et alli.

Speaking Personally

George Stephanopolos asked Larry Summers about use of the "Depression" term in high places (1) (2) and Summers gave the standard answer...

"We’re in a very serious situation, George. This is worse than any time since the Second World War. It’s worse than I think most economists like me ever thought we would see. But let’s remember. In the Depression, the unemployment rate was 25 percent. GDP had fallen in half. We were really in a very different situation than that"

...followed by an offered segue which Stephanopolos accepted.

Some blogers using the "D" word cite Alice Rivlin...

'Because of the institutions established as a result of the Great Depression, we are not going to have the kind of meltdown that the financial crisis of the 1930s precipitated, when unemployment went to 25 percent and almost everybody was in deep trouble. Referring to the current crisis as the deepest recession since the Great Depression does not mean it will be comparable to the Great Depression. But, it could be long and deep like the recession of 1980-82. It is important to remember why we got into this mess. We are in trouble basically because as a country we were spending too much, borrowing too much, and living beyond our means. That is something people like me have warned about for a long time, but few of us foresaw that it would precipitate this kind of meltdown. The reason it did is that we had not modernized our regulatory systems to keep up with innovation in the financial sector.'
Alice Rivlin

1.  IMF Says Advanced Economies Already in Depression, http://www.bloomberg.com
/apps/news?pid=20601087&sid=a6aaWZ8ab8yU&refer=home

2.The Economic Outlook and Washington Area Nonprofitshttp://www.brookings.edu/speeches/2008/1215_dc_nonprofits_rivlin.aspx


Reading this review, Manhattan _ Kansas _ murder mystery ,  I think the point of
Beattie's  book is the "cats and mouse" game between a person of interest and legal system investigators.  This game took several months to play out and in the end a highly intelligent dark triad suspect was convicted on circumstantial evidence. 

It doesn't really matter too much who ratted Amy Brian out .  It doesn't matter that troops in combat zones with her knew about her sexuality and didn't care enough to complain.  What matters, as the war in Iraq draws to a Vietnam type conclusion and military forces face downsizing, is that the past pattern of "sexual cleansing" gays from the military during peace time downsizing not  be repeated.

Three 

Important Stories

Downsizing America

Executive Compensation in Japan

Remarks by President Barack Obama on Executive Compensation with Secretary Geithner

Quotes and Pointers

'Here is a new fact of life: America’s economy is getting a little smaller. This “shrinkage” is likely to be a secular — as opposed to a cyclical — sets of changes.'

Barry Ritholtz

'Japanese executives earn substantially less than U.S. executives.  We find that the
median president at the largest 500 firms earned about $420,000.  The median president
at the largest 100 earned about $530,000.  We estimate that the elasticity of an
executive’s taxable income with respect to firm size is about .05.  Its elasticity on with
respect to  firm profitability is about .06.

Other variables that lead to higher executive incomes are for the executive to hold
positions at several firms instead of just one, to hold more shares in the firm that employs
him, to be older, and to work at a firm that uses stock options to compensate executives.  
Graduating from a prestigious university is negatively correlated with income for corporate presidents, because the richest executives are entrepreneurs who are less likely
to go to the best colleges, or, indeed, to any college at all.'
Minoru Nakazato, J. Mark Ramseyer & Eric B. Rasmusen  

'This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we believe that success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.

      For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste – it’s a bad strategy'
Barack Obama

Out and About on the Net.

Manhattan _ Kansas _ murder mystery

"Language of Evil" by Robert Beattie (Signet True Crime, 341 pages, $7.99 paper)

German bishops say 'no room' for Holocaust denier in Catholicism  -- how will this Bishop of Rome deal with Bishop Williamson?

Kansas Army Guard discharges gay soldier -- "Someday that policy will change." Amy Brian

Drybulk shippers soar as rates rise   --  Green Shoots?

Freezing Tofu

Carbon E7 police car headed for duty in 2012  --  So why the rear "suicide doors"?

Speaking Personally

Happy New Year.  Its the Year of the Ox.  "Out with the old...In with the new"  Note change of avitar. 

