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.
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Monday, October 31, 2011
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.
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.
Sunday, October 30, 2011
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
“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.
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.
" 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."
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
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%
Or at least a bit player.
Sunday, October 23, 2011
You’re Doing It Wrong
On Why financial regulation must be principles based, not rules based.
Break up the Big Banks
A good summary of recent literature on the reason to break up big banks.
Wednesday, October 19, 2011
Lessons from the Crash
Apparently Beranke has learned nothing, despite what he says in his speech yesterday in Boston. This is moral hazard at the highest level. ML is moving risk from an uninsured entity to an insured one, after the fact. Who will lose? You guessed it, you, not the ML traders or BAC bondholders.
Display of graphical information
This shows the regressiveness of a VAT combined with a low flat tax. Unfortunately, many in the Republican party will see this as a feature and not a bug.
Tuesday, October 18, 2011
Yves Smith does not like Elizabeth Warren
Warren, like everyone, has flaws. But there must be something more behind this level of criticism.
Monday, October 17, 2011
Edward Luttwak Talks Israel and Bin Laden – Tablet Magazine
Fascinating take on foreign policy from someone I have never heard of...
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.
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.
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.
Sunday, October 16, 2011
Does algorithmic trading improve liquidity? — Marginal Revolution
Algorithmic trading improves liquidity, at least in large cap stocks.
Lunch with the FT: Mitsuko Uchida
Insights into Japanese culture
“Japanese culture has two extremes – utter simplicity and over-the-top vulgarity. "
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?
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."
Thursday, October 13, 2011
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.
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?
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.
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.
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.
Tuesday, October 11, 2011
Two Novels That Can Change Your Life
Lots of rich white fund managers love Atlas Shrugged.
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?
Monday, October 10, 2011
Sunday, October 09, 2011
Solyndra: A bad bet
Solyndra: A bad bet Obama should regret - The Washington Post: The important lesson is that the government “is a crappy vc”
Financial crisis and stimulus:
Financial crisis and stimulus: Could this time be different? - The Washington Post: If you believe Santelli’s rant kicked off the tea party, then that’s what the tea party was originally about: forgiving housing debt.
Origins of the Tea Party
interfluidity � The lump of unfairness fallacy:
If you believe Santelli’s rant kicked off the tea party, then that’s what the tea party was originally about: forgiving housing debt.
Saturday, October 08, 2011
Did Steve Jobs give good advice? | The Moral Sciences Club | Big Think
Just settle. Most of us have to.
"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,
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."
(The Wall Street Occupiers and the Democratic Party)
Occupy Wall Street is not the Tea Party of the Democrats.
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."
Friday, October 07, 2011
Late in life surgery
Sometimes studies ignore the obvious. First, surgeries are inherently dangerous procedures and the risk of failure is high. Second, surgery is often the last resort for very sick patients.
Steven Jobs as a Baumeister Male
If everyone took Steve Job's advice " most everyone else wouldn't stay long on any job, and most stuff would get done pretty badly."
China labour costs push jobs back to US - FT.com
Why we do not need a currency bill now. Labor costs and other input costs are rapidly climbing in China.
Thursday, October 06, 2011
Chart Of The Day
Defense dollars are more than just the defense department budget - they are nearly twice that amount.
Wednesday, October 05, 2011
Misrepresentations, Regulations and Jobs - NYTimes.com
It is demand, not taxes and regulations, that cause layoffs.
Tuesday, October 04, 2011
Monday, October 03, 2011
Economics in the Next Ten Years?
55 Papers on Economics in the next ten years.
Why the Obama Administration Invested in Solyndra : The New Yorker
Why the Obama Administration Invested in Solyndra : The New Yorker:
Lost in teh Solyndra debate, the
"implicit, but incredibly costly, subsidy that oil producers have received in the form of the Fifth and Sixth Fleets."