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Monday, October 31, 2011

‘Reshoring’ jobs from China won’t happen - FT.com

The math of reshoring does not look so good. Chinese wages are still low in simple manufacturing, productivity is still growing in higher value added manufacturing.

‘Reshoring’ jobs from China won’t happen - FT.com

Social Security Bait And Switch,

Social Security Bait And Switch, A Continuing Series - NYTimes.com:

In legal terms, the program is funded not just by today’s payroll taxes, but by accumulated past surpluses — the trust fund. If there’s a year when payroll receipts fall short of benefits, but there are still trillions of dollars in the trust fund, what happens is, precisely, nothing — the program has the funds it needs to operate, without need for any Congressional action.

Alternatively, you can think about Social Security as just part of the federal budget. But in that case, it’s just part of the federal budget; it doesn’t have either surpluses or deficits, no more than the defense budget.

Thursday, October 27, 2011

Best Steve Jobs Quotes From Biography

Best Steve Jobs Quotes From Biography

“You don’t make plans more than a year out, and that’s bad. You need to force yourself to plan as if you will live for many years.”

Read more: http://www.businessinsider.com/best-steve-jobs-quotes-from-biography-2011-10?op=1#ixzz1byduftNZ

Crisis in industry

The crisis has been a long time coming. It was done by different players (specialists) and with different tools.


There is a crisis of leadership in our industry, folks. The markets will be broken until the focus returns to helping investors invest money, and not touching investor orders to siphon money.


Wednesday, October 26, 2011

The Power of Leverage

One reason why the top .1 percent has been able to grow their wealth is that they understand the power of leverage.

Return On Equity Versus Return On Assets | ThinkProgress:


" Imagine that in 1990 bank CEO pay had been indexed to bank ROE. By 2007, CEO compensation would have reached $26 million. That is precisely in line with their actual payouts. If you believed ROE were a reliable performance metric, US bank CEOs would have had a watertight defence back in 2007. Instead, of course, we had ludicrously leveraged banks that were too big to fail and brought the economy down with them. [...] Imagine if the CEOs of the seven largest US banks had in 1989 agreed to index their salaries not to ROE, but to ROA. By 2007, their compensation would not have grown tenfold. Instead, it would have risen from $2.8 million to $3.4 million. Rather than rising to 500 times median household income, it would have fallen to around 68 times."

Thank you

DEAR AMERICA: It's Time To Say A Big "Thank You" To Amazon

China Takes Loss to Get Ahead

China has a very different view on government investment.


“Someone has to lose money,” Guo Qigang, the plant’s general manager, said in a recent interview. “We’re a state-owned corporation, and it’s our social responsibility.”

Tuesday, October 25, 2011

FEAR THE MUSTACHE:

FEAR THE MUSTACHE: Here Is The Best Campaign Video Of All Time

The Romney Economy


These Bain Capital guys,” says Neil Fligstein, an economics-sociology professor at the University of California, Berkeley, “were agents of the shareholder value revolution.”


How private equity changed the US economy and spurred the rise of the .01%

The Romney Economy:

Or at least a bit player. 

Monday, October 17, 2011

America’s Secret Empire of Drone Bases: Its Full Extent Revealed for the First Time | World | AlterNet

This will turn out well.

America’s Secret Empire of Drone Bases: Its Full Extent Revealed for the First Time | World | AlterNet

Edward Luttwak Talks Israel and Bin Laden – Tablet Magazine

Fascinating take on foreign policy from someone I have never heard of...

Edward Luttwak Talks Israel and Bin Laden – Tablet Magazine:

Listen, my wife is a very good cook. And we have a housekeeper, who is an even better cook. It’s a weird situation, but I think my housekeeper is a better cook than any restaurant in Washington. She is a simple woman with no education, from Chile, and she just happens to have a superhuman talent. She being such a good cook, she achieves wonderful effects with very strange ingredients, and strange combinations of ingredients. Israel’s success as a state has been made possible by Arab threats of different kinds. Arab violence or threats of violence are part of the Israeli soup. There are certain levels of violence that are so high that they’re damaging, and there are also levels that are so low they are damaging. There is an optimum level of the Arab threat. I would say for about nine days of the 1973 war, the level of violence was much too high. Even when Israelis were successful, the level of violence was destroying the tissue of the state. Most of the time, the violence is positive.

Varieties of inequality

Money isn't everything.

TheMoneyIllusion � Varieties of inequality

Volcker Rule Divides Regulators - NYTimes.com

Five agencies have to weigh in on the Volker rule. This is part of the problem. There are too many agencies regulating financial transactions. Too much room for regulatory arbitrage. Lobbyists for the banksters know how to divide and conquer.

Volcker Rule Divides Regulators - NYTimes.com

Show the Fed more forbearance - FT.com

The tea party might be the only populist movement in history that has called for harder money. This probably means that this populist movement has been co opted.

Show the Fed more forbearance - FT.com

Sunday, October 16, 2011

Does algorithmic trading improve liquidity? — Marginal Revolution

Algorithmic trading improves liquidity, at least in large cap stocks.

Does algorithmic trading improve liquidity? — Marginal Revolution

Deng Xiaoping and the Transformation of China - FT.com

Deng Xiaoping and the Transformation of China - FT.com

Lunch with the FT: Mitsuko Uchida

Insights into Japanese culture

“Japanese culture has two extremes – utter simplicity and over-the-top vulgarity. "

Lunch with the FT: Mitsuko Uchida - FT.com

White House Starts a Mini-War in Africa | FDL News Desk

Why do we always "seek out monsters to destroy"
and forget MacArthur's advice?