Three Important Stories

Resolution Trust Corporation

Richard Williamson (bishop)

Roger Shimomura | Stereotypes and Admonitions, 2003

Quotes and Pointers

'Multiple Investor Fund (MIF)

Under the MIF Program, the RTC established limited partnerships (each known as a “Multiple Investor Fund” or “MIF”) and selected private sector entities to be the general partner of each MIF. The MIF structure contemplated the following:

• The RTC conveyed to the MIF a portfolio of assets (principally commercial non- and sub-performing mortgage loans) which were described generically, but which had not been identified at the time the MIF general partners were selected. The assets were delivered in separate pools over time, and there were separate closings for each pool.

• The selected general partner paid the RTC for its partnership interest in the assets. The price was determined by the so-called Derived Investment Valueliquidation value of assets based on a valuation formula developed by the RTC), multiplied by a percentage of DIV based on the bid of the selected general partner. The general partner paid its equity share relating to each pool at the closing on the pool. The RTC retained a limited partnership interest in the MIF.

  (“DIV”) of the assets (an estimate of the

• The MIF asset portfolio was leveraged by RTC-provided seller financing. The RTC offered up to 75% seller financing, and one element of the bid was the amount of seller financing required by the bidder. Because of the leverage, the amount required to be paid by the MIF general partner on account of its interest was less than it would have been if the MIF had been an all-equity transaction.

• The MIF general partner, on behalf of the MIF, engaged an asset manager (one or more entities of the MIF general partner team) to manage and liquidate the asset pool. The asset manager was paid a servicing fee out of MIF funds, and used MIF funds to improve, manage and market the assets. The asset manager was responsible for day-to-day management of the MIF, but the general partner controlled major budgetary and liquidation decisions. The RTC had no management role.

• After repayment of the RTC seller financing debt, net cash flow was divided between the RTC (as limited partner) and general partner in accordance with their respective percentage interests (the general partner had at least a 50% interest).

Each of the MIF general partners was a joint venture among an asset manager with experience in managing and liquidating distressed real estate assets, and a capital source. There were two MIF transactions involving over 1000 loans having an aggregate book value of slightly over $2 billion and an aggregate DIV of $982 million .'  http://en.wikipedia.org/wiki/Resolution_Trust_Corporation

'Williamson is viewed as being at the hardline end of the traditionalist spectrum.^[14][15][16] He opposes compromise with the Vatican^[17][18], accusing it of deceit^[19] and of being under "the power of Satan"^[16][20], and judges reconciliation between the Society and the Holy See to be impossible, noting that some SSPX members might refuse to follow the Society even if an agreement were reached.^[21][3][18] Williamson holds that the SSPX is not schismatic but the genuine Roman Catholics that keep the orthodox "complete faith".^{[clarification needed][22][20][23][24]}

Like the SSPX in general, Williamson opposes the changes brought about by the Second Vatican Council, which he sees as liberal, neo-modernist, and destroying the Catholic Church.^[20][23][22] Among the changes he decries are informality and simplicity in worship, preferring "beauty and majesty, beautiful music and vestments." Williamson considers the mainstream Catholic Church after the Second Vatican Council to be too forthcoming of other denominations and religions, viewing Ecumenism an error.^[25][20] He has criticized the theological understanding of both Pope John Paul II, whom he attested a "weak grasp of Catholicism", and Pope Benedict XVI.^[26][15]

Williamson holds strong views regarding gender roles and dress. He opposes the wearing of trousers or shorts by women,^[27][28][29] and has urged more manliness in men.^[28][29]

Williamson supports conspiracy theories regarding the assassination of President Kennedy and the collapse of the Twin Towers, denying that the latter were terrorist attacks but were instead staged by the U.S. government.^[29][3][30]

Williamson has expressed controversial views about Jews. He called Jews "enemies of Christ" and urges their conversion to Catholicism.^[31][32][33] He claims that Jews and Freemasons have contributed to the "changes and corruption" in the Catholic Church^{[34][35][36][31]} He has also stated that Jews aim at world dominion^[3][37] and has endorsed The Protocols of the Elders of Zion.^[3][38] Williamson has denied that he is antisemitic, stating that he goes against "adversaries of Our Lord Jesus Christ", that not all Jews are such, and that he also attacks other other groups such as Communists and Freemasons.^{[3][31][32][16]'}

http://en.wikipedia.org/wiki/Richard_Williamson_(bishop)#Episcopal_succession

'NO THANKS, 2003
Acrylic on canvas, 20 x 24 inches
SOLD

Accompanying text:
In March, 1942, as incarceration of over 120,000 Japanese Americans into concentration camps began, the Chancellor at the University of Kansas expressed his support for acceptance of college-aged Japanese Americans into the University. In early April, 1942, the Kansas Board of Regents vetoed the Chancellor's decision, ruling that the University would not accept any Japanese American students.''

http://www.gregkucera.com/shimomura_stereotypes.htm

Out and About on the Net.

