Jesse interprets the Federal Reserve's request to issue its own debt, as a preparation for selective default on public debt issued by the Treasury.
Now then, cheat China (pop. 1.3 billion, army personnel 2.3 million)- or the UK (pop. 61 million, army personnel 100,000)? Tough call...
Wednesday, December 10, 2008
Tuesday, December 09, 2008
Time Management [Guest post by Paddington]
For decades, much was made of the fact that American workers were the most productive of the Western world. Business articles derided the 35-hour work week of the French and Germans.
However, about 10 years ago, there was a study that showed that the French and German workers were much more productive per hour.
This supports my long-held belief that a typical worker averages 6-7 hours of productive work per day. Give them a short-term project and they will work harder and faster, but be less productive afterwards. Tell them that they are going to work overtime, and they will not work as hard in the regular day. Presented with too much work (for them), many will actually do less.
Realizing this is one of the things that has made my job (university teaching) better. I could do my work in less time, so that I had time for myself and my family, rather than twiddling my thumbs at my desk for 8 hours.
In short, people need time to goof off and socialize, and it makes them work better.
However, about 10 years ago, there was a study that showed that the French and German workers were much more productive per hour.
This supports my long-held belief that a typical worker averages 6-7 hours of productive work per day. Give them a short-term project and they will work harder and faster, but be less productive afterwards. Tell them that they are going to work overtime, and they will not work as hard in the regular day. Presented with too much work (for them), many will actually do less.
Realizing this is one of the things that has made my job (university teaching) better. I could do my work in less time, so that I had time for myself and my family, rather than twiddling my thumbs at my desk for 8 hours.
In short, people need time to goof off and socialize, and it makes them work better.
Bide-a-Wii
The West is worrying about indebtedness and global competition, and China is devaluing the renminbi to maintain its trading advantage.
It's time for electronic warfare. Not hacking into the military system - that's so obvious, and it was so uncharacteristically direct of the Chinese to do it. No, I think the counterattack is through computer games.
Fund the provision of PSPs, Xboxes, Wiis and a host of absorbing games (e.g. Morrowind, Gears of War) as pseudo-benevolent gifts to bright young Chinese kids. With any luck, the effect will be the same as here: early, heavy adoption by the ASD/OCD types who might otherwise become the core of the mathematics/engineering/science elite that keep the rest of the population warm, well-fed and protected against disease.
If that doesn't work, only power cuts can save us.
Monday, December 08, 2008
WeaselWordWatch: "Quantitative Easing"
Google references now 177,000 (up from 159,000 yesterday); 1,663 news references in the last 24 hours.
Excuse me while I quantitatively ease a balloon, then stick a pin into it for a non-gradual relaxation.
Excuse me while I quantitatively ease a balloon, then stick a pin into it for a non-gradual relaxation.
The MSM take up the punishment theme
Nassim Taleb and Pablo Triana echo my call for condign punishment for the white-collar thieves.
Sunday, December 07, 2008
Worrying about the wrong things
We teach regularly in schools about drugs, guns and gangs... actually, the real threats to life - that we can do something about -are much less dramatic:
I packed in smoking over 30 years ago - but this coming year, I'd better do something about the weight.
I packed in smoking over 30 years ago - but this coming year, I'd better do something about the weight.
You know you're in trouble when...
... they give a new name to an old crime, in this case, dubbing inflation "quantitative easing".
This phrase yielded an estimated 159,000 results on Google today; watch for imminent "Google result hyperinflation" with respect to this weaselly term. Sackerson is offering a prize for the first sighting of a cartoon in the MSM featuring it.
P.S. 3,210 Google-found news items have it (all dates); 970 in the past month but 1,619 in the last day (how does that statfreak happen?) The earliest news reference found via Google is July 1, 1995 - relating to China's commercial bank reform. A Communist plot, then!
Death to the paper tigers! We demand only tigers with intrinsic value!
