Commentaries
Now raising intellectual capital
from Rolfe Winkler:
Lunchtime Links 2-1
President's budget (gpoaccess.gov)
Barney Frank: The poor should rent, not own (Indiviglio, Atlantic)
Citigroup said to plan sale of private equity unit (Keoun/Keehner, Bloomberg) Citi cites raising cash to pay down debt as the reason to sell this unit. Of course this would also get Pandit some brownie points with Paul Volcker, who wants commercial banks out of private equity, hedge funds and proprietary trading...
HCA owners get $1.75 billion payout (Lattam, WSJ) Speaking of private equity...a nice payout for investors in one of the biggest LBOs in history.
All those little Stuy towns (Morgenson, NYT) Bullying as a business model...
Goldman Sachs and the $100 million question (Times UK) This is a thinly sourced article that claims Lloyd Blankfein will get a blowout $100m bonus for 2009. If true, talk about giving the finger to, well, pretty much everyone.
Five myths about America's credit card debt (Manning, WaPo)
from Rolfe Winkler:
Lunchtime Links 12-31
Bankers get $4 trillion gift from Barney Frank (Reilly, Bloomberg) David pours over HR 4173, all 1,279 pages of it. He finds some interesting nuggets. One of the bigger problems I see is the proposed insurance fund that would pay for resolving systemically dangerous banks. Talk about moral hazard!
Show some balls (Saletan, Slate) A colorful take on new TSA security procedures.
New jobless claims hit 17-month low (Kaiser, Reuters) Good news for the economy but, paradoxically, bad news for stocks (and gold). If the economy improves, the Fed will have to raise rates. That will hit equity values and strengthen the dollar. But don't count on strength lasting very long. As soon as the Fed meaningfully tightens, we'll head right back into debt deflation.....which is why many think the Fed is trapped.
The land of the rising bearish wager (Zuckerman/Slater, WSJ) Betting on a "sudden stop" in Japan. (ht Walker Todd)
Shoplifters? Keen an eye on workers (Greenhouse, NYT)
UBS whistleblower asks why he's going to prison (Brown, Reuters) This will be an interesting 60 Minutes piece.
Europe's vast farm subsidies face challenges (Castle/Carvajal, NYT)
from Rolfe Winkler:
Frank changes mind, now favors pre-funding
From Alison Vekshin:
Barney Frank, chairman of the U.S. House Financial Services Committee, reversed course and will support requiring financial firms to prepay into a fund the government will use to unwind large firms after they fail.
If Frank's legislation passes, there will be an explicit taxpayer guarantee backing the high risk activities of the big banks.
Why? Because there's no way banks could fund the cost of even one systemic resolution. How much has AIG set back taxpayers? $182 billion so far. And we've promised $200 billion each for Fannie and Freddie. Banks complained about the $5.6 billion special assessment on FDIC. We expect them to pre-fund sufficient scarol to fund the next AIG?
David Reilly made this point very cogently a couple days ago.
Will creditors and shareholders actually have to absorb meaningful losses? As reader Ralph DG points out the creditors and counterparties of the banks are ... other banks and insurance companies, systemically-important themselves.
Losses can't be forced on them without causing the kind of systemic "domino effect" this whole scheme is trying to prevent.
At some point it will dawn,too late, on the corrupt fools in government, that the Taxpayers, the American workers are systemically too important to fail. The US government and their banking controllers are now a country within themselves. The rest of us just exist to support their insatiable greed for money and power. This will be the downfall of the USA as it was for Rome, and the time is short.
Frank shines some light on G.E.
The price of reduced political risk? For General Electric, it’s worth some $6 billion of added market value this morning.
G.E..’s finance arm, GE Capital, had a investor presentation on Tuesday that was impressive on many fronts but not entirely convincing on the regulatory outlook. Obama’s proposed financial overhaul, as outlined in the June white paper, would force the company to spin off its giant finance arm, resulting in higher taxes and increased costs
But Representative Barney Frank, the powerful chairman of the House Financial Services Committee, told Bloomberg News late Wednesday that the Obama administration’s planned financial overhaul did not necessarily mean that industrial companies like General Electric or Harley-Davidson would need to spin off their finance problems.
“This particular arrangement is not part of the problem,” Frank told Bloomberg, echoing the arguments that GE Capital executives made on an investor call on Tuesday.
General Electric’s general counsel, Brackett Denniston, had indicated on Tuesday that this was indeed the thinking among Washington lawmakers, although his understandable inability to give details made his comments at the time seem less persuasive.
Goldman Sachs analysts, however, are convinced that the political risk for G.E. has diminished, upgrading their recommendation on the stock to “buy” from “neutral.”
“While numerous uncertainties remain, we are reducing our probability assumption for a costly GECS separation to 25% from 50% and this drives our higher target,” Terry Darling, an analyst with Goldman, wrote in a note today.
GE Capital has not been a concern in my mind because they have a stake in much of what they finance. Even if the deal is for competing product, GE gets a share of the deal and some valuable market data to boot. Part of the problem? Nah.
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The Wall
Regarding running, yeah, you should land (and stay) on your forefeet, not on your heel. However, you’re resting when you land on your heel (it’s like walking), so it’s more energy efficient to heel strike. This ain’t exactly new news…
At any rate, we should all forefoot striking. When I used to heel strike, I broke small bones in my feet several times, and was constantly dealing with shin splints, sore knees, sore hips. I will note, however, that the first time I went from heel strike to forefoot strike, I went from running 12 miles a pop to 1.5 miles a pop before my calves and my feet tired out and I couldn’t run anymore (forefoot striking, that is… I could still heel strike). It took me a long time to build back up, and I run about 1 mph slower forefoot striking because of the energy difference (went from 8.6 mph to 7.5 mph, body temperature limited, not cardio limited). It’s a no brainer as long as you’re not racing competitively.
You need flat running shoes to forefoot strike. Most running shoes have high heels because heel strikers need the extra cushioning, which in turn makes it harder to run on your forefeet unless you set a treadmill to incline. Something like a New Balance 758 is reasonably flat.
If one can’t forefoot strike, then I’d seriously suggest not running and hitting an elliptical machine instead.