 

Roger Shimomura

 

Antihaitianismo

 

0% — Act Now !

 

 

"Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions. Nothing pains some people more than having to think."
Martin Luther King, Jr.

"We are a people of common hopes, of common dreams..."
Barack Obama Philadelphia 30th St. Station 1/17/09

We may have all come on different ships, but we're in the same boat now.
Martin Luther King, Jr.

Three 

Important Stories

President Barack Obama's inaugural address

Refuted economic doctrines #1: The efficient markets hypothesis

Obama asks Gene Robinson to give Inaugural concert invocation

See also: Gay Bishop Gene Robinson Left Out Of HBO Concert Coverage

HBO will include omitted invocation in re-broadcasts of 'We Are One' concert

Quotes and Pointers

'Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends — hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism — these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence — the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed — why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled.'
Barack Obama

'Once the EMH is abandoned, it seems likely that markets will do better than governments in planning investments in some cases (those where a good judgement of consumer demand is important, for example) and worse in others (those requiring long-term planning, for example). The logical implication is that a mixed economy will outperform both central planning and laissez faire, as was indeed the experience of the 20th century.'

John Quiggin

'It's a mark of Obama's raw power at the moment as much of his unifying message, that he can bring in fundamentally opposed Christian leaders like those two, without either walking out. (Though, to be fair, they're a safe 48 hours apart.)

Still, it's a mark of just how different, when it comes to mainstreaming gay leaders, it is to have a Democrat in the White House than a Republican, or even than a 1990s Democrat.'

Ben Smith

'I do wonder whether the idea of Anglicanism as a liturgical movement is coming to an end. The movers and shakers of the new fundamentalist Anglicanism growing out of places like Sydney do not, I think, bother their heads much about liturgy. And every so often when, in various discussion groups, I raise liturgical issues, someone will invariably pipe up and say that liturgy simply does not matter when set against hunger, starvation, dictatorship and other evils. It is, I have to admit, easy to be bullied into submission at such moments.

And yet, it seems to me that liturgy matters. It is there at the moment where we come to worship God, and how can we say that how we address and speak with God doesn’t matter. It is how we in part express our faith, and it is how we allow God to touch us. And when it ceases to be familiar to the people, a lot of what we believe in theology can also become distant.

When I first became a liturgical Anglican, it was universal in churches I would attend for Christmas to bow, genuflect or kneel at the ‘incarnatus’ in the creed. Right then, it is a meaningful way for us to express something about the Incarnation. But, it seems, not so much any more. I notice that fewer and fewer people do it, even amongst the clergy.'

Ferdinand von Prondzynski

Out and About on the Net.

Full Employment AND Price Stability

P.R. Methodist Church

Williams' music to Obama's ears

Speaking Personally

Forbes article on how to be a good billionaire gives insight into a segment of society that gave us Carnegie libraries.  One of the Sunday Morning news-maker interview shows mentioned a Federal grand jury investigation of New Mexico state contracts.  Its an important story because Bill Richardson appointed many of the people who gave the contracts and he is now probable US Secretary of Commerce.  The explanation quoted below is plausible. The press thankfully is not giving Richardson the Rod Blagojevich treatment but it should keep a careful eye on the grand jury proceedings. 

Three 

Important Stories

How To Be a Good BillionaireGrand Jury Probes
 
Richardson Donor’s New Mexico Financing Fee
 

Yearly growth rate ticks above record low: ECRI

 

Quotes and Pointers

'So if you're Nike, for example, and you just think, "I'm going to make money in whatever way I can cheaply in the third world," and you don't think, "Hang on, I've got a consumer brand with lots of people in the rich world who are predominately using our brand for leisure." You don't want to have their leisure experience tainted by the thought that some little kid in Africa is being exploited. Then you're not very good at understanding or managing the risks of your brands. You should actually say, "Well look, this is a leisure product bought by wealthy people in the Western world. We should really make sure that we look after our workers properly in the developing world." That penny has dropped with Nike very clearly.