This phrase yielded an estimated 159,000 results on Google today; watch for imminent "Google result hyperinflation" with respect to this weaselly term. Sackerson is offering a prize for the first sighting of a cartoon in the MSM featuring it.
P.S. 3,210 Google-found news items have it (all dates); 970 in the past month but 1,619 in the last day (how does that statfreak happen?) The earliest news reference found via Google is July 1, 1995 - relating to China's commercial bank reform. A Communist plot, then!
Death to the paper tigers! We demand only tigers with intrinsic value!
The free market and redistribution of wealth
Jesse argues the free market case: interventions just make things worse; real wages in Western economies must decline; international currencies must float freely.
Okay, if we also have some other system of supporting our workers through the change, instead of import tariffs and other protectionist measures. You can't drop masses of people from a great height and expect society to remain stable.
A lot of our present arrangements - health, education, welfare - seem to me to be a fairly inefficient way of transferring wealth from the upper strata to the lower, less the cost and inconvenience of all the system servicers in between.
Why don't we get honest and open about the need for wealth redistribution, balanced with the need to encourage enterprise? Could we get rid of weaselly taxes and insidious benefit traps? All we need is some way of levelling the playing field between groups of workers in very different parts of the world, in such a way as not to force the game to be abandoned by either side. Can anyone propose a system of financial support - could some form of the Citizens' Basic Income be made to work?
Okay, if we also have some other system of supporting our workers through the change, instead of import tariffs and other protectionist measures. You can't drop masses of people from a great height and expect society to remain stable.
A lot of our present arrangements - health, education, welfare - seem to me to be a fairly inefficient way of transferring wealth from the upper strata to the lower, less the cost and inconvenience of all the system servicers in between.
Why don't we get honest and open about the need for wealth redistribution, balanced with the need to encourage enterprise? Could we get rid of weaselly taxes and insidious benefit traps? All we need is some way of levelling the playing field between groups of workers in very different parts of the world, in such a way as not to force the game to be abandoned by either side. Can anyone propose a system of financial support - could some form of the Citizens' Basic Income be made to work?
Saturday, December 06, 2008
What is "Common Purpose"?
Googling this term, one gets (a) lots of stuff by Common Purpose and/or a Julia Middleton, (b) lots of favourable stuff about either or both, and (c) a handful of snarling "stop-them" sites. I shouldn't bother asking any more, except it seems that this organisation does have connexions with many influential people and organizations.
What is the "Common Purpose" of the eponymous outfit? Who exactly is this Julia Middleton, and why has she become so apparently prominent? Is it a McKinsey-type thing, or a McCarthy-type thing? Can anyone who isn't obviously a nutter tell me, in cool and rational terms?
What is the "Common Purpose" of the eponymous outfit? Who exactly is this Julia Middleton, and why has she become so apparently prominent? Is it a McKinsey-type thing, or a McCarthy-type thing? Can anyone who isn't obviously a nutter tell me, in cool and rational terms?
And as for the D-word...
The Economist Intelligence Unit democracy index has moved the UK up from 23rd place in 2006 to 21st place in 2008. Of course, this was before the government started nationalising the banks and arresting the Opposition.
Even so, the Civil Liberties strand has fallen in two years from 9.12 to 8.82; and the competition seems to be weakening anyway, as the 2008 report notes:
...following a decades-long global trend in democratisation, the spread of democracy has come to a halt. Comparing the results for 2008 with those from the first edition of the index, which covered 2006, shows that the dominant pattern in the past two years has been stagnation. Although there is no recent trend of outright regression, there are few instances of significant improvement. However, the global financial crisis, resulting in a sharp and possibly protracted recession, could threaten democracy in some parts of the world.