White House Starts a Mini-War in Africa | FDL News Desk

Now Chuck Schumer is just toying with China

Currency devaluation is an easy political call and the evidence for it seems strong. However:

"I wonder if we’ll ever learn. We kept pressuring countries like Japan, Germany and Switzerland to appreciate their currencies. And then their currencies do appreciate very sharply. But the current account surpluses remain very large, because currency appreciation doesn’t address the root cause of those surpluses. Now we are engaged in the same fruitless quest with China. What a waste of time."



TheMoneyIllusion � Now Chuck Schumer is just toying with China

Thursday, October 13, 2011

DVA Gains

"It's so bad that it is good"

Statement 159 Helps Unhealthy Banks Book Healthy Earnings

Nein, Nein, Nein

Limerick Poems on Finance and Economics by Dr. Goose - Limericks �conomiques: Taxed to the Nines

Clive, don’t change the subject

The problem is demand, not regulatory or tax uncertainty. The argument matters because of the policy implications. If the demand problem is not acknowledged then all the Republicans try to do is reduce taxes and do away with regulations.

Clive, don’t change the subject | Economic Policy Institute

Did Fannie Cause the Disaster?

This has become a very partisan argument. Republicans blame the GSE's and CRA for the sub-prime disaster and the liberal Democrats feel obliged to defend them. The defense is weak. Even though they were late to the game, the GSEs certainly poured oil on the sub-prime fire and made a bad situation much worse. Much more than any Wall Street bank, the GSEs are an example of privatization of profits and the socialization of risk. How much of their bonuses have Johnson and Raines returned?

Did Fannie Cause the Disaster? by Jeff Madrick and Frank Partnoy | The New York Review of Books

Wednesday, October 12, 2011

What Smaller Government Looks Like in the US

A shocking table. Half of the decline in government related employment (25o,000 workers) is in education. Not a way to win the future. More like WTF.

The Street Light: What Smaller Government Looks Like in the US

Econbrowser: Crowding Out Watch, Again

Econbrowser: Crowding Out Watch, Again:

TIPS spreads are negative.
At TBP Conference yesterday, there were still strategists worried about inflation. But then again there were hedge fund managers calling for 10,000 on gold.
From the comments:
"I will also note that a lot of the decline took place after the end of purchases under QE2 at end-2011Q2." So it is not just the Treasury manipulating the markets.

The Woman Who Knew Too Much

Elizabeth Warren for Senate


The Woman Who Knew Too Much | Politics | Vanity Fair

Tax Ju Addicted to tax havens: The secret life of the FTSE 100


How tax havens work: UK edition. All but two of 100 companies have tax haven subs. The tax (avoidance) department of most multinationals is seen as a revenue center. Providing tax avoidance products is also a large part of the product line of investment banks.

Tax Justice Network: Addicted to tax havens: The secret life of the FTSE 100

Tuesday, October 11, 2011

Two Novels That Can Change Your Life

Lots of rich white fund managers love Atlas Shrugged.

QOTD: Two Novels That Can Change Your Life | The Big Picture

SEC Charges Bank Executives With Hiding Millions of Dollars in Losses During 2008 Financial Crisis

Obama was wrong. There were many illegal acts by banks and bank executives during the crisis. The charges have just not been filed. This is the first charge that I have seen.

“Today’s charges reflect an all too familiar pattern – corporate executives once seen as rising stars embrace deception to avoid losses and conceal negative news, with investors and the FDIC insurance fund left to pick up the pieces,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “But accountability for these executives begins today.”

But when will John Mack of Morgan Stanley or Dick Fuld of Lehman be charged?


SEC Charges Bank Executives With Hiding Millions of Dollars in Losses During 2008 Financial Crisis

Economic crisis: This time was different, and could have been more different still | The Economist

The fed could have done more.

Economic crisis: This time was different, and could have been more different still | The Economist

If Banks Are Outlawed, Only Outlaws Will Have Banks - NYTimes.com

If Banks Are Outlawed, Only Outlaws Will Have Banks - NYTimes.com

Sunday, October 09, 2011

Saturday, October 08, 2011

Did Steve Jobs give good advice? | The Moral Sciences Club | Big Think

Just settle. Most of us have to.

Did Steve Jobs give good advice? | The Moral Sciences Club | Big Think:

"Now notice: doing what you love, and never settling until you find it, is a costly signal of your career prospects. Since following this advice tends to go better for really capable people, they pay a smaller price for following it. So endorsing this strategy in a way that makes you more likely to follow it is a way to signal your status."

Better advice
"Reconcile yourself to the limits of your talent and temperament and find the most satisfactory compromise between what you love to do and what you need to do feed your children" is rather less stirring, "


And from the comments:
"The advice is more traditionally given in relation to marriage. If you go into a relationship thinking that you’re settling, you’ve undermined it from the start. Of course you’re settling and making compromises – but the brain has a wonderful capacity to ignore this fact if you let it. Some people honestly believe they have the perfect partner,
And I think there’s an analogy here to be drawn with careers."

Solar System Scale Model

Solar System Scale Model

In The Long Run We Are Undead

Another view of what OWS is saying. The zombie is wrong

In The Long Run We Are Undead - NYTimes.com

(The Wall Street Occupiers and the Democratic Party)

Occupy Wall Street is not the Tea Party of the Democrats.

Robert Reich (The Wall Street Occupiers and the Democratic Party)

U.S. Panel’s Advice on Prostate Test Draws Opposition

Medicine too, is part art, part science.

"At the heart of its advice is the startling finding that thousands of doctors in the United States have been doing many of their patients more harm than good."

U.S. Panel’s Advice on Prostate Test Draws Opposition - NYTimes.com:

Occupying Occupying Wall Street?

What is the message of occupying wall street?



EconoSpeak: Occupying Occupying Wall Street?