And if you're Wal-Mart and you started to think about climate change, again how do you see it in terms of costs of renewable energy and your ability to use your supply chain to drive down costs? And [how do you see it in terms of] your customers want to have products they feel better about? Then you can actually use your purchasing power to make a huge difference that no charity is ever going to be able to match on the environment.

You can really make the argument that the penny dropping at Wal-Mart has probably done more for improving the environmental performance of all the firms working in China than anything any nonprofit has done or anything any foreign government has done in China. So those are not things that would have happened automatically. I don't believe that capitalism is so efficient that people simply always do the thing that is always in their rational self-interest.'

Matthew Bishop

'CDR was hired after responding to a Dec. 30, 2003, request for proposals from the New Mexico Finance Authority for investment advisory services.

Splitting the Mandate

Six companies answered the request, which contained two questions out of 39 items related to experience with interest-rate swaps and guaranteed investment contracts. A joint venture from Smith Barney and New York-based Ryan Labs Inc. received the top score of 99 percent. CDR had the second-highest score of 97 percent, authority records show.

Rather than select the Smith Barney/Ryan Labs team as both investment and swap adviser, the authority’s then- Chief Financial Officer, Keith Mellor, recommended splitting the mandate. The agency gave the swap adviser job to CDR, which received the same score as the Smith Barney/Ryan Labs team on the swap section of the proposals, authority records show.'

Martin Z. Braun and William Selway

"With WLI growth barely above its all-time low seen two weeks ago, the U.S. recession will persist in the months ahead."

Melinda Hubman

Out and About on the Net.

 

"Auld Lang Syne"

 

Out of Place: A HyperHistory of the Elusive Acoustics of Concert Hall Venues

 

Evo Morales  -- Mr. 50% to the people

 

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org:  seriatim

Speaking Personally

.

Merry Christmas/Happy Holidays

 

“Peace I leave with you; 

My peace I give to you;

 not as the world gives, do I give to you.

Let not your heart be troubled, nor let it be fearful”

(John 14:27 NASB

Three 

Important Stories

Best Buy Profit Sinks; Firm Will Shed Workers 

 

Angry, Outspoken Youths Become a Force in Darfur  

 

Leveraged ETFs and Large Late Day Trading Moves

 

Quotes and Pointers

 

"We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace.  We also believe that customers will continue to reward those retailers who understand their needs and desires, and offer relevant solutions at fair prices. Yet we clearly recognize that these changes require us to make significant adjustments."

Brad Anderson 

 

'In the long run, outsiders also worry that a cohesive militant group will organize across Darfur’s many camps, just as they emerged in the Palestinian territories and among Afghan refugees.

 

The shabab, strident in their politics, watch warily for any sign of compromise with the government of President Omar Hassan al-Bashir, who is being sought by an international prosecutor on charges of genocide and war crimes against the people of Darfur. Humanitarian officials suspect there are jails that the shabab help run in the camps, and that they mete out punishment like whippings to transgressors.

 

At Zalingei, United Nations officials have learned to give traditional sheiks 24 hours’ notice before any gathering outside the camps so that the sheiks can seek approval from elected shabab representatives.'

NEIL MacFARQUHAR 

'Leveraged ETFs, now numbering over 100 in total (see lists here and here), have recently become popular since they allow market participants to take 2X and 3X positions on popular stock and sector indexes. Many of the leverage ETFs utilize swaps and options to achieve their leverage ratios. Not surprising, when the linked index or sector falls, corresponding stocks in the ETF have to be sold at a two to three times greater rate, increasing the moves in the indexes. In fact, the trend has become so predictable that many proprietary trading desks actively trade the levered ETFs toward the end of trading days with large moves, knowing that increased buying or selling is on its way'
David Enke 

Out and About on the Net.

 

Our New Ruling Class... 

U.S. recession to worsen "significantly": ECRI 

Christmas Wreaths at Arlington Cemetery

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org:  golconda

Speaking Personally

Layoffs at NPR...What is the world/economy coming to and when will it be over?  NPR's layoffs are not due of declines in audience or local station revenues.  They are the result of drastic losses of interest income from the Krok foundation endowment and underwriting grants from corporate America.  NPR's interim CEO and President, Dennis Haarsager,  according to the report believes " economic pressures will continue to confront NPR for  several more years."

