Opinion

Felix Salmon

Extra Credit, Tuesday Edition

By Felix Salmon
April 1, 2009

Usury: It’s a bad idea to give banks an incentive to drown individuals in debt.

The injustice of pricing tea in dollars: Always good to see the denomination fallacy applied to something other than oil.

Pension insurer shifted to stocks: At the top of the market. More billions of dollars of losses for the government.

H-1B Visa Window Opens Amid Recession: The quota will still run out in a matter of days, starting tomorrow.

Comments
3 comments so far | RSS Comments RSS

better than portfolio (easy to read), just disable auto-refresh…

Thanks

Posted by parag | Report as abusive
 

The banks are just taking any TARP money from the government & shoring up capital reserves since the loss loan provisions taken each quarter are a % of the “real” numbers.Non performing loans within any North American bank is 3 to 5 times the numbers being talk about. They are all essentially bankrupt but we need not know the truth. How do I know? I worked within the reporting unit of one of these major banks during the real estate downturn in 1991/92 and the numbers were staggering. Therefore small businesses I know can not get realistic terms on any lending. Help is needed but how should run these institutions? It will get much worse before it gets better, hide your money in gold or under your mattress.

Posted by DavidV | Report as abusive
 

“Pension insurer shifted to stocks: At the top of the market. More billions of dollars of losses for the government.”

Didn’t expect you to believe this silly meme; for extensive debunking read Tom Maguire here:
http://justoneminute.typepad.com/main/20 09/03/prof-krugman-meet-prof-krueger.htm l
Or read Justin Fox here:
http://curiouscapitalist.blogs.time.com/ 2009/03/31/the-pension-benefit-guaranty- scandal-that-isnt-at-least-not-yet

Or go to primary docs (cited by Maguire) and read PGBC head Mr. Millard’s testimony to Congress on Oct 24 2008:
http://frwebgate.access.gpo.gov/cgi-bin/ getdoc.cgi?dbname=110_house_hearings&doc id=f:45030.pdf
page 118-119:
“Mr. MILLARD. No. The investment performance for fiscal year
2008, which concluded September 30th, and these are, again, I
want to emphasize unaudited numbers, is based principally on the
prior policy. We have made very small changes so far in
transitioning into the new policy because as we went into manager
selection and as we talked to transition managers and we saw
what was happening in the fixed-income markets, we saw things
like the liquidity crisis, et cetera; it made sense to not only have
a long-term strategy, we are not market timers, we are not trying
to be a market timer, have a long-term strategy that is designed
to pay our bills over time without having to turn to Congress for
a multibillion dollar bailout, and at the same time as we transition,
to do so in a deliberate and measured way.
Mr. COURTNEY. Then your testimony is then that this loss was
not the result of any new policy?
Mr. MILLARD. Correct. The decline in our portfolio, the portfolio
was approximately 70 percent [corrected to 30%] equities in September a year ago,
and other than the fact that equities have dropped, we have not
changed our allocation yet. We have interviewed managers. We
have prepared to make transition, but we haven’t moved anything
yet. We will do so very, very deliberatively.”

Posted by Bob Montgomery | Report as abusive
 

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