Even so, the Civil Liberties strand has fallen in two years from 9.12 to 8.82; and the competition seems to be weakening anyway, as the 2008 report notes:
...following a decades-long global trend in democratisation, the spread of democracy has come to a halt. Comparing the results for 2008 with those from the first edition of the index, which covered 2006, shows that the dominant pattern in the past two years has been stagnation. Although there is no recent trend of outright regression, there are few instances of significant improvement. However, the global financial crisis, resulting in a sharp and possibly protracted recession, could threaten democracy in some parts of the world.
Press release from September:
Transparency International’s global Corruption Perceptions Index (CPI) 2008, launched today, shows a significant worsening of the way the UK’s attitude to corruption is seen in the world. The UK’s score has dropped from 8.4 last year to only 7.7 today: the first time it has ever fallen from the high rating of more than 8 (10 is the highest a country can score on the Index).
The UK's engrained complacency over its failure to take international corruption seriously is now further exposed to public scrutiny. The UK has a wretched foreign bribery prosecution record compared to most of its G7 peers. It was strongly criticised this summer by the OECD body responsible for ensuring that members comply with the 1997 OECD Anti-Bribery Convention and may now face tougher measures by the OECD if it continues to fail.
The top 20:
Transparency International’s global Corruption Perceptions Index (CPI) 2008, launched today, shows a significant worsening of the way the UK’s attitude to corruption is seen in the world. The UK’s score has dropped from 8.4 last year to only 7.7 today: the first time it has ever fallen from the high rating of more than 8 (10 is the highest a country can score on the Index).
The UK's engrained complacency over its failure to take international corruption seriously is now further exposed to public scrutiny. The UK has a wretched foreign bribery prosecution record compared to most of its G7 peers. It was strongly criticised this summer by the OECD body responsible for ensuring that members comply with the 1997 OECD Anti-Bribery Convention and may now face tougher measures by the OECD if it continues to fail.
The top 20:
(htp: Hatfield Girl)
BTW: Zimbabwe is not even in the bottom 10 of the list.
An expert writes
The words...
In truth, gold has been a poor investment for a long time...
Other safe havens have done much better... Government bonds... Swiss franc...
Gold rises and falls with oil, copper and wheat, and all the other things that get turned into stuff in factories. It is still a useful metal. But it is not money — and after its failure to rally in this crisis, even the most dogmatic gold bug may well have to admit that.
(Matthew Lynn in The Spectator)
The picture...
Friday, December 05, 2008
Corruption Competition
Jeremy Clarke's dragoman introduces a brilliant new system of classification:
The Egyptian government is 100 per cent corrupt. In other countries the government is 10 per cent corrupt or maybe 20 or 50 per cent. Here in Egypt it is 100 per cent corrupt. I am telling you.
You are invited to argue the case for one or more "other countries" to be considered as runners-up in this competition.
(Please have regard for libel law.)
China to devalue its currency?
I said some time ago that Far Eastern creditors weren't going to let themselves be swindled by currency depreciation; now it is rumoured that China (and maybe another country also) will take their revenge and begin a dangerous round of competitive devaluation around the world.
Hurray for a radical
I sympathise with Mish; but getting it done would be like a goat persuading a tiger to turn vegetarian.
If deflation is not the problem, what is?
The problem is fractional reserve lending that allows banks to leverage lending 12-1 and broker dealers like the now defunct Bear Stearns and Lehman 40-1. It does not take much to cause a run on the bank when leverage is 40-1. Fannie Mae is leveraged many times more than that.
Without that excessive leverage, no one would be in trouble over falling prices. Actually everyone would benefit. The cure is not to defeat deflation, the cure is to embrace deflation and stop fractional reserve lending and the serially bubble blowing activities of the Fed.
I support abolishing the Fed and the elimination of fractional reserve lending. Those are the only long term cures to the problems we face.
If deflation is not the problem, what is?
The problem is fractional reserve lending that allows banks to leverage lending 12-1 and broker dealers like the now defunct Bear Stearns and Lehman 40-1. It does not take much to cause a run on the bank when leverage is 40-1. Fannie Mae is leveraged many times more than that.