With ECRI's WLI at its worst level in 60 years my guess is that any "2009 January Effect" will be a sharp upward spike in a Bear Market...playable but   not investable.

Three 

Important Stories

The Year in Ideas 

Deflation has become inevitable

ECRI: Economy Remains at Cycle Low 

Quotes and Pointers

 

 'Elderly people reasonably dread falling: falls are the leading cause of death from injury in adults 65 and older.

Perhaps they need not worry anymore. This month the Japanese company Prop begins selling a wearable set of air bags to protect against falls. The device looks something like a fishing vest with a fanny pack attached. When its built-in motion sensors detect a fall, it inflates two air bags — one around the hips, the other around the neck — in a 10th of a second. Instant Michelin Man. It retails in Japan for approximately $1,400.'

http://www.nytimes.com/interactive/2008/12/14/magazine/2008_IDEAS.html

'

I reread my piece on Fisher’s Theory of Debt Deflation in Great Depressions the other day. One of the more confusing aspects is his assertion that the dollar “swells” as debt deflation takes hold. What he meant, of course, is that deflation increases the quantity of assets and the likely investment return each dollar purchases as deflation wrings debt and misallocation of capital out of the economy.

It is now clear to me that policy makers in the West are determined to apply every available resource to underpinning failure, misallocation and executive excess. As this discourages the honest saver from parting with cash, policy makers are ensuring that deflation will wreak its havoc on the financial and real economies of the world. Only when that deflation has played out and rational policies that reward market-based management and returns are restored will it be worthwhile to invest again. In the meanwhile, any wealth saved securely from state seizure will "swell" to buy more assets in future - a key aspect of deflation and a key means of restoring the control of the economy into the hands of more farsighted savers and investors.'
http://londonbanker.blogspot.com/2008/12/deflation-has-become-inevitable.html

'As a leading indicator, the WLI is demonstrating that economic conditions in the future are going to be worse than they are today.'

Steven Hansen 

Out and About on the Net.

 

Google Calls The Wall Street Journal 'Confused'

The January Effect After Really Bad Years In Stocks

Top 100 Stories of 2008

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org:  pleach

 

Speaking Personally

Mr. Donnelley went to congress again for money.  He drove this time.  He arrived at capital hill in GM's plug in electric the Volt...a game changer if there ever  was one.  Automotive lore is filled with game changers; Ford Taurus, Chryslers's Minivans, Studebaker, Packard, Pierce Arrow, Moon, and Detroit Electric.  Sometimes the "game changers" really do change the game but more often they are simply the final move.  Whatever happens to Detroit's motor companies the US will need to replace with  newer forms of transportation its current fleet of recreational trucks encouraged by exemptions from mandated fuel economy standards. 

President-elect Obama on Meet The Press seemed to describe for GM a prospect of government funded extra-judicial bankruptcy with a plan to save jobs and plant capacity for production of energy efficient cars without government getting into the day to day management of the company.  He said some auto companies, presumably Ford, are doing a better job.  Chrysler was not mentioned.

Expect rafts of regulation in the financial world to restore transparency and responsibility.

He rejected increases on fuel taxes when so many families are struggling.  He believes on principle that the economy does best when its benefits are widely spread and made clear that the trend of awarding more of  productivity increases to upper income citizens through tax policy will be reversed.

Rod Blagojevich, governor of Illinois, was arrested this morning accused of disgracing himself by seeking favors for state contracts and appointments.  He has been a good friend to liberal causes just as Senator Stevens was a good friend to federal employees. However, corruption is corruption and politicians need to learn it is a career ender.  

On Tuesday its snowing in central Kansas -- time to make chili and get ready to install a TV scheduled for delivery late this afternoon.  I have been window shopping for over two years.  I expected to buy from Sam's but they didn't have the highly rated by Consumer Reports model I want so Sears got the sale.  

Three 

Important Stories

FOMC Revolt ?

Education and income were strong factors in vote against gay marriage

New Province, of Something, Begun 

Quotes and Pointers

 

'Say what you will about the Bernanke plan, but at least he is trying to save the economy — not rescue speculators.'
Barry Ritholtz 

'Baldassare said it's difficult to say from the polling why people with higher incomes and a college degree tend to support same-sex marriage.

