Archive for July, 2010

More Random Links

Posted in Econ, Law on 20100714 by Avenging Sword

Tyler Cowen and Brad DeLong explain why monetary policy via “helicopter drops” might be helpful.  Paul Krugman expresses skepticism, on economic and legal grounds.  Mark Thoma doesn’t seem to mind, but he’d prefer it be done via government spending rather than tax cuts.

Calculated Risk has a series of guest posts dealing with the issue of sovereign defaults.  So far, we’ve got parts 1, 2, 2B, 3, & 4.  Apparently the really interesting (to me) parts of the series – re. worst-case scenarios & knock-on effects – is yet to come.

Michael Pettis explains why China’s “nuclear option” of dumping Treasuries is overrated, and why we really ought to be worried about a diametrically-opposite scenario of massive Chinese capital exports.  And speaking of China, here’s an FT article about a huge Chinese ghost town, plus a post with pretty pictures of the same.

Megan McArdle provides some tips re. dealing with abusive debt-collectors.  See here and here.

In utterly-unrelated news, Marko Milanovic gives a nice overview of the issues at stake in the ICJ’s Kosovo independence case.

And apropos absolutely nothing, this guy thinks WWII would suck as a TV show.

About Those Ruthless Rich Walkaways….

Posted in Econ on 20100712 by Avenging Sword

So that NYT story regarding “rich walkaways” seems to be attracting some attention from the blogosphere, including Alexandria and The Other Blog.  I first heard about the story on Calculated Risk, who asked a key question that I’ve not seen addressed either in that story or in any of the (admittedly-limited) sample of econoblogospheric commentary I’ve read regarding it:

Were these borrowers really “rich”? Or did they just buy more home than they could really afford?

Along related lines…AFAICT that story didn’t provide us w/ any details of the loans in question besides the size of their initial balances.  No stats re. the income or non-housing assets of the borrowers in question (both in general, and among defaulters), nor a comparison between the rate of >$1 mil mortgage defaults and local housing prices.  No effort determine whether high income or assets has any remaining effect once key factors like negative equity or job loss are taken into account.  No effort expended to figure out how many of these defaults really were “strategic”, in the sense that the loan really was affordable to a borrower who nevertheless “walked away”.

Moreover, we’re left to assume that anyone w/ such a mortgage is “rich”, and maybe if “liar loans”, NINJAs, etc., had never existed, such an assumption would be warranted.  But in fact, such “innovations” did exist – which would seem to cast doubt upon whether the aforementioned assumption still holds.  Yet the only “evidence” provided to support this notion that “>$1 mil mortgage = rich” is anecdotal:  the rapper Chamillionaire and a so-called “technology entrepreneur” (whose income & assets are oddly left out of the story).

Maybe the rich really are more “ruthless” than everyone else; it’s not entirely implausible.  But before we declare the case closed, it’d be nice to see a little more evidence from the prosecution.  For starters, NYT et al might want figure out how many of those defaulters really were “rich”, and how many really were “ruthless”.

Random Links on Various Topics

Posted in Econ, Law on 20100709 by Avenging Sword

Jack Balkin suggests, tongue-in-cheek, that McDonald v. Chicago‘s constitutional holding was unnecessary.  Sasha Volokh disagrees.  David Post, meanwhile, wonders what McDonald really held (if anything).

Tom Goldstein explains why everything you read about SCOTUS & ideology is wrong.

Jack Goldsmith laments the politicization of the judicial appointment process.

Peter Spiro discusses US v. Arizona.  Twice.

Eugene Volokh explains why CLS v. Martinez was rightly decided.

Balkin & Carpenter being unimpressed by the recent federal district court decisions striking down part of DOMA.

Randy Barnett expresses skepticism regarding the constitutionality of state nullification.

Calculated Risk highlights a newly-released NY Fed staff report re. shadow banking.

Someone emails Jerry Pournelle, pointing out that the “Fury of the Legions” passage is probably a fake.  Glad I included a disclaimer in my post on that piece….

Finally, apropos Steve’s post below, James Hamilton discusses (in two parts) the possible causal relationship between high oil prices & the Great Recession.  And Pournelle makes the case for mild protectionism.