Without that excessive leverage, no one would be in trouble over falling prices. Actually everyone would benefit. The cure is not to defeat deflation, the cure is to embrace deflation and stop fractional reserve lending and the serially bubble blowing activities of the Fed.
I support abolishing the Fed and the elimination of fractional reserve lending. Those are the only long term cures to the problems we face.
Tuesday, December 02, 2008
The dangers of harmony
I'm still convinced that many in the financial community deserve far harsher treatment than they've so far received - if they didn't know what would happen, they should have.
But I've been casting about for some deeper structural reason - what allowed financiers to kid themselves that they were acting reasonably, or at least assure themselves that they had followed official guidelines and were "covered"?
So I looked for something relating to the regulation of fractional reserves, and came across references to the Basel Accords (I and II). These are an attempt to "harmonise" central banking policies in developed nations, and perhaps can serve as an object lesson (especially for EU enthusiasts) about international legislation.
Here is the conclusion of an analysis of the two Accords (highlights mine):
One very important fact to assess is the achievements and limitations of each Basel Accord. The first Basel Accord, Basel I, was a groundbreaking accord in its time, and did much to promote regulatory harmony and the growth of international banking across the borders of the G-10 and the world alike. On the other hand, its limited scope and rather general language gives banks excessive leeway in their interpretation of its rules, and, in the end, allows financial institutions to take improper risks and hold unduly low capital reserves.
Basel II, on the other hand, seeks to extend the breadth and precision of Basel I, bringing in factors such as market and operational risk, market-based discipline and surveillance, and regulatory mandates. On the other hand, in the words of Evan Hawke, the U.S. Comptroller of the Currency under George W. Bush, Basel II is “complex beyond reason” (Jones, 37), extending to nearly four hundred pages without indices, and, in total, encompassing nearly one thousand pages of regulation.
The author's concern is that the rules can permit the risk of assets in emerging markets to be understated, and as it turns out the Trojan horse came in through another gate; but in complexity lies opportunity, and in rule-following lies the illusion that personal responsibility is thereby written off.
But I've been casting about for some deeper structural reason - what allowed financiers to kid themselves that they were acting reasonably, or at least assure themselves that they had followed official guidelines and were "covered"?
So I looked for something relating to the regulation of fractional reserves, and came across references to the Basel Accords (I and II). These are an attempt to "harmonise" central banking policies in developed nations, and perhaps can serve as an object lesson (especially for EU enthusiasts) about international legislation.
Here is the conclusion of an analysis of the two Accords (highlights mine):
One very important fact to assess is the achievements and limitations of each Basel Accord. The first Basel Accord, Basel I, was a groundbreaking accord in its time, and did much to promote regulatory harmony and the growth of international banking across the borders of the G-10 and the world alike. On the other hand, its limited scope and rather general language gives banks excessive leeway in their interpretation of its rules, and, in the end, allows financial institutions to take improper risks and hold unduly low capital reserves.
Basel II, on the other hand, seeks to extend the breadth and precision of Basel I, bringing in factors such as market and operational risk, market-based discipline and surveillance, and regulatory mandates. On the other hand, in the words of Evan Hawke, the U.S. Comptroller of the Currency under George W. Bush, Basel II is “complex beyond reason” (Jones, 37), extending to nearly four hundred pages without indices, and, in total, encompassing nearly one thousand pages of regulation.
The author's concern is that the rules can permit the risk of assets in emerging markets to be understated, and as it turns out the Trojan horse came in through another gate; but in complexity lies opportunity, and in rule-following lies the illusion that personal responsibility is thereby written off.
Monday, December 01, 2008
The eyes, look at the eyes
I referred recently to some BNP supporters as "scrubbed-up thugs"; sadly, that also is the impression given by some New Labour apparatchiks.Is it true that, like Cordelia and the Fool, Ed Balls and Nick Griffin have never been seen together?
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