"It has to do with exposure to different ideas," Baldassare said, struggling to interpret that link. "It's perceptions about lifestyle differences, tolerance for differences, broader view of social trends and issues — all those things tend to come with more education.

"I didn't really expect to find this" in the survey, he added. "I hadn't thought about probing it."'

http://www.mercurynews.com/news/ci_11131721

'But still the question remains: Of what are they a Province? But of course that does not matter, because the Constitution and Canons, provisional though they may be, make no reference to any point outside the province except to say that they will be in communion with those they wish to relate to, and who will relate to them. There is no mention of the Archbisho

p or the See of Canterbury.'
Mark Harris

 

Out and About on the Net.

 

URBAN TAKEDOWN: MUMBAI

Report Links State Gun Laws To Rates of Slayings, Trafficking

ECRI: Economy Still Worsening (New Week, Same Title) 

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org:  absquatulate

 

Speaking Personally

 Friday news of Tim Geithner's appointment to Treasury seemed to reassure the markets...again.  Testimony in congress by the CEO's of Chrysler, GM, and Ford earlier in the week set off this week's downward market trend.  Volatility continues with huge moves, on average over time, two dollars down for every one dollar up -- a classic proportion.   Its notable that Citibank shares lost ground during that late market rally.   At some point the markets will settle on a low and await signs of a recovery.  On Face The Nation Austan Goolsbee, Obama's apostle to Wall Street, spoke of getting things off with a bang in the first days of Obama's presidency and target recovery within two years.  So after a five year market up trend followed by a one and one half year decline which equaled all of the gain we are looking at a minimum 18 month market trough.  

Many commentators point to Fiat as a big industrial concern, 5% of Italy's GNP, which successfully restructured and recovered in the period 2000-2006.  During the same period Rover in the UK disappeared and its carcass was sold off mostly to Chinese companies.  Naturally business commentators give the lions share of credit to the company's CEO.  However the recovery he orchestrated involved subsidies and "shock absorbers" from the Italian government and many concessions from Italian labor unions. See: The European Industrial Relations Observatory's (EIRO)  database searching on terms like Fiat,restructure, and social shock absorbers.  It should be noted that despite successful recovery Fiat like most other auto companies is now seeking assistance from its government in a time of world wide over capacity in auto plants combined with the likelihood or rather possibility of world wide deflation.  

Three 

Important Stories

Le Citi Toujours Dormer... 

Dr Peter Morici: US Senate Testimony on US auto industry bailout

U.S. intel panel warns of coming national decline

Quotes and Pointers

 

'Should Citi's management have planned for and guarded against this explosion in the risk premium? I certainly did not expect it--I did not think we could see this big a rise in the risk premium outside of a real cousin of the Great Depression, and I thought that modern tools of macroeconomic management would keep such a thing from happening. I never expected to see the unemployment rate hit 15% in my lifetime. I still don't.

It's in the nature of a bank to get into trouble and be on (or over) the edge of failure in a financial crisis. Banks exist to provide liquidity and safety: to turn the long-term highly-risky investments in plant, equipment, and infrastructure that are our social capital into the short-term liquid largely-safe assets that savers largely want. This means that banks are--if they are doing there job--long duration and long risk, and their values crater whenever there is a financial crisis because a financial crisis is a sharp fall in the value of long-duration and high-risk assets.'

J. Bradford DeLong

'Without a new labor agreement that brings wages, benefits and work rules in line with those at the most competitive transplant factories, and without reduced debt and other liabilities, the Detroit Three will continue to lag in product innovation and field too few attractive new vehicles, because their higher costs, debt and other liabilities require them to spend less on new productive development than they should. Also, they are inclined to field products with less desirable content to compensate for higher costs. As consumers find vehicles made by Japanese and other transplants more attractive, like those imported from Korea and eventually from China, the Detroit Three will cede market share of one or a few percentage points each year. 

If Chapter 11 is put off, the successors to GM, Ford and Chrysler that emerge from a bankruptcy reorganization process will be smaller and support fewer jobs than if these companies endure this difficult transition in 2009. 

