but the decline in stock prices and trade has been(by some measures) faster.


Economist's View: "A Tale of Two Depressions"

Table A-12. Alternative measures of labor underutilization

U6 is 15.6

Table A-12. Alternative measures of labor underutilization

Corporate Goverance in the US

Icahn see his point | Free exchange | Economist.com

Skype to Launch iPhone Software - WSJ.com

Skype to Launch iPhone Software - WSJ.com

Silly Economics

A silly and fun way to look at the economic crisis.
From South Park

Goodbye, homo economicus'

The end of economics?

Features: 'Goodbye, homo economicus' by Anatole Kaletsky | Prospect Magazine April 2009 issue 157

Sachs Explains PPIP

Just a raid on the FDIC

Economist's View: Sachs: Will Geithner and Summers Succeed in Raiding the FDIC and Fed?

Hedge Fund Socialism?

How to scam Geithner.

naked capitalism: Guest Post: Hedge Fund Socialism?

Mary Meeker

Still around. Still good.

Mary Meeker on Economy/Internet Trends

David Swensen and the Yale Model - Portfolio.com

David Swensen and the Yale Model - Portfolio.com

As only the rolling stone could write it

On the end of the empire.

The Big Takeover : Rolling Stone

The Geithner Plan FAQ

Grasping Reality with Both Hands: The Geithner Plan FAQ

Calculated Risk: Housing Starts: Is this the Bottom?

Calculated Risk was one of the most prescient on the crisis.

Calculated Risk: Housing Starts: Is this the Bottom?

Swensen's guide to Sleeping Soundly

Yale Alumni Magazine

naked capitalism: On Traders Behaving Badly and Cognitive Bias

naked capitalism: On Traders Behaving Badly and Cognitive Bias

Larry Summers

Free Larry Summers

The Looting of America’s Coffers - NYTimes.com

Akerlof and Romer

Economic Scene - The Looting of America’s Coffers - NYTimes.com

The fact that People are buying this book

is revealing in itself.

FT.com / Comment / Opinion - Outside Edge: The book that’s in and out of fashion

Land of the Setting Sun

The Land of the Setting Sun

Japan has been in a malaise for 20 years. And just when it looked like the country
might turn around, the bottom has seemingly fallen out. Japan’s economy shrank
a slightly revised 3.2% in the last quarter of last year, confirming the
sharpest contraction since the oil crisis in 1974, and economists warn of
further contraction in the next two quarters.
The Japanese economy, mired in its
worst recession since World War II, is forecast to shrink a further 2.5% in the
first quarter of this year and another 0.4% in the second quarter, a Reuters
poll shows.
But if you look at the underlying
data, it’s even worse. Let’s turn to a recent letter from my good friend and
favorite data maven, Greg Weldon. (www.weldononline.com)

Japanese exports have fallen 54% in
the last 6 months, an average of $40 billion a month, or down over a quarter of
a trillion dollars. Greg notes that past 6-month changes in exports in Japan
were hardly ever up or down more than a trillion yen. This is four times that
level, about 4 trillion yen. To get a visual view, look at the graph below.
That is called falling off a cliff.

The decline in exports is about 45%
year over year. Japan is one of the countries that has run a very large trade
surplus, allowing them to buy lots of dollars and lend a great deal of money.
Their banks have been an engine for growth worldwide, but especially in Asia.
And the graph below shows that trade surplus turning into a large trade deficit
of 952 billion yen, or somewhere over 9 billion dollars.

To give that some perspective, the
US trade deficit came in today and was “only” $36 billion, the lowest level in
six years, mainly due to lower oil prices, as our exports have been shrinking
as well (more on that below). The US economy is roughly three times the size of
Japan’s (and Japan is the world’s second largest economy); so $9 billion is no
small sum of money, relatively speaking.
(Quick note - while looking
for that number on the web, I came across this tidbit in the China Daily. They project that the GDP of
China will surpass Japan’s next year.)
Inventory-to-shipping ratios in
Japan are rising by over 50%, as industrial production is down more than 10%
and likely to fall much further. Japanese auto exports are down 63% in just
four months. Auto exports have literally fallen off a cliff, as inventories
have doubled.
No surprise, Japan is promising
even more government support programs, and aid to industries of all sorts. This
from a government that has over 140% of debt to GDP, about twice that of the
US. And their rapidly rising credit default swap rate is not helping. Who would
have thought of Japan as a credit risk? Three years ago, almost no one. Now,
rates are 30 times higher.
Japan’s economy is driven by
exports. And those exports were crushed as the yen rose in buying power and
Japan’s exports became less competitive in the last quarter, with calls for
intervention to bring the yen back to a level where their industries can be more
competitive. Look at the chart below of the Japanese yen versus the US dollar.
(The moving average is 90 days.)

