Random Links LIV

Costs of Credit Card Reform:  TANSTAAFL

Automatic DFE Swaps:

http://www.interfluidity.com/posts/1241225458.shtml

http://www.interfluidity.com/posts/1242632171.shtml

China, Demographics, & Renminbi Reserve Currency:  He makes an interesting analogy between China & Estonia on the question of demographics’ effect upon long-term economic strength.

Household Deleveraging & Consumption:  Why the former may keep the latter depressed for some time.

Bush, Obama, & the Black September War:  Meet the new boss….

Danish Mortgage:  My favorite mortgage system’s still ticking….

On the Veracity of Anonymous Speech:  Why the two aren’t necessarily mutually exclusive.

Liquidity Risk:  Granted, liquidity was an issue in the crisis.  But even this study admits that there was also credit risk at work – illiquidity wasn’t arising from pure panic, but rather from severe risk-aversion arising from justified concerns re. institutions’ solvency.  The solution, therefore, wasn’t guarantees or LOLR operations (except initially); but rather to kill off the solvency concerns by determining who was solvent & who wasn’t, and killing off the latter.  I.e., the “Swedish solution”.

China & Gold:

The last couple paragraphs of this NYT article give the lie to those who think China can easily diversify out of dollars via gold stockpiles.  And, as Setser points out, other commodities have non-trivial risks, too.

Unemployment & Freedom:

When you read the history of the Great Depression, it’s hard not to notice another horrible cost: Unemployment undermines support for a free society by robbing ordinary people of their independence and self-respect.

This is the modern-economy equivalent of “No civilization is more than three meals away from collapse”, and one of the major reasons I’m not a liquidationist.

IQ, College, & Signaling:

If non-teachable and teachable employees can both do well on aptitude tests, that is not a good signal. But if only teachable employees can sit through college classes and pass them, then a college degree is a good signal.

One possible counterpoint to the notion that college is basically an IQ test – clearly, college does “test” for other stuff as well.

Explaining CRE Cap Rates:

http://real-estate-and-urban.blogspot.com/2009/05/cap-rates-and-commercial-real-estate.html

http://www.calculatedriskblog.com/2009/03/cre-cap-rate-expansion.html

“Cap Rate” = investor’s expected return on their capital investment in CRE.  Hence, higher cap rate + constant or falling cash flow = lower prices.

Efficiency & Economic Growth:

This reminds me of those who attribute at least part of post-Depression economic growth to increased productivity.

Broadband Cloaking:  Nifty….

Chinese SOEs as Value Destroyers:  Below-market interest rates may be keeping large Chinese conglomerates on life support.

Dollar Crash Watch

Credit, Speculation & Financial Institutions

Economic Crisis, Russian Edition

Changing Brady Campaign Rhetoric

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