More jobs can be saved among GM, Ford and Chrysler and their suppliers if bankruptcy reorganization is endured now than in the future.'
Peter Morici

'The report is also an indirect but very explicit repudiation of the grand strategy of outgoing President George W. Bush, Vice President Dick Cheney, former Defense Secretary Donald Rumsfeld and the neo-conservative intellectuals who served them. 

It clearly rejects their assumption that a new century of U.S. global supremacy, leadership and even control more total than any the United States enjoyed in the past is likely or even achievable.

Instead, the NIC report warns of an increasingly uncontrollable, fragmented world with strategic, military and economic power increasingly diffused -- and with the danger of local and wider wars, especially over scarce resources, greater than ever before.'

MARTIN SIEFF 

Out and About on the Net.

 

Plan to Strengthen Civil Rights at change.gov

Attorney General Mukasey Collapses During Speech

Prepackaged Bankruptcy for Automakers

B.C. brewery toasts tough times with Bailout Bitter beer 

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org:  mythologem

 

Speaking Personally

Sometime in his first term President elect Obama will face the great dilemma President Bush faced on taxes in his four year presidency.  I suspect conditions will force Obama to do the same and raise taxes during the third or fourth year of his first administration. 

Senator Biden during the campaign spoke of early challenges to an Obama presidency from abroad.  U.S. Roman Catholic bishops have warned the President elect that his heavy support from Catholic voters should not be taken as a referendum on abortion.  Cardinal Francis George said "If the election is misinterpreted ideologically as a referendum on abortion, the unity desired by President-elect Obama and all Americans at this moment of crisis will be impossible to achieve.  ... Aggressively pro-abortion policies, legislation and executive orders will permanently alienate tens of millions of Americans, and would be seen by many as an attack on the free exercise of their religion."   I don't see a connection between available abortions and "free exercise of their religion"  unless free exercise of religion means using government to enforce their religious views on the general population.

T. Boone Pickens said on Meet The Press he had heard President-elect Obama say twice that in ten years the U.S. will be importing no oil from the middle east.  Its true.  "Oct 15, 2008 ... OBAMA : I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela." 

Something will have to be done for the automotive industry but America should draw a line or else there will be pleas to bail out Hollywood and Broadway.  David Bonior is whispered as Obama's pick for auto industry czar.  If this happens it will be interesting to see if he is tough enough to order entire plants and lines closed. 

Three 

Important Stories

The Plum Book (United States Government Policy and Supporting Positions): 2008 Edition

GSA Transition Directory

Special Report Energy & Genius

Quotes and Pointers

 

'APPENDIX NO. 5
OFFICE OF THE VICE PRESIDENT
The Vice Presidency is a unique office that is neither a part of the executive branch nor a part
of the legislative branch, but is attached by the Constitution to the latter. The Vice Presidency performs
functions in both the legislative branch (see article I, section 3 of the Constitution) and in the executive
branch (see article II, and amendments XII and XXV, of the Constitution, and section 106 of title
3 of the United States Code).
http://www.gpoaccess.gov/plumbook/2008/2008_plum_book.pdf

'The executive functions of the Vice President include participation 
in Cabinet meetings and, by statute, membership on the National Security 
Council and the Board of Regents of the Smithsonian Institution.'
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2008_government_manual&docid=214669tx_xxx-18


'This special issue of Forbes explores both the supply and the
demand sides of energy economics. On the supply side we look at
biofuel-emitting bacteria, micronukes, smarter grids, clean coal and
that perennial favorite of politicians, ethanol. On the demand side we
look at hybrid cars, the metal mining that may make hybrids more
compelling and a utility chief who wants to get paid to produce fewer
watts.'
Edited by Bruce Upbin 

Out and About on the Net.

 

A Kurosawa Celebration, From Many Angle

120 Ways to Boost Your Brain Power

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org: logy

Speaking Personally

I enjoy the ritual of voting.  So on Tuesday morning about 10:45 at Grace Church it felt good to put my ballot in the tabulator and watch its counter changeover from 772 to 773.  My vote made no difference since Kansas is a Red state but the Presidential election outcome is pleasing.  The results of most local elections leave me feeling like an underdog who sometimes just wants to roll over.

An inflation adjusted chart illustrates the likelihood that we are in a secular bear market with the 2007 peak in total S@P returns coming in lower than the 2000 peak.  More immediately the Weekly Leading Index and other data from the Economic Cycle Research Institute indicate the United States is in a deep recession and there is as yet no indication of an end or even the middle.

