Random Links X

Atlas Shrugged in Boliviahttp://www.washingtonpost.com/wp-dyn/content/article/2008/05/04/AR2008050402147_pf.html

Civilizations have the morality & ethics that they can afford:


Geopolitics of China:


Cheese as Collateral:



American Debt Repudiation:


Chinese Stimulus:

…via infrastructure & social spending:  http://eapblog.worldbank.org/content/considering-chinas-options-in-weakening-global-economy

…via wage increases:


…via stupid lending:

http://mpettis.com/2009/01/all-but-the-kitchen-sink/ (he starts discussing “kitchen sinks” about halfway down)


Regarding the latter…Hmmm…so China’s trying to stave off recession/anemic growth in the same way the US did (**) from ’03-’08 – via massive extensions of credit using poor lending standards virtually guaranteed to generate tons of dud loans.  Nice.

…And why China needs (lots of) stimulushttp://blogs.ft.com/wolfforum/2009/01/how-will-china-deal-with-the-us-adjustment/

(Intelligent) Conservative/Libertarian Stimulus Prescriptions:



2009 vs. 1933http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4339501/Bad-news-were-back-to-1931.-Good-news-its-not-1933-yet.html

Evans-Pritchard has a flair for the dramatic, but he does give a good flavor of the mood of the ’30s.

Why banks aren’t (and shouldn’t be) lending:



http://www.nakedcapitalism.com/2009/01/quelle-surprise-big-banks-who-got-tarp.html (about halfway down – note Yves Smith’s no fan of Wall Street)



Stimulus Commentaryhttp://blogs.wsj.com/economics/2009/01/29/economists-debate-diverse-perspectives-on-stimulus/

Loan defaults & 10% unemploymenthttp://online.wsj.com/article/SB123293202890614265.html

(Note that 10% unemployment isn’t beyond the realm of possibility for the current recession.)

Toxic Waste Bonuses:


I found this utterly hilarious when I first read it.

Emerging markets economic troubles:


US Treasuries denominated in foreign currency:

Story:  http://www.bloomberg.com/apps/news?pid=20601087&sid=aFgHlh.Dn4Lc&refer=home

Commentary:  http://www.nakedcapitalism.com/2008/11/japanese-float-idea-of-treasury-selling.html

Expect to hear more about this if our foreign creditors start choking on the next few years’ worth of massive Treasury borrowing.  FWIW, this strikes me as a horrible idea; even if “Obama bonds” carried lower interest rates, they’d do so at the price of saddling our government with potentially massive foreign currency risk.  If the dollar were to decline significantly – as it did, e.g., in the late ’80s & early ’00s – we’d find the dollar value our foreign-denominated debt booming.

50 year Treasury bonds:



(Note that the former preceded the latter….)

Risk & the Financial Crisis:


FWIW, my answer to Thoma’s question is “all of the above”.

America v. Israel:


Interesting.  An America in need of Iranian assistance in Afghanistan may end up hanging Israel out to dry.  Recall that our alliance with Israel is a byproduct of the Cold War; it’s worth considering whether such an alliance still serves US national interests.

(**) It can be argued – e.g., here & here – that HEL(OC)-financed spending boosted consumption during the ’00s.  Add in the contribution to economic growth from “investment” in housing (and the jobs it provided) during that timeframe…which was also funded by crap mortgages.  In other words:  Much of our ’00s growth was funded by crap RE-related loans (both housing & commercial).


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