Note
that less than two years ago the yen was over 124 to the dollar, and fell last
quarter to below 87, and has risen back to 98 today. Think about the Japanese
auto manufacturer. Two years ago he could sell his car in the US (or wherever)
for $30,000 and get 3,750,000 yen. Today, that $30k only gets him a little
under 3,000,000 yen. Think his costs dropped 20%? Think he can raise prices 25%?
If you sell machinery, you are
competing with companies, countries, and currencies all over the world. If your
currency rises, you are less competitive, or your profits have to fall.
Japan has problems, and not just in
manufacturing. The population of the country is now literally shrinking, as
they have the highest proportion of elderly people and the lowest proportion of
children. By 2050, 70% of the labor force will have disappeared. While Toyota
is the world’s largest car company, auto sales in Japan peaked 18 years ago.
Supermarket sales have fallen every year for the last 11 years. This is a
country in a long-term decline, with massive debt. While there is still a lot
of economic power there, it is not the country of the future. Unless they
figure out how to grow their population, it will be a long slow slide.

Indiana Has Problems with Math

Or is it because they do not like pie?

No Pi for You! ~ Angry Bear

The Obama Program

Greg Mankiw's Blog: The Obama Program

Stewart on CNBC

Matthew Yglesias » Stewart vs Jim Cramer

Financial Regulations

The Becker-Posner Blog: Financial Regulations-Becker

Top Marginal Tax Rates Over Time

Grasping Reality with Both Hands: Top Marginal Tax Rates Over Time

Just guessing

Any ideas about the size of the hedge fund market.

AllAboutAlpha.com» Today's Post » Reading the divergent hedge fund industry barometers

Inflation Adjusted Dow is at 1966 Levels | The Big Picture

Inflation Adjusted Dow is at 1966 Levels | The Big Picture

Nationalization: Pro and Con

naked capitalism: An Amazingly Disingenuous Piece by Alan Blinder on Bank Nationalization

U6

14.8

Table A-12. Alternative measures of labor underutilization

America 2009

Hard to believe.

Financial Armageddon: Unfiltered and Unspun

Classic Stewart

Daily Show vs CNBC | The Big Picture

Harvard, Private Equity and the Education Bubble - DealBook Blog - NYTimes.com

Are universities just asset management companies with a education department

NY Times on Harvard
Harvard, Private Equity and the Education Bubble - DealBook Blog - NYTimes.com

Forbes

Square Root Day - Wikipedia, the free encyclopedia

Square Root Day - Wikipedia, the free encyclopedia

Vik

Be careful about getting what you wish.

How Citigroup CEO Vikram Pandit Became the Most Powerless Powerful Man on Wall Street -- New York Magazine

Hudson River Plane Landing (US Airways 1549) Animation with Audio | The Big Picture

Hudson River Plane Landing (US Airways 1549) Animation with Audio | The Big Picture

Economist's View: Fed Watch: When Does Faith in Financial Engineering Wane?

Economist's View: Fed Watch: When Does Faith in Financial Engineering Wane?

Japan’s Crisis of the Mind - NYTimes.com

Masaru Tamamoto on the crisis that is Japan.
It is hard to make an argument for long term macro.

Op-Ed Contributor - Japan’s Crisis of the Mind - NYTimes.com

Old but good

Principles of Economics

metacool

metacool: Travis Pastrana and the future of the world economy

The Budget and Charitable Donations

The deduction for high income earners will be reduced from 35 to 28 percent.

OMB - Blog Post - The Budget and Charitable Donations

Why the Stimulus will work

Guatemala News | The Stimulus Ostriches

The Recession in Perspective - Compares output and employment changes during the present recession with the same data for the 10 previous recessions - The Federal Reserve Bank of Minneapolis

How does this recession compare to others?

The Recession in Perspective - Compares output and employment changes during the present recession with the same data for the 10 previous recessions - The Federal Reserve Bank of Minneapolis

2009 Berkshire Letter

2009 Letter

Then Jane Goodall andDian Fossey

Now Dan Beunza and David Stark

Zero Hedge: Weekend Reading: The Social Dynamics Of The Trading Desk

First Question

Why wouldn't Faust give her tenure?

Economist's View: Christina Romer Answers Criticisms from Robert Barro and "The Best Man at My Wedding, Greg Mankiw"

The Epicurean Dealmaker: Fooled by Arrogance

On traders.

The Epicurean Dealmaker: Fooled by Arrogance

Cliffdiving

The title says it all.

doomsday.jpg (image)

When will house prices bottom?

FDIC says: not yet.


Calculated Risk: Stress Test House Price Scenarios

Look at the gap between new home sales and existing home sales to narrow first.

Hedge fund assets and leverage

AllAboutAlpha.com» Today's Post » Data in new UBS report supports Bernanke’s view that HF leverage not a top concern

Obsidian Wings: The Audacity of the Speech

Obsidian Wings: The Audacity of the Speech

Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions - Economix Blog - NYTimes.com

Get rid of the Home mortgage deduction. It is regressive and promotes leverage.

Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions - Economix Blog - NYTimes.com

Recipe for Disaster: The Formula That Killed Wall Street

Financial Engineering

Recipe for Disaster: The Formula That Killed Wall Street

Entrepreneur and Software Engineer Marc Andreessen | The Big Picture

Entrepreneur and Software Engineer Marc Andreessen | The Big Picture

Entrepreneur and Software Engineer Marc Andreessen | The Big Picture

Entrepreneur and Software Engineer Marc Andreessen | The Big Picture