President elect Obama's economic kitchen cabinet met in Chicago.  Obama gave his first press conference since the election but was not specific on methods other than 1) big fiscal stimulus to create jobs and 2) something to preserve jobs and manufacturing capacity in the U.S. automotive/support industries which is essential to the US industrial base.  Triage in these industries will be ugly.  In companies deemed unworthy of saving/loans, stockholders will loose whatever capital value they placed on their stock. Inefficient plants will join the rustbelt. Workers will lose high paid jobs and look for lower paid jobs in an 8-10% unemployed environment. Automotive pensioners and healthcare will need other sources of funding...this may not be a depression but it feels like the great recession.  Robert Reich calls it the "mini depression."

Rahm Emanuel was all over the Sunday morning news programs.   Fox News Sunday had John Podesta who is co-chairing the transition team.  Both emphasized "there is only one President  at a time."  On face the nation Emanuel outlined a middle class cash flow change with the average family today having $2000 less in income and $4000 more in health and education cost.  Initially Mr. Obama's program will address this $6000 cash flow problem with a new $1000 income tax deduction.  This is 60% more. stimulus than the 2008 tax rebate.  

Saturday, a local Mensan, Bob Beattie, author of Nightmare in Wichita: The Hunt for the BTK, spoke about his NEW book and made himself available to talk with our group about the Electoral College. He is involved in politics as well as election law.  Bob is a good guy and I have a copy of Nightmare in Wichita on my bookshelf in the small collection of Wichita/Kansas books.  He says there is not much overlap between the true crime and mystery book segments. For me that is very true. I enjoy  reading mystery but true crime leaves me cold.  I've never read In Cold Blood.  Clouds of Witness by Dorothy Sayers is my idea of good recreational reading. 

Three Important Stories

The Political Mind

A Conspiracy So Immense

   See also: Winter Lights Oxford: hysterical tosh

The Mini Depression and the Maximum-Strength Remedy

Quotes and Pointers

"We reason  in terms of frames, metaphores, and narratives."
George Lakoff

"here are some major themes. A frequent one in the US is that global elites are plotting – via the Bilderberg Group and the Council on Foreign Relations, among others – to establish a “One World Government” dominated by themselves rather than national governments. Sometimes, more folkloric details come into play, broadening the members of this cabal to include the Illuminati, the Freemasons, Rhodes Scholars, or, as always, the Jews.

The hallmarks of this narrative are familiar to anyone who has studied the transmission of certain story categories in times of crisis. In literary terms, this conspiracy theory closely resembles The Protocols of the Elders of Zion , featuring secretive global elite with great power and wicked aims. Historically, there tends to be the same set of themes: fearsome, uncontrolled transformative change led by educated, urbanized cosmopolitans.

Students of Weimar Germany know that sudden dislocations and shocks – rapid urbanization, disruption of traditional family and social ties, loosening of sexual restrictions, and economic collapse – primed many Germans to become receptive to simplistic theories that seemed to address their confusion and offer a larger meaning to their suffering."

Naomi Wolf

 

'So the crucial questions become (1) how much will the government have to spend to get the economy back on track? and (2) what sort of spending will have the biggest impact on jobs and incomes?

The answer to the first question is "a lot." Given the magnitude of the mess and the amount of underutilized capacity in the economy-- people who are or will soon be unemployed, those who are underemployed, factories shuttered, offices empty, trucks and containers idled -- government may have to spend $600 or $700 billion next year to reverse the downward cycle we're in.

The answer to the second question is mostly "infrastructure" -- repairing roads and bridges, levees and ports; investing in light rail, electrical grids, new sources of energy, more energy conservation. Even conservative economists like Harvard's Martin Feldstein are calling for government to stimulate the economy through infrastructure spending. Infrastructure projects like these pack a double-whammy: they create lots of jobs, and they make the economy work better in the future. (Important qualification: To do this correctly and avoid pork, the federal government will need to have a capital budget that lists infrastructure projects in order of priority.'

Robert Reich

Out and About on the Net.

Braveheart - THE Speech

NANO WIRE BATTERY

Presidential Power on the Road

et alli is cross posted at The Intelligence Forum 

A.Word.A.Day from Wordsmith.org: 

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