Commentaries

Russia’s shocking corruption belies Medvedev’s tough rhetoric

November 20, 2009

Everyone knows that Russia is corrupt, but did you know just how corrupt? The short answer is: more than any other country. That, at least, is the conclusion of a survey just published by PricewaterhouseCoopers, which examines the level of economic crime around the world.

from Rolfe Winkler:

Morning Links 11-20

November 20, 2009

Bill Gross says chase risk! (PIMCO) In his December letter, Gross laments the ultra low yields available to investors. Holding cash is a terrible idea he argues. (Luckily he's not saying to go far out on the risk curve.) Still, I disagree. While I believe there's an outside chance of a dollar crisis (highly inflationary...hence the reason many investors have a 5-10% position in gold for insurance), the more likely scenario over the next few years is the one laid out by the SocGen guys: debt deflation. In that case the purchasing power of cash goes up. Looking at the .01% nominal yield on cash equivalents is therefore unfair. The deflation-adjusted yield would be much higher. This is not a reason to try to "inflate away" debt however as that's not actually a solution. It just gets us closer to the dollar crisis scenario. 90% cash + 10% gold has done very well over the past two years (especially on a risk-adjusted basis!) I guess you can jump back into risky assets if you feel you "need" yield. Of course that's the mistake so many people made in response to Alan Greenspan's low rates. How well did that strategy work?

Smartphones’ ecosystem dilemma

November 20, 2009

Why  is the Motorola Droid apparently gaining traction in the smartphone market, when Microsoft and Nokia are failing so miserably?

from Rolfe Winkler:

Krugman on the invisible bond vigilantes

November 20, 2009

Paul Krugman is complaining of deficit hysteria over on his blog again. Where are the bond vigilantes? he wonders. Since we're still able to sell debt so cheaply, why is anyone worried about more deficit spending?

from Rolfe Winkler:

Midnight Links 11-18(19?)

November 19, 2009

Rep. DeFazio calls for Geithner and Summers to be fired (YouTube) Geithner has done many other things wrong besides paying out 100% to AIG's counterparties. Slamming banks together to avoid resolving their balance sheets was another big one. As for Summers, I still don't understand why he's so revered at the top of Democratic policy circles. His prior support of the CFMA and Gramm, Leach, Bliley -- two of the biggest regulatory blunders of our time -- should be enough to disqualify him from his current post.

from Rolfe Winkler:

Silverdome sold for $583k

November 19, 2009

From Mark Guarino at CS Monitor.....New tale of Detroit’s woe: Pontiac Silverdome sold for $583,000

from Rolfe Winkler:

Steve Keen on Minksy

November 18, 2009

One of my favorite economists talking about one of my favorite economists (ht Yves). Liberal use of the "pause" button to read his slides is recommended. He also goes into great detail about his "roving cavaliers of credit" thesis, which, in a nutshell, argues that money isn't created by the Fed, it's created by banks.

We don’t need your stinking financing

November 17, 2009

The New York Fed reports that investors only requested financing for $72.2 million of new CMBS loans through its TALF program.  Since there’s only been one, the $400 million offering from Developers Diversified, it raises an interesting question: would investors prefer to go it alone without perceived government strings attached rather than juice returns through leverage?

Goldman Sachs says sorry

November 17, 2009

Wall Street’s response to public criticism has mainly been exercises in “never apologize, never explain.”

Death of lawyer raises new questions in Russian scandal

November 17, 2009

You might think that the scandal involving Hermitage Capital in Russia couldn’t get any more perturbing. If you have been following the case, you’ll be aware that the British investment fund, managed by American-born financier William Browder, has repeatedly accused Russian criminals and corrupt officials of stealing $230 million in funds